1. Enterprise Business Systems
Chapter 8
Enterprise Business Systems
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Learning Objectives
Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource manage-ment, and supply chain management systems:
Business processes supported
Customer and business value provided
Potential challenges and trends
Understand the importance of managing at the enterprise level to achieve maximum efficiencies and benefits.

3. Managing at the Enterprise Level
Lessons from Geese
Importance of team work
Encourage passion and energy
Lessons from Geese
'Individual empowerment results from quality honking'
Lessons from Geese provides a perfect example of the importance of team work and how it can have a profound and powerful effect on any form of personal or business endeavor. When we use these five principles in our personal and business life it will help us to foster and encourage a level of passion and energy in ourselves, as well as those who are our friends, associates or team members.
It is essential to remember that teamwork happens inside and outside of business life when it is continually nurtured and encouraged.

4. Customer Relationship Management (CRM)
Customer focused
Customer relationships – most valued asset
Find and retain most profitable customers possible
Company has
Single, complete view of every customer
Customers have
Single, complete view of the company
Integrates and automates customer-serving processes
Customer relationships have become a company’s most valued asset
Every company’s strategy should be to find and retain the most profitable customers possible
Managing the full range of the customer relationship involves
Providing customer-facing employees with a single, complete view of every customer at every touch point and across all channels
Providing the customer with a single, complete view of the company and its extended channels
CRM uses IT to create a cross-functional enterprise system that integrates and automates many of the customer-serving processes

5. Contact and Account Management
Track relevant data about
Every past and planned contact with prospects and customers
Other business and life cycle events
Data captured from touchpoints
Telephone, fax,
Websites, retail stores, kiosks
Personal contact
CRM helps sales, marketing, and service professionals capture and track relevant
data about
Every past and planned contact with prospects and customers
Other business and life cycle events of customers
Data are captured through customer touchpoints
Telephone, fax,
Websites, retail stores, kiosks
Personal contact

6. RWC 1: CRM Goes Mobile Sales people Autonomous and don’t play by rules
Ignore new processes unless direct benefit
More sales
Better time efficiency
Designing Mobile Applications
What are the common tasks
What are the priorities
What are the pain points
Less is more

7. Application Clusters in CRM
CRM or Customer Resource Management revolves around interactions with the customer.

8. Sales A CRM system provides: Support and manage sales activities
Optimize cross-selling and up-selling
Method to check account status and history
A CRM system provides sales reps with the tools and data resources they need to
Support and manage their sales activities
Optimize cross- and up-selling
Cross-selling is an approach in which a customer of one product or service,
-- auto insurance, might also be interested in purchasing a related product or service,
say, homeowner’s insurance.
Up-selling refers to the process of finding ways to sell a new or existing customer a better product than they are currently seeking.
CRM also provides the means to check on a customer’s account status and history before scheduling a sales call

9. Customer retention evaluation report

10. Marketing and Fulfillment
Automate direct marketing campaigns
Qualifying leads for targeted marketing
Scheduling and tracking mailings
Capturing and managing responses
Analyzing the business value of the campaign
Fulfilling responses and requests

11. Customer Service and Support
Shared database
Requests for service are created, assigned, and managed
Call center software routes calls to agents
Help desk software provides service data and suggestions for solving problems
Personalized support information
A CRM system gives service reps real-time access to the same database used by sales and marketing

12. Retention and Loyalty Programs
Statistics
Costs 6 times more to sell to a new customer
Unhappy customer will tell 8-10 others
Boosting customer retention by 5 percent can boost profits by 85 percent
Odds of selling:
Existing customer - 50 percent
New - 15 percent
70 percent of customers will do business again if problems are quickly resolved.

13. Retention and Loyalty Programs
Primary objective - enhancing and optimizing customer retention and loyalty
Identify, reward, and market to the most loyal and profitable customers
Evaluate targeted marketing and relationship programs

14. The Three Phases of CRM
Phases of CRM
Acquire
Enhance
Retain

15. Identify and target the best customers
Benefits of CRM
Identify and target the best customers
Real-time customization and personalization of products and services
Track when and how a customer contacts the company
Provide a consistent customer experience
Provide superior service and support
Benefits of CRM
Identify and target the best customers
Real-time customization and personalization of products and services
Track when and how a customer contacts the company
Provide a consistent customer experience
Provide superior service and support across all customer contact points

16. CRM Failures Reasons for Failure
Lack of senior management sponsorship
Improper change management
Elongated projects that take on too much, too fast
Lack of or poor integration between CRM and core business systems
Lack of end-user incentives leading to poor user adoption rates
Lack of understanding and preparation -- # 1
Not solving business process problems first
No participation on part of business stakeholders involved
Business benefits of CRM are not guaranteed
50 percent of CRM projects did not produce promised results
20 percent damaged customer relationships
List of reasons for failure from 9th edition changed to paragraph below list in 10th edition
Lack of understanding and preparation
Not solving business process problems first
No participation on part of business stakeholders involved
How could some of the spectacular failures of ERP systems have been avoided?
Recommendations:
start early
clean up data first
involve end users
obtain top management commitment
get professional help from industry experienced consultants
implement the system in phases (reduces complexity)
train users
promote realistic expectations

17. Trends in CRM

18. Cross-functional enterprise system
What is ERP?
Cross-functional enterprise system
Integrated suite of software modules
Supports basic internal business processes
Manufacturing
Logistics
Distribution
Accounting
Finance
Human resources
Facilitates information flows
Business
Supplier
Customer
Enterprise resource planning is a cross-functional enterprise system
An integrated suite of software modules
Supports basic internal business processes
Facilitates business, supplier, and customer information flows

19. RWC 2: ERPs Get a Second Lease on Life
Old ERPs customized to fit individual needs
Upgrades can’t be applied without testing and modification
New ERPs have new features and capability
Some companies stay with old systems
Some companies buy new, but avoid customization

20. ERP Application Components

21. ERP Process and Information Flows

22. Business processes and functions of ERP

23. Needed to coordinate globally, act locally
ERP at Colgate
Needed to coordinate globally, act locally
Order-to-delivery time cut in half
Order acquisition and process
7 days cut to 4 hours
Distribution
4 days cut to 14 hours
Increased on-time deliveries
Domestic inventories dropped by 1/3

24. Costs of Implementing a New ERP
ERP Business Benefits
Quality and efficiency
Decreased costs
Decision support
Enterprise agility
Broke down silos
Silos - departmental or functional walls that inhibit free flow of information
ERP Costs
Risks and costs are considerable
Implementing ERP – corporate equivalent of brain surgery
Hardware and software are a small part of total costs
Legacy systems
Failure can cripple or kill a business
Losses in revenue, profits, market share
Bankruptcy
Reengineering - developing new methods for running the business
Training and Change Management - preparing employees for the new system

25. Most common causes of ERP failure
Causes of ERP Failures
Most common causes of ERP failure
Under-estimating complexity
Planning, development, training
Failure to involve affected employees
Too much too fast
Insufficient training
Insufficient data conversion and testing
Over-reliance on ERP vendor or consultants

26. Trends in ERP

27. ERP application components

28. Supply Chain Management (SCM)
Helps a company
Get the right products
To the right place
At the right time
In the proper quantity
At an acceptable cost
Goal of SCM is to efficiently…
Forecast demand
Control inventory
Enhance relationships
Receive feedback
What is a Supply Chain?
Definition from previous chapter
Supply Chain Management (SCM)
the complete sequence of suppliers that contribute to creating a good or service and delivering it to business users and final customers
1. Supply chain begins when the raw materials used in production are delivered to the producer
2. Continues with the actual production activities that create finished goods.
3. Finally the finished goods move through the producer's distribution channels to end customers.
Chapter 8
The interrelationships with suppliers, customers, distributors, and other businesses needed to design, build, and sell a product
Each supply chain process should add value to the products or services a company produces
Frequently called a value chain
Forecast demand
How much to build
Control inventory
How much to have on hand
Enhance relationships with customers, suppliers, distributors, and others
Receive feedback on the status of every link in the supply chain

29. RWC 3: Supply Chains Adapt to Tough Times
Old push model uses best-guess forecasts
High inventory levels
Supply chain stops during down-turn
Key to survival in down-turn
Reduced inventory
Increased working capital
Pull system
Information to build inventory comes from supply chain partners
Inventory based on “demand signals”

30. Supply Chain Life Cycle

31. EDI Activities
One of the earliest uses of information technology for supply chain management
The electronic exchange of business transaction documents between supply chain trading partners
The almost complete automation of an e-commerce supply chain process
Many transactions occur over the Internet, using secure virtual private networks

32. Roles and Activities of SCM in Business
Top three are objectives and outcomes of planning.
Accomplished by the business partners in a supply chain at the Execution level of SCM

33. Functions and Benefits of SCM
Top three are objectives and outcomes of planning.
Accomplished by the business partners in a supply chain at the Execution level of SCM

34. Benefits of SCM Key Benefits Faster, more accurate order processing
Reductions in inventory levels
Quicker times to market
Lower transaction and materials costs
Strategic relationships with supplier

35. Challenges of SCM Key Challenges
Lack of knowledge, tools, and guidelines
Inaccurate data
Lack of collaboration
SCM tools are immature, incomplete, and hard to implement

36. Emerson Transaction Hub
SCM at Emerson
Emerson Transaction Hub
Different orders in separate containers
Created Transaction Hub (& Logistics Hub)
Combine multiple orders into single shipments/containers
Key Benefits
Why pay to send inventory from one supplier on one ship and goods form a second supplier on another ship when both deliveries are coming from the same place and could be loaded into a single container?
How much impact?
Number of Emerson business? 70
Number of suppliers? 35,000
Cost? $500,000
Saving? 35%

37. Goals and Objectives of SCM
Make your company goals help customer achieve their goals

38. Trends in SCM
Make your company goals help customer achieve their goals

39. Modern Plastics, SupplySolution, Inc.
Trends in SCM
CVS, McKesson
CVS leading drug retail chain
McKesson largest pharmaceutical distributor
Point-of-sale data
Agreed on service levels
Reduced replenishment time
Modern Plastics, SupplySolution, Inc.
Upraded reactive system to proactive system
Customer persuaded Modern Plastics to connect with its iSupply system, could see what customers needed eliminating the wait for an order

40. RWC 4: The Secret to CRM is in the Data
CRM enables increased sales revenue
CRM provides more and better services to customers and prospects.
CRM – better earlier than later.
“Without accurate, complete, and comprehensive data, any CRM effort will be less than optimal.”
CRM software enables sales and marketing professionals to increase sales revenue by providing more and better services to customers and prospects. (caption)
CRM implementation is lot easier to do early in a company’s history than it is later.
By starting "early", organizations won't have data conflicts and cleanup issues to sort through. Employees can get in the habit of using CRM data. And the organization can acquire off the shelf integrated software without having to worry about migration or consolidation issues
Read sentences - "I have a customer- relationship-management system that has a customer master file. I have an order-management system that has a customer master. If the information between those systems doesn't agree, which one is true? Having a single instance of the customer master, we know what the truth is."
Without accurate, complete, and comprehensive data, any CRM effort will be less than optimal