1. Business Across the Enterprise
Chapter 8
Business Across the Enterprise

2. Learning Objectives
Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource management, and supply chain management systems:
Business processes supported
Customer and business value provided
Potential challenges and trends

3. Learning Objectives
Understand the importance of managing at the enterprise level to achieve maximum efficiencies and benefits.

4. Getting All the Geese Lined Up: Managing at the Enterprise Business Level
Customer Relationship Management, Enterprise Resource Planning, and Supply Chain Management all share the same Goal: to get the organization to line up and head in the same direction (like geese).

5. Section 1 Customer Relationship Management: The Business Focus

6. I. Introduction Businesses today must be
Customer-centric/Customer-focused – Customer, Customer, Customer!

7. II. What Is CRM?
Providing the organization with a single complete view of every customer, and providing the customer with a single complete view of the organization and its extended channels
Contact and Account Management – capture and track relevant data about past and planned contacts

8. II. What Is CRM?
Sales – providing software tools and data sources to manage sales activities, and optimize cross-selling and up-selling
Cross-selling – selling related products to current customers
Up-selling – selling better products than the one currently purchased

9. II. What Is CRM?
Marketing and Fulfillment – automate direct marketing, scheduling, and tracking, and assist in scheduling responses and requests, while capturing relevant information for the marketing database

10. II. What Is CRM?
Customer Service and Support – provide customer service software tools, and real-time access to the customer database
Call Center Software – routes calls to customer support agents
Help Desk Software – provides assistance for customer service agents having problems with a product/service

11. II. What Is CRM?
Retention and Loyalty Programs – enhancing and optimizing customer retention and loyalty is a major business strategy because:
It costs 6 times more to sell a new customer than an existing one
Dissatisfied customers will tell 8–10 people about bad experiences
A firm can boost sales 85% by increasing customer retention 5%
Odds of selling a new customer – 15%; Odds of selling a current customer – 50%
If a firm resolves a service problem quickly, 70% of complaining customers will do business with the firm again

12. III. The Three Phases of CRM
Acquire – CRM helps a new customer perceive value of a superior product/service
Enhance – CRM supports superior customer service, and cross-selling/up-selling
Retain – CRM helps proactively identify and reward the most loyal and profitable customers

13. Section 2 Enterprise Resource Planning: The Business Backbone

14. I. Introduction II. What is ERP?
ERP is a multifunctional enterprisewide backbone that integrates/automates business processes and information systems
II. What is ERP?
A cross-functional software suite supporting basic internal business processes of a firm

15. Colgate-Palmolive: The Business Value of ERP
What were Colgate’s needs?
What solutions did SAP provide?
What results have occurred with this installation? What impact does this have on business?

16. III. Benefits and Challenges of ERP
Major Business Value from ERP
Quality and Efficiency – significant improvements in quality and efficiency of customer service, production, and distribution
Decreased Costs – significant reductions in transaction costs, hardware and software, and IT support staff
Decision Support – provides cross-functional information that enables better decision making across the enterprise
Enterprise Agility – breaks down departmental/functional walls and enables more flexible, adaptive organizational structures

17. III. Benefits and Challenges of ERP
Costs of ERP – if you do not do ERP properly you can kill the firm
Causes of ERP Failures
#1 cause – underestimating the complexity of planning, development, and training necessary for success
Failure to involve affected employees
Trying to do too much too fast
Overreliance on claims of software vendors/consulting firms

18. ERP Implementations: When They Fail, They Fail Big
How is an “ERP Failure” define?
What was the original budget? What was the last cost?
If the project was a failure, why did they go ahead with it?
What part did the users have in the failure?

19. Capital One Financial: Success with ERP Systems
In the old system, how many people had to sign off on an address change?
Which ERP system did they choose?
(NOTE: also see the Imperial Sugar case)
What cultural change was effected? Why is that important?
How are software applications accessed?

20. IV. Trends in ERP
Improvements in Integration and Flexibility – ERP modules have become more flexible and easier to install
Extensions to Business Applications – access to intranets/extranets
Broader Reach to New Users – use of the Internet, intranets and extranets provides new links to customers, suppliers, and partners
Adoption of Internet Technologies –enables all the above

21. VISA International: Implementing the e-Business Suite
What were the problems with VISA’s internal systems?
What did the solution do?

22. Section 3 Supply Chain Management: The Business Network

23. I. Introduction
Successful SCM is based on accurate order processing, JIT inventory management, and timely order fulfillment; this was theoretical 10 years ago, but is now a competitive weapon

24. II. What is SCM?
A cross-functional interenterprise system using IT to support/manage links between key business processes and suppliers, customers, and business partners
Electronic Data Interchange (EDI) – an early SCM methodology for exchanging information between partners using standard document message formats, still very popular but being replaced by .xml-based Web services

25. PC Connection: Learning to Stop, Drop, and Ship
What was the problem with PC Connection’s ERP system?
What was their solution?
How well has it worked?
What does the system have to do with customer satisfaction?

26. Telefonica TSAI: Internet EDI
How much of Spain’s EDI traffic does TSAI handle?
What service does TSAI offer smaller customers?
How does this help these smaller customers?

27. III. The Role of SCM
To optimize the effective/efficient movement of materials between suppliers, customers, and other partners

28. Imperial Sugar: Supply Chain Management to the Rescue
What was Imperial’s problem following the refinery explosion?
What software did they use to help?
What did this software offer them to help with the problem?
Which ERP system failed them? Why did it not work?

29. IV. Benefits and Challenges of SCM
SCM solutions are becoming more complex
Benefits:
Faster, More Accurate Order Processing
Reductions in Inventory Levels
Quicker Times to Market
Lower Transaction and Materials Costs
Strategic Relationships with Suppliers

30. IV. Benefits and Challenges of SCM
Challenges – SCM Failures Caused By:
Lack of Knowledge about Demand Planning
Inaccurate/Overly Optimistic Demand Forecasts
Inaccurate Production, Inventory, and Other Business Data
Lack of Adequate Collaboration Among Marketing, Production, and Inventory Management Departments

31. Emerson Transaction Hub: A Bright Idea That’s Paying Off
What problem did Emerson identify?
What was the solution to this problem?
How was the solution implemented?
What percentage of costs was saved by shipping in the same container?
How much did Emerson invest in the communications hub? Have they recovered their costs?

32. Nike Inc.: Failure (and Bouncing Back) with Supply Chain Management
How much did Nike’s “speed bump” cost, and in what areas?
How does Nike use historical models?
What have the benefits of the ERP system been?

33. V. Trends in SCM 3 Stages to SCM Implementation
Improve Internal Supply Chain Processes and Improve Relationships with Suppliers and Customers
Use Supply Chain Software, Intranets, and Extranets with Trading Partners
Develop and Implement Collaborative SCM Applications

34. CVS, McKesson, and MPT: Web-Based SCM Integration
Why does CVS prefer push to pull promotions?
What do both CVS and McKesson achieve through this relationship?
What was MPT’s problem?
What solutions does i-Supply offer?