2. Enterprise Business Systems
Chapter 8
Enterprise Business Systems

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

4. Customer Relationship Management
A customer-centric focus
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

5. Case 1: Business Benefits of CRM
Forex Capital Markets trades $20 billion worth of currency per month
12,000 clients in 70 countries
Tracking sales leads and prospects
Began with Excel spreadsheets
Switched to Access database
Volume forced move to CRM system
Access controlled through data security and information sharing privileges

6. Case 1: Business Benefits of CRM
Wyse Technology
World leader in thin-client computing
Revenues in excess of $180 million
Doubled sales within 12 months of installing CRM system
No additional staff needed

7. Case Study Questions
Why can’t Microsoft Excel spreadsheets and Access database software handle the customer relationship needs of companies like FXCM?
What functions do CRM systems like Salesforce provide to a company that these software packages do not?
What business benefits has the Salesforce CRM system provided to FXCM?
To Wyse Technology?

8. Case Study Questions
Salesforce.com is an example of an ASP (application service provider), which was discussed in Chapter 4.
What benefits do you see in this case for that method of providing a CRM system to a company versus installing a CRM software package?
What disadvantages might arise?
Which method would you prefer?

9. What is CRM?
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

10. Application Clusters in CRM

11. Contact and Account Management
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

12. Sales
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
CRM also provides the means to check on a customer’s account status and history before scheduling a sales call

13. Marketing and Fulfillment
CRM systems help with direct marketing campaigns by automatic such tasks as
Qualifying leads for targeted marketing
Scheduling and tracking mailings
Capturing and managing responses
Analyzing the business value of the campaign
Fulfilling responses and requests

14. Customer Service and Support
A CRM system gives service reps real-time access to the same database used by sales and marketing
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
Web-based self-service enables customers to access personalized support information

15. Retention and Loyalty Programs
It costs 6 times more to sell to a new customer
An unhappy customer will tell 8-10 others
Boosting customer retention by 5 percent can boost profits by 85 percent
The odds of selling to an existing customer are 50 percent; a new one 15 percent
About 70 percent of customers will do business with the company again if a problem is quickly taken care of

16. Retention and Loyalty Programs
Enhancing and optimizing customer retention and loyalty is a primary objective of CRM
Identify, reward, and market to the most loyal and profitable customers
Evaluate targeted marketing and relationship programs

17. The Three Phases of CRM

18. Benefits of CRM 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

19. CRM Failures Business benefits of CRM are not guaranteed
50 percent of CRM projects did not produce promised results
20 percent damaged customer relationships
Reasons for failure
Lack of understanding and preparation
Not solving business process problems first
No participation on part of business stakeholders involved

20. Trends in CRM Operational CRM
Supports customer interaction with greater convenience through a variety of channels
Synchronizes customer interactions consistently across all channels
Makes the company easier to do business with

21. Trends in CRM Analytical CRM
Extracts in-depth customer history, preferences, and profitability from databases
Allows prediction of customer value and behavior
Allows forecast of demand
Helps tailor information and offers to customer needs

22. Trends in CRM Collaborative CRM
Easy collaboration with customers, suppliers, and partners
Improves efficiency and integration throughout supply chain
Greater responsiveness to customer needs through outside sourcing of products and services

23. Trends in CRM Portal-based CRM
Provides users with tools and information that fit their needs
Empowers employees to respond to customer demands more quickly
Helps reps become truly customer-faced
Provides instant access to all internal and external customer information

24. ERP: The Business Backbone
ERP is a cross-functional enterprise backbone that integrates and automates processes within
Manufacturing
Logistics
Distribution
Accounting
Finance
Human resources

25. Case 2: Business Value of ERP
Autosystems produces headlamps for major automobile manufacturers
Until a few years ago, the manufacturing process was managed with paper documents
An ERP system was installed, but did not extend to the shop floor
Significant research was done before deciding to add the shop floor reporting module

26. Case 2: Business Value of ERP
Installing PCs and ERP software on the shop floor allows Autosystems to
Enter timely, accurate information
Plan more efficiently
Make production changes in order to avoid labor or scrap problems
Discuss these issues with employees while they are still current and meaningful

27. Case Study Questions
Why did Autosystems decide to install the ActivEntry system?
Why did they feel it necessary to integrate it with their TRANS4M ERP system?
Which three business benefits of the use of ActivEntry provided the most business value?
What changes are already being planned to improve the use of ActivEntry?
What other improvements should the company consider?

28. What is ERP?
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

29. ERP Application Components

30. ERP Process and Information Flows

31. Benefits and Challenges of ERP
ERP Business Benefits
Quality and efficiency
Decreased costs
Decision support
Enterprise agility
ERP Costs
Risks and costs are considerable
Hardware and software are a small part of total costs
Failure can cripple or kill a business

32. Costs of Implementing a New ERP

33. Causes of ERP Failures Most common causes of ERP failure
Under-estimating the complexity of planning, development, training
Failure to involve affected employees in planning and development
Trying to do too much too fast
Insufficient training
Insufficient data conversion and testing
Over-reliance on ERP vendor or consultants

34. Trends in ERP

35. Supply Chain Management (SCM)
Fundamentally, supply chain management helps a company
Get the right products
To the right place
At the right time
In the proper quantity
At an acceptable cost

36. Goals of SCM The goal of SCM is to efficiently Forecast demand
Control inventory
Enhance relationships with customers, suppliers, distributors, and others
Receive feedback on the status of every link in the supply chain

37. Case 3: Applying Lean Logistics to SCM
The Tesco supermarket chain is a pioneer in retailing
Used SCM to overcome disadvantage of weak supplier leverage and expensive logistics
Changed product distribution methods to reduce labor costs and inventory levels
Got suppliers to ship in smaller quantities, preconfigured for sales display
Reduced total product “touches” from 150 to 50
Reduced throughput time from 20 days to 5

38. Case Study Questions
What key insights of Tesco’s SCM direction Graham Booth helped revolutionize Tesco’s supply chain and range of retail store formats?
Can these insights be applied to any kind of retail business?
How did Dan Jones and the Cardiff Business School of Wales demonstrate the inefficiencies of the Tesco and Britvic supply chains?
Can this methodology be applied to the supply chain of any kind of business?

39. Case Study Questions
What are the major business and competitive benefits gained by Tesco as the result of its supply chain initiatives?
Can other retail chains and retail stores achieve some or all of the same results?
Defend your position with examples of actual retail chains and stores you know.

40. What is a Supply Chain? 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

41. Supply Chain Life Cycle

42. Electronic Data Interchange
EDI
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

43. Typical EDI Activities

44. Roles and Activities of SCM in Business

45. Planning & Execution Functions of SCM
Supply chain design
Collaborative demand and supply planning
Execution
Materials management
Collaborative manufacturing
Collaborative fulfillment
Supply chain event management
Supply chain performance management

46. Benefits and Challenges 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

47. Goals and Objectives of SCM

48. Benefits and Challenges of SCM
Key Challenges
Lack of demand planning knowledge, tools, and guidelines
Inaccurate data provided by other information systems
Lack of collaboration among marketing, production, and inventory management
SCM tools are immature, incomplete, and hard to implement

49. Trends in SCM

50. Case 4: Consequences of ERP Failure
The goal Agilent Technologies Inc. specializes in measurement and technology
Its goal is to enable customers to speed their time to market
Achieve volume production
Obtain high-quality precision manufacturing
Consequences of a new ERP system
One year to stabilize system
$105 million in lost revenue
$70 million in lost profits

51. Case 4: Consequences of ERP Failure
Lessons Learned
Disruptions can be more extensive than expected
Enterprise resource planning is very complex
ERP implementations are more than software
People, process, policies, the company’s culture should all be taken into consideration
According to Enterprise Applications Consulting
99 percent of rollout fiascoes are caused by management’s inability to spec requirements, and the implementer’s inability to implement specs

52. Case 4: Consequences of ERP Failure
Russ Berrie and Company
First ERP implementation attempt took three years and cost $10.3 million
Litigation is pending between Russ Berrie and SAP
Second attempt
Uses new applications
Is being implement department by department
Uses stand-alone systems

53. Case Study Questions
What are the main reasons companies experience failures in implementing ERP systems?
What are several key things companies should do to avoid ERP systems failures?
Why do you think ERP system in particular are often cited as examples of failures in IT systems development, implementation, or management?