1. Enterprise Resource Planning and Customer Relationship Management (ERP and CRM) Minder Chen, Ph.D. Professor of MIS Martin V. Smith School of Business and Economics CSU Channel Islands Minder.Chen@CSUCI.EDU

2. ERP & CRM - 2 © Minder Chen, 1996-2014 ERP Market http://www.forbes.com/sites/louiscolumbus/2013/05/12/2013-erp-market-share-update-sap-solidifies-market-leadership/ ERP: Enterprise Resource Planning

3. ERP & CRM - 3 © Minder Chen, 1996-2014 Major Global Software Firms Source: http://www.forbes.com/global2000/list/Source: http://www.forbes.com/global2000/list/ under software and programming

4. ERP & CRM - 4 © Minder Chen, 1996-2014 ERP Systems Major investment –Cost between $50,000 and $100,000,000+ Variety of business justifications –Replace legacy systems –Reduce cycle times –Lower operating costs –Enables better management decisions »Real-time »On-line

5. ERP & CRM - 5 © Minder Chen, 1996-2014 What is ERP? Enterprise-wide application packages Manage business processes/functions via various modules –Supply chain, receiving, inventory, customer orders, production planning, shipping, accounting, HR Allow automation and integration of business processes Enable data and information sharing Incorporate and implement “best practices”

6. ERP & CRM - 6 © Minder Chen, 1996-2014 Evolution of ERP 1960s: software packages with inventory control 1970s: MRP systems –Production schedule with materials management 1980s: MRPII systems –Adds financial accounting system 1990s: MRPII –Integrated systems for manufacturing execution Late 1990s: ERP –Integrated manufacturing with supply chain Late 1990s and 200X: SCM & CRM

7. ERP & CRM - 7 © Minder Chen, 1996-2014 Major Vendors SAP –SAP Business One http://en.wikipedia.org/wiki/SAP_Business_One http://en.wikipedia.org/wiki/SAP_Business_One –http://www.sap.com/solutions/business-suite/erp/demos/index.epxhttp://www.sap.com/solutions/business-suite/erp/demos/index.epx Oracle e-Business Suite –PeopleSoft Microsoft –Microsoft Dynamics http://www.microsoft.com/dynamics/default.mspx http://www.microsoft.com/dynamics/default.mspx –http://www.microsoft.com/dynamics/product/experience.mspx#EWChttp://www.microsoft.com/dynamics/product/experience.mspx#EWC –http://www.microsoft.com/dynamics/ax/product/demos.mspxhttp://www.microsoft.com/dynamics/ax/product/demos.mspx http://en.wikipedia.org/wiki/List_of_ERP_vendors

8. ERP & CRM - 8 © Minder Chen, 1996-2014 Other Vendors (II) QAD: Providing innovative enterprise software and services for global manufacturers –http://www.qad.com/erp/http://www.qad.com/erp/ Salesforce.com for CRM –Software as a service (SaaS)  Cloud computing –http://www.salesforce.comhttp://www.salesforce.com NetSuite – http://www.netsuite.com/portal/home.shtmlhttp://www.netsuite.com/portal/home.shtml –http://www.netsuite.com/portal/resource/edemo_main.shtmlhttp://www.netsuite.com/portal/resource/edemo_main.shtml QuickBooks –http://quickbooks.intuit.com/index.jsphttp://quickbooks.intuit.com/index.jsp Microsoft Accounting Express –http://office.microsoft.com/en-us/accountingexpress/default.aspxhttp://office.microsoft.com/en-us/accountingexpress/default.aspx

9. ERP & CRM - 9 © Minder Chen, 1996-2014 Anatomy of an Enterprise System Harvard Business Review article: "Putting the enterprise into the Enterprise System" by Thomas H. Davenport

10. ERP & CRM - 10 © Minder Chen, 1996-2014 Integrated Systems Approach Common set of applications/modules Overcomes inefficiencies of independent systems Integrated data supports multiple business functions Limit your customization –Easier upgrades Consider reengineering business processes according to ERP package’s underlying business model (reference model / blueprint) –Better alignment, best practices, less customization

11. ERP & CRM - 11 © Minder Chen, 1996-2014 / Web-enabled architecture

12. ERP & CRM - 12 © Minder Chen, 1996-2014 R Procurement Tasks Materials Planning Invoice Verification Internal and External Accounting Sales and Distribution Master Data Material Batches Vendors G/L accounts Storage bins Goods Receipt Transfer Posting Goods Issue Invoice Receipt Inventory Management Internal Procurement Production External Procurement Purchasing

13. ERP & CRM - 13 © Minder Chen, 1996-2014 ERP: Business Processes Overview SOP: Sales & Operations Planning; MPS: Master Production Schedule http://134.198.33.115/sap/1000.htm

14. ERP & CRM - 14 © Minder Chen, 1996-2014 MRP Information Flow Demand Management (MPS) MRP Bill of Materials (BOM) Purchase Requisition Outstanding Purchase Orders Stock (Inventory) Sales Planning & Forecasting LT: Lead Time

15. ERP & CRM - 15 © Minder Chen, 1996-2014 R/3 Logistics Process Flow SAP R/3 Typical Business Blueprint

16. ERP & CRM - 16 © Minder Chen, 1996-2014 Commercial Application Package’s Implementation Strategy Commercial application package – a software application that can be purchased and customized to meet the business requirements of a large number of organizations or a specific industry. A synonym is commercial off-the- shelf (COTS) system. –Request for proposal (RFP) – a formal document that communicates business, technical, and support requirements for an application software package to vendors that may wish to compete for the sale of that application package and services. –Request for quotation (RFQ) – a formal document that communicates business, technical, and support requirements for an application software package to a single vendor that has been determined as being able to supply that application package and services. –Gap analysis – a comparison of business and technical requirements for a commercial application package against the capabilities and features of a specific commercial application package for the purpose of defining the requirements that cannot be met. Source: Preparing and Evaluating A Request for Proposals: How to Select a Vendor (link)link

17. ERP & CRM - 17 © Minder Chen, 1996-2014 Gap Analysis and Strategies to Reduce Gaps Redesign the firm’s business processes Define business requirements and the firm’s processes / procedures / business rules Conduct detailed gap analysis & Determine ways to reduce the gap Assess and explore ERP Packages’ functionality & its underlying Reference Model Customize the package Gap Analysis Big gap Develop a custom- built solution Select the best fit ERP package Small gap AS-IS vs.TO-BE Assume the selected ERP package has the best practices Consider costs of customization and future upgrades

18. ERP & CRM - 18 © Minder Chen, 1996-2014 The Flow of Your Implementation Process Define project scope & organization Install software Define & build technical infrastructures Train project team Perform fit/gap analysis Build and test prototypes Convert data Develop interfaces Perform testing Go live Support system after conversion Evolve system Tune system performance Create end-user procedures documentation & training This process assumes that a software package has been selected.

19. ERP & CRM - 19 © Minder Chen, 1996-2014 Why Do ERP Projects Often Fail? Under-estimate the complexity of planning, development, and training for ERP implementation. Fail to involve affected employees in planning and implementation Try to do too much too fast Provide insufficient training for ERP users Do not conduct sufficient data conversation and testing Rely too much on ERP vendors or consultants (you cannot outsource your problems away) http://ramialsindi.wordpress.com/2011/10/24/week-10-enterprise-resource-planning/

20. ERP & CRM - 20 © Minder Chen, 1996-2014 Implementation Success Factors Understand your business objectives Assemble a dedicated project team with the appropriate skills Recognize and capitalize on re-engineering opportunities Leverage the experience of others and follow a proven formula Understand the system’s capabilities Explore new technology solutions Execute your implementation in phases Customize by prototyping Maintain a close relationship with your vendors

21. ERP & CRM - 21 © Minder Chen, 1996-2014 ERP Benefits Framework Source: Shari Shang & Peter Seddon, Assessing and managing the benefits of enterprise systems: the business manager’s Perspective, Info Systems Journal, (2002) 12, pp. 271–299 at http://cba.uah.edu/guptaj/m680/erpbenefits.pdfhttp://cba.uah.edu/guptaj/m680/erpbenefits.pdf

22. ERP & CRM - 22 © Minder Chen, 1996-2014 Benefits Achieved by Organizations Improved financial management Faster, more accurate transactions Improved inventory & asset mgt Ease of expansion & increased flexibility Cycle time reduction Improved customer service Headcount reduction Improved logistics Increased revenue Better managerial decision making

23. ERP & CRM - 23 © Minder Chen, 1996-2014 Maximizing Benefits from Enterprise Systems Evolving Functionality Sophisticated Knowledge Application Infrastructure Packaged Software Features Operational Benefits Managerial Benefits Strategic Benefits IT infrastructure Benefits Organizational Benefits Distinctive Characteristics of Packaged Enterprise Application Software (PEAS) Evolutionary Spiral of PEAS & Process Change and Management Initiatives Net Benefits from ES Use Use ES to Generate Benefits Monitor Changing Conditions & Reevaluate Benefits Initiatives to Manage the Distinctive Characteristics of the PEA Software Another cycle of ES Exploration, Redesign and Use Changes to Process Assess and Explore Processes Agree on Redesigned Processes Assess and Explore PEAS Changes to PEAS Achieving Fit between PEAS and Business needs Source: Shari Shang and Peter Seddon

24. ERP & CRM - 24 © Minder Chen, 1996-2014 When, in the years after "go live", are net benefits realized? One of the most consistent findings reported in the literature is that there is a dip in organizational performance in the six to twelve months after " go live ". Design Stabilization Continuous Improvement Transformation Source: Ross & Vitale (1998) A possible explanation for the above pattern is organizational learning, the time taken for people in the organization to really understand their role in the new processes. Low employee morale due to extra work, mismatched processes, data errors and change pressures Under Promise and over Deliver

25. ERP & CRM - 25 © Minder Chen, 1996-2014 Why Do Problems Occur after "Go Live"? Factors that might explain why problems occur after go live (packages or websites): 1.Poor project management including poor decisions regarding requirements and design specifications during the implementation project 2.Inappropriate software choice and configuration, resulting in poor fit 3.Lack of business and technical knowledge on part of implementation team and users 4.Lack of testing before “go live” 5.Poor change management The star witness  HealthCare.Gov went live Oct. 1, 2013

26. ERP & CRM - 26 © Minder Chen, 1996-2014 Customer Relationship Management (CRM) “The purpose of a business is to get and keep customers. ”* - Peter Drucker *Source: http://www.forbes.com/sites/petercohan/2012/10/01/four-ways-start-ups-can-get-and-keep-customers/print/ Watch https://www.salesforce.com/form/conf/crm-sales-indexpage-demo.jsphttps://www.salesforce.com/form/conf/crm-sales-indexpage-demo.jsp

27. ERP & CRM - 27 © Minder Chen, 1996-2014 Customer Relationship Management (CRM) The measures an organization takes to –Identify, –Select, –Acquire, –Work with, –Retain –Grow its customers Companies spend two to 20 times as much finding new customers as they do keeping old ones.

28. ERP & CRM - 28 © Minder Chen, 1996-2014 Customer Relationship in Business Model Canvas Source: Steve Blank, The Startup Owners Manual. http://www.businessmodelgeneration.com/canvas

29. ERP & CRM - 29 © Minder Chen, 1996-2014 Objectives of CRM The right offer (products or services) To the right person (target marketing) At the right time (spacing outbound calls) Through the right channel (direct vs. channel) Via appropriate media (phone, email, Web)

30. ERP & CRM - 30 © Minder Chen, 1996-2014 Customer Management Activities Touch Points Moments of Truth (MOT)

31. ERP & CRM - 31 © Minder Chen, 1996-2014 Highest Level Business Flow Source: Oracle. http://barnraisersllc.com/2012/06/21-experts-define-crm-words-pictures/

32. ERP & CRM - 32 © Minder Chen, 1996-2014 Get, Keep, and Grow Customers Source: Steve Blank, The Startup Owners Manual.

33. ERP & CRM - 33 © Minder Chen, 1996-2014 Complexity of CRM Source: http://barnraisersllc.com/2012/06/21-experts-define-crm-words-pictures/ /service

34. ERP & CRM - 34 © Minder Chen, 1996-2014 CRM Architecture Collaborative CRM Operational CRMAnalytical CRM ODS: Operational Data Stores

35. ERP & CRM - 35 © Minder Chen, 1996-2014 Source: http://www.sugarforge.org/screenshots/screenshot.php/6/1861/fullsize/Accounts.jpghttp://www.sugarforge.org/screenshots/screenshot.php/6/1861/fullsize/Accounts.jpg An Open Source CRM Solution

36. ERP & CRM - 36 © Minder Chen, 1996-2014 http://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpg

37. ERP & CRM - 37 © Minder Chen, 1996-2014 Salesforce.Com Example Advertise your business on Google Take five minutes to write your ad and select a couple keywords—even target your ad locally. People click on your ad When people search on Google, your ad is displayed and traffic is driven to your site. Convert leads into customers Update deal information, track opportunity milestones, and record all opportunity-related interactions. Capture leads from your Web site Prospects fill out a Web form, which creates a lead in Salesforce that is routed to your sales team. Manage customer relationships Acquire deep knowledge of every account, facilitate collaboration, and build and maintain strong, lasting customer relationships. Manage the follow-up process Log calls, send emails, and update the status of your leads so that you never miss an opportunity.

38. Month-to-Date TrendingClosed Business by MonthTop Sales RepsTop 10 Deals PresentationProposalNegotiationWon Yes No Open Opportunities You can monitor your opportunities reports and dashboards to keep track of your top deals and prioritize your time. Customize Salesforce to fit your internal sales methodologies and processes, making it easier to monitor your sales pipeline. Use email marketing and call downs to re-market to your archived opportunities. Keep an archive of your dead opportunities. Salesforce gives your entire company a 360-degree view of your customers and facilitates collaboration across your organization, helping you build strong, lasting customer relationships. Sales Support Marketing New Customers Close More Deals Close deals faster by providing a single place for updating deal information, tracking opportunity milestones, and recording interactions. Easily analyze your sales pipeline so you can quickly identify and eliminate any bottlenecks in the sales cycle.

39. ERP & CRM - 39 © Minder Chen, 1996-2014 Trading Partners Suppliers Distributors Business Partners E-Business Integration Imperatives Heterogeneous Platforms ERP Application Packages Proprietary Applications Legacy Applications Consumers REQUIREMENTS Standards based integration Configurable across applications Business process oriented Loosely coupled Supports an incremental approach Scaleable, available, secure, manageable B2B Integration EAI B2C Internet / Virtual Private Network SouthWest.com Dollars.com

40. ERP & CRM - 40 © Minder Chen, 1996-2014 ERP-CRM-SCM Implementation Software Package (proprietary or open source) Hosting Solution (SaaS) Custom-built Development Teams/Staffing In-house staff Outsourcing firms: –Systems integrator/IT consulting firm (onsite vs. offsite) –Offshoring: SI firms outside US (e.g., Tata Consultancy Services, Wipro, Infosys) –BPO (Business Process Outsourcing) vs. ITO

41. ERP & CRM - 41 © Minder Chen, 1996-2014 Backup Slides

42. ERP & CRM - 42 © Minder Chen, 1996-2014 A Taxonomy for System Development Methodologies & Strategies

43. ERP & CRM - 43 © Minder Chen, 1996-2014 Sucessive Platforms for Enterprise Applications Source: IDC, at http://resources.idgenterprise.com/original/AST-0104779_IDC_SAP_and_the_transition_to_the_3rd_platform_for_enterprise_applicatio_.pdf http://resources.idgenterprise.com/original/AST-0104779_IDC_SAP_and_the_transition_to_the_3rd_platform_for_enterprise_applicatio_.pdf

44. ERP & CRM - 44 © Minder Chen, 1996-2014 http://www.flickr.com/photos/softwareinsider/10670994216/sizes/o/in/photostream/

45. ERP & CRM - 45 © Minder Chen, 1996-2014 Commercial Application Package Implementation Strategy

46. ERP & CRM - 46 © Minder Chen, 1996-2014

47. ERP & CRM - 47 © Minder Chen, 1996-2014 Social Media CRM "Companies have departments dedicated to surfing the Internet and making sure their brands are protected," says Sherry. Many firms have separate Twitter handles for help, such as @ComcastCares, @DeltaAssist, and @Zappos_Service. AT&T invites consumers to use Facebook and Twitter to reach the company, calling the service " social media customer care."

48. ERP & CRM - 48 © Minder Chen, 1996-2014 Customer Management Activities