1. 8.1 © 2007 by Prentice Hall 5 Chapter Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

2. 8.2 © 2007 by Prentice Hall Enterprise Systems Systems That Span the Enterprise Essentials of Business Information Systems Chapter 2 E-Business: How Businesses Use Information Systems Figure 2-15 Enterprise systems integrate the key business processes of an entire firm into a single software system that enables information to flow seamlessly throughout the organization. These systems focus primarily on internal processes but may include transactions with customers and vendors.

3. 8.3 © 2007 by Prentice Hall Enterprise Applications Essentials of Business Information Systems Chapter 2 E-Business: How Businesses Use Information Systems Systems That Span the Enterprise Enterprise applications are systems that span functional areas and automate processes for multiple business functions and organizational areas; they include: 1.Enterprise systems 2.Supply chain management systems 3.Customer relationship management systems 4.Knowledge management systems

4. 8.4 © 2007 by Prentice Hall Enterprise Application Architecture Systems That Span the Enterprise Essentials of Business Information Systems Chapter 2 E-Business: How Businesses Use Information Systems Figure 2-14 Enterprise applications automate processes that span multiple business functions and organizational levels and may extend outside the organization.

5. 8.5 © 2007 by Prentice Hall Integrate data from key business processes into single system Speed communication of information throughout firm Enable greater flexibility in responding to customer requests, greater accuracy in order fulfillment Enable managers of large firms to assemble overall view of operations Alcoa used ERP to eliminate redundancies and inefficiencies in its disparate systems Enterprise Systems Essentials of Business Information Systems Chapter 2 E-Business: How Businesses Use Information Systems Systems That Span the Enterprise

6. 8.6 © 2007 by Prentice Hall Enterprise Systems Aka enterprise resource planning (ERP) systems Suite of integrated software modules and a common central database Collects data from many divisions of firm for use in nearly all of firm’s internal business activities Information entered in one process is immediately available for other processes Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

7. 8.7 © 2007 by Prentice Hall Enterprise Systems Enterprise Software The software helps the organization automate many of the steps in the best practices instead of having to do everything manually. And best of all, the software will help employees remember all of the necessary steps in a process and provide the data to all who need it. Examples. Finance/accounting: General ledger, accounts payable, etc. Human resources: Personnel administration, payroll, etc. Manufacturing/production: Purchasing, shipping, etc. Sales/marketing: Order processing, billing, sales planning. Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

8. 8.8 © 2007 by Prentice Hall Enterprise Systems Business Value of Enterprise Systems Increase operational efficiency Provide firm wide information to support decision making Enable rapid responses to customer requests for information or products Include analytical tools to evaluate overall organizational performance Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

9. 8.9 © 2007 by Prentice Hall Enterprise Systems Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Figure 8-1 Enterprise systems feature a set of integrated software modules and a central database that enables data to be shared by many different business processes and functional areas throughout the enterprise How Enterprise Systems Work

10. 8.10 © 2007 by Prentice Hall Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications The Supply Chain Network of organizations and processes for: Purchase raw materials Transforming them into products Distributing the products Upstream supply chain: Firm’s suppliers, suppliers’ suppliers, processes for managing relationships with them Downstream supply chain: Organizations and processes responsible for delivering products to customers Supply Chain Management Systems

11. 8.11 © 2007 by Prentice Hall Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Nike’s Supply Chain Supply Chain Management Systems Figure 8-2 This figure illustrates the major entities in Nike’s supply chain and the flow of information upstream and downstream to coordinate the activities involved in buying, making, and moving a product. Shown here is a simplified supply chain, with the upstream portion focusing only on the suppliers for sneakers and sneaker soles.

12. 8.12 © 2007 by Prentice Hall Supply Chain Management Applications Supply chain systems enable firms to Generate demand forecasts Develop sourcing and manufacturing plans Share information about changes and faster so work can be better coordinated Manage the flow of products through distribution centres and warehouses by Coordinate activities with supply chain partners Simplification Handle complex interdependencies among various supply chain processes Allow users to balance the costs of transportation and delivery Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Supply Chain Management Systems

13. 8.13 © 2007 by Prentice Hall Global Supply Chains and the Internet Suppliers can log on to a company’s extranet site and review next week’s production schedule. The supplier can ensure enough production supplies are delivered to a manufacturer without over- or under-extending itself. Changes to the production schedule can be communicated easier to suppliers through Internet- enabled applications. Intranets and Extranets Intranets: To improve coordination among internal supply chain processes Extranets: To improve coordinate supply chain processes shared with their business partners Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Supply Chain Management Systems

14. 8.14 © 2007 by Prentice Hall Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Intranets and Extranets for Supply Chain Management Supply Chain Management Systems Figure 8-4 Intranets integrate information from isolated business processes within the firm to help manage its internal supply chain. Access to these private intranets can also be extended to authorized suppliers, distributors, logistics services, and, sometimes, to retail customers to improve coordination of external supply chain processes.

15. 8.15 © 2007 by Prentice Hall Global Supply Chains and the Internet Global supply chain issues Global supply chains typically span greater geographic distances and time differences More complex pricing issues (local taxes, transportation, etc.) Foreign government regulations Cultural differences Internet helps companies manage many aspects of global supply chains such as Sourcing, transportation, communications, international finance Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Supply Chain Management Systems

16. 8.16 © 2007 by Prentice Hall Global Supply Chains and the Internet Supply chain management systems 1. Push-based model (build-to-stock) Schedules based on best guesses of demand 2. Pull-based model (demand-driven) Customer orders trigger events in supply chain 3. Sequential supply chains Information and materials flow sequentially from company to company 4. Concurrent supply chains Information flows in many directions simultaneously among members of a supply chain network Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Supply Chain Management Systems

17. 8.17 © 2007 by Prentice Hall Push- Versus Pull-Based Supply Chain Models Figure 8-5 The difference between push- and pull-based models is summarized by the slogan “Make what we sell, not sell what we make.” Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Supply Chain Management Systems

18. 8.18 © 2007 by Prentice Hall Match supply to demand Reduce inventory levels Improve delivery service Speed product time to market Use assets more effectively Reduced supply chain costs lead to increased profitability Increased sales Business Value of Supply Chain Management Systems Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Supply Chain Management Systems

19. 8.19 © 2007 by Prentice Hall What Is Customer Relationship Management? Knowing the customer In large businesses, too many customers and too many ways customers interact with firm Customer relationship management (CRM) systems Capture and integrate customer data from all over the organization Consolidate and analyze customer data Distribute customer information to various systems and customer touch points across enterprise Provide single enterprise view of customers Customer Relationship Management Systems Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

20. 8.20 © 2007 by Prentice Hall What Is Customer Relationship Management? The goals of CRMS are to optimize 1.Increase revenue 2.Increase profitability 3.Increase customer satisfaction 4.Increase customer retention Customer Relationship Management Systems Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

21. 8.21 © 2007 by Prentice Hall Customer Relationship Management (CRM) Figure 8-7 CRM systems examine customers from a multifaceted perspective. These systems use a set of integrated applications to address all aspects of the customer relationship, including customer service, sales, and marketing. Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Customer Relationship Management Systems

22. 8.22 © 2007 by Prentice Hall CRM Software CRM packages range from niche tools to large- scale enterprise applications 1. Partner relationship management (PRM) Integrating lead generation, pricing, promotions, order configurations, and availability Tools to assess partners’ performances 2. Employee relationship management (ERM) E.g. Setting objectives, employee performance management, performance-based compensation, employee training Customer Relationship Management Systems Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

23. 8.23 © 2007 by Prentice Hall CRM Software 3.Sales force automation: allows the sales force to focus on the most profitable customer. It also reduces the cost per sale for acquiring new customers and retaining old ones. 4.Customer service: gathers information from a variety of sources and makes it available across organizational functions so that data is input only once. 5. Marketing: Allows companies to capturing prospect and customer data, scheduling and tracking direct-marketing mailings or e-mail. Customer Relationship Management Systems Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

24. 8.24 © 2007 by Prentice Hall How CRM Systems Support Marketing Figure 8-8 Customer relationship management software provides a single point for users to manage and evaluate marketing campaigns across multiple channels, including e-mail, direct mail, telephone, the Web, and wireless messages. Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Customer Relationship Management Systems

25. 8.25 © 2007 by Prentice Hall CRM Software Capabilities Figure 8-9 The major CRM software products support business processes in sales, service, and marketing, integrating customer information from many different sources. Included are support for both the operational and analytical aspects of CRM. Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Customer Relationship Management Systems

26. 8.26 © 2007 by Prentice Hall Customer Loyalty Management Process Map Figure 8-10 This process map shows how a best practice for promoting customer loyalty through customer service would be modeled by customer relationship management software. The CRM software helps firms identify high-value customers for preferential treatment. Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Customer Relationship Management Systems

27. 8.27 © 2007 by Prentice Hall Operational CRM: Customer-facing applications such as sales force automation, call center and customer service support, and marketing automation Analytical CRM: Analyze customer data output from operational CRM applications Based on data warehouses populated by operational CRM systems and customer touch points Customer lifetime value (CLTV) Customer Relationship Management Systems Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Operational and Analytical CRM

28. 8.28 © 2007 by Prentice Hall Business Value of Customer Relationship Management Increased customer satisfaction Reduced direct-marketing costs More effective marketing Lower costs for customer acquisition/retention Increased sales revenue Customer Relationship Management Systems Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

29. 8.29 © 2007 by Prentice Hall Enterprise Application Challenges Highly expensive to purchase and implement enterprise applications – total cost may be 4 to 5 times the price of software Technology changes Business process changes Organizational changes Switching costs, dependence on software vendors Data standardization, management, cleansing Enterprise Applications: New Opportunities and Challenges Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

30. 8.30 © 2007 by Prentice Hall To bring greater value from enterprise applications Enterprise solutions : Make applications more flexible, Web-enabled, integrated with other systems Service platform: Integrates multiple applications to deliver a seamless experience for all parties Order-to-cash process Portal software Enterprise Applications: New Opportunities and Challenges Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Extending Enterprise Software

31. 8.31 © 2007 by Prentice Hall Order-to-Cash Service Figure 8-12 Order-to-cash is a composite process that integrates data from individual enterprise systems and legacy financial applications. The process must be modeled and translated into a software system using application integration tools. Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Enterprise Applications: New Opportunities and Challenges

32. 8.32 © 2007 by Prentice Hall Interactive Session: Organizations Invacare Struggles with Its Enterprise System Implementation Read the Interactive Session and then discuss the following questions: How did problems implementing the Oracle enterprise software affect Invacare’s business performance? What people, organization and technology factors affected Invacare’s ERP implementation? If you were Invacare’s management, what steps would you have taken to prevent these problems? Essentials of Business Information Systems Chapter 5 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Enterprise Systems