ISDS Chapter 9 & 10

Enterprise Application Challenges

-Highly expensive to purchase and implement enterprise applications -- Average cost of ERP system is over $7 million -- Average completion time is over 17 months • Deep-seated technology changes and fundamental changed in the way a business operates. • Business process changes • Organizational learning, changes • Switching costs, dependence on software vendors • Data standardization, management, cleansing

Analytical CRM

-Includes applications that analyze customer data generated by operational CRM applications to provide information for improving business performance. -based from data from operational CRM systems, customer touch points, and other sources that have been organized in data warehouses or analytic platforms for use in online analytical processing (OLAP), data mining, and other data techniques. -- Customer lifetime value (CLTV) is based on the relationship between the revenue produced by a specific customer, the expenses incurred in acquiring and servicing that customer, and the excepted life of the relationship between the customer and company.

Supply Chain Planning Systems

-software to help businesses plan their supply chains. -enables the firm to model its existing supply chain, generates demand forecasts for products, and develop optimize sourcing and manufacturing plans -help companies to make better decision such as: - determining how much of a specific product to manufacture in a given time period - establishing inventory levels for raw materials, intermediate products and finished goods - determining where to store finished goods - identifying the transportation mode to use for product delivery. One of the most important and complex supply chain planning functions is demand planning. Which determines how much product a business needs to make to satisfy all its customer demands. JDA Software, SAP, and Oracle all offer SC management solutions.

Supply Chain Management Software

2 types: supply chain planning or supply chain executive

Pull-based model

AKA demand driven or build-to-order model, actual customer orders or purchases trigger events in the supply chain. Transactions to produce and deliver only what customer have ordered move up the supply chain from retailers to distributors to manufactures and eventually to suppliers. Internet and internet technologies help businesses move from sequential supply chains to concurrent supply chains

Enterprise Systems

Also called "enterprise resource planning (ERP) systems" • Are based on a suite of integrated software modules and a common central database. • The database collects data from many divisions and departments in a firm and from a large number of key business processes for use in nearly all of firm's internal business activities. ( includes finance and accounting, sales and marketing, Human resources, and manufacturing & production. • Information created by one process is immediately available for other processes

Enterprise Software

Built around thousands of predefined business processes that reflect best practices • 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, etc.

Business Value of Customer Relationship Management

Business benefits: • Increased customer satisfaction • Reduced direct-marketing costs • More effective marketing • Lower costs for customer acquisition/retention • Increased sales revenue Churn rate: • Number of customers who stop using or purchasing products or services from a company • Indicator of growth or decline of firm's customer base -Customer churn is reduced as sales, services, and marketing respond better to customer needs.

Business Value of Supply Chain Management Systems

By implementing a networked and integrated supply chain management system, companies match supply to demand, reduce inventory levels, improve delivery service, speed product time to market, and use assets more effectively, reduced supply chain costs that increase profitability, and increase sales. • Total supply chain costs can be 75% of operating budget so reduced supply chain costs lead to increased profitability.

Customer Relationship Management Software

CRM packages range from niche tools that perform limited functions to large-scale enterprise applications • More comprehensive CRM have modules for: -- Partner relationship management (PRM) - uses many of the same data, tools, systems as CRM to enhance collaboration between a company and its selling parents. • provides a company and its selling partners with the ability to trade information and distribute leads and data about customers, integrating lead generation, pricing, promotions, order configurations, and availability • Tools to assess partners' performances --Employee relationship management (ERM) •deals with employee issues that are closely related to CRM such as setting objectives, employee performance management, performance-based compensation, employee training

Business Value of Enterprise Systems

Enterprise Systems provide value by: • Increase operational efficiency • Standardize and coordinate business processes • 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

Global Supply Chain Issues

Global SC typically span greater geographical distances and time differences than domestic SC and have participants from a number of different countries. Performance standards may vary form region to region or nation to nation. SC management may need to reflect foreign government regulations and cultural differences. Internet helps companies manage many aspects of their global supply chains, including sourcing, transportations, communications, and international finance. Globalization has encouraged outsourcing warehouse management, transportation management, and related operations to third-party logistics providers. These logistics services offer web based software to give their customers a better view of their global supply chain.

Information Systems and Supply Chain Management

Inefficiencies cut into a company's operating costs • Can waste up to 25% of operating expenses Just-in-time strategy: • Components arrive as they are needed • Finished goods shipped after leaving assembly line Safety stock • Buffer for lack of flexibility in supply chain • Bullwhip effect • Information about product demand gets distorted as it passes from one entity to next across supply chain is tamed by reducing uncertainties about demand and supply when all members of the supply chain have accurate and up-to-date information.

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 --Touch point-aka contact point- is a method of interaction with the customer, such as telephone, email, customer service desk, conventional mail, Facebook, Twitter, website, wireless device, or retail store. • Well designed CRM systems provide single enterprise view of customers that is useful for improving both sales and customer service.

Supply Chain Execution Systems

Manage flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner. - they track the physical status of goods, the management of materials, warehouse and transportation operations, and financial information involving all parties. Ex. Warehouse Management System (WMS) that Haworth Incorporated uses.

The Supply Chain

Network of organizations and processes for: • Procuring raw materials • Transforming them into products • Distributing the products Links suppliers, manufacturing plants, distribution center, retail outlets and customers to supply goods and services through consumption. 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 Internal supply chain- transforming materials, components, and services their suppliers finish products or intermediate products for their customers and for managing materials and inventory.

Push-based model

Production master schedules are based on forecasts or best guesses of demand for products, and products are pushed to customers. More easier to follow

CRM packages typically include tools for:

Sales Force Automation (SFA) -help sales staff increase productivity by focusing sales efforts on the most profitable customers, those who are good candidate for sales and services -Sales prospect and contact information, sales quote generation capabilities Customer Service - provide information and tools to increase the efficiency of call centers, help desks, and customer support staff -Assigning and managing customer service requests -may also include web-based self-service capabilities Marketing -supports direct-marketing campaigns by providing capturing prospect and customer data, scheduling and tracking direct-marketing mailings or e-mail. - also include tools for analyzing marketing and customer data, identifying profitable and unprofitable customers, designing products and services to satisfy specific customers needs and interest, and identifying opportunities for cross-selling. --Cross-selling- is the marketing of complementary products to customers.

Next-Generation Enterprise Applications

To bring greater value from enterprise applications: • Enterprise solutions/suites: make applications more flexible, Web-enabled, integrated with other systems -Major enterprise software vendors have created what they called enterprise solutions, enterprise suites, or e-business suites to make their CRM, SCM, and, ERP systems work closely with each other and link to systems of customers and suppliers. Ex. SAP Business Suites, Oracle E-Business Suite, and Microsoft Dynamics Suite. • Inclusion of SOA standards to link to 3rd party software. Ex Oracle Fusion middleware products. • Open-source applications • Cloud-based, on-demand solution -- global market leader Salesforce.com Social CRM- enable a business to connect customer conversations and relationships from social networking to CRM processes. • Incorporating social networking technologies • Company social networks • Customer interaction via Facebook- much faster to provide customer service. • E.g. Buzzient platform integrates social media with enterprise applications Business Intelligence • Inclusion of BI with enterprise applications to help mangers obtain more meaningful information from the massive amounts of data. • Flexible reporting, ad hoc analysis, "what-if" scenarios, digital dashboards, data visualization

Implement Enterprise Software

To implement enterprise software, firms: • First select functions of system they wish to use • Then map their business processes to the predefined business process in the software. • Use softwares' configuration tables for customizing. Configuration tables provided by the software manufacturer enable the firm to tailor a particular aspect of the system to the way it does business. If software does not support business processes • Businesses can rewrite some of the software to support the way their business processors work. However, enterprise system is unusually complex, and extensive customization may degrade system performance, compromising the information and process integration that are the main benefits if the system. If the companies want to reap the maximum benefits from enterprise software, they must change the way they work to conform to the business process defined by the software. Leading enterprise software vendors include: SAP, Oracle, IBM, Infor Global Solutions, and Microsoft.

Operational CRM

• Customer-facing applications such as sales force automation, call center and customer service support, and marketing automation