ITM 209 - Exam 3

CRM Analysis Technologies

Help organizations segment their customers into categories such as best/worst customers Analyzing: customer segmentation - why did it happen?

Supply Chain Management Overview

Materials flow from suppliers and their "upstream" suppliers at all levels Transformation of materials into semi-finished and finished products through the organization's own production process Distribution of products to customers and their "downstream" customers at all levels

Benefits of CRM

Organization can find their most valuable customers through "RFM" - Recovery, Frequency, and Monetary value

Systems Development Challenges

Systems development is difficult and risky and many projects are never finished Some projects finish 200-300% over budget

The ratio of industrial robots to humans as of 2015 in the US (per 10,000 workers)?

176

Challenges of SCM

Cost Complexity

Hybrid ERP

Own components of hardware and software - host components of hardware and software with cloud vendor

Development Phase

- involves taking all of the detailed design documents from the design phase and transforming them into the actual system

What percentage of the US population were farmers in 1900?

38%

SCM Disruptive Technologies

3D Printing RFID Drones Robotics

Challenges of SCM - Cost

A SCM can cost millions for the software and millions for implementation

What is a business model?

A conceptual framework that expresses the underlying economic logic and system that prove how a business can deliver value to customers at an appropriate cost and make money

SCM Disruptive Technologies - 3D Printing

A process that builds layer-by-layer in an additive process a three-dimensional solid object from a digital model - supports procurement

Core ERP Components

Accounting and finance Production/materials management Human Resources

Cloud Rep

All hardware and software is owned and remotely hosted by the cloud vendor

Systems Development

As organization's reliance on software grows, so do the business-related consequences of software successes and failures including: increase/decrease in revenue repair/damage to the brand reputation prevent/incur liabilities increase/decrease productivity

Benefits of SCM - Execution System

Automates the different activities of the supply chain

Source - SCM Activity

Build relationships with suppliers to procure raw materials

Extended ERP Components

Business Intelligence CRM Supply Chain Management E-Business Components - E-Logistics/E-Procurement

Causes of ERP Failures

Business managers and IT professionals underestimate the complexity of the planning, development, and training needed Failure to involve affected employees in the planning/development phases Trying to do too much too fast in the conversion process Failure to do enough data conversion and testing

What has been the evolution of CRM?

CRM Reporting Technology CRM Analysis Technologies CRM Predicting Technologies

CRM Benefits

CRM allows a business to identify and target their best customers so they can be retained as lifelong customers for greater and more profitable services. CRM makes possible real-time customization and personalization of products and services based on customer wants, needs, buying habits, and life cycles. CRM can keep track of when a customer contacts the company, regardless of the contact point. CRM systems can enable a company to provide a consistent customer experience and superior service and support across all the contact points a customer chooses

Who has the world's largest manufacturing economy?

China

Denver Airport Case - how could more time spent in the analysis and design phase have saved Colorado taxpayers hundreds of millions of dollars?

Cost $1MM/day Delayed opening day by 16 months Penalty of $500MM

What is SCM effect on Porter's Five Forces?

Decrease of buyer power Decrease of threat of substitute products/services Threat of new entrants leads to an increase of supplier power

Efficient and Effective SCM can enable an organization to...

Decrease the power of its buyers Increase its own supplier power Increase switching costs to reduce the threat of substitute products/services Create entry barriers -- reducing the threat of new entrants Increase efficiencies while seeking a competitive advantage through cost leadership

Maintenance Cycle - revise the prototypes to better meet end user requirements

Design/Implementation - the business system prototypes are tested, evaluated, and modified repeatedly unit end users find them acceptable

Which is not one of the 3 D's of robotics?

Dumb Dirty/Dull/Dangerous

ERP Benefits - Enterprise Agility

ERP breaks down many former departmental and functional walls of business processes, information systems, and information resources

ERP Benefits - Quality/Efficiencey

ERP creates a framework for integrating and improving a company's internal business processes that results in significant improvements in the quality and efficiency of customer service, production, and distribution

Reasons ERP systems are powerful tools

ERP systems bring an organization together -logical solution to incompatible applications -addresses global information, sharing, and reporting -avoids the pain and expertise of fixing legacy systems -automate business processes -collect data from across an organization and correlates the data generating an enterprise wide view

Challenges of ERP

ERP systems contain multiple complex components that are not only expensive to purchase, but also expensive to implement Costs include: Software Consulting fees Hardware expenses Training fees

Planning

Establishes a high-level plan of the intended project and determines project goals

Design Phase

Establishes descriptions of the desired features and operations of the system including screen layouts, business rules, process diagrams, pseudo code, and other documentation

Extended ERP Components

Extra components that meet the organizational needs not covered by the core components and primarily focus on external operations

SCM Disruptive Technologies - Robotics

Focus on creating artificial intelligence devices that can move and react to sensory input - supports materials management

Benefits of SCM - Demand Planning System

Generates demand forecasts using statistical tools and forecasting techniques, so companies can respond faster and more effectively to consumer demands through supply chain enhancements

Core ERP Components - Production/Materials Management

Handles the various aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control

CRM Reporting Technologies

Help organizations identify their customers across other applications Reporting: customer identification - what happened?

CRM Predicting Technologies

Help organizations make predictions regarding customer behavior (i.e. which customers are at risk of leaving) Predicting: customer prediction - what will happen?

What are the benefits of SCM?

Improved Visibility - the ability to view all areas up and down the supply chain in real time Companies can respond faster and more effectively to consumer demands through supply chain enhances

Testing Phase

Involves bringing all the project pieces together into a special testing environment to eliminate errors and bugs, and verify that the system meets all of the business requirements defined in the analysis phase

Core ERP Components - Accounting/Finance

Manages accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management

Make - SCM Activity

Manufacture products and create production schedules

Operational CRM - marking/sales/customer services

Marking -- list generator, campaign management, cross-selling, and up-selling Sales -- sales management, contact management, opportunity management Customer Services -- contact center, web-based self-service, call scripting

Benefits of SCM - improved profitability

Metrics: backorder, inventory cycle time, customer order cycle time, inventory turnover

Denver Airport Case - one of the biggest problems with Denver Airport's baggage system was inadequate testing. Why is testing important to a project's success?

Not enough time to develop the system properly Central baggage handling - blind with silo'd aspects Business requirements kept changing

Website Personalization

Occurs when a website has stored enough data about a person's likes and dislikes to fashion offers more likely to appeal to that person *Analytical CRM relies heavily on data warehousing technologies and business intelligence and business analytics to glean insights into consumer behavior *These systems quickly aggregate, analyze, and disseminate customer information throughout an organization

Benefits of SCM - Bullwhip Effect

Occurs when distorted product demand information ripples from one partner to the next throughout the supply chain

ERP Implementation Choices

On-Premise Rep Cloud Rep Hybrid Rep

Dell Model Example

One of the largest direct PC manufacturers - sells directly to the customers, bypassing retailers and passes on the savings Less inventory and faster deliveries than its competitors

On-Premise Rep

Own all hardware and software, significant capital investment, and complete ownership

What are the five basic supply chain activities?

Plan Source Make Deliver Return

Deliver - SCM Activity

Plan for transportation of goods to customers

Plan - SCM Activity

Prepare to manage all resources required to meet demand

ERP Enterprise Application

Primary Users - accounting, finance, logistics, production Business Result - forecasting, planning, purchasing, material management, warehousing, inventory, and distribution

SCM Enterprise Application

Primary Users - customers, resellers, partners, suppliers, distributors Business Result - market demand, resource and capacity constraints, real-time scheduling

CRM Enterprise Application

Primary Users - sales, marketing, customer service Business Result - sales forecasts, sales strategies, marketing campaigns

What does a CRM provide?

Provides customer-facing employees with a single, complete view of every customer at every touch point Provides customers with a single complete company view Integrates and automates many customer processes Creates an IT framework of web-enabled software and databases that integrates front office with back offices Includes many software modules and tool

ERP Benefits - Decision Support

Provides vital cross-functional information on business performance quickly to managers to significantly improve their ability to make better decisions in a timely manner

ERP Benefits

Quality and Efficiency Decreased Costs Decision Support Enterprise Agility

ERP Implementation Costs

Reengineering - 43% Data Conversions - 15% Training/Change Management - 15% Software - 15% Hardware - 12%

How does FANUC use analytics?

Reporting Market Forecasting Robot Programming Robot Maintenance

Enterprise Resource Planning

Services as a cross-functional enterprise backbone that integrates and automates many internal business processes and information systems Helps companies gain the efficiency, agility, and responsiveness needed to succeed today Gives a company an integrated real-time view of its core business processes ERP software consists of many integrated modules and relies upon a common database management system

Denver Airport Case - evaluate the different systems development methodologies. Which one would have most significantly increased the chances of the project's success?

Should the waterfall method have been used? No - success rate is 10%

ERP Benefits - Decreased Costs

Significant reductions in transaction processing costs, supply chain costs, inventory, and IT costs

ERP Risks

Software cost, consulting fees, process rework, customization, integration/testing, training, and data warehouse integration/data conversion

What does a business model specify/focus?

Specifies what value to offer customers and which customers to provide this value to using certain products/services at prices Specifies how the business will organize/operate Focuses attention on how all the essential components fit into a complete system

Extending CRM - current trends

Supplier relationship mgt Partner relationship mgt Employee relationship mgt Supplier, Partner, Employee

What are the three primary enterprise systems? (integration tools)

Supply Chain Management Customer Relationship Mgt Enterprise Resource Planning

Extended supply chain

Supply chain event mgt Selling chain mgt Collaborative engineering Collaborative demand planning Business analytics

Return - SCM Activity

Support customers and product returns

Analytical CRM

Supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customer Examples: (back office) data warehouse and data mining

Operational CRM

Supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customer

Challenges of CRM

The customer is always right and now has more power than ever thanks to the Internet Lack of understanding/preparation Rely on CRM to solve business problem without first developing the business process changes and change management programs that are required CRM projects implemented without the participation of the business stakeholders involved

Software problems are business problems

The later in the SDLC the problem is found, the more money it is to fix

What is SCM?

The management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability

Customer Service and Operational CRM

Three customer service operational CRM technologies - common features: automatic call distribution, interactive voice response, predictive dialing Contact Center (call center) Web-based self-service system Call scripting system

Core ERP Components - Human Resources

Tracks employee information including payroll, benefits, compensation, performance assessment, and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities

Core ERP Component

Traditional components included in most ERP systems and they primarily focus on internal operations

SCM Disruptive Technologies - Drones

Unmanned aircraft that can fly autonomously - supports logistics

Primary reasons for project failure

Unclear/missing business requirements Skipping SDLC phases Failure to manage project scope (scope creep and feature creep) Failure to manage project plan Changing technology

Benefits of SCM - Planning System

Uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory

SCM Disruptive Technologies - RFID

Uses electronic tags and labels to identify objects wirelessly over short distances - supports logistics

Integration/Testing

ensuring all software products, including disparate systems into part of the ERP system, are working together or are integrated. Testing the ERP system includes testing all integrations

Consulting fees

hiring exernal experts to help implement the system correctly

Customization

if the software packwage does not meet all of the company's needs, it may be required to customize the software

What is ERP?

integrates all departments and functions throughout an organization into a single IT system (integrated set of IT systems) so that employees can make enterprise wide decisions by viewing enterprise wide information on all business operations

Analysis Phase

involves analyzing end-user business requirements and refining project goals into defined functions and operations of the intended system Business requirement --> detailed set of business requests that the system must meet in order to be successful

What is CRM?

involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability

Maintenance Phase

involves performing changes, corrections, additions, and upgrades to ensure the system continues to meet the business goals

Implementation Phase

involves placing the system into production so users can begin to perform actual business operations with it

Data Warehouse Integration and Data Conversion

moving data from an old system into the new ERP system

Software cost

purchasing the software

Process rework

redefining processes in order to ensure the company is using the most efficient and effective processes

FANUC has been referred to in the press as...

the Microsoft of Machine Tools

Challenges of SCM - Complexity

the move towards globalization is increasing complexity in the supply chain

Systems Development Life Cycle (SDLC)

the overall process for developing information systems from planning and analysis through implementation and maintenance Planning - analysis - design - development - testing - implementation - maintenance

Sales and Operational CRM

the sales department was the first to begin developing CRM systems with sales force automation -- a system that automatically tracks all of the steps in the sales process *Sales Management CRM System *Contact Management CRM System *Opportunity Management CRM System

Training

training all new users