Ex Ch 12 Cross-Functional Processes
MIS 301 Introduction to IT Management
Lizhen Xu
IROM Department McCombs School of Business
Ch Ex 12: Learning Objectives
Customer Relationship Management (CRM) Systems Enterprise Resource Planning (ERP) Systems Enterprise Application Integration (EAI) Systems
Problems of Functional Processes
May lead to Islands of Automation, or Functional Silos In company silos, systems are
segregated in functional areas
Name from grain silos
Problems of Functional Processes
Cross-Functional Systems and Value Chain
Cross-functional systems designed to overcome problems in functional systems
Customer Relationship Management
Customer relationship management systems (CRM)
Integrate all primary business activities Make organization customer-centric Manage Customer Life Cycle
Customer Life Cycle
captured in CRM System
Figure CE10-2
Customer Life Cycle
Customer life cycles
Marketing sends messages to target market Prospects order and need to be supported Support and resale increases value to existing customers Win-back processes categorize customers according to value
CRM Components
Figure CE10-3
Components of CRM System
Related Information systems: email; general online advertising; organizations Web site Solicitation on Web site: cost effective
Components of CRM System
Lead-tracking
Presale applications turn prospects into customers Is particularly important when multiple salespeople call on the same customer
Components of CRM System
CRM and Value Chain
CRM Systems Integrate Primary Value Chain Activities
Integrated Customer Database
Data stored in a single database CRM processes can be linked to one another
Enterprise Resource Planning (ERP)
MRP C MRP II C ERP
Materials Requirements Planning Manufacturing Resource Planning Enterprise Resource Planning
Primary ERP users are manufacturing companies Support all of the primary business processes & human resources and accounting support processes Enterprise-wide Cross-departmental process systems
ERP Systems Cross Value Chain
ERP Characteristics
A collection of interrelated activities
Based on documented, tested business models Organizations must adapt to blueprint ERP application: Comprehensive set of inherent processes for all business activities (Process blueprint)
ERP Characteristics
Inherent Processes
Example SAP of R/3 Ordering Process
Benefits and Disadvantages of Inherent Processes
Business applications
Processes for using software inherent
Integrate activities across departments
Benefits
Saves time Saves money Reduces design process problems
Disadvantages
Organizations must conform activities to processes
May have to change substantially
Homogeny across competitors all have access to the same applications and processes
ERP Implementation
Figure CE12-9
Benefits & Problems of ERP
Benefits
Processes effective and efficient Organizations do not need to reinvent processes No data inconsistency problem Lower costs
Problems
Costly; Change is challenging
Challenges: Organizational Change
Change is challenging
Blend of business, engineering, sociology, psychology
No major software implementation is really about the software. Its about change management. (Nestles)
Challenges: Organizational Change
Employee resistance
Need to understand rationale for new system Fear of unknown Bosses behavior and communication important Not only did workers not understand how to use the new system, they didnt even understand the new processes. Nobody wanted to learn the new way of doing things. (Nestles)
Enterprise Application Integration (EAI) Systems
Poor mans ERP ? Solves problems of isolated systems Provides layers of software that connect applications together Leverages existing systems
Leaves existing applications as is Provides integrated information
Enables gradual move to ERP No centralized database
Files of metadata describing where data is kept (translator)
EAI Architecture
No centralized EAI database Provide a virtual integrated database: Files of metadata describing where data kept
Example : Convert Different data formats
EAI program makes conversion
Benefits of EAI
Less costly Less disruptive Allow stepwise implementation process Ideally suited to SOA (Service-oriented Architecture)
Implement EAI Systems
Identify sources of major isolation problems Specify the scope of the EAI implementation Develop and implement selected EAI systems Assess the benefits of EAI Decide:
Stop further EAI development; Expand EAI efforts; Switch to ERP;
For Next Class
I Read Ch Ex 13 C Read Dell Supply Chain (packet) C Revisit Microsoft in 2005 case C Work on RFID case write-up