This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Chapter 9: Achieving Opera2onal Excellence and Customer In2macy: Enterprise Applica2ons Learning Objec2ves • Evaluate how enterprise systems help businesses achieve opera2onal excellence • Describe how supply chain management systems coordinate planning, produc2on, and logis2cs with suppliers • Explain how customer rela2onship management systems help ﬁrms achieve customer in2macy • Iden2fy the challenges posed by enterprise applica2ons Produced by Dr. Brian Janz 1 Enterprise Systems • a.k.a. enterprise resource planning (ERP) systems • Suite of integrated soLware modules and a common central database – Informa2on entered in one process is immediately available for other processes • Collects data from many divisions of ﬁrm for use in nearly all of ﬁrm’s internal business ac2vi2es How Enterprise Systems Work Produced by Dr. Brian Janz 2 Business Value of Enterprise Systems • Increase opera2onal eﬃciency • Provide ﬁrm‐wide informa2on to support decision making • Enable rapid responses to customer requests for informa2on or products • Include analy2cal tools to evaluate overall organiza2onal performance Enterprise Systems SoLware • Built around thousands of predeﬁned business processes that reﬂect best prac2ces – Finance/accoun2ng: General ledger, accounts payable, etc. – Human resources: Personnel administra2on, payroll, etc. – Manufacturing/produc2on: Purchasing, shipping, etc. – Sales/marke2ng: Order processing, billing, sales planning, etc. • To implement, ﬁrms: – Select func2ons of system they wish to use – Map business processes to soLware processes • Managerial debate: should organiza2ons map their processes to the ERP system, or vice versa? Produced by Dr. Brian Janz 3 Chapter 9: Achieving Opera2onal Excellence and Customer In2macy: Enterprise Applica2ons Part 2: Supply Chains and Supply Chain Systems The Supply Chain • Network of organiza2ons and processes for: – Procuring raw materials – Transforming them into products – Distribu2ng the products • Upstream supply chain: – Firm’s suppliers, suppliers’ suppliers, processes for managing rela2onships with them • Downstream supply chain: – Organiza2ons and processes responsible for delivering products to customers Produced by Dr. Brian Janz 4 Nike’s Supply Chain Why Informa2on and Supply Chain Management? • Ineﬃciencies cut into a company’s opera2ng costs – Can waste up to 25% of opera2ng expenses • Just‐in‐2me strategy: – Components arrive as they are needed – Finished goods shipped aLer leaving assembly line • Safety stock – Buﬀer for lack of ﬂexibility in supply chain • Bullwhip eﬀect – Informa2on about product demand gets distorted as it passes from one en2ty to next across supply chain Produced by Dr. Brian Janz 5 The Bullwhip Eﬀect Supply Chain Management Systems • Supply chain planning systems – Model exis2ng supply chain – Demand planning – Op2mize sourcing, manufacturing plans – Establish inventory levels – Iden2fying transporta2on modes • Supply chain execu2on systems – Manage ﬂow of products through distribu2on centers and warehouses Produced by Dr. Brian Janz 6 Global Supply Chains and the Internet • Before the Internet, supply chain coordina2on was hampered by diﬃcul2es of using disparate internal supply chain systems (if they existed) • Enterprise systems supply some integra2on of internal supply chain processes but not designed to deal with external supply chain processes • Intranets and Extranets – Intranets: To improve coordina2on among internal supply chain processes – Extranets: To coordinate supply chain processes shared with their business partners Intranets and Extranets for Supply Chain Management Produced by Dr. Brian Janz 7 Global Supply Chain Issues • Global supply chains typically span greater geographic distances and 2me diﬀerences • More complex pricing issues (local taxes, transporta2on, etc.) • Foreign government regula2ons • Internet helps companies manage many aspects of global supply chains – Sourcing, transporta2on, communica2ons, interna2onal ﬁnance Push‐ Versus Pull‐Based Supply Chain Models Produced by Dr. Brian Janz 8 Demand‐Driven Supply Chains • Push‐based model (build‐to‐stock) – Schedules based on best guesses of demand – Customer orders trigger events in supply chain • Pull‐based model (demand‐driven) • Sequen2al supply chains • Concurrent supply chains – Informa2on and materials ﬂow sequen2ally from company to company – Informa2on ﬂows in many direc2ons simultaneously among members of a supply chain network The Future Internet‐Driven Supply Chain Produced by Dr. Brian Janz 9 Business Value of Supply Chain Management Systems • Match supply to demand • Reduce inventory levels • Improve delivery service • Speed product 2me to market • Use assets more eﬀec2vely • Reduced supply chain costs • Increased sales Chapter 9: Achieving Opera2onal Excellence and Customer In2macy: Enterprise Applica2ons Part 3: Customer Rela2onship Management and CRM Systems Produced by Dr. Brian Janz 10 What Is Customer Rela2onship Management? • Knowing the customer – In large businesses, too many customers and too many ways customers interact with ﬁrm • Customer rela2onship management (CRM) systems – Capture and integrate customer data from all over the organiza2on – Consolidate and analyze customer data – Distribute customer informa2on to various systems and customer touch points across enterprise – Provide single enterprise view of customers Customer Rela2onship Management (CRM) Produced by Dr. Brian Janz 11 CRM SoLware Capabili2es Types of CRM Systems • Opera2onal CRM: – Customer‐facing applica2ons such as sales force automa2on, call center and customer service support, and marke2ng automa2on • Analy2cal CRM: – Analyze customer data output from opera2onal CRM applica2ons – Based on data warehouses populated by opera2onal CRM systems and customer touch points – Customer life2me value (CLTV) Produced by Dr. Brian Janz 12 Analy2cal CRM Data Warehouse Business Value of Customer Rela2onship Management • Increased customer sa2sfac2on • Reduced direct‐marke2ng costs • More eﬀec2ve marke2ng • Lower costs for customer acquisi2on/reten2on • Increased sales revenue • Reduced churn rate – 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 Produced by Dr. Brian Janz 13 Wrap‐Up: Enterprise Applica2on Challenges • Highly expensive to purchase and implement enterprise applica2ons – total cost may be 4 to 5 2mes the price of soLware • Requires fundamental changes Technology changes – Business processes changes – Organiza2onal changes • Incurs switching costs, dependence on soLware vendors • Requires data standardiza2on, management, cleansing Produced by Dr. Brian Janz 14 ...
View Full Document
This note was uploaded on 02/24/2011 for the course MIS 7650 taught by Professor Janz during the Spring '11 term at U. Memphis.
- Spring '11