Enterprise Business Systems

Chapter 5 Enterprise Business Systems

1/11/2012

Identify the following aspects of customer relationship management (CRM), enterprise resource management (ERP), and supply chain (SCM) mgt systems:
Business processes supported Customer and business value provided Potential challenges and trends

Customer Relationship Management (CRM): The Business Focus

A customer-centric focus
Customer relationships have become a companys most valued asset Every companys strategy should be to find and retain the most profitable customers possible

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Managing the full range of the customer relationship involves

Providing customer-facing employees with a single, complete view of every customer at every touch point and across all channels Providing the customer with a single, complete view of the company and its extended channels.

CRM uses IT to create a cross-functional enterprise system that integrates and automates many of the customer-serving processes

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According to one industry view, CRM consists of:

Helping an enterprise to enable its marketing departments identify and target their best customers, manage marketing campaigns with clear goals and objectives, and generate quality leads for the sales team. Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices)

Chapter 5 Enterprise Business Systems

Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service. Providing employees with the information and processes necessary to know their customers, understand their needs, and effectively build relationships between the company, its customer base, and distribution partners.

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CRM helps sales, marketing, and service professionals capture and track relevant data about
Every past and planned contact with prospects and customers Other business and life cycle events of customers

Data are captured through customer touchpoints

Telephone, fax, e-mail Websites, retail stores, kiosks Personal contact

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A CRM system provides sales reps with the tools and data resources they need to
Support and manage their sales activities Optimize cross- and up-selling

CRM also provides the means to check on a customers account status and history before scheduling a sales call.

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CRM systems help with direct marketing campaigns by automating such tasks as
Qualifying leads for targeted marketing Scheduling and tracking mailings Capturing and managing responses Analyzing the business value of the campaign Fulfilling responses and requests

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A CRM system gives service reps real-time access to the same database used by sales and marketing
Requests for service are created, assigned, and managed Call center software routes calls to agents Help desk software provides service data and suggestions for solving problems

Web-based self-service enables customers to access personalized support information

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It costs 6 times more to sell to a new customer An unhappy customer will tell 8-10 others Boosting customer retention by 5 percent can boost profits by 85 percent The odds of selling to an existing customer are 50 percent; a new one 15 percent About 70 percent of customers will do business with the company again if a problem is quickly taken care of Enhancing and optimizing customer retention and loyalty is a primary objective of CRM Identify, reward, and market to the most loyal and profitable customers Evaluate targeted marketing and relationship programs
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Benefits of CRM
Identify and target the best customers Real-time customization and personalization of products and services Track when and how a customer contacts the company Provide a consistent customer experience Provide superior service and support across all customer contact points

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Business benefits of CRM are not guaranteed

50 percent of CRM projects did not produce promised results 20 percent damaged customer relationships

Reasons for failure

Lack of understanding and preparation Not solving business process problems first No participation on part of business stakeholders involved

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Operational CRM Supports customer interaction with greater convenience through a variety of channels Synchronizes customer interactions consistently across all channels Makes the company easier to do business with Analytical CRM Extracts in-depth customer history, preferences, and profitability from databases Allows prediction of customer value and behavior Allows forecast of demand Helps tailor information and offers to customer needs
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Collaborative CRM Easy collaboration with customers, suppliers, and partners Improves efficiency and integration throughout supply chain Greater responsiveness to customer needs through outside sourcing of products and services Portal-based CRM Provides users with tools and information that fit their needs Empowers employees to respond to customer demands more quickly Helps reps become truly customer-faced Provides instant access to all internal and external customer information

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ERP is a cross-functional enterprise backbone that integrates and automates processes within
Manufacturing Logistics Distribution Accounting Finance Human resources

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Enterprise-wide system which integrates the business functions and processes of an organization Integration of business functions into one seamless application Usually runs on a RDBMS Replaces Countless Departmental and Workgroup Information Systems

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1960s: Inventory Control Systems 1970s: MRP: Material Requirement Planning 1980s: MRPII: MRP & Distribution 1990s: MRPII ERP with introduction of other business functions Extended ERP, ERP II Today: Interenterprise ERP,Web Enabled ERP Connecting ERP Externally

ERP and Business Processes

ERP and Business Processes

ERP means: ` Single customer, product and supplier data ` Information captured only once ` Visibility through the business process ` Workflow management and eventtriggered processes ` Empowered users ` Informed management decisions ` Globalisation of the business ` Rapid change capability

Difficult to build: Require fundamental changes in the way the business operates Technology: Require complex pieces of software and large investments of time, money, and expertise

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35% ERP projects are cancelled 55% overrun their budgets Less than 10% are on time and under budget Implementation averages Cost: 178% over budget Schedule: 230% longer Functionality: only 41%

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Some firms recognize benefit Standardize and improve processes Improve level of systems integration replacement of outdated legacy systems Improve IT responsiveness and information quality Customer-driven

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Where does ERP fit in a business process class? It is arguably the most common cause of process redesign in business today. But the thinking is inverted. Instead of designing a process and building the support structure including IT you start with the software and modify your processes to fit.

Fundamentally, supply chain management helps a company

Get the right products To the right place At the right time In the proper quantity At an acceptable cost

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A cross-functional interenterprise system that uses IT to help support & manage the links between some of a companys key business processes and those of its suppliers, customers, & business partners. Goal is to create a fast, efficient, & low-cost network of business relationships.

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The goal of SCM is to efficiently

Forecast demand Control inventory Enhance relationships with customers, suppliers, distributors, and others Receive feedback on the status of every link in the supply chain

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WHAT DO SUPPLY CHAIN MANAGEMENT (SCM) TOOLS DO?

 Supply
Supply Chain Management Definition

chain management tools enable managers to make informed business decisions about the operation of their supply chain

 Supply
Supply Chain Management Overview

chain management tools facilitate planning and production scheduling based on known business constraints

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The interrelationships
With suppliers, customers, distributors, and other businesses Needed to design, build, and sell a product

Each supply chain process should add value to the products or services a company produces
Frequently called a value chain

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One of the earliest uses of information technology for supply chain management The electronic exchange of business transaction documents between supply chain trading partners The almost complete automation of an ecommerce supply chain process Many transactions occur over the Internet, using secure virtual private networks

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Planning
Supply chain design Collaborative demand and supply planning

Execution
Order management Inventory Management Warehouse Management Supply chain event management Supply chain transportation management

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Supply Chain Planning Process

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Demand Planning


Network Design


Design where to place production facilities and optimize the end to end chain Construct alternate flow scenarios that incorporate associated constraints

Anticipate demand based on historical trends and current conditions Perform what if analysis - highlight the impact of changing demand drivers


Production Planning Decompose the supply plan into sub assembly / production needs by site Balance production capacity across sites

Production Scheduling


Supply Planning


Optimize processing flows, sequence, and timing Produce a finite capacity production schedule

Balances unconstrained demand against high level supply chain constraints Reflect order priority and due dates

Planning Years Horizon

Quarters

Weeks / Months

Hours / Days

Supply Chain Execution Process

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Order Management


Inventory Management


Warehouse

Transportation

Management


Management


Record customer orders and track status from receipt to final delivery Direct efficient response to orders with dynamic cost / benefit analysis of options

Streamline information movement and provide tight inventory control Inventories replenished using kanban, min-max, or reorder point

Optimization and management of warehouse processes

Optimize and track outbound and inbound shipping

Event Management
 

Monitor and manage critical planning and event information Broadcast alert notification and present response alternatives based on pre determined business rules

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Key Benefits
Faster, more accurate order processing Reductions in inventory levels Quicker times to market Lower transaction and materials costs Strategic relationships with supplier

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Key Challenges
Lack of proper demand planning knowledge, tools, and guidelines Inaccurate data provided by other information systems Lack of collaboration among marketing, production, and inventory management SCM tools are immature, incomplete, and hard to implement

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Trends

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