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Chapter

6

Enterprise e-Business Systems

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Learning Objectives

Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource management, and supply chain management systems:Business processes supportedCustomer and business value providedPotential challenges and trends

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Section I

Customer Relationship Management: The Business Focus

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Customer Relationship Management

Provides customer-facing employees with a single, complete view of every customer at every touch point and across all channels

Provides the customer with a single, complete view of the company and its extended channels

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Customer Relationship Management (continued)

CRM..Integrates and automates many of the

customer serving processes

Creates an IT framework of Web-enabled software & databases that integrates these processes with the rest of the company’s business operations

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Customer Relationship Management (continued)

Includes software modules that provide tools that enable a business & its employees to provide fast, convenient, dependable, consistent service.

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Customer Relationship Management (continued)

Major Application Components

Contact & Account ManagementHelps capture and track relevant data

about past and planned contacts with prospects & customers.

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Customer Relationship Management (continued)

SalesProvides sales reps with software tools &

company data needed to support & manage their sales activities.

Helps optimize cross-selling & up-selling

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Customer Relationship Management (continued)

Marketing & FulfillmentHelps accomplish direct marketing

campaigns by automating tasksHelps capture & manage prospect &

customer response dataHelps in fulfillment by quickly scheduling

sales contacts & providing appropriate information on products & services to them

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Customer Relationship Management (continued)

Customer Service and SupportProvides software tools & real-time access

to the common customer databaseHelps create, assign, & manage requests

for service from customersCall center softwareHelp desk software

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Customer Relationship Management (continued)

Retention and Loyalty Programs

Helps the company identify, reward, and market to their most loyal and profitable customers

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Customer Relationship Management (continued)

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Customer Relationship Management (continued)

Three Phases of CRM

Acquire (new customers)By doing a superior job of contact

management, sales prospecting, selling, direct marketing, & fulfillment.

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Customer Relationship Management (continued)

Enhance (customer satisfaction)By supporting superior service from a

responsive networked team of sales and service specialists.

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Customer Relationship Management (continued)

Retain (your customers)Help identify and reward your most loyal,

profitable customers.

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Customer Relationship Management (continued)

Benefits and ChallengesAllows a business to identify its best

customersMakes possible real-time customization &

personalization of products & services based on customer wants, needs, buying habits, & life cycles

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Customer Relationship Management (continued)

Benefits and Challenges (continued)Enables a company to provide a consistent

customer service experience

FailuresDue to lack of understanding & preparation.CRM is not a silver bullet

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Customer Relationship Management (continued)

TrendsOperational CRMAnalytical CRMCollaborative CRMPortal-based CRM

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Section II

Enterprise Resource Planning: The Business Backbone

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Enterprise Resource Planning

Serves as a cross-functional enterprise backbone that integrates & automates many internal business processes and information systems

Helps companies gain the efficiency, agility, & responsiveness needed to succeed today

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Enterprise Resource Planning (continued)

Gives a company an integrated real-time view of its core business processes

ERP software suites typically consist of integrated modules of…ManufacturingDistributionSalesAccountingHuman Resource Management

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Enterprise Resource Planning (continued)

Benefits and ChallengesQuality and efficiency

Helps improve the quality and efficiency of customer service, production, & distribution by creating a framework for integrating and improving internal business processes

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Enterprise Resource Planning (continued)

Decreased CostsReductions in transaction processing costs

and hardware, software, and IT support staff

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Enterprise Resource Planning (continued)

Decision supportProvides cross-functional information on

business performance to assist managers in making better decisions

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Enterprise Resource Planning (continued)

Enterprise agilityResults in more flexible organizational

structures, managerial responsibilities, and work roles

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Enterprise Resource Planning (continued)

Costs of ERPThe costs and risks of failure in

implementing a new ERP system are substantial.

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Enterprise Resource Planning (continued)

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Enterprise Resource Planning (continued)

Causes of ERP failuresUnderestimating the complexity of the

planning, development, and training required

Failure to involve affected employees in the planning & development phases and change management programs

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Enterprise Resource Planning (continued)

Trying to do too much, too fast

Insufficient training

Believing everything the software vendors and/or consultants say

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Enterprise Resource Planning (continued)

TrendsFlexible ERPWeb-enabled ERPInterenterprise ERPE-Business Suites

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Section III

Supply Chain Management: The Business Network

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Supply Chain Management

A cross-functional interenterprise system that uses IT to help support & manage the links between some of a company’s 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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Supply Chain Management (continued)

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Supply Chain Management (continued)

Electronic data interchangeExchanging business transaction

documents over the Internet & other networks between supply chain trading partners

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Supply Chain Management (continued)

The Role of SCM

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Supply Chain Management (continued)

Benefits and ChallengesCan provide faster, more accurate order

processing, reductions in inventory levels, quicker time to market, lower transaction and materials costs, & strategic relationships with suppliers

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Supply Chain Management (continued)

Problem causesLack of proper demand planning

knowledge, tools, and guidelinesInaccurate or overoptimistic demand

forecastsInaccurate production, inventory, and other

business dataLack of adequate collaboration

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Supply Chain Management (continued)

Trends

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Discussion Questions

Should a company become a customer-focused business?

Why would systems that enhance a company’s relationships with customers have such a high rate of failure?

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Discussion Questions (continued)

How could some of the spectacular failures of ERP systems have been avoided?

Should companies continue to use EDI systems?

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Discussion Questions (continued)

How can the problem of overenthusiastic demand forecasts in supply chain planning be avoided?

What challenges do you see for a company that wants to implement collaborative SCM systems?

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Discussion Questions (continued)

Should companies install e-business software suites or “best of breed” e-business software components?

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Real World Case 1 – Mitsubishi Motor Sales

What are the key application components of Mitsubishi’s CRM system?

What is the business use of each of those components?

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Real World Case 1 (continued)

What are the benefits to a business and its customers of a CRM system like Mitsubishi’s?

Do you approve of Mitsubishi’s approach to acquiring and installing its CRM system?

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Real World Case 1 (continued)

Why have many CRM systems failed to provide promised benefits like those generated by Mitsubishi’s system?

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Real World Case 2 – Agilent Technologies & Russ Berrie

What are the main reasons companies experience failures in implementing ERP systems?

What are several key things companies should do to avoid ERP systems failures?

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Real World Case 2 (continued)

Why do you think ERP systems in particular are often cited as examples of failures in IT systems development, implementation, or management?

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Real World Case 2 (continued)

What do you think caused the major failure of Agilent’s ERP implementation?

Why do you think they did not act to avoid the reasons you specified?

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Real World Case 3 – TaylorMade Golf & HON Industries

How could moving business information systems with suppliers and distributors to the Web result in such dramatic business benefits as experienced by TaylorMade Golf?

How does HON Industries’ new SCM system improve the efficiency of their supply chain?

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Real World Case 3 (continued)

What other SCM initiatives would you recommend that TaylorMade or HON Industries implement to improve their supply chain performance and business value?

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Real World Case 3 (continued)

What are several ways a small business could use supply chain management to improve the efficiency and business value of their supply chain?

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Real World Case 4 – H-P, Eastman Chemical, & Others

Why can both large and small businesses cut costs and increase revenues by moving their supply chains online?

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Real World Case 4 (continued)

What is the business value to Eastman Chemical and W.W. Grainger of their initiatives to help their suppliers and customers do business online?

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Real World Case 4 (continued)

Why are many small suppliers reluctant to do business online with their large customers?

What can be done to encourage small suppliers to get online?

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Real World Case 5 – Wal-Mart & Mattel

Do you agree that Wal-Mart is “the best supply chain operator of all time”?

Why or why not?

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Real World Case 5 (continued)

What has Mattel learned from Wal-Mart?

How well are they applying it to their own business?

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Real World Case 5 (continued)

What can other businesses learn from the experiences of Wal-Mart and Mattel that could improve their supply chain performance?