Lecture 15chp9

8.1 © 2007 by Prentice Hall

8Chapter

Achieving Operational Achieving Operational Excellence and Customer Excellence and Customer

Intimacy: Enterprise Intimacy: Enterprise ApplicationsApplications

Achieving Operational Achieving Operational Excellence and Customer Excellence and Customer

Intimacy: Enterprise Intimacy: Enterprise ApplicationsApplications


STUDENT OBJECTIVES

Essentials of Business Information SystemsEssentials of Business Information SystemsChapter 8 Achieving Operational Excellence and CustomerChapter 8 Achieving Operational Excellence and Customer

Intimacy: Enterprise ApplicationsIntimacy: Enterprise Applications

• Enterprise application

• Demonstrate how enterprise systems achieve operational excellence by integrating and coordinating diverse functions and business processes in the firm.

• Demonstrate how supply chain management systems coordinate planning, production, and logistics with suppliers.


STUDENT OBJECTIVES

• Demonstrate how customer relationship management systems achieve customer intimacy by integrating all customer information and making it available throughout the firm.

• Assess the challenges and new opportunities raised by enterprise applications.




Enterprise application

• Enterprise systemsEnterprise systems

• Supply chain managementSupply chain management

• CRMCRM


Why we need enterprise Why we need enterprise systemssystems

• How does a business manage all the How does a business manage all the information needs from different information needs from different functional areas functional areas

• Serving different managerial Serving different managerial requirements? requirements?

• Let’s find out.Let’s find out.


Problems that give rise to Problems that give rise to ERSERS• Run a business based on information from Run a business based on information from

tens of different databases and systems tens of different databases and systems none of which speak to each other.none of which speak to each other.

• Company I0 different product Company I0 different product lines ,produced in separate factories, don’t lines ,produced in separate factories, don’t exchange information.exchange information.

• No business can afford disjointed information No business can afford disjointed information systems that don’t work together tosystems that don’t work together to

• produce a coherent picture of the entire produce a coherent picture of the entire organization.organization.


What Are enterprise What Are enterprise applicationsapplications

• Business need enterprise systems to Business need enterprise systems to integrate information.integrate information.

• Enterprise applications easily Enterprise applications easily combine internal and external combine internal and external information to present a complete information to present a complete picture of the business.picture of the business.


Enterprise Systems

• What Are Enterprise Systems?• Based on integrated software modules and a common

central database• Integrate information from across company’s

divisions, departments, key business processes in the four functional areas

• Updated information made available to all business processes

• Generate enterprise-wide data for management analyses




Enterprise Systems



Figure 8-1

Enterprise systems feature a set of integrated software modules and a central database that enables data to be shared by many different business processes and functional areas throughout the enterprise

How Enterprise Systems WorkHow Enterprise Systems Work


How enterprise system workHow enterprise system workexampleexample• Place order for tire rimsPlace order for tire rims

• Verifies customers credit limitVerifies customers credit limit• Schedules the shipment, identifies the best shipping route Schedules the shipment, identifies the best shipping route

and reserves the item from inventory.and reserves the item from inventory.• If inventory stocks insufficient to fill order, system orders If inventory stocks insufficient to fill order, system orders

from suppliers.from suppliers.• Sales and production forecast are immediately updatedSales and production forecast are immediately updated• General ledger and cash levels are automatically updatedGeneral ledger and cash levels are automatically updated• User could tap into the system to find the status of the User could tap into the system to find the status of the

order, at any min.order, at any min.• Management could obtain info about how business Management could obtain info about how business

operatingoperating• Generate enterprise wide data for management analyses of Generate enterprise wide data for management analyses of

product cost and profitability.product cost and profitability.


Enterprise software Enterprise software

– Built around thousands of predefined business Built around thousands of predefined business processes that reflect best practices .(Refer to next processes that reflect best practices .(Refer to next slide.)slide.)

– Companies map business processes to enterprise Companies map business processes to enterprise softwares predefined processes for desired softwares predefined processes for desired functions functions

– System software can be rewritten in part, but may System software can be rewritten in part, but may degrade performance and process integration degrade performance and process integration

– For maximum benefit company must change its For maximum benefit company must change its working to business processes in software.working to business processes in software.


Business processes supported Business processes supported by enterprise systemsby enterprise systems

– Financial and accounting: General ledger, Financial and accounting: General ledger, accounts payable, cost-center accounting, accounts payable, cost-center accounting, financial reporting, etc. financial reporting, etc.

– Human resources: Personnel administration, Human resources: Personnel administration, benefits accounting, time management, benefits accounting, time management, compensation, etc. compensation, etc.

– Manufacturing and production: Procurement, Manufacturing and production: Procurement, inventory management, purchasing, shipping, inventory management, purchasing, shipping, quality control, etc. quality control, etc.

– Sales and marketing: Order processing, Sales and marketing: Order processing, quotations, product configuration, billing, credit quotations, product configuration, billing, credit checking, sales planning, etc. checking, sales planning, etc.


Business Value of Enterprise Business Value of Enterprise SystemsSystems• Increase operational efficiencyIncrease operational efficiency• Support decision making and rapid responses to Support decision making and rapid responses to

requestsrequests• Include analytical tools to evaluate overall Include analytical tools to evaluate overall

performanceperformance• Respond rapidly to customer request for Respond rapidly to customer request for

information or products.information or products.• Enforcing standard practices and data throughout Enforcing standard practices and data throughout

company company • Providing firm-wide information to help managers Providing firm-wide information to help managers

make better decisions make better decisions


Business Value of Enterprise Business Value of Enterprise SystemsSystems

• Allowing senior management to easily find Allowing senior management to easily find out at any moment how a particular out at any moment how a particular organizational unit is performing organizational unit is performing

• determine which products are most or determine which products are most or least profitableleast profitable

• For e.g. Coca cola uses enterprise systems For e.g. Coca cola uses enterprise systems to standardize and coordinate important to standardize and coordinate important business processes in 200 countries.business processes in 200 countries.




The Supply ChainThe Supply Chain

• A network of organizations and processes

• for procuring raw materials,

• transforming them into products,

• and distributing the products

• Upstream supply chain: firm’s suppliers, suppliers’ suppliers, processes for managing relationships with them

• Downstream supply chain: organizations and processes responsible for delivering products to customers

Supply Chain Management Systems




Nike’s Supply ChainNike’s Supply Chain


Figure 8-2

This figure illustrates the major entities in Nike’s supply chain and the flow of information upstream and downstream to coordinate the activities involved in buying, making, and moving a product. Shown here is a simplified supply chain, with the upstream portion focusing only on the suppliers for sneakers(tier1) and sneaker soles(tier2),supplier to these suppliers(tier3).


Supply Chain Management Supply Chain Management SystemsSystems

• Automate the flow of information Automate the flow of information among members of the supply chainamong members of the supply chain

• Help make better decisions about Help make better decisions about when and how much to when and how much to purchase ,produce or ship.purchase ,produce or ship.


• Match supply to demand

• Reduce inventory levels

• Improve delivery service

• Speed product time to market

• Use assets more effectively

• Reduced supply chain costs lead to increased profitability

• Increased sales

Business Value of Supply Chain Management SystemsBusiness Value of Supply Chain Management Systems





What Is Customer Relationship Management?What Is Customer Relationship Management?

Capture, consolidate, analyze customer data and distribute results to various systems and customer touch points (contact points) across enterprise

Provide single enterprise view of customers

Provide analytical tools for determining value, loyalty, profitability of customers

Assist in acquiring new customers, providing better service and support to customers, customize offerings to customer preferences, provide ongoing value to retain profitable customers

Customer Relationship Management Systems




Customer Relationship Management (CRM)Customer Relationship Management (CRM)

CRM systems examine customers from a multifaceted perspective. These systems use a set of integrated applications to address all aspects of the customer relationship, including customer service, sales, and marketing.





CRM SoftwareCRM Software

• CRM packages are available with a wide spectrum of functions

• Typically include tools for sales, customer service, and marketing





Business Value of Customer Relationship ManagementBusiness Value of Customer Relationship Management• Business benefits:

• Increased customer satisfaction

• Reduced direct-marketing costs

• More effective marketing

• Lower costs for customer acquisition/retention

• Increased sales revenue

• By identifying profitable customers and segments for focused marketing and cross-selling

• Reduced churn rate (number of customers who stop using or purchasing products or services)





Challenges posed by enterprise Challenges posed by enterprise applicationapplication

• Enterprise systems are difficult to Enterprise systems are difficult to implement.implement.

• Require extensive organizational Require extensive organizational changechange

• Large new software investmentLarge new software investment

• If implemented atop flawed processes If implemented atop flawed processes they cant provide value.they cant provide value.

• Employees require proper trainingEmployees require proper training


EXAMPLES OF enterprise EXAMPLES OF enterprise applicationapplication

• SAP business suite BASED ON SAP business suite BASED ON SERVICE ORIENTED ARCHITECTURE)SERVICE ORIENTED ARCHITECTURE)

• Oracle e business suiteOracle e business suite

• Microsoft dynamics suiteMicrosoft dynamics suite

Documents

Lecture 15chp9