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11.1 © 2006 by Prentice Hall
11Chapter
Enterprise Applications Enterprise Applications and Business Process and Business Process
IntegrationIntegration
Enterprise Applications Enterprise Applications and Business Process and Business Process
IntegrationIntegration
11.2 © 2006 by Prentice Hall
• Assess how enterprise systems provide value for businesses and describe how they work
• Assess how supply chain management systems provide value for businesses and describe how they work
• Assess how customer relationship management systems provide value for businesses and describe how they work
Management Information SystemsManagement Information SystemsChapter 11 Chapter 11 Enterprise Applications and Business Process Enterprise Applications and Business Process
Integration Integration
OBJECTIVES
11.3 © 2006 by Prentice Hall
• Explain how enterprise applications can be used
in platforms for new cross-functional services
• Identify the challenges posed by enterprise
applications and management solutions
OBJECTIVES (Continued)
Management Information SystemsManagement Information SystemsChapter 11 Chapter 11 Enterprise Applications and Business Process Enterprise Applications and Business Process
Integration Integration
11.4 © 2006 by Prentice Hall
• Challenge: develop a single view of corporate and private banking customers; overcome historic segmentation of customers by product and location
• Solutions: develop a customer relationship management system (CRM) and data warehouse to integrate customer data from diverse legacy systems
• Enable a single view of corporate customers• Illustrates the role of enterprise systems in developing
a holistic view of customers and achieving higher customer loyalty and profitability
Management Information SystemsManagement Information SystemsChapter 11 Chapter 11 Enterprise Applications and Business Process Enterprise Applications and Business Process
Integration Integration
PNC Bank CasePNC Bank Case
11.5 © 2006 by Prentice Hall
How Enterprise Systems Work
ENTERPRISE SYSTEMS
• Enterprise Resource Planning (ERP) systems
• Interdependent software modules with a common central database that support basic internal business processes for finance and accounting, human resources, manufacturing and production, and sales and marketing
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Enterprise Systems:
11.6 © 2006 by Prentice Hall
What Are Enterprise Systems? What Are Enterprise Systems?
ENTERPRISE SYSTEMS
Enterprise System Architecture
Figure 11-1
Management Information SystemsManagement Information SystemsChapter 11 Chapter 11 Enterprise Applications and Business Process Enterprise Applications and Business Process
Integration Integration
11.7 © 2006 by Prentice Hall
ENTERPRISE SYSTEMS
• Enables data to be used by multiple functions and
business processes for precise organizational
coordination and control.
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
How Enterprise Systems Work (Continued)
Enterprise Systems: (Continued)
11.8 © 2006 by Prentice Hall
Process Map for Procuring New Equipment
ENTERPRISE SYSTEMS
Figure 11-2
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.9 © 2006 by Prentice Hall
• A more uniform organization
• More efficient operations and customer-driven business processes
• Firmwide information for improved decision making
Business Value of Enterprise Systems
ENTERPRISE SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.10 © 2006 by Prentice Hall
• Company can use enterprise system to support organizational structures that were not previously possible or to create a more disciplined organizational Culture.
• Example: use ER to create a more disciplined organizational culture across geographic or business unit
A more uniform organization
ENTERPRISE SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.11 © 2006 by Prentice Hall
• ER can help create the foundation for a more customer-driven organization. By integrating discrete business processes in sales, production, finance, and logistics, the entire organization more efficiently respond to customer requests for products or information, forecast new products, and build and deliver them as demand requires,
More efficient operations and customer-driven business processes
ENTERPRISE SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.12 © 2006 by Prentice Hall
• ER create a single, integrated repository of data for the entire firm, The data have common, standardized definitions and formats that are accepted by the entire organization.
• ER software includes analytical tools for using data captured by the system to evaluate overall organizational performance.
Firmwide information for improved decision making
ENTERPRISE SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.13 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
• Network of organizations and business processes for procuring raw materials, transforming into products, and distributing them to customers
• Materials, information, and payments flow through the supply chain in both directions.
The Supply Chain The Supply Chain
Supply chain:
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.14 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
• Coordination of business processes to speed
information, product, and fund flows up and
down a supply chain to reduce time, redundant
effort, and inventory costs
Supply chain management:
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
The Supply Chain (Continued)The Supply Chain (Continued)
11.15 © 2006 by Prentice Hall
A Supply Chain
SUPPLY CHAIN MANAGEMENT SYSTEMS
Figure 11-3
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.16 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
• Plan: Balancing demand and supply to meet sourcing, production, and delivery requirements
• Source: Procurement of goods and services needed to create a product or service
Supply Chain Processes Supply Chain Processes
SCOR (Chain Operations Reference Model) identifies five major supply chain processes:
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.17 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
• Make: Processes that transform a product into a finished state
• Deliver: Processes to manage order transportation and distribution
• Return: Processes associated with product returns and post delivery customer support
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Supply Chain Processes (Continued)
11.18 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
• Planning and control of all factors that have an
impact on the supply chain
Logistics:
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Supply Chain Processes (Continued)Supply Chain Processes (Continued)
11.19 © 2006 by Prentice Hall
Key Supply Chain Management Processes
SUPPLY CHAIN MANAGEMENT SYSTEMS
Figure 11-4
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.20 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
• Scheduling system for minimizing inventory by
having components arrive exactly at the moment
they are needed and finished goods shipped as
soon as they leave the assembly line
Just-in-time strategy :
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Information and Supply Chain Management
Inaccurate or untimely information causes inefficiencies in supply chain, such as shortages, excessive inventory
11.21 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
• Distortion of information about the demand for a
product as it passes from one entity to the next
across the supply chain
Bullwhip effect:
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Information and Supply Chain Management (Continued)
11.22 © 2006 by Prentice Hall
The Bullwhip Effect
SUPPLY CHAIN MANAGEMENT SYSTEMS
Figure 11-5
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.23 © 2006 by Prentice Hall
Supply chain management systems: Automate flow of information between company and supply chain partners
SUPPLY CHAIN MANAGEMENT SYSTEMS
Supply Chain Management Applications Supply Chain Management Applications
Supply chain planning systems: Generate demand forecasts for a product (demand planning) and help develop sourcing and manufacturing plans for that product
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.24 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
Supply chain execution systems:
• Manage the flow of products through distribution
centers and warehouses to ensure that products
are delivered to the right locations in the most
efficient manner
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Supply Chain Management Applications (Continued)
11.25 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
Metrics for measuring supply chain performance:
Supply Chain Performance Measurement Supply Chain Performance Measurement
• Fill rate (the ability to fill orders by the due date)
• Average time from order to delivery
• The number of days of supply in inventory
• Forecast accuracy
• The cycle time for sourcing and making a product
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.26 © 2006 by Prentice Hall
Supply Chain Management and the Internet Supply Chain Management and the Internet Intranets and Extranets for Supply Chain Management
SUPPLY CHAIN MANAGEMENT SYSTEMS
Figure 11-6
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.27 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
Internet-based supply chain management applications: Internet-based supply chain management applications:
• Provide standard set of tools
• Facilitate global supply chains
• Reduce costs
• Enable efficient customer response
• Allow concurrent supply chains
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.28 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
Push-based model:
• Production master schedules based on forecasts
of demand for products, and products are
“pushed” to customers (build-to-stock)
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Pull-based model:
• Supply chain driven by actual customer orders or
purchases (build-to-order)
11.29 © 2006 by Prentice Hall
Push- versus Pull-Based Supply Chain Models
SUPPLY CHAIN MANAGEMENT SYSTEMS
Figure 11-7
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.30 © 2006 by Prentice Hall
The Future Internet-Driven Supply Chain
SUPPLY CHAIN MANAGEMENT SYSTEMS
Figure 11-8
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.31 © 2006 by Prentice Hall
SUPPLY CHAIN MANAGEMENT SYSTEMS
Business Value of Supply Chain Management Systems
• Improved customer service and responsiveness
• Cost reduction
• Cash utilization
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.32 © 2006 by Prentice Hall
Customer Relationship Management and Partner Customer Relationship Management and Partner Relationship Management Relationship Management
Customer Relationship Management (CRM):
• Business and technology discipline for managing
customer relationships to optimize revenue,
profitability, customer satisfaction, and customer
retention
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.33 © 2006 by Prentice Hall
• CRM helps organization identify customers whose cost little to attract and to keep and who provide the greatest revenues for every marketing or customer service dollar spent.
• The good customers represent about 80-90 percent of a company’s profits, but the represent only 10 to 20 percent of the company’s customer bas.
• CRM focuses on ways of retaining profitable customers and maximizing lifetime revenue from them.
11.34 © 2006 by Prentice Hall
Partner Relationship Management (PRM):
• Automation of the firm’s relationships with its selling
partners using customer data and analytical tools to
improve coordination and customer sales
• It provides a firm with tools to assess its partners’
performance so it can make sure its best partners
receive the support they need to close more
business.
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.35 © 2006 by Prentice Hall
Customer Relationship Management Applications Customer Relationship Management Applications
CRM systems:
• Capture and integrate customer data from all over the organization
• Consolidate and analyze the data
• Distribute results to various systems and customer touch points across the enterprise
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.36 © 2006 by Prentice Hall
Touch point:
• A method of interaction with a customer, such as
telephone, e-mail, customer service desk,
conventional mail, Web site, or retail store
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Customer Relationship Management Applications Customer Relationship Management Applications (Continued)(Continued)
11.37 © 2006 by Prentice Hall
• CRM systems can provide a single enterprise view of customers that can be used for improving both sales and customer service. it can provide customers with a single view of the company regardless of what touch point the customer uses.
11.38 © 2006 by Prentice Hall
Customer Relationship Management (CRM) Software Customer Relationship Management (CRM) Software
• Can range from niche tools to large-scale enterprise
applications
• Can link to other major enterprise applications, such
as supply chain management
• Can include modules for partner relationship
management (PRM) and employee relationship
management (ERM)
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.39 © 2006 by Prentice Hall
o Sales Force Automation (SFA)
o Customer service
o Marketing
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
• Typically include capabilities for
Customer Relationship Management (CRM) Software (Continued)
11.40 © 2006 by Prentice Hall
• Sales force automation (SFA): SAF modules in CRM systems help sales staff increase their productivity by focusing sales efforts on the most profitable customers, those who are good candidates for sales and services.
• It provide sales prospect and contact information, product configuration capabilities, and sales quote generation capabilities.
11.41 © 2006 by Prentice Hall
o Customer service: in this modules provide information and tools to make call centers, help desk, and customer support staff more efficient. they have capabilities for assigning and managing customer service request.
11.42 © 2006 by Prentice Hall
• Marketing: CRM systems support direct-marketing campaigns by providing capabilities for:
• capturing prospect and customer data
• providing product and service information,
• qualifying leads for targeted marketing, and
• scheduling and tracking direct-marking mailings or e-mail.
11.43 © 2006 by Prentice HallFigure 11-9
CRM Software Capabilities
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.44 © 2006 by Prentice Hall
Customer Loyalty Management Process Map
Figure 11-10
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.45 © 2006 by Prentice Hall
Operational and Analytical CRM Operational and Analytical CRM
Operational CRM:
• Customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation
• Examples: Campaign management, e-marketing, account and contact management, lead management, telemarketing, teleselling, e-selling, field sales
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.46 © 2006 by Prentice Hall
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Analytical CRM:
• Applications that analyze customer data generated by operational CRM applications to provide information for improving business performance
• Examples: Develop customer segmentation strategies and customer profiles; analyze customer or product profitability; identify trends in sales length cycle; analyze leads generated and conversion rates
11.47 © 2006 by Prentice Hall
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Analytical CRM Data Warehouse
Figure 11-11
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.48 © 2006 by Prentice Hall
Business Value of Customer Relationship Business Value of Customer Relationship Management Systems Management Systems
• Increased customer satisfaction
• More effective marketing and reduced direct marketing costs
• Lower costs for customer acquisition and retention
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.49 © 2006 by Prentice Hall
Reduce churn rate:
• Increased revenue from identifying most profitable customers and segments for marketing, cross-selling, up-selling
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
• Number of customers who stop using or purchasing products or services from a company
Business Value of Customer Relationship Management Systems (Continued)
11.50 © 2006 by Prentice Hall
The Importance of CRM Performance Measurement
Metrics for CRM may include:
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Successful CRM implementations require that financial and operation goals, and metric for evaluation, are clearly defined at outset of project
• Cost per lead
• Cost per sale
11.51 © 2006 by Prentice Hall
CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
• Number of repeat customers
• Reduction of churn
• Sales closing rate
• Customer Lifetime Value (CLTV): Difference between revenues and expenses minus the cost of promotional marketing used to retain an account
The Importance of CRM Performance Measurement The Importance of CRM Performance Measurement (Continued)(Continued)
11.52 © 2006 by Prentice Hall
Service Platforms and Business Process Management Service Platforms and Business Process Management
Service Platform:
• Integration of multiple applications from multiple
business functions, business units, or business
partners to deliver a seamless experience for the
customer, employee, manager, or business
partner
ENTERPRISE INTEGRATION TRENDS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.53 © 2006 by Prentice Hall
Business Process Management:
• A methodology for dealing with the organization’s
need to change its business processes continually
to remain competitive
• Portals: Frameworks for building composite
services, integrating information form enterprise
applications and in-house legacy systems
ENTERPRISE INTEGRATION TRENDS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.54 © 2006 by Prentice Hall
Order-to-Cash Service
ENTERPRISE INTEGRATION TRENDS
Figure 11-12
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
11.55 © 2006 by Prentice Hall
• Improvement of process coordination and
management decision making
• Reductions in inventory costs, order-to-delivery time,
and more efficient customer response and higher
product and customer profitability
MANAGEMENT OPPORTUNITIES, CHALLENGES AND SOLUTIONS
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Management Opportunities:
11.56 © 2006 by Prentice Hall
• High total cost of ownership
• Organizational change requirements
• Realizing strategic value
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Management Challenges:
MANAGEMENT OPPORTUNITIES, CHALLENGES AND SOLUTIONS
11.57 © 2006 by Prentice Hall
• Look at business objectives first
• Attention to data and data management
• Senior management commitment and employee support
• Education and training
Management Information SystemsManagement Information SystemsChapter 11 Enterprise Applications and Business Process Chapter 11 Enterprise Applications and Business Process
Integration Integration
Solution Guidelines:
MANAGEMENT OPPORTUNITIES, CHALLENGES AND SOLUTIONS