1
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Chapter
6
Enterprise e-Business Systems
2
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
3
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Section I
Customer Relationship Management: The Business Focus
4
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
5
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
6
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Customer Relationship Management (continued)
Includes software modules that provide tools that enable a business & its employees to provide fast, convenient, dependable, consistent service.
7
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Customer Relationship Management (continued)
Major Application Components
Contact & Account ManagementHelps capture and track relevant data
about past and planned contacts with prospects & customers.
8
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
9
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
10
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
11
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Customer Relationship Management (continued)
Retention and Loyalty Programs
Helps the company identify, reward, and market to their most loyal and profitable customers
12
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Customer Relationship Management (continued)
13
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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.
14
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Customer Relationship Management (continued)
Enhance (customer satisfaction)By supporting superior service from a
responsive networked team of sales and service specialists.
15
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Customer Relationship Management (continued)
Retain (your customers)Help identify and reward your most loyal,
profitable customers.
16
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
17
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
18
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Customer Relationship Management (continued)
TrendsOperational CRMAnalytical CRMCollaborative CRMPortal-based CRM
19
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Section II
Enterprise Resource Planning: The Business Backbone
20
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
21
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
22
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
23
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Enterprise Resource Planning (continued)
Decreased CostsReductions in transaction processing costs
and hardware, software, and IT support staff
24
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Enterprise Resource Planning (continued)
Decision supportProvides cross-functional information on
business performance to assist managers in making better decisions
25
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Enterprise Resource Planning (continued)
Enterprise agilityResults in more flexible organizational
structures, managerial responsibilities, and work roles
26
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Enterprise Resource Planning (continued)
Costs of ERPThe costs and risks of failure in
implementing a new ERP system are substantial.
27
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Enterprise Resource Planning (continued)
28
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
29
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Enterprise Resource Planning (continued)
Trying to do too much, too fast
Insufficient training
Believing everything the software vendors and/or consultants say
30
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Enterprise Resource Planning (continued)
TrendsFlexible ERPWeb-enabled ERPInterenterprise ERPE-Business Suites
31
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Section III
Supply Chain Management: The Business Network
32
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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.
33
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Supply Chain Management (continued)
34
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Supply Chain Management (continued)
Electronic data interchangeExchanging business transaction
documents over the Internet & other networks between supply chain trading partners
35
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Supply Chain Management (continued)
The Role of SCM
36
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
37
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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
38
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Supply Chain Management (continued)
Trends
39
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
40
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Discussion Questions (continued)
How could some of the spectacular failures of ERP systems have been avoided?
Should companies continue to use EDI systems?
41
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
42
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Discussion Questions (continued)
Should companies install e-business software suites or “best of breed” e-business software components?
43
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
44
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
45
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Real World Case 1 (continued)
Why have many CRM systems failed to provide promised benefits like those generated by Mitsubishi’s system?
46
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
47
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
48
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
49
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
50
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
51
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
52
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
53
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
54
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
55
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
56
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Real World Case 5 (continued)
What has Mattel learned from Wal-Mart?
How well are they applying it to their own business?
57
McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
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?
Recommended