MIS 5
ENTERPRISE SYSTEMS
11
BIDGOLI
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LEARNING OUTCOMES
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1 Explain how supply chain management is used
2 Describe customer relationship management systems
3 Describe knowledge management systems
4 Describe enterprise resource planning systems
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Enterprise System
• Application used in all the functions of a business which supports decision making throughout the organization
• Supply chain • Integrated network consisting of an
organization, its suppliers, transportation companies, and brokers
• Used to deliver goods and services to customers
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Exhibit
11.1 Supply Chain Configuration
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Supply Chain Management (SCM)
• Process of working with suppliers and other partners in the supply chain to improve procedures for delivering products
• Functions• Procuring materials• Transforming materials into intermediate and
finished products• Distributing finished products to customers
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Supply Chain Management (SCM)
• Communication in SCM system takes place among• Product flow• Information flow• Finances flow
• Key decisions in SCM• Location• Inventory• Production• Transportation
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Electronic Data Interchange (EDI)
• Enables business partners to exchange information• Expedites delivering accurate information• Web-based EDI: Using the Internet and Web
protocols to transmit documents• Lowers cost• Platform independent and easy to use
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Drawbacks of EDI
• Uses proprietary standards• Cost per partner is higher when the number
of partners is small• Organizations can use the Internet and
Open EDI to perform the same function as EDI
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Internet-Enabled SCM
• Improves information sharing throughout the supply chain
• Improves SCM activities• Purchasing/procurement• Inventory management• Transportation• Order processing• Customer service• Production scheduling
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E-Marketplaces
• Third-party exchange that provides a platform for buyers and sellers to interact and trade efficiently
• Helps maintain a competitive edge in the supply chain• Provides opportunities for sellers and buyers to
establish partnerships • Offers a single platform for prices, availability,
and stock levels that’s accessible to all participants
www.Alibaba.com
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E-Marketplaces
• Solves time constraint problems for international trade
• Makes it easy to compare prices and products from a single source instead of spending time contacting each seller
• Reduces marketing costs more than traditional sales channels
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E-Distributor http://www.powersourceonline.com/http://www.farms.com/
• Marketplace owned and operated by a third party that provides an electronic catalog of products
• Maintenance, repair, and operations (MROs) services including services from different vendors
• Example of a horizontal market• Offers fast delivery of a wide selection of products
and services, at lower prices• Helps companies reduce the time and expense of
searching for goods
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Online Auctions
• Brings traditional auctions to customers around the globe • Makes it possible to sell far more goods and
services than at a traditional auction • Based on the brokerage business model which
brings buyers and sellers together• Cost-effective for selling excessive inventory
• Reverse auctions• Invite sellers to submit bids for products and
services• One-to-many relationship (choose the seller)
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Collaborative Planning, Forecasting, and Replenishment
• Used to coordinate supply chain members through point-of-sale (POS) data sharing and joint planning
• Aims to improve operational efficiency and manage inventory
• Advantages: Decreases merchandising, inventory, and logistics costs
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Collaborative Planning, Forecasting, and Replenishment
• Ensures that inventory and sales data are shared across the supply chain
• Exception management: Planning for handling unforeseen problems• Lessons learned during the process can be used
in future planning
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Exhibit
11.2 CPFR Process
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Customer Relationship Management (CRM)
• Consists of the processes a company uses to track and organize its contacts with customers
• Improves services offered to customers• Uses customer contact information for
targeted marketing• Involves marketing strategies which focus
on long-term relationships• Identifying customer segments
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Customer Relationship Management (CRM)
• Improving products to meet customers’ needs• Improving customer retention• Identifying a company’s profitable and loyal
customers• Helps organizations make use of data, and
knowledge to understand customers• Gives organizations complete picture of
their customers
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CRM Activities
• Sales automation• Order processing• Marketing automation• Customer support• Knowledge management• Personalization technology
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CRM Applications
• Implemented with either on-premise CRM or Web-based CRM approach
• Software packages available for setting up a CRM system• Amdocs CRM• Optima Technologies ExSellence• Infor CRM• SAP mySAP• Oracle PeopleSoft CRM• Oracle Siebel
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Features of Software Packages
• Salesforce automation• eCRM or Web-based CRM• Survey management• Automated customer service
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Personalization Technology
• Personalization: Process of satisfying customers’ needs, building customer relationships, and increasing profits• Design goods and services that meet customers’
preferences better• Customization: Allows customers to modify
the standard offering• Selecting a different home page to be displayed
each time you open your Web browser
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Personalization Technology
• Using personalization requires gathering customer information• Preferences and shopping patterns
• Used by companies to improve customer service• Implementation requires• Internet, databases• Data warehouse/data marts• Data-mining tools• Mobile networks
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Collaborative Filtering (CF)
• Search for specific information or patterns, using input from multiple business partners and data sources• Identifies groups of people based on common
interests and recommends products• Works well for a single product category• Drawback: Needs a large sample of users and
content to work well• Fails to make recommendations across unrelated
categories
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Knowledge Management (KM)
• Draws on concepts of organizational learning, culture, and best practices to convert tacit knowledge into explicit knowledge
• Creates a knowledge sharing culture in an organization
• Eliminates obstacles to sharing knowledge• Technique to improve CRM systems• Identifying, storing, and disseminating facts about
how to perform tasks
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Knowledge Management (KM)
• Knowledge repository • Stores knowledge of experts• Created for employees to refer to when needed
• Knowledge management system consists of using groupware
• Other tools and technologies• DBMSs, data-mining tools, decision support
systems
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Contributions of Knowledge Management System to Organizations• Promote innovation by encouraging free
exchange of ideas • Improve customer service by reducing
response time • Increase revenue by reducing the delivery
time for products and services • Improve employee retention rates by
rewarding employees for their knowledge
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Chief Knowledge Officer (CKO)
• Position created by organizations because of the importance of• Knowledge• Knowledge management• Knowledge management systems
• Responsible for overseeing knowledge management within an organization
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Chief Knowledge Officer (CKO)
• Ensures knowledge resources are properly collected stored, and disseminated among the decision-makers
• Ensures organization profits from knowledge resources
• Tries to maximize the return on investment (ROI) related to KM, KMS and processes
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Enterprise Resource Planning (ERP)
• Integrated system that collects and processes data
• Manages and coordinates resources, information, and functions throughout an organization
• Includes hardware, software, procedures, and input from all functional areas
• Uses a unified database to store data for various functions
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Exhibit
11.3 ERP Configuration
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Table 11.1 ERP Components
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Benefits of a Well-designed ERP System
• Increased:• Availability and timeliness of information • Data accuracy and improved response time
• Improved:• Customer satisfaction • Employee satisfaction • Planning and scheduling • Supplier relationship • Reliability of information
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Benefits of a Well-designed ERP System
• Reduced:• Inventory costs • Labor costs • Order-to-fulfillment time
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ERP Systems
• Drawbacks• High cost• Difficulties in installation• Needs extensive training• Compatibility problems with legacy systems
• Available as modules so an organization can purchase only required components• Keeps costs down for organizations
KEY TERMS
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• Collaborative filtering (CF)• Collaborative planning, forecasting, and
replenishment (CPFR)• Customer relationship management (CRM)• Customization• e-marketplace• Electronic data interchange (EDI)• Enterprise resource planning (ERP)
KEY TERMS
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• Enterprise system• Knowledge management (KM)• Online auction• Personalization• Reverse auction• Supply chain• Supply chain management (SCM)
SUMMARY
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• Supply chains exist in both service and manufacturing organizations, although the chain’s vary in different organizations and industries
• CRM system helps organizations make better use of data and knowledge to understand their customers
• ERP systems use a unified database to store data for various functions
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