Chapter 8

1. Chapter 8 Business Across the Enterprise

2. Getting All the Geese Lined Up: Managing at the Enterprise Business Level Customer Relationship Management, Enterprise Resource Planning, and Supply Chain Management all share the same Goal: to get the organization to line up and head in the same direction (like geese).

3. II. What Is CRM? Providing the organization with a single complete view of every customer, and providing the customer with a single complete view of the organization and its extended channels CRM helps identify and reward the best customers

4. II. CRM Features Sales – providing software tools and data sources to manage sales activities, and optimize cross-selling and up-selling Cross-selling – selling related products to current customers Up-selling – selling better products than the one currently purchased Marketing and Fulfillment – automate direct marketing, scheduling, and tracking, and assist in scheduling responses and requests, while capturing relevant information for the marketing database

5. II. CRM Features Customer Service and Support – provide customer service software tools, and real-time access to the customer database Call Center Software – routes calls to customer support agents Help Desk Software – provides assistance for customer service agents having problems with a product/service Contact and Account Management – capture and track relevant data about past and planned contacts

6. II. CRM Features Retention and Loyalty Programs – enhancing and optimizing customer retention and loyalty is a major business strategy because: It costs 6 times more to sell a new customer than an existing one Dissatisfied customers will tell 8–10 people about bad experiences A firm can boost sales 85% by increasing customer retention 5% Odds of selling a new customer – 15%; Odds of selling a current customer – 50% If a firm resolves a service problem quickly, 70% of complaining customers will do business with the firm again

7. III. The Three Phases of CRM Acquire – CRM helps a new customer perceive value of a superior product/service Enhance – CRM supports superior customer service, and cross-selling/up-selling Retain – CRM helps proactively identify and reward the most loyal and profitable customers

8. V. CRM Failures Although over 70% of firms plan to implement CRM, over 50% of CRM projects fail to produce promised results due to: Lack of senior management sponsorship Improper change management Projects take on too much too fast Poor integration between CRM and core business systems Lack of end-user incentives leading to low user adoption rates

9. VI. Trends in CRM Firms must create tighter linkages with customers while enhancing the customer experience Operational CRM – supports/synchronizes customer interactions Analytical CRM – extracts customer information and predicts customer behavior Collaborative CRM – enables collaboration with customers, suppliers, and business partners Portal-Based CRM – enables access to customer information and CRM tools

10. ERP ERP is a multifunctional enterprisewide backbone that integrates/automates business processes and information systems What is ERP? • A cross-functional software suite supporting basic internal business processes of a firm

11. III. Benefits and Challenges of ERP Major Business Value from ERP Quality and Efficiency – significant improvements in quality and efficiency of customer service, production, and distribution Decreased Costs – significant reductions in transaction costs, hardware and software, and IT support staff Decision Support – provides cross-functional information that enables better decision making across the enterprise Enterprise Agility – breaks down departmental/functional walls and enables more flexible, adaptive organizational structures

12. III. Benefits and Challenges of ERP Costs of ERP – if you do not do ERP properly you can kill the firm Causes of ERP Failures #1 cause – underestimating the complexity of planning, development, and training necessary for success Failure to involve affected employees Trying to do too much too fast Overreliance on claims of software vendors/consulting firms

13. IV. Trends in ERP Improvements in Integration and Flexibility – ERP modules have become more flexible and easier to install Extensions to Business Applications – access to intranets/extranets Broader Reach to New Users – use of the Internet, intranets and extranets provides new links to customers, suppliers, and partners Adoption of Internet Technologies –enables all the above

14. I. What is SCM? A cross-functional interenterprise system using IT to support/manage links between key business processes and suppliers, customers, and business partners Electronic Data Interchange (EDI) – an early SCM methodology for exchanging information between partners using standard document message formats, still very popular but being replaced by .xml-based Web services SCM optimizes the effective/efficient movement of materials between suppliers, customers, and other partners

15. III. Benefits and Challenges of SCM SCM solutions are becoming more complex Benefits: Faster, More Accurate Order Processing Reductions in Inventory Levels Quicker Times to Market Lower Transaction and Materials Costs Strategic Relationships with Suppliers

16. III. Benefits and Challenges of SCM Challenges – SCM Failures Caused By: Lack of Knowledge about Demand Planning Inaccurate/Overly Optimistic Demand Forecasts Inaccurate Production, Inventory, and Other Business Data Lack of Adequate Collaboration Among Marketing, Production, and Inventory Management Departments

17. IV. Trends in SCM 3 Stages to SCM Implementation Improve Internal Supply Chain Processes and Improve Relationships with Suppliers and Customers Use Supply Chain Software, Intranets, and Extranets with Trading Partners Develop and Implement Collaborative SCM Applications

18. Rolling IT Out:Facilitating IT-enabled Change

19. Management is faced with two conflicting situations… • We must implement all necessary change • We must resist all unnecessary change • These pose a Management Challenge and paradox • How can we get employees to embrace necessary change? • How can we create an environment that allows rational resistance?

20. Moving Through The Really Treacherous Iceberg Prone Waters...

21. Rolling IT out! • 40% of ERP projects fail • Why do they fail? • Why do they succeed?

23. What’s the worst plan you’ve seen in dealing with change???

24. The Navigational Guides • Assess • Anticipate 1

25. Star Gazing or…

26. Pattern Recognition

27. Assessing the Organization • Leadership style • Use of and sharing of information • Decision-making styles • Performance standards/expectations • Consequences of failure • Communication patterns • Norms/behaviors • Stories, traditions, myths, heroes • Space/layout • Symbols

28. CRISES RED TAPE CONTROL STAGE AUTONOMY LEADERSHIP EXISTENCE EARLY GROWTH MATURITY HARVEST SURVIVAL Age MATURE YOUNG

29. Taking a Merlin view . . .

30. THE MERLIN FACTOR A View From the Future “Ah yes.” Merlin said, “How did I know to set breakfast for two?... Now ordinary people are born forwards in time, if you understand what I mean, and nearly everything in the world goes forward too. This makes it quite easy for ordinary people to live... But unfortunately I was born at the wrong end of time, and I have to live backwards from in front, while surrounded by a lot of people living forward from behind...” Source: Smith, C.E. “The Merlin Factor”.

31. Transition • Predictable Crisis • Culture Change • Confusion/Ambiguous Roles • Changing Power/Influence • Self Directedness vs. Control • Reward Structure • Lack of Clarity Old Enterprise New Enterprise

32. Navigational Guide Creating the Blueprints… The Plan 2

33. Initial strategy development • Top management support - Conditions for success (including resources) have been identified, committed to, and initiated • Communication plan created for the transformation • Measurements for the change process and outcome have been determined • Strategy to create shared vision has been developed

34. Initial strategy development(cont’d) • Current change plans have been assessed for they will impact employees • Course correction strategy developed • Temporary rewards for supporting the change process have been designed • Temporary change support structures, policies, systems, and roles have been designed • External expertise (use of consultants)

35. Navigational Guide Identify the Potential “Fatal Flaws” in the Plan before Leaving the Dock 3

36. Thinking outside the box Connect the nine stars using only four straight lines and never lifting your pen!

37. outside the box Thinking

38. Implementing the Plan • Management of expectations • Best people full-time on project • Business process re-engineering • Minimal customization • Information and access security • User participation • Interdepartmental co-operation and communication

39. Implementing the Plan (cont’d) • Effective communications • Presence of champion • Monitoring and evaluating of performance • Software development testing and troubleshooting • Vendor / customer partnership • Use of vendor development tools (Adapted from “Critical Success Factors for Implementing ERP System” by Teau Hai Mi)

40. Involving the Users • Town Meetings • Name That Project • $100 gift certificate to local upscale restaurant • User Teams • Solicit Input

41. Written Communications • Newsletters • Project Website • Information and documentation • Project Listserve • General project information • Group Emails

42. Presentations and Demonstrations • “About the Project” presentations • Why are we doing this? • How does this affect you? • What are we doing to avoid failure? • How can we all be involved? • Where can we find information about the project and the system? • Product demonstrations • Pep Talk

43. Training • Class Designs • Student and Instructor Manuals • Class Materials • Web Learning Assistant • On-Line Help • Web-Based Training • Interactive, simulation-type training • On-demand (Modify each of these based on branding)

44. Training (cont’d) • Designed and developed course materials using purchased materials as base • Purchased materials geared more toward centralized operations • Progressive approach (Know what the users need!) • Beginners / Overviews • Intermediate • Advanced • Sandbox (playtime) Database • Mirrored classroom training database • Refreshed daily

45. Navigational Guide • Keep a Ready Eye to the Horizon …Watch how the implementation is progressing 4

46. The Reference Point “Planning is more important than the plan” General Dwight Eisenhower

47. A large boat moving its rudder and slowly changing direction versus…

48. a lone whitewater kayaker might shoot the rapids of a river, dodging obstacles by instinct and quick reflexes

49. Why Understand User Resistance? • At the root of many enterprise software project failures • Still a significant amount of user resistance even after nine months of ERP integration testing • Resistance was the second most important contributor to time and budget overruns and was the fourth most important barrier to SAP implementation • Users’ resistance can cause ES implementation failures • Low ES return on investments is because of resistance

50. Common Myths • You gradually wear down resisters. Eventually everyone will embrace change. • Change is a one-time thing. Once we make the changes we need, everything will be OK. • They are employees, they should just get on board • Others have to change, not me. • It’s really not that big of a change • This isn’t personal • We don’t have to involve them • We will figure it out as we go