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Chapter 9

Chapter 9. Achieving Operational Excellence and Customer Intimacy: Enterprise Applications. Enterprise Systems. Also called enterprise resource planning (ERP) systems Suite of integrated software modules and a common central database

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Chapter 9

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  1. Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

  2. Enterprise Systems Also called enterprise resource planning (ERP) systems Suite of integrated software modules and a common central database Collects data from many divisions of firm for use in nearly all of firm’s internal business activities Information entered in one process is immediately available for other processes

  3. Enterprise Systems

  4. Business Value of Enterprise Systems Business value of enterprise systems Increase operational efficiency Provide firm wide information to support decision making Enable rapid responses to customer requests for information or products Include analytical tools to evaluate overall organizational performance

  5. Supply Chain Management Systems • Supply chain: • Network of organizations and processes for: • Procuring raw materials • Transforming them into products • 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

  6. IT and Supply Chain Management Systems IT helps with inefficiencies in the supply chain (inefficiencies waste as much as 25% of a company’s operating costs) Just-in-time strategy – components arrive exactly at the moment needed and finished goods shipped when leave assembly line Bullwhip effect – demand for a product gets distorted as it passes from one entity to the next across supply chain

  7. Supply Chain Management Software • Supply chain planning systems • Model existing supply chain • Demand planning (how much product a business needs to make to satisfy all of its customers) • Optimize sourcing, manufacturing plans • Establish inventory levels • Identifying transportation modes • Supply chain execution systems • Manage flow of products through distribution centers and warehouses

  8. Global Supply Chains and Internet • Global supply chain issues • Global supply chains typically span greater geographic distances and time differences • More complex pricing issues (local taxes, transportation, etc.) • Foreign government regulations • Internet helps companies manage many aspects of global supply chains • Sourcing, transportation, communications, international finance

  9. Supply Chain Misc • Push-based model (build-to-stock) • Schedules based on best guesses of demand • Pull-based model (demand-driven) • Customer orders trigger events in supply chain • Sequential supply chains • Information and materials flow sequentially from company to company • Concurrent supply chains • Information flows in many directions simultaneously among members of a supply chain network

  10. Customer Relationship Management (CRM) Systems • Customer relationship management (CRM) systems • Capture and integrate customer data from all over the organization • Consolidate and analyze customer data • Distribute customer information to various systems and customer touch points (contact point; method of interaction with customer) across enterprise • Provide single enterprise view of customers • Lemonade Stand

  11. CRM Software Components • Sales force automation (SFA) • E.g. sales prospect and contact information, and sales quote generation capabilities • Customer service • E.g. assigning and managing customer service requests; Web-based self-service capabilities • Marketing • E.g. capturing prospect and customer data, scheduling and tracking direct-marketing mailings or e-mail • Cross-selling • Up-selling • SAS campaign management • Microsoft Dynamics sales force automation • Emotion detection Comprehensive (extended ) CRM • Partnership Relationship Management (PRM) • Employee Relationship Management (ERM)

  12. CRM Misc • Operational CRM • Customer-facing applications • E.g. sales force automation, call center and customer service support, and marketing automation • Analytical CRM • Analyze customer data output from operational CRM applications • Business-facing • Based on data warehouses populated by operational CRM systems and customer touch points • Customer lifetime value (CLTV) – Relationship between revenue/expenses/expected relationship life • Churn Rate – number of customers who stop using or purchasing products or services from a company

  13. ERP Misc • Highly expensive to purchase and implement • $3.5 million to over $12 million • Technological changes • Business process changes • Organizational changes • Switching costs, dependence on software vendors • Data standardization, management, cleansing

  14. Next Generation • Next-generation enterprise applications • Move is to make applications more flexible, Web-enabled, integrated with other systems • Enterprise suites • Software to enable CRM, SCM, and enterprise systems work together and with suppliers and client systems • Utilize Web services, SOA • Open source & on-demand solutions • Mobile compatible; Web 2.0 capabilities • Complementary analytics products

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