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11.,*,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 Systems,Chapter 11,Enterprise Applications and Business Process,Integration,OBJECTIVES,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 Systems,Chapter 11,Enterprise Applications and Business Process,Integration,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 Systems,Chapter 11,Enterprise Applications and Business Process,Integration,PNC Bank Case,ENTERPRISE SYSTEMS,Enables data to be used by multiple functions and business processes for precise organizational coordination and control.,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,How Enterprise Systems Work(Continued),Enterprise Systems:(Continued),Process Map for Procuring New Equipment,ENTERPRISE SYSTEMS,Figure 11-2,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,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,Supply chain:,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,The Supply Chain(Continued),A Supply Chain,SUPPLY CHAIN MANAGEMENT SYSTEMS,Figure 11-3,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,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,SCOR(Chain Operations Reference Model)identifies five major supply chain processes:,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Supply Chain Processes(Continued),SUPPLY CHAIN MANAGEMENT SYSTEMS,Planning and control of all factors that have an impact on the supply chain,Logistics:,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Supply Chain Processes(Continued),Key Supply Chain Management Processes,SUPPLY CHAIN MANAGEMENT SYSTEMS,Figure 11-4,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Information and Supply Chain Management,Inaccurate or untimely information causes inefficiencies in supply chain,such as shortages,excessive inventory,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Information and Supply Chain Management(Continued),The Bullwhip Effect,SUPPLY CHAIN MANAGEMENT SYSTEMS,Figure 11-5,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Supply chain management systems:,Automate flow of information between company and supply chain partners,SUPPLY CHAIN MANAGEMENT SYSTEMS,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Supply Chain Management Applications(Continued),SUPPLY CHAIN MANAGEMENT SYSTEMS,M,etrics for measuring supply chain performance:,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Supply Chain Management and the Internet,Intranets and Extranets for Supply Chain Management,SUPPLY CHAIN MANAGEMENT SYSTEMS,Figure 11-6,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,SUPPLY CHAIN MANAGEMENT SYSTEMS,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,SUPPLY CHAIN MANAGEMENT SYSTEMS,Push-based model:,Production master schedules based on forecasts of demand for products,and products are“pushed”to customers,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Pull-based model:,Supply chain driven by actual customer orders or purchases,Push-versus Pull-Based Supply Chain Models,SUPPLY CHAIN MANAGEMENT SYSTEMS,Figure 11-7,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,The Future Internet-Driven Supply Chain,SUPPLY CHAIN MANAGEMENT SYSTEMS,Figure 11-8,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,SUPPLY CHAIN MANAGEMENT SYSTEMS,Business Value of Supply Chain Management Systems,Improved customer service and responsiveness,Cost reduction,Cash utilization,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Customer Relationship Management and Partner 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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Partner Relationship Management(PRM):,Automation of the firms relationships with its selling partners using customer data and analytical tools to improve coordination and customer sales,CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Customer Relationship Management Applications(Continued),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 PRM and employee relationship management(ERM),CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Sales Force Automation(SFA),Customer service,Marketing,CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Typically include capabilities for,Customer Relationship Management(CRM)Software(Continued),Figure 11-9,CRM Software Capabilities,CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Customer Loyalty Management Process Map,Figure 11-10,CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,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,CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS,Analytical CRM Data Warehouse,Figure 11-11,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Business Value of Customer Relationship 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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Reduce churn rate:,Increased revenue from identifying most profitable customers and segments for marketing,cross-selling,up-selling,CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Number of customers who stop using or purchasing products or services from a company,Business Value of Customer Relationship Management Systems(Continued),The Importance of CRM Performance Measurement,Metrics for CRM may include:,CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,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,CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,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(Continued),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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Business Process Management:,A methodology for dealing with the organizations 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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Order-to-Cash Service,ENTERPRISE INTEGRATION TRENDS,Figure 11-12,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,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 Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Management Opportunities:,High total cost of ownership,Organizational change requirements,Realizing strategic value,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Management Challenges:,MANAGEMENT OPPORTUNITIES,CHALLENGES AND SOLUTIONS,Look at business objectives first,Attention to data and data management,Senior management commitment and employee support,Education and training,Management Information Systems,Chapter 11 Enterprise Applications and Business Process,Integration,Solution Guidelines:,MANAGEMENT OPPORTUNITIES,CHALLENGES AND SOLUT
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