Enterprise Applications

(E-Business Systems)
 What is E-Business?
• E-business means using the Internet, other networks,
and IT to support
– Electronic commerce
– Enterprise communications and collaboration
– Web-enabled business processes

• E-commerce is the buying, selling, and marketing of

products, services, and information over the Internet
and other networks

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 Cross-Functional Enterprise Systems
• Cross the boundaries of traditional business functions
– Used to reengineer and improve vital business processes all
across the enterprise

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Enterprise Application Architecture
• The interrelationships of the major cross-functional
enterprise applications
• Provides a conceptual framework
– Helps in building enterprise applications
– Helps visualize the basic components, processes, and
interfaces of major e-business applications
– Architecture is based on the business requirements
– Managing how multiple applications are poised to work
together – This is different from s/w architecture which
deals with technical design of system

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Enterprise Application Architecture
• Focuses on accomplishing fundamental business
processes in concern with:
– Customers
– Suppliers
– Partners
– Employees

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Enterprise Application Architecture

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Information Systems Architecture

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 Enterprise Business Systems
• Customer Relationship Management (CRM)
– The business focus

• Enterprise Resource Planning (ERP)

– The business backbone

• Supply Chain Management (SCM)

– The business network

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 Objectives
• To identify and give examples to illustrate the
following aspects of customer relationship
management, enterprise resource management, and
supply chain management systems:
– Business processes supported
– Customer and business value provided
– Potential challenges and trends/types

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 CRM: The Business Focus
• CRM – Customer Relationship Management

• Competitive advantage based on an innovative new

product/service is often short

• Companies are realizing that their most enduring

competitive strength is their relation with customers

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 CRM: The Business Focus

• A customer-centric focus
– Customer relationships have become a company’s most
valued asset
– Every company’s strategy should be to find and retain the
most profitable customers possible

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 What is CRM?
• CRM is described as a cross-functional e-business
application that integrates and automates many customer-
serving processes in sales, direct marketing, accounting
and order management, and customer service and support.

• Managing the full range of the customer relationship

involves
– Providing the companies with a single, complete view of every
customer at every touch point and across all channels
– Providing the customer with a single, complete view of the
company and its extended channels

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 What is CRM?

• CRM uses IT to create a cross-functional enterprise

system that integrates and automates many of the
customer-serving processes

• Oracle, PeopleSoft, Siebel Systems ,SAP AG,

Ephiphany – Some of the leading vendors of CRM
s/w

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 Purpose of CRM
• Creating value for the customer and the company
over long term
• When customers value the customer service that they
receive from suppliers, they are less likely to look to
alternative suppliers for their needs
• CRM enables organizations to gain competitive
advantages over competitors that supply similar
products or services

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 Why CRM is Important?
• Retaining and building long-term relationships with
customers

• Good CRM systems provide data and analytical tools

for answering questions such as:
– What is the value of a particular customer to the firm over
his or her lifetime?
– Who are our most loyal customers?
– Who are our most profitable customers? What do they want
to buy?

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Application Clusters in CRM

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CRM: Contact and Account Management
• CRM helps sales, marketing, and service
professionals capture and track relevant data about:
– Every past and planned contact with prospects and
customers
– Other business and life cycle events of customers

• Data are captured through customer touch-points

– Telephone, fax, e-mail
– Websites, retail stores, kiosks
– Personal contact

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 CRM: Sales
• A CRM system provides sales reps with the tools and
data resources they need to
– Support and manage their sales activities
– Optimize cross- and up-selling

• CRM also provides the means to check on a

customer’s account status and history before
scheduling a sales call

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The Three Phases of CRM

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 CRM: Customer Service and Support
• A CRM system gives service reps real-time access to
the same database used by sales and marketing
– Requests for service are created, assigned, and managed
– Call center software routes calls to agents
– Help desk software provides service data and suggestions
for solving problems

• Web-based self-service enables customers to access

personalized support information

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 CRM: Retention and Loyalty Programs
• It costs 6 times more to sell to a new customer
• An unhappy customer will tell 8-10 others
• Boosting customer retention by 5 percent can boost profits by
85 percent
• The odds of selling to an existing customer are 50 percent; a
new one 15 percent
• About 70 percent of customers will do business with the
company again if a problem is quickly taken care of

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 CRM: Retention and Loyalty Programs
• Enhancing and optimizing customer retention and loyalty is a
primary objective of CRM
– Identify, reward, and market to the most loyal and
profitable customers
– Evaluate targeted marketing and relationship programs

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 Benefits of CRM
• Benefits of CRM
– Identify and target the best customers
– Retain existing customers
– Real-time customization and personalization of products
and services
– Track when and how a customer contacts the company
– Provide a consistent customer experience
– Provide superior service and support across all customer
contact points
– Helps top management to do data analysis to set future goal

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 CRM Failures
• Business benefits of CRM are not guaranteed
– 50 percent of CRM projects did not produce promised
results
– 20 percent damaged customer relationships

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 CRM Failures
• Reasons for failure
– Lack of understanding and preparation
– Not solving business process problems first
– No participation on part of business stakeholders involved
– Lack of senior management sponsorship
– Lack of or poor integration between CRM and core
business systems
– Lack of end-user incentives leading to poor user adoption
rates
– Lack of employee training

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 Real world cases of CRM failure
• Gevity HR Inc.
– Provides human resource outsourcing and support services
to small- and medium-sized businesses in the United States.
– Implemented CRM (Oracle) – helped to solve customers’
problems online without the live operator (call centre
employees)
– Call centre employees felt that software threatened their
jobs
– So they discouraged customers from using it

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 Real world cases of CRM failure
• Monster.com
– Developed CRM for sales reps to instantly access data for
customers
– Slow system , unable to download customer information
– Rebuild the whole system, costing millions of dollars

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 Trends in CRM
• Operational CRM
– Streamlines the business process
– Includes sales, marketing and service automation
– Supports customer interaction with greater convenience
through a variety of channels
– Synchronizes customer interactions consistently across all
channels
– Makes the company easier to do business with

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 Trends in CRM
• Analytical CRM
– Analyzes customer data
– Extracts in-depth customer history, preferences, and
profitability from databases
– Allows prediction of customer value and behavior
– Allows forecast of demand
– Helps top management to take better decisions
– Helps tailor information and offers to customer needs

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 Trends in CRM
• Collaborative CRM
– Shares customer information with different teams
– Easy collaboration with customers, suppliers, and partners
– Improves efficiency and integration throughout supply chain
– Greater responsiveness to customer needs through outside
sourcing of products and services

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 Trends in CRM
• Portal-based CRM
– Provides users with tools and information that fit their needs
– Empowers employees to respond to customer demands more
quickly
– Helps reps become truly customer-faced
– Provides instant access to all internal and external customer
information

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 Information Technology and CRM
• Database
• Data Mining

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 Real world case of CRM in Indian context

• CRM tools help Airtel in handling customer support

process efficiently
• Before CRM
– Manual customer support process
– Couldn’t provide centralised service
– Poor Quality of service
– Customer retention was low
– No unified view of customer data

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 Real world case of CRM in Indian context

• Oracle’s E-Business CRM suite was adopted

– Initially they had different databases – resulting in high
turnaround time for day to day reporting and analysis
– Later switched to central database to serve as common,
dedicated reporting database
– Synchronised database environment served the purpose of
reporting on operational and analytical CRM queries

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 Real world case of CRM in Indian context

• Airtel uses data to cross-sell and up-sell products and

services to customers
– Example – offers are made to customers based on their
usage of a certain service; If a customer reaches a certain
threshold, discounts and other perks are offered

• Airtel generates leads from customer data for the

purpose of SMS campaigns
– Reduced the number of calls made to customers
– Increased the number of services availed by customers

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 Real world case of CRM in Indian
context
• Airtel CRM is divided into 2 kinds of solutions
– Operational – looks after day to day call center activities
– Analytical – used for business development activities
• Example – to measure the success of its products and services in
the market by tracking
• Enables Airtel to answer several questions
– Which are the best customers?
– Who are likely to leave? What can be done to retain them?
– What is the likelihood that the customer will churn?
• Achieved by tracking several parameters like – avg bill value,
payment pattern, usage etc.
• Fraud detection

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 ERP: The Business Backbone
• ERP – Enterprise Resource Planning

• ERP is a cross-functional enterprise backbone that

integrates and automates processes within
– Manufacturing
– Logistics
– Distribution
– Accounting
– Finance
– Human resources

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 What is ERP?
• Enterprise resource planning is a cross-functional
enterprise system
– An integrated suite of software modules
– Supports basic internal business processes (manufacturing,
logistics, distribution, accounting, finance and human
resources)
– Facilitates business, supplier, and customer information
flows

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 ERP Implementation in Companies
• Large companies throughout the world began to install
ERP in 1990s (Y2K problem helped to boost ERP sales)

• Companies such as Microsoft, Coca-Cola, Cisco and

Nokia reengineered their business processes by
implementing ERP.

• They credit their ERP systems for helping them to reduce

inventories, shorten cycle times, lower costs and improve
overall operations.

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 ERP Implementation
• Proper planning required
– Simply installing the software, doesn’t work
• Implementation process:
– Study business requirements, Find out how ERP should be
behaving
– Setup or configure the s/w such that it starts working as per
business requirements
– Fill the gaps between business requirements and the
functionality offered by ERP s/w
• Many times companies do take implementation of ERP as
an opportunity to streamline their business process

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ERP Application Components

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 Benefits of ERP
• ERP Business Benefits
– Integration across all business processes
– Increase performance / Reduce cycle time
– Quality and efficiency
• customer service, production and distribution
– Decreased costs / Lower operating cost
• transaction processing costs and h/w, s/w & IT support staff
compared to non-integrated legacy systems
– Decision support / Better management decisions
– Enterprise agility

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 Real World Case: ERP
• Colgate-Palmolive: The Business value of ERP
– Global consumer product company
– Implemented ERP (SAP R/3) – to access more timely & accurate
data, get the most out of working capital & reduce the
manufacturing costs
– Needed the ability to coordinate globally and act locally
– Increased profitability
– Before ERP, it took from 1 to 5 days to acquire an order, and
another 2 days to process the order
– Now, order acquisition & processing combined take 4 hours
– Before ERP, on-time deliveries were only 91.5%, now increased
to 99%

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 Challenges of ERP
• ERP Challenges
– Cost
– Customization
– Reengineering business process
– High switching cost
– Resistance from departments to share sensitive info
between department
– Risks
– Failure can cripple or kill a business

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Costs of Implementing a New ERP

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 Causes of ERP Failures
• Most common causes of ERP failure
– Under-estimating the complexity of planning, development,
training
– Failure to involve affected employees in planning and
development
– Trying to do too much too fast
– Insufficient training
– Insufficient data conversion and testing
– Over-reliance on ERP vendor or consultants

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 Trends in ERP
• Flexible ERP
– ERP software packages are gradually being modified into
more flexible products.

• Web enabled ERP

– Use of Internet technologies to build Web interfaces and
network capabilities into ERP systems.

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 Trends in ERP
• Inter-enterprise ERP
– Web-enabled links between key business systems of a
company and its customers, suppliers, distributors, and
others.

• E-Business suites
– Web-enabled software suites that integrate other business
applications
• Integrating ERP, CRM, SCM and other business applications
• Example – Oracle’s e-Business suite, SAP’s mySAP
• Visa International – Oracle e-Business suite

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 Trends in ERP
• ERP software suites (from Oracle, SAP or other ERP
vendors) vs. Open-Source ERP
– Cost
– Flexibility / Less customization

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 ERP - IT professional roles
• Network administrators
• Operating system administrators
• Database administrators
• ERP system administrators
• Functional consultant
• Business analyst
• Technical consultant
• Project managers

• One role might fill up many people in larger projects and

one person may do many roles in a small projects

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 ERP - Backend
• 3 tier environment
– Database servers
– Application servers
– Personal computers of users

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 SCM – The Business Network
• SCM – Supply Chain Management

• Cross-functional inter-enterprise system that uses IT

to help support and manage the links between some
of a company’s key business processes and those of
its suppliers, customers, and business partners

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 SCM – The Business Network
• Supply chain
– 3 major phases: procurement of raw materials, processing
the materials into finished goods (manufacturing), delivery
of goods to customers

• Supply chain management – monitoring, controlling

and facilitating supply chains

• Supply chain management (SCM) systems are

information technologies that support SCM.

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 SCM – The Business Network
• What is Supply Chain?
– Suppose a company want to build and sell a product
– It must buy raw materials and variety of services from
other companies
– Interrelationships with suppliers, customers, distributors,
and other businesses that are needed to design, build and
sell a product constitutes the Supply Chain

• Each supply chain process should add value to the

products or services a company produces
– Frequently called a value chain

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Supply Chain Management (SCM)

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 SCM – The Business Network
• In retail, the manufacturing phase does not exist, so
the term “supply chain” refers only to purchasing of
finished goods and the delivery to customers of those
goods.

• In the service industries the term “manufacturing” is

practically meaningless, because no raw materials are
purchased and processed.

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 Goal and Objectives of SCM
• Goal:
– To create a fast, efficient, and low-cost network of business
relationships, or supply chain, to get a company’s products
from concept to market.
• Objective
– Get the right product to the right place at the least cost.
– Keep inventory as low as possible and still offers superior
customer service.
– Reduce cycle times.

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 SCM – The Business Network
• Basically, SCM helps a company get the right
products to the right place at the right time, in the
proper quantity at an acceptable cost

• SCM manages the process efficiently by:

– forecasting demand
– controlling inventory
– enhancing the network of business relationships
– receiving feedback on the status of every link in the supply
chain

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 SCM – The Business Network
• Technically, anyone with access to the system can know
the status of every part of an order received by the
business:
– whether the raw materials have been purchased
– how many units of the finished product have been shipped
– how much money has been billed or collected for the order.

• HR Managers can tell which workers are involved in any

of the processes of the order.
• Accountants can use their module of the system to know
how much money has been spent on the order and what
the breakdown of the cost is in labor, materials, and
overhead expenditures.

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Supply Chain Life Cycle

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 Benefits of SCM
• Key Benefits
– Reductions in inventory levels
• One area of manufacturing that has experienced the greatest
improvement from IS
• Traditional inventory-control techniques operated according to the
basic principle that future inventory needs are based on past use
• By contrast, replenishment in inventory is based on the future need,
calculated by software from demand forecasts

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 Benefits of SCM
• Key Benefits
– Quicker times to market – Shipping
• Variables that affect the cost and speed of shipping are many
– Length of routes, type of shipped materials (e.g. perishable, hazardous
or fragile), fuel prices, road tolls, restricted roads etc.
• Use of sophisticated s/w to optimize shipping time, the cost of
labor, equipment use, helps companies stay competitive
– Faster, more accurate order processing
– Reduction in production cost
– Strategic relationships with supplier

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 Challenges of SCM
• Key Challenges
– Lack of demand planning knowledge, tools, and guidelines
– Inaccurate data provided by other information systems
– Lack of collaboration among marketing, production, and
inventory management
– SCM tools are hard to implement

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 Role of IT in SCM
• Technology trends helping in SCM
– GPS
– RFID

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 Successful Implementation of SCM
• Wal-Mart
– SCM is the foundation of their business
– All of Wal-Mart’s operation is based on high volume,
extremely quick inventory turnover, and low prices (which
come with low margins).
– With this business strategy, anything other than efficient
supply chain management would not allow an organization
to make a profit, and profit is something Wal-Mart is very
good at making.

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Common business activities and their
interdependence

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 Human Resource Management Systems
(HRMS):
• A software solution designed to manage and streamline
HR processes.

Key Objectives:
• Centralizing employee data
• Automating HR processes
• Enhancing HR decision-making

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 Key Features of HRMS

• Employee Information Management

• Payroll Management
• Recruitment and Applicant Tracking
• Performance Management
• Time and Attendance Tracking
• Training and Development Management

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 Conclusion and Future Trends
Future Trends:
• Integration with AI and Machine Learning
• Mobile HRMS Applications
• Focus on Employee Wellbeing and Engagement

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 Benefits of Implementing HRMS
• Increased Efficiency: Automation of routine tasks
reduces time spent on administrative work.
• Improved Data Accuracy: Minimizes errors through
standardized processes.
• Enhanced Reporting: Real-time analytics for informed
decision-making.
• Better Employee Experience: Self-service portals
empower employees.

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 Discussion Questions
• Why would systems that enhance a company’s
relationships with customers have such a high rate of
failure?
– CRM is a complex system to develop
– Failures mainly because of integrating many departments
– Lack of understanding and preparation

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 Discussion Questions
• What are the main reasons companies experience
failures in implementing ERP systems?
– Lack of top management commitment
– Inadequate requirements definition
– Poor ERP package selection
– Inadequate resources
– Resistance to change / Lack of buy-in
– Miscalculation of time and effort required
– Misfit of application and business processes
– Unrealistic expectations of benefits and ROI
– Inadequate training and education

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 Discussion Questions
• What are several key things companies should do to
avoid ERP systems failure?
– Foster high employee involvement, ownership and buy-in
– Comprehensive and systematic approach that addresses all
parts of the implementation
– Provide adequate resources
– Extensive education and training at all levels
– Understanding that ERP implementations are not about the
technology package but rather the transformation to all
processes and way of doing business of the organization

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 Discussion Questions
• How can the problem of overenthusiastic demand
forecasts in supply chain planning be avoided?
– SCM – complex task
– A lack of proper demand planning – one of the major failure
– Inaccurate and overenthusiastic demand forecasts will cause
major production, inventory, and other business problems, no
matter how efficient the rest of the supply chain management
process is constructed.
– Suggestions:
• Ensure that systems capture real time and correct data
• Getting everyone on board early so that problems can be identified
during implementation.

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 Discussion Questions
• Should companies install e-business software suites or
“best of breed” e-business software applications? Why?
– E-business suites – integrated system of s/w modules for CRM,
ERP, SCM and other business applications.
– Goal is to enable companies to run most of their business using
one Web-enabled system of integrated s/w and databases, instead
of variety of e-business applications
– For companies that know what they are doing, and how to use
these suites, the integration is probably a good move as they
should operate seamlessly without any major problems.
– However, for companies who really don’t know how to operate
any of these components, this is no magic cure or recipe to their
problems.

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