Chapter 8 Enterprise

Business Systems

James A. O'Brien, and George Marakas.

Management Information Systems with MISource
2007, 8th ed. Boston, MA: McGraw-Hill, Inc.,
2007. ISBN: 13 9780073323091
Customer Relationship
Management
 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?
 Managing the full range of the customer
relationship involves
 Providing customer-facing employees 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
 CRM uses IT to create a cross-functional
enterprise system that integrates and automates
many of the customer-serving processes

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Application Clusters in CRM

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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 touchpoints
 Telephone, fax, e-mail
 Websites, retail stores, kiosks
 Personal contact
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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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Marketing and Fulfillment
 CRM systems help with direct marketing
campaigns by automatic such tasks as
 Qualifying leads for targeted marketing
 Scheduling and tracking mailings
 Capturing and managing responses
 Analyzing the business value of the campaign
 Fulfilling responses and requests

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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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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
 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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The Three Phases of CRM

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Benefits of CRM
 Benefits of CRM
 Identify and target the best 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

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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
 Reasons for failure
 Lack of understanding and preparation
 Not solving business process problems first
 No participation on part of business
stakeholders involved

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ERP: The Business Backbone
 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
 Facilitates business, supplier, and customer
information flows

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ERP Application Components

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Benefits and Challenges of ERP
 ERP Business Benefits
 Quality and efficiency
 Decreased costs
 Decision support
 Enterprise agility
 ERP Costs
 Risks and costs are considerable
 Hardware and software are a small part
of total costs
 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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Supply Chain Management (SCM)
 Fundamentally, supply chain management
helps a company
 Get the right products
 To the right place
 At the right time
 In the proper quantity
 At an acceptable cost

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Goals of SCM
 The goal of SCM is to efficiently
 Forecast demand
 Control inventory
 Enhance relationships with customers,
suppliers, distributors, and others
 Receive feedback on the status of every link
in the supply chain

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What is a Supply Chain?
 The interrelationships
 With suppliers, customers, distributors, and
other businesses
 Needed to design, build, and sell a product
 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 Life Cycle

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Electronic Data Interchange
 One of the earliest uses of information
technology for supply chain management
 The electronic exchange of business transaction
documents between supply chain trading
partners
 The almost complete automation of an e-
commerce supply chain process
 Many transactions occur over the Internet, using
secure virtual private networks

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Typical EDI Activities

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Planning & Execution Functions
of SCM
 Planning
 Supply chain design
 Collaborative demand and supply planning
 Execution
 Materials management
 Collaborative manufacturing
 Collaborative fulfillment
 Supply chain event management
 Supply chain performance management

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Benefits and Challenges of SCM
 Key Benefits
 Faster, more accurate order processing
 Reductions in inventory levels
 Quicker times to market
 Lower transaction and materials costs
 Strategic relationships with supplier

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Benefits and 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 immature, incomplete, and
hard to implement

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