IT for Management: On-Demand Strategies for

Performance, Growth, and Sustainability

Twelfth Edition
Turban, Pollard, Wood

Chapter 10

Enterprise Systems
Learning Objectives (1 of 5)

Intro to
Enterprise
Systems
Communicating
and
Collaborating
with
Knowledge Enterprise
Management, Resource
Content Planning
Management,
and Enterprise
Social
Platforms

Customer
Supply Chain
Relationship
Management
Management

Copyright ©2021 John Wiley & Sons, Inc. 2

 • Enterprise System are large
scale application software
packages that supports business
processes, information flows,
reporting, and data analytics in
Intro to complex organizations.
Enterprise • Core business processes:
Systems Include accounting, finance,
sales, marketing, human
resources, inventory,
productions, and manufacturing

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Integrating Legacy Systems
• Legacy systems
o Older information systems maintained over decades because
they fulfill critical needs
• Major reasons why companies replace legacy systems:
o High maintenance costs
o Inflexibility
o Integration obstacles (Hardwired, predefined, process flows)
o Lack of staff (qualified/trained professionals)
o Cloud-based enterprise systems are lower in cost

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Migrating to enterprise systems
• Three typical situations where changes are most
needed:
1. Changes in how people perform their jobs
2. Redesign of business processes
3. Integration of many types of uncoupled legacy
systems

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Intro to Enterprise Systems: Questions
1. Explain the purpose of an enterprise system.
2. Describe six types of enterprise systems.
3. What are the five major reasons organizations migrate
to enterprise systems?
4. What are two challenges of legacy systems?
5. Why do companies not replace all of their legacy
systems?
6. Why is it difficult to implement enterprise systems?
7. Explain the three types of changes needed when an
enterprise system is implemented.
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Learning Objectives (2 of 5)

Intro to
Enterprise
Systems
Communicating
and
Collaborating
with
Knowledge Enterprise
Management, Resource
Content Planning
Management,
and Enterprise
Social
Platforms

Customer
Supply Chain
Relationship
Management
Management

Copyright ©2021 John Wiley & Sons, Inc. 9

Automating ERP
• Enterprise resource planning (ERP) is business process
management software that allows an organization to
use tightly integrated applications to manage business
and automate business processes related to services,
technology, and human resources.
• The central feature of all ERP systems is a shared
database that supports multiple business functions
used throughout an organization.

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Enterprise Resource Planning Complexity

Figure 10.3: Overview of the complexity of ERP and its interfaces with other
enterprise systems (U.S. Army Business Transformation Knowledge Center,
2009)

Copyright ©2021 John Wiley & Sons, Inc. 12

 • Acquiring an ERP
ERP and the • ERPs are not usually built in-
house or built using proprietary
IT software because the costs and
Infrastructure time to do so would be
staggering.
• Typically, ERP systems are
acquired by purchasing or
leasing in a software-as-a-service
(SaaS) arrangement.

13
Copyright ©2021 John Wiley & Sons, Inc.
 Choosing
an ERP
Solution

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ERP
Implementation
Critical Success
Factors

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ERP: Lessons Learned
• The success of an ERP depends on organizational and
technological factors that occur prior to, during, and after
its implementation.
• Most often when an ERP implementation fails, the ERP is
eventually fixed and remains in use.
• Planning, deploying, or fine-tuning these complex business
software systems for your company is such a large
undertaking that such projects fail more than 50% to 70% of
the time.
• The most important lesson to be learned from these
examples of ERP failures is that when it comes to ERP
selection, you either get it right or pay the price for years to
come!
Copyright ©2021 John Wiley & Sons, Inc. 16
 • New apps and mobile add-ons enable the
following:
• Sales associates to process orders,
take payments, and collect signatures
What’s with an iPad app
• Field technicians to provide customer
New in service from anywhere
• Marketing to manage every aspect of
ERP ongoing customer relationships using
a smartphone app
Systems? • Production to access to the real-time
information needed to reduce
stockouts and excess inventory
• Customers to access, pay, and view
invoices online

Copyright ©2021 John Wiley & Sons, Inc. 17

 • ERP vendors: An ERP vendor develops
ERP software and implements and
supports its own product(s). The two
Selecting largest ERP vendors are SAP and Oracle.
an ERP • Value-added reseller (VAR) customizes
or adds features to a vendor’s software
Vendor, or equipment and resells the enhanced
Value- product.

Added • Independent ERP consultant: An ERP

consultant offers customized consulting
Reseller or services that include identifying and
vetting different ERP options, selecting
Consultant the best ERP for the task at hand, and
implementing and supporting the ERP
when it is in operation.

Copyright ©2021 John Wiley & Sons, Inc. 18

Learning Objectives (3 of 5)

Intro to
Enterprise
Systems
Communicating
and
Collaborating
with
Knowledge Enterprise
Management, Resource
Content Planning
Management,
and Enterprise
Social
Platforms

Customer
Supply Chain
Relationship
Management
Management

Copyright ©2021 John Wiley & Sons, Inc. 19

 • Supply Chain Starts with the
acquisition of raw materials or the
procurement (purchase) of
products and proceeds through
Supply Chain manufacture, transport, and
Management delivery—and the disposal of
recycling products.
Systems • Supply chain management (SCM)
is the efficient management of the
flows of material, data, and
payments among companies in
the supply chain, from suppliers to
consumers.
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Automating the Supply Chain
• SCM software focuses around improving business functions such as the
following:
• Inventory optimization to minimize overhead costs and ensure uninterrupted
delivery.
• Warehouse management to track materials and goods within a warehouse or
distribution center.
• Forecasting to reduce uncertainty and variability associated with supply and
demand.
• Optimal cycle time and customer service by increasing control over processes.
• Supplier management to track performance and compliance, measure risk, etc.
• Procurement by managing and automating purchase orders and receipts,
creating a transparent audit trail and integrating financial management systems.
• Logistics planning to ensure that ready-to-ship items are delivered to the
customer as quickly as possible and are handled carefully to ensure they are
undamaged.

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Supply Chain Flows
• Material or product flow: the movement of materials
and goods from a supplier to its consumer. Products
that are returned make up what is called the reverse
supply chain because goods are moving in the reverse
direction
• Information flow: the movement of detailed data
among members of the supply chain, for example,
order information, customer information, order
fulfillment, delivery status, and proof-of-delivery
confirmation.
• Financial flow: the transfer of payments and financial
arrangements via electronic funds transfer (EFT).
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 • Order fulfillment is the set of complex
processes involved in providing customers
with what they ordered on time and all
Electronic customer services related to on-time delivery
Data of a product.
Interchange • Logistics entails all processes and
information needed to efficiently move
in the Order products from origin to destination.
Fulfillment • Back-office operations supports accounting,
inventory management and shipping
and processes in the fulfillment of orders.
Logistics • Front-office operations involve order
fulfillment activities visible to the customer,
Process: like sales and advertising.
Terminology • Electronic data interchange (EDI) involves
electronically communicating information
such as purchase order and invoices.

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Supply Chain Management: Order
Fulfillment
• Step 1: Make sure the customer will pay
• Step 2: Check in-stock availability and reorder as necessary
• Step 3: Arrange shipments
• Step 4: Insurance
• Step 5: Replenishment
• Step 6: In-house production
• Step 7: Use suppliers
• Step 8: Contacts with customers
• Step 9: Returns

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Achieving a Fully Digitized Supply Chain
• Always-on supply chain is an integrated set of supply
networks characterized by a continuous, high-velocity
flow of information and analytics creating predictive,
actionable decisions to better serve the customer 24/7.
• Always-on supply chains are more connected,
intelligent, scalable, and agile.
• Driven by social media and the IoT, digitized supply
chains have 50 times more data available to them than
just five years ago

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Four Technology Stages of Digital Adoption

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 • Changing business and customer
requirements are putting new and
greater pressures on organizations to
improve on the “Always-On” supply chain
by developing what some are calling the
“NextGen” or “Thinking” supply chain.
Lessons • This new form of supply chain will be
proactive, predictive, and prescriptive.
Learned • It will be tightly connected to data
sources such as social opinion and IoT
outputs and will allow close collaboration
with suppliers and customers through
cloud-based commerce networks that
offer a high level of security.

Copyright ©2021 John Wiley & Sons, Inc. 29

Supply Chain Management: Questions
1. What is a supply chain?
2. List four functions carried out by companies in a supply chain.
3. List and describe the three main flows being managed in a supply
chain.
4. Describe SCM.
5. What are the top two strategic priorities of SCM executives?
6. What are the two major barriers preventing innovation in the
supply chain?
7. What are the top innovative digital technologies impacting SCM?
8. Why would companies want to achieve a fully digitized supply
chain?
9. What are the characteristics of the NextGen SCM?
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Learning Objectives (4 of 5)

Intro to
Enterprise
Systems
Communicating
and
Collaborating
with
Knowledge Enterprise
Management, Resource
Content Planning
Management,
and Enterprise
Social
Platforms

Customer
Supply Chain
Relationship
Management
Management

Copyright ©2021 John Wiley & Sons, Inc. 31

 Customer Relationship
Management
• Customer relationship management (CRM) is the
process of choosing the most suitable and efficient
approach to making and maintaining interactions
with customer and clients.
• Effective CRM can provide managers with a 360-
degree view of the customer relationship, enable
real-time responses, and improve sales
productivity and predictability.

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The CRM
Process

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Figure 10.10 Four CRM critical success factors and their importance

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Automating CRM
• A CRM system is a widely used and mature technology that
can be deployed on the premises, in the cloud, or as on-
demand SaaS.
• CRM refers to the methodologies and software tools to
leverage customer data in order to achieve the following:
• Identify the appropriate customer experience for a customer.
• Predict and prevent attrition (loss) of a customer, unless he or she
is not worth retaining.
• Acquire new customers who are most likely to become profitable.
• Up-sell or cross-sell to unprofitable customers to move them to a
profit position.
• Reduce inefficiencies that waste advertising dollars.

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Customer Acquisition/Retention

• CRM and Customer Acquisition/Retention

o CRM technologies help marketing managers run effective
campaigns, promotions, commercials, and advertisements to
attract new customers, or to increase sales to existing
customers, or to do both.
o Newly acquired customers are unprofitable until they have
purchased enough products or services to exceed the cost to
acquire and service them.
o Some customers can be unprofitable so it’s important to
determine each customer lifetime value (CLV).
o Retaining customers that generate revenues in excess of the
costs is critical.

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CRM for a Competitive Edge
• Drucker on Marketing Effectiveness
o Know your customers
o Understand customer needs
o Communicate intelligently with customers

• 5% increase in customer retention can improve profits

by as much as 20%
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How to Avoid CRM Mistakes
• CRM Mistakes
o IT department in charge instead of business users.
o Incorrect CRM requirements by not involving key business
stakeholders from the outset.
o Mobility CRM strategy is an afterthought.
o Taking the wrong approach to CRM training.
o Underestimating users’ resistance to change.

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Customer Relationship Management:
Questions
1. Explain the four critical success factors for CRM.
2. Why does CRM matter?
3. Discuss how CRM impacts customer acquisition and
retention.
4. According to Peter Drucker, what does marketing
effectiveness depend on?
5. Give three reasons why CRM fails.
6. How can an organization justify implementing a CRM
system?

Copyright ©2021 John Wiley & Sons, Inc. 39

Learning Objectives (5 of 5)

Intro to
Enterprise
Systems
Communicating
and
Collaborating
with
Knowledge Enterprise
Management, Resource
Content Planning
Management,
and Enterprise
Social
Platforms

Customer
Supply Chain
Relationship
Management
Management

Copyright ©2021 John Wiley & Sons, Inc. 40

 • Knowledge management (KM) is
the process of creating, sharing,
using and managing knowledge
and information in an
organization to make the best
What Is use of the knowledge.
Knowledge • Four operational KM
Management? components:
• Content management
• Expertise location
• Lessons learned
• Community of practice (CoP)

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Koenig’s Three Stages of KM Development

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 • Enterprise knowledge management is
any solution or system that deals with
organizing data into structures that
create business knowledge out of
existing assets while ensuring its security
and managing access.
• Enterprise knowledge management
Automatin (EKM) system is an information system
used to capture, organize and create
g EKM knowledge to enhance organizational
processes.
• A sophisticated EKM system also has
powerful search and collaboration
features and can integrate seamlessly
with other systems to share important
information with employees and
customers.

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Benefits of EKM System
• Better strategic management
• Increases productivity and productivity
• Increases collaboration, sharing, and teamwork
• Decreases gaps in learning
• Increases accumulation of corporate knowledge
• Accelerates productivity of new employees through
better training based on existing expertise
• Standardizes processes to more easily access
information to improve decision-making
• Protects intellectual capital
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 Brainstorming is a group
problem-solving technique in
Techniques which group members offer up
spontaneous ideas for discussion
for to stimulate creative thinking
and develop new ideas.
Managing
Knowledge
in Group Mindmapping is a creative and
logical method of note-taking
Work that maps out ideas on a graph.

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Creating a Mind Map
• A mind map starts with a blank sheet of paper or blank
computer screen on which a central theme is drawn as
a single word or image.
• Next, associated representations or major ideas, called
first-level associations, are added. A maximum of seven
first-level associations should be used.
• These are then connected back to the central concept
with curved lines, and other second and third level
associations are represented as branches that emanate
from the related higher-level association.

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 • Enterprise content management
is a set of defined processes,
strategies, and tools that allow
an organization to effectively
Enterprise obtain, organize, store, and
Content deliver critical information to its
Management employees, stakeholders, and
(ECM) customers.
• Enterprise content management
(ECM) is one of the operational
components of KM.

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 • ECM systems enable an organization to
securely store large quantities of content,
distribute information, build and manage
Purpose workflows, facilitate team collaboration,
and integrate with other enterprise
and systems.

Benefits • By eliminating dependence on paper

documents, ECM systems empower
of an organizations to work more efficiently.
• Other benefits of an ECM system include:
ECM • Streamlining business processes by
eliminating paper
System • Driving improved customer service
• Increased productivity
• Reduced risk

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Using an ECM System
• The first step in using an ECM system is the digital capture and
import of information such as vendor invoices, customer
payments, job applicant resumes, vendor contracts,
correspondence with customer and vendors, and research
reports.
• Next, business critical documents are stored in a digital
repository where they can be viewed, edited, and organized.
• Now documents can be retrieved based on a full-text search,
specific words or phrases, and/or preset search options such as
document creation date or names of previous users.
• Finally, an ECM system reduces organizational risk by providing a
safe and secure repository for all corporate content.

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Enterprise
Social
Platforms
• Enterprise social
platform is a private,
company-owned
social media software
app that promotes
social connectivity
and collaboration with
an organization and
enhances productivity
and employee
satisfaction.

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Enterprise Social Platforms: SharePoint
• SharePoint is a Microsoft collaboration and document
management platform currently used by 85% to 90% of
Fortune 500 firms.
• The platform is a back-end system that links employees’
computers and mobile devices to make it easy to
communicate and to synchronize their efforts.
• It has the following social capabilities:
• Intranet and extranet
• Documents: SharePoint provides a shared space to
store documents
• Collaboration and BI
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Enterprise Social Platforms: Yammer
• Features similar to Facebook likes, newsfeeds, threaded
conversation, and direct messaging
• This private social channel helps employees, partners,
and customers communicate, exchange information,
and collaborate across departments, locations, and
business apps.
• Includes Enterprise Graph which shows how users are
related to ne another, solving social network sprawl
• Office Graph and Oslo App: Microsoft’s newer project,
code-named Oslo, builds on the concept of the
Enterprise Graph.

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Communicating and Collaborating with Knowledge
Management, Content Management, and
Enterprise Social Platforms : Questions
1. What are the basic functions of an ESP?
2. What are the capabilities of SharePoint?
3. In what ways can enterprises realize value from
Yammer or other enterprise social?
4. Why is KM important in an organization?
5. How does Salesforce Chatter enable workers to solve
problems?
6. What are three advantages of online brainstorming?
7. How is mindmapping different from brainstorming?
Copyright ©2021 John Wiley & Sons, Inc. 57
Copyright
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Copyright ©2021 John Wiley & Sons, Inc. 58