1 enterprise e-business systems. 2 learning objectives identify the following aspects of customer...

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Enterprise e-Business Systems

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Learning Objectives

Identify the following aspects of customer relationship management (CRM), enterprise resource management (ERP), and supply chain (SCM) mgt systems: Business processes supported Customer and business value provided Potential challenges and trends

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Customer Relationship Management (CRM): The Business Focus

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A customer focused business was one of the top business strategies that can be supported by IT.

Thus many Companies are implementing CRM business initiatives and information systems as part of a customer-focused or customer centric strategy to improve their chance for success in today’s competitive environment.

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Mitsubishi Motor Sales

They realized their business lacked a customer focus and decided to change through a CRM initiative.

CRM project involved acquiring and installing the hardware, software, network and data resources from 18 vendors needed to create and support one central call center system that would provide superior service to all customers, prospects, and other callers.

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The team of sales, marketing, finance, and IT professionals who directed the project decided to install individual CRM software components using a slow, phased development approach so employees could be properly trained in each new application.

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The new system has produced increased customer satisfaction, major cost savings, improved employee morals, etc for Mitsubishi management.

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Customer Relationship Management

Provides customer-facing employees with a single, complete view of every customer at every touch point and across all channels

Provides the customer with a single, complete view of the company and its extended channels

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Customer Relationship Management (continued)

CRM.. Integrates and automates many of the

customer serving processes

Creates an IT framework of Web-enabled software & databases that integrates these processes with the rest of the company’s business operations

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CRM include a family of software modules that provides the tools that enable a business and its employees to provide fast, convenient, dependable, and consistent service to its customers.

Siebel systems, Oracle, PeoppleSoft, SAP are some leaders of CRM.

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Contact and Accountant Mgt

Information is captured from all customer touchpoints such as telephone, fax, email, etc.

CRM systems store the data in a common customer database that integrate all customer account information and makes it available throughout the company via internet, intranet, etc for sales, marketing, service, and other CRM applications.

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Sales

It provides sales representative with the software tools and company data sources they need to support and manage their sales activities and optimize cross selling and up selling.

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Marketing and Fulfillment

CRM helps marketing professionals accomplish direct marketing campaigns by automating tasks like qualifying leads for targeted marketing, scheduling and tracking direct marketing mailings.

Then CRM software helps marketing professionals capture and manage prospects and customer response data in CRM database and analyze the customer and business value of a company’s direct marketing campaigns.

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Customer service and support

It provides service representative with software tools and real time access to the common customer database shared by sales and marketing professionals.

It helps customer service managers create, assign and manage requests for service by customers.

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Call center software routes calls to customer support agents based on their skills and authority to handle specific kinds of service requests.

Help desk software assists customer service reps in helping customers who are having problems with a product or service by providing relevant service data and suggestions for resolving problems.

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Retention and Loyalty Programs

It costs 6 times more to sell a new customer than to sell to an existing one.

A typical dissatisfied customer will tell 8 to 10 people about his or her experience.

A company can boost its profits 85% by increasing its annual customer retention by only 5%.

70% of complaining customers will do business with the company again if it quickly takes care of a service.

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CRM try to help a company identify, reward, and market to their most loyal and profitable customers.

CRM analytical software includes data mining tools and other analytical marketing software while CRM databases may consist of a customer data warehouse and CRM data marts.

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3 Phases of relationship between a business and customers

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Benefits and Challenges Allows a business to identify its best

customers Makes possible real-time customization &

personalization of products & services based on customer wants, needs, buying habits, & life cycles

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Benefits and Challenges (continued) Enables a company to provide a

consistent customer service experience

Failures Due to lack of understanding &

preparation. CRM is not a silver bullet

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Monster.com rolled out a CRM in 1998. The company had invested over $1 million in customized software and integrated all its computer systems in an attempt to boost the efficiency of its sales force.

However the new system proved to be so slow that sales people in the field found themselves unable to download customer information from the company database on to their laptops. Every time they tried, their machine froze.

Eventually the company was forced to rebuild the entire system and lost millions of dollars and goodwill of customers and employees.

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Trends Operational CRM Analytical CRM Collaborative CRM Portal-based CRM

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Operational CRM

Supports customer interaction with greater convenience through a variety of channels including phone, fax, email, chat and mobile.

Synchronize customer interactions consistently across all channels.

Makes your company easier to do business with

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Analytical CRM

Extracts in-depth customer history, preferences and profitability information from your data warehouse and other database.

Allows to analyze, predict and derive customer value and behavior and forecast demand.

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Collaborative CRM

Enables easy collaboration with customers, suppliers, and partners.

Improves efficiency and integration throughout the supply chain

Allows greater responsiveness to customer needs through sourcing of products and services outside of your enterprise.

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Portal-based CRM

Provides all users with the tools and information that fit their individual roles and preferences.

Empowers all employees to respond to customer demands more quickly and become truly customer focused

Provides the capability to instantly access, link and use all internal and external customer information

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Enterprise Resource Planning (ERP): The Business Backbone

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Enterprise Resource Planning

Serves as a cross-functional enterprise backbone that integrates & automates many internal business processes and information systems

Helps companies gain the efficiency, agility, & responsiveness needed to succeed today

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Enterprise Resource Planning (continued)

Gives a company an integrated real-time view of its core business processes

ERP software suites typically consist of integrated modules of… Manufacturing Distribution Sales Accounting Human Resource Management

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Benefits Quality and efficiency

Helps improve the quality and efficiency of customer service, production, & distribution by creating a framework for integrating and improving internal business processes

Decreased Costs Reductions in transaction processing costs

and hardware, software, and IT support staff

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Benefits Decision support

Provides cross-functional information on business performance to assist managers in making better decisions

Enterprise agility Results in more flexible organizational

structures, managerial responsibilities, and work roles

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Challenges Costs of ERP

The costs and risks of failure in implementing a new ERP system are substantial.

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Causes of ERP failures

Underestimating the complexity of the planning, development, and training required

Failure to involve affected employees in the planning & development phases and change management programs

Trying to do too much, too fast

Insufficient training

Believing everything the software vendors and/or consultants say

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Trends Flexible ERP

SAP AG, Oracle, PeopleSoft, etc Web-enabled ERP Interenterprise ERP

ERP with web enabled links between company, its customers, suppliers, distributors and others.

E-Business Suites Integrate ERP, CRM, SCM, procurement, decision

support and other business functions. Oracle’s e-Business Suit and SAP’s mySAP

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Supply Chain Management: The Business Network

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Supply Chain Management

A cross-functional interenterprise system that uses IT to help support & manage the links between some of a company’s key business processes and those of its suppliers, customers, & business partners.

Goal is to create a fast, efficient, & low-cost network of business relationships.

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The inter relationships with suppliers, customers, distributers and other businesses that are needed to design, build and sell a product make up the network of business entities, relationships and processes that is called a supply chain.

And since each supply chain process should add value to the products or services a company produces, a supply chain is frequently called a value chain.

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Supply Chain Management (continued)

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What do supply chain management (SCM) tools do?

Supply ChainManagement Definition

Supply ChainManagement Definition

Supply chain management tools enable managers to make informed business decisions about the operation of their supply chain

Supply ChainManagement

Overview

Supply ChainManagement

Overview

Supply chain management tools facilitate planning and production scheduling based on known business constraints

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SCM capacity constraints

-- OR --

Can only drillone piece of metal

at a time

Computer processingand storage capacity

not infinite

“How do I decide what to doon which piece of equipment,

and when?”

Managing a supply chain would be easy if we had unlimited resourcesManaging a supply chain would be easy if we had unlimited resources

Supply Chain Manager

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SCM Tools levels

Supply Chain Planning services configure operations to best meet projected demand levels

The planning horizon ranges from developing a long term strategic outlook to developing a short term tactical production schedule

Event Management

Order Management

Inventory Management

Warehouse Management

Production Planning

Supply Planning

Demand Planning

Network Design

SCM Service Offering

OperationalPlanning

TacticalPlanning

StrategicPlanning

Real time /Minutes

Hours /Days

Weeks / Months

Quarters Years

Supply Chain Planning Tools Supply Chain Execution Tools

Supply Chain Execution services monitor and control production operations

They provide real time tracking and alert notification

Supply Chain Elements

Transportation Management

Source: BAH

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Supply Chain Planning Process

Supply PlanningSupply Planning

Balances unconstrained demand against high level supply chain constraints

Reflect order priority and due dates

Balances unconstrained demand against high level supply chain constraints

Reflect order priority and due dates

Network DesignNetwork Design

Design where to place production facilities and optimize the end to end chain

Construct alternate flow scenarios that incorporate associated constraints

Design where to place production facilities and optimize the end to end chain

Construct alternate flow scenarios that incorporate associated constraints

Production PlanningProduction Planning

Decompose the supply plan into sub assembly / production needs by site

Balance production capacity across sites

Decompose the supply plan into sub assembly / production needs by site

Balance production capacity across sites

Production SchedulingProduction Scheduling

Optimize processing flows, sequence, and timing

Produce a finite capacity production schedule

Optimize processing flows, sequence, and timing

Produce a finite capacity production schedule

Demand PlanningDemand Planning

Anticipate demand based on historical trends and current conditions

Perform what if analysis - highlight the impact of changing demand drivers

Anticipate demand based on historical trends and current conditions

Perform what if analysis - highlight the impact of changing demand drivers

Hours /Days

Weeks / Months

QuartersYearsPlanningHorizon

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Supply Chain Execution Process

Order ManagementOrder Management Record customer

orders and track status from receipt to final delivery

Direct efficient response to orders with dynamic cost / benefit analysis of options

Record customer orders and track status from receipt to final delivery

Direct efficient response to orders with dynamic cost / benefit analysis of options



Streamline information movement and provide tight inventory control

Inventories replenished using kanban, min-max, or reorder point

Streamline information movement and provide tight inventory control

Inventories replenished using kanban, min-max, or reorder point

Event ManagementEvent Management

Monitor and manage critical planning and event information Broadcast alert notification and present response alternatives based on pre determined

business rules

Monitor and manage critical planning and event information Broadcast alert notification and present response alternatives based on pre determined

business rules

Transportation ManagementTransportation Management

Optimize and track outbound and inbound shipping

Optimize and track outbound and inbound shipping



Optimization and management of warehouse processes

Optimization and management of warehouse processes

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I2 >master production schedule

Source: i2 Technologies

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SCM vendors

Source: Gartner

Although each of the vendors claim to provide an end to end solution, they actually fall into two distinct camps

First are the ERP vendors who provide a strong solution for integrating the data environment and providing visibility

Second are the SCM vendors who provide robust optimization solutions

In combination, with an ERP vendor providing the data environment and a SCM vendor providing the optimization solution, you can achieve a very elegant solution

Leading SCM VendorsLeading SCM Vendors

ERP Focused

Oracle SAP JD Edwards Peoplesoft Invensys /

Baan

ERP Focused

Oracle SAP JD Edwards Peoplesoft Invensys /

Baan

SCM Focused

i2 Manugistics Aspentech Logility

SCM Focused

i2 Manugistics Aspentech Logility

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Benefits and Challenges Can provide faster, more accurate

order processing, reductions in inventory levels, quicker time to market, lower transaction and materials costs, & strategic relationships with suppliers

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Problem causes Lack of proper demand planning

knowledge, tools, and guidelines Inaccurate or overoptimistic demand

forecasts Inaccurate production, inventory, and

other business data Lack of adequate collaboration

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Trends

1 enterprise e-business systems. 2 learning objectives identify the following aspects of customer...

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