2K Ch 9: Achieving Operational Excellence

Operational Excellence

Strategic approach focused on optimizing the production and delivery of products and services.

Enterprise Applications

Integrated software applications that manage business operations across

different departments within an organization.

Collects data from many divisions of firm for use in nearly all of firm’s internal business activities

Information entered in one process is immediately available for other processes

Enterprise Applications – Key characteristics

Centralized database for all business operations

Built around thousands of predefined business processes that reflect best practices

Implementing Enterprise Applications

Features/Functions: Select functions of system they wish to use

Mapping: Map business processes to software processes

Customizing: Can rewrite some of the software to support the business processes

Business Value of Enterprise Applications

A more uniform organization

More efficient operations and customer-driven business processes

Firm wide information for improved dcsn making

Supply Chain

A network of orgs and biz processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to customers

Just-in-time strategy

Components arrive as they are needed

Finished goods shipped after leaving assembly line

Safety stock

Buffer for lack of flexibility in supply chain

Supply chain planning system

Model existing supply chain

Demand planning

Optimize sourcing, mfc plans

Establish inventory levels

Identifying transportation modes

Supply chain execution systems

Manage flow of products through distribution centers and warehouses

Pull-based scm

Supply chain driven by forecasts or best guesses of demand for products and products “pushed” to customers

Pull-based scm

Driven by actual customer orders or purchases so members of supply chain produce and deliver only what customers have ordered

Bullwhip effect

Distortion of info abt demand for a product as it passes from one entity to next across the supply chain

Business Value of SCM

Match supply to demand

Reduce inventory levels

Improve delivery service

Speed product time to market

Use assets more effectively

Reduced supply chain costs

Incr sales

Customer Relationship mgmt

Capture and integrate customer data from across the org

Consolidate the data

Analyze the data

Distribute the results to various systems and customer touch points across the enterprise

Touch points

Method of interaction with the customer

Most CRM packages have modules for

Sales force automation (SFA): Sales prospect and contact info, and sales quote generation capabilities

Customer service: assigning and managing customer service requests; Web-based self-service capabilities

Marketing: Capturing prospect and customer data, scheduling and tracking direct-marketing mails or email

Comprehensive CRM pkgs have modules for

Partner relationship mgmt (PRM)

Employee Relationship mgmt (ERM)

Major CRM software products support biz processes in which 3 areas

Sales

Mkting

Service

Operational CRM

Customer facing applications such as call centre and customer service support

Analytical CRM

Based on data warehouses that consolidate the data for data analysis

Biz val of CRM

Incr customer satisfaction

Reduced direct-marketing costs

More effective marketing

Lower costs for customer acquisition/ retention

Incr sales revenue

Reduced churn rate

Churn rate

no. of customers who stop using or purch products or services from a company

Indicator of growth or decline of firm’s customer base

Enterprise appl challenges

High Costs: Enterprise applications require significant investment in software, infrastructure, and training.

Organizational Change: Employees must learn and adapt to new workflows.

Complexity: Integration with legacy systems can be difficult

Next Generation EA

Enterprise solutions/suites: replacing stand-alone enterprise, CRM, SCM systems

Making these applications more flexible, web-enabled, integrated with other systems

Open-source and on-demand applications: SaaS

Social CRM Tools

Enable biz to connect customer convos and relationships from social networking sites to CRM processes

Social CRM and BI

Vendors have added BI features to help managers obtain more meaningful info from the mass amts of data generated by these social CRM systems