Chapter 6 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

ENTERPRISE SYSTEMS or enterprise resource planning (ERP) systems

based on a suite of integrated software modules and a common central database

database

collects data from many different divisions and departments in a firm, and from a large number of key business processes in manufacturing and production, finance and accounting, sales and marketing, and human resources, making the data available for applications that support nearly all of an organization's internal business activities.

new information

entered by one process, the information is made immediately available to other business processes

Enterprise software

built around thousands of predefined business processes that reflect best practices

1. Financial and accounting processes
2. Human resources processes
3. Manufacturing and production processes
4. Sales and marketing processes

BUSINESS PROCESSES SUPPORTED BY ENTERPRISE SYSTEMS

1. select the functions of the system they wished to use
2. then map their business processes to the predefined business processes in the software

Companies implementing enterprise software would have to f

1. provide value by increasing operational efficiency
2. providing firmwide information to help managers make better decisions
3. help firms respond rapidly to customer requests for information or products
4. include analytical tools to evaluate overall organizational performance

BUSINESS VALUE OF ENTERPRISE SYSTEMS

supply chain

network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to customers

upstream

portion of the supply chain includes the company's suppliers, the suppliers' suppliers, and the processes for managing relationships with them

downstream

portion consists of the organizations and processes for distributing and delivering products to the final customers

internal supply chain

processes for transforming materials, components, and services furnished by their suppliers into finished products or intermediate products (components or parts) for their customers and for managing materials and inventory

just-in-time strategy

Components would arrive exactly at the moment they were needed and finished goods would be shipped as they left the assembly line.

safety stock

acts as a buffer for the lack of flexibility in the supply chain

bullwhip effect

which information about the demand for a product gets distorted as it passes from one entity to the next across the supply chain

Supply chain planning systems

enable the firm to model its existing supply chain, generate demand forecasts for products, and develop optimal sourcing and manufacturing plans

demand planning

determines how much product a business needs to make to satisfy all of its customers' demands. JDA Software, SAP, and Oracle all offer supply chain management solutions

Supply chain execution systems

manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner

1. greater geographic distances
2. time differences than domestic supply chains
3. have participants from a number of different countries

Global Supply Chain Issues

1. sourcing
2. transportation
3. communications
4. international finance

e Internet helps companies manage many aspects of their global supply chains, including what?

push-based model

production master schedules are based on forecasts or best guesses of demand for products, and products are "pushed" to customers

pull-based mode

also known as a demand-driven or build-to-order model, actual customer orders or purchases trigger events in the supply chain

Internet and Internet technology

make it possible to move from sequential supply chains, where information and materials flow sequentially from company to company, to concurrent supply chains, where information flows in many directions simultaneously among members of a supply chain network

1. match supply to demand
2. reduce inventory levels
3. improve delivery service
4. speed product time to market
5. use assets more effectively
6. increase sales

BUSINESS VALUE OF SUPPLY CHAIN MANAGEMENT SYSTEMS

CUSTOMER RELATIONSHIP MANAGEMENT

"know your customer"

A touch point

(also known as a contact point) is a method of interaction with the customer, such as telephone, e-mail, customer service desk, conventional mail, Facebook, Twitter, Web site, wireless device, or retail store

1. capture and integrate customer data from all over the organization
2. consolidate the data, analyze the data
3. distribute the results to various systems and customer touch points across the enterprise
4. provide a single enterprise view of customers

Customer relationship management (CRM) systems help in what?

Commercial CRM software packages

range from niche tools to large-scale enterprise applications

partner relationship management (PRM)

uses many of the same data, tools, and systems as customer relationship management to enhance collaboration between a company and its selling partners

employee relationship management (ERM)

deals with employee issues that are closely related to CRM, such as setting objectives, employee performance management, performance-based compensation, and employee training

Sales Force Automation (SFA)

help sales staff increase their productivity by focusing sales efforts on the most profitable customers, those who are good candidates for sales and services

Customer Service

provide information and tools to increase the efficiency of call centers, help desks, and customer support staff. They have capabilities for assigning and managing customer service requests.

Marketing

support direct-marketing campaigns by providing capabilities for capturing prospect and customer data, for providing product and service information, for qualifying leads for targeted marketing, and for scheduling and tracking direct-marketing mailings or e-mail

Cross-selling

marketing of complementary products to customers. (For example, in financial services, a customer with a checking account might be sold a money market account or a home improvement loan.)

Operational CRM

includes customer- facing applications, such as tools for sales force automation, call center and customer service support, and marketing automation.

Analytical CRM

includes applications that analyze customer data generated by operational CRM applications to provide information for improving business performance

Customer lifetime value (CLTV)

based on the relationship between the revenue produced by a specific customer, the expenses incurred in acquiring and servicing that customer, and the expected life of the relationship between the customer and the company

1. including increased customer satisfaction
2. reduced direct- marketing costs
3. more effective marketing
3. lower costs for customer acquisition and retention
4. increased sales revenue

BUSINESS VALUE OF CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS

churn rate

measures the number of customers who stop using or purchasing products or services from a company

enterprise solutions, enterprise suites, or e-business suites

make major enterprise software vendors' customer relationship management, supply chain management, and enterprise systems work closely with each other, and link to systems of customers and suppliers

-enterprise solutions/suite
-SOA standards
-Open-source applications
-On-demand solutions
-Cloud-based versions
-Functionality for mobile platform

NEXT-GENERATION ENTERPRISE APPLICATIONS

Social CRM

tools enable a business to connect customer conversations and relationships from social networking sites to CRM processes

Business Intelligence in Enterprise Applications

help managers obtain more meaningful information from the massive amounts of data generated by these systems. Included are tools for flexible reporting, ad hoc analysis, interactive dashboards, what-if scenario analysis, and data visualization.