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Chapter 8 Notes: Enterprise Applications and Business Communications

Chapter 8 Overview

  • This chapter covers enterprise systems, supply chain management (SCM), customer relationship management (CRM), and enterprise resource planning (ERP).

Section 8.1: Enterprise Systems and Supply Chain Management

Building a Connected Corporation Through Integrations

  • Integration: Allows separate systems to communicate directly, eliminating manual data entry into multiple systems.
  • Application Integration
  • Data Integration
  • Forward Integration: Sends information entered into a given system automatically to all downstream systems and processes.
  • Backward Integration: Sends information entered into a given system automatically to all upstream systems and processes.

Integration Tools

  • Enterprise System: Provides enterprisewide support and data access for a firm’s operations and business processes.
  • Enterprise Application Integration (EAI): Connects plans, methods, and tools aimed at integrating separate enterprise systems.

Three Primary Enterprise Systems

  1. Supply Chain Management (SCM)
  2. Customer Relationship Management (CRM)
  3. Enterprise Resource Planning (ERP)

Supply Chain Management (SCM)

  • Supply Chain Management (SCM): The management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and profitability.

Five Basic Supply Chain Activities

  1. Plan: Prepare to manage all resources required to meet demand.
  2. Source: Build relationships with suppliers to procure raw materials.
  3. Make: Manufacture products and create production schedules.
  4. Deliver: Plan for transportation of goods to customers.
  5. Return: Support customers and product returns.
  • Materials flow from suppliers and their “upstream” suppliers at all levels.
  • Transformation of materials into semifinished and finished products through the organization’s own production process.
  • Distribution of products to customers and their “downstream” customers at all levels.

Supply Chain Management and Porter’s Five Forces

  • Effective and efficient SCM systems can enable an organization to:
    • Decrease the power of its buyers.
    • Increase its own supplier power.
    • Increase switching costs to reduce the threat of substitute products or services.
    • Create entry barriers, thereby reducing the threat of new entrants.
    • Increase efficiencies while seeking a competitive advantage through cost leadership.

Technologies Reinventing the Supply Chain

  • Three components of Supply Chain Management:
    • Procurement
    • Logistics
    • Materials Management

Technologies Supporting SCM

  • Blockchain: Supports Materials Management and Logistics
  • 3D Printing: Supports Procurement
  • RFID: Supports Logistics
  • Drones: Disruptive technologies supporting Logistics
  • Robotics: Supports Materials Management and Logistics

3D Printing Supports Procurement

  • 3D Printing (Additive Manufacturing): Builds a three-dimensional solid object from a digital model, layer by layer, in an additive process.
  • Computer-Aided Design (CAD): Software used to create precision drawings or technical illustrations.
  • Computer-Aided Manufacturing (CAM): Uses software and machinery to facilitate and automate manufacturing processes.
  • 4D Printing: Additive manufacturing that prints objects capable of transformation and self-assembly.

RFID Supports Logistics

  • Radio-Frequency Identification (RFID): Uses electronic tags and labels to identify objects wirelessly over short distances

Three Components of an RFID System

  1. Tag: A microchip holds data, in this case an EPC(electronic product code), a set of numbers unique to an item. The rest of the tag is an antenna that transmits data to a reader.
    * EPC example: 01-0000A77-000136BR5
  2. Reader: A reader uses radio waves to read the tag and sends the EPC to computers in the supply chain.
  3. Computer Network: Each computer in the supply chain recognizes the EPC and pulls up information related to the item, such as dates made and shipped, price, and directions for use, from a server maintained by the manufacturer. The computers track the item's location throughout the supply chain.

Drones Support Logistics

  • Drone: An unmanned aircraft that can fly autonomously, or without a human.

Section 8.2: Customer Relationship Management and Enterprise Resource Planning

Customer Relationship Management (CRM)

  • Customer Relationship Management (CRM): Involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization's profitability.

CRM Key Players

  • Lead: A person or company that is unknown to your business.
  • Contact: Specific individual representing the account.
  • Account: A business relationship exists and can include customers, prospects, partners, and competitors.
  • Sales Opportunity: An opportunity exists for a potential sale of goods or services related to an account or contact.

Customer Valuation

  • Organizations can find their most valuable customers through "RFM": Recency, Frequency, and Monetary value.
    • How recently a customer purchased items.
    • How frequently a customer purchased items.
    • The monetary value of each customer purchase.

CRM Technologies

  • CRM Reporting Technology: Helps organizations identify their customers across other applications.
  • CRM Analyzing Technologies: Helps organizations segment their customers into categories such as best and worst customers.
  • CRM Predicting Technologies: Help organizations make predictions regarding customer behavior such as which customers are at risk of leaving.

Operational and Analytical CRM

  • Operational CRM: Supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers.
  • Analytical CRM: Supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers.

Marketing and Operational CRM Technologies

  • List Generator
  • Campaign Management
  • Cross-Selling and Up-Selling

Sales and Operational CRM Technologies

  • Sales Management CRM System
  • Contact Management CRM System
  • Opportunity Management CRM System

Customer Service and Operational CRM Technologies

  • Contact Center (Call Center)
    • Common features included in contact centers:
      • Automatic call distribution
      • Interactive voice response
      • Predictive dialing
  • Web-Based Self-Service System
  • Call Scripting System

Analytical CRM

  • Website Personalization: Occurs when a website has stored enough data about a person’s likes and dislikes to fashion offers more likely to appeal to that person.
  • Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into customer behavior.
  • These systems quickly aggregate, analyze, and disseminate customer information throughout an organization. 49