ITM 102 Lecture Notes - Lecture 9: Switching Barriers, Sales Quote, Accounts Payable

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Chapter 9: Enterprise Applications to Manage Supply chains and respond to Customers
Enterprise Systems
Suite of integrated software modules and a common central database
The database collects data from many different divisions and departments in a firm and from a large
number of business processes
Information collected from one process can be assessed and use by other processes in the firm
Enterprise Software
Built around thousands of predefined business processes that reflect best practices
oFinance/accounting: General ledger, accounts payable etc.
oHuman resources: Personnel administration, payroll, etc.
oManufacturing/production: purchasing, shipping
oSales/marketing: order processing, billing, sales planning
To implement, firms must,
oSelect functions of system they wish to use
oMap business processes to software processes
oUse software configuration tables for customizing
Business Value of Enterprise System
A more uniform organization
More efficient operations and customer-driven business processes
Firm-wide information for improved decision making
Supply Chain Management Systems
Supply chain
oA network of organizations and business processes for procuring raw materials, transforming
these materials into intermediate and finished products, and distributing the finished products to
oLinks supplier, manufacturing plants, distribution centres, retail outlets and customers
oMaterial, information, and payments flow through the supply chain in both directions
Information Systems and Supply Chain Management
Inefficiencies cut into a company’s operating costs
oCan waste up to 25% of operating expenses
Just-in-time Strategy:
oComponents arrive s they are needed
oFinished goods shipping after leaving assembly line
Bullwhip effect
oInformation about product demand gets distorted as it passes from one entity to the next across
supply chain
Supply Chain Management Software
Supply chain planning systems
oModel existing supply chain
oDemand planning
oOptimize sourcing, manufacturing plans
oEstablish inventory levels
oIdentifying transportation modes
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JDA software, SAP, Oracle are all supply chain management solutions
Supply chain execution systems
oManage flow of products through distribution centers and warehouses
Global Supply Chains and the Internet
Before internet, supply chain coordination hampered by difficulties of using disparate internal supply
chain systems
oEnterprise systems supply some integration of internal supply chain processes but not designed
to deal with external supply chain processes
Demand-Driven Supply Chains: From Push to Pull
oProduction master schedules are based on forecasts or best guesses of demand for products and
products are pushed to customers
oAlso known as a demand-driven or build-to-order model
oActual customer orders or purchases trigger events in the supply chain
Business Value of Supply Chain Management Systems
Match supply to demand
Reduce inventory levels
Improve delivery service
Speed product time to market
Use assets more effectively
Reduce supply chain costs
Increased sales
What is Customer Relationship Management
Customer Relationship Management systems
oCaptures and integrate customer data from across the organization
oConsolidate data
oAnalyze data
oDistribute the results to various systems and customer touch points across the enterprise
oTouch point: a method of interaction with the customer
Customer Relationship Management Software
More comprehensive packages have modules for:
oPartner relationship management (PRM)
oEmployee relationship management (ERM)
Most packages have modules for:
oSales force automation (SFA): sale prospect and contact information, and sales quote generation
oCustomer service: Assigning and managing customer services requests; web-based self-service
oMarketing: Capturing prospect and customer data, scheduling and tracking direct –marketing
mailings or emails
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Operational and Analytical CRM
Operational CRM
oCustomer-facing applications such as call centre and customer service support
Analytical CRM
oBased on data ware house that consolidate the data for data analysis
Business Value of Customer relationship management systems
Increased customer satisfaction
Reduced direct-marking costs
More effective marketing
Lower costs for customer acquisition
Increases sales revenue
Reduced churn rate
oChurn rate
Number of customer who top using products or services from company
Indicator of growth or decline of firms customer base
Enterprise Application: New Opportunities and Challenges
Highly expensive to purchase and implement enterprise applications- total cost may be 4-5 times the price
of software
Requires fundamental changes
oTechnology changes
oBusiness processes changes
oOrganizational changes
Incurs switching costs, dependence on software vendors
Requires data standardization, management, cleansing
Next-Generation Enterprise Applications
Enterprise solutions:
oReplacing stand-alone enterprise, CRM, SCM systems; more flexibility and web-enables
Open-source and on-demand applications
Social CRM and Business Intelligence
oSocial CRM tools enable a business to connect customer conversations and relationships from
social networking sites to CRM processes
oVendors have added business intelligence features to help managers obtain more meaningful
information from the massive amounts of data generated by these systems
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