MIS 301 Lecture Notes - Lecture 24: Supply Chain Management Software, Switching Barriers, Network Effect
11 Nov 2016
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Document Summary
Erp system integrates many function needed in an organization. Ex: notify production, hire more employees, shipping, get raw materials, mkt. Customer relationship management (crm) software supports customer-related sales & mkt activities. Business intelligence (bi) software provides reporting and decision support. Need to ensure consistent formats across the enterprise. 6 steps avg time 6 days. Huge spending avg 15mil for a large company. Many costs involved: licensing, design, testing, etc. About 70-80%many costs involved: licensing, design, testing, etc. High switching costs & vendor lock in. Yearly tab for failed & troubled software conservatively runs form -bil in. Id total cost of ownership (toc) all costs associated w/ design, devel. , testing, implementation, documentation, training & maintenance of software system. Large upfront costs huge economies of scale. Exhibits complentarity potential for bundling high switching costs for customer generate substantial revenue from upgrading. Network effects & switching cost can offer a degree of customer preference and lock in.
