Learning Objectives How do enterprise systems help businesses achieveoperational excellence? How do supply chain management systemscoordinate planning, production, and logistics withsuppliers? How do customer relationship managementsystems help firms achieve customer intimacy? What are the challenges posed by enterpriseapplications? How are enterprise applications taking advantage ofnew technologies?Eng. Rasha Al Ababseh

Enterprise Systems Before having an Enterprise systems, your decisionmaking would often be based on manual hardcopyreports, often out of date, and it would be difficultto really understand what is happening in thebusiness as a whole. Sales personnel might not be able to tell at the timethey place an order whether the ordered items are ininventory, and manufacturing could not easily use sales data toplan for new production.Eng. Rasha Al Ababseh

Enterprise SystemsEnterprise Application ArchitectureEnterprise applicationsautomate processes thatspan multiple businessfunctions andorganizational levels andmay extend outside theorganization.Eng. Rasha Al Ababseh

Enterprise Systems Enterprise Systems– Also called “enterprise resource planning (ERP)systems”– Suite of integrated software modules and acommon central database– Collects data from many divisions of firm for usein nearly all of firm’s internal business activities– Information entered in one process isimmediately available for other processesEng. Rasha Al Ababseh

Enterprise SystemsHOW ENTERPRISE SYSTEMSWORKEnterprise systems feature a set ofintegrated software modules and acentral database that enables datato be shared by many differentbusiness processes and functionalareas throughout the enterprise.Eng. Rasha Al Ababseh

Enterprise Systems Enterprise Software– Built around thousands of predefined business processes that reflectbest practices Finance/accounting: General ledger, accounts payable, etc.Human resources: Personnel administration, payroll, etc.Manufacturing/production: Purchasing, shipping, etc.Sales/marketing: Order processing, billing, sales planning, etc.– To implement, firms: Select functions of system they wish to use Map business processes to software processes– Use software’s configuration tables for customizing– A firm would use configuration tables provided by the software manufacturerto tailor a particular aspect of the system to the way it does business– SAP has more than 3,000 configuration tables for its enterprise software.Eng. Rasha Al Ababseh

Enterprise Systems Users could tap into the system and find out where thatparticular order was at any minute. Management could obtain information at any point intime about how the business was operating. The system could also generate enterprise-wide data formanagement analyses of product cost and profitability.Eng. Rasha Al Ababseh

Enterprise Systems Business value of enterprise systems– Increase operational efficiency– Large companies with many operating units indifferent locations have used enterprise systems toenforce standard practices and data so that everyonedoes business the same way worldwide.– Enable rapid responses to customer requests forinformation or products– Include analytical tools to evaluate overallorganizational performanceEng. Rasha Al Ababseh

Enterprise Systems Enterprise systems provide much valuable informationfor improving management decision making. Corporate headquarters has access to up-to-the-minutedata on sales, inventory, and production, and uses thisinformation to create more accurate sales andproduction forecasts. Enterprise systems allow senior management to easilyfind out at any moment how a particular organizationalunit is performing, determine which products are mostor least profitable, and calculate costs for the companyas a whole.Eng. Rasha Al Ababseh

SAP Business processes integration ERPEng. Rasha Al Ababseh

SAP Business processes integration ERPEng. Rasha Al Ababseh

SAP Business processes integration ERPEng. Rasha Al Ababseh

SAP Business processes integration ERPEng. Rasha Al Ababseh

Supply Chain Management Systems Supply chain:– Network of organizations and processes for: Procuring raw materials Transforming them into products Distributing the products Upstream supply chain:– Firm’s suppliers, suppliers’ suppliers, processes formanaging relationships with them Downstream supply chain:– Organizations and processes responsible for deliveringproducts to customersEng. Rasha Al Ababseh

Supply Chain Management SystemsThis figure illustrates the major entities in Nike’s supply chain and the flow of information upstream and downstream tocoordinate the activities involved in buying, making, and moving a product. Shown here is a simplified supply chain, with theupstream portion focusing only on the suppliers for sneakers and sneaker soles.Eng. Rasha Al Ababseh

Supply Chain Management Systems Information and supply chain management– Inefficiencies cut into a company’s operating costs Can waste up to 25% of operating expenses– Just-in-time strategy: Components arrive as they are needed Finished goods shipped after leaving assembly line If a manufacturer had perfect information about exactly howmany units of product customers wanted, when they wantedthem, and when they could be produced,– Safety stock Buffer for lack of flexibility in supply chain– Bullwhip effect Information about product demand gets distorted as itpasses from one entity to next across supply chainEng. Rasha Al Ababseh

Supply Chain Management SystemsTHE BULLWHIP EFFECTInaccurate information can cause minor fluctuations in demand for a product to be amplified as one moves further back inthe supply chain. Minor fluctuations in retail sales for a product can create excess inventory for distributors, manufacturers,and suppliers.Eng. Rasha Al Ababseh

Supply Chain Management SystemsThe bullwhip is tamed by: reducing uncertainties about demand and supply when allmembers of the supply chain have accurate and up-to-dateinformation. If all supply chain members share dynamic information aboutinventory levels, schedules, forecasts, and shipments, theyhave more precise knowledge about how to adjust theirsourcing, manufacturing, and distribution plans. Supply chain management systems provide the kind ofinformation that helps members of the supply chain makebetter purchasing and scheduling decisions.Eng. Rasha Al Ababseh

Supply Chain Management Systems Supply chain management software– Supply chain planning systems, enables the firm to: Model existing supply chain Generate Demand planning: how much product a business needsto make to satisfy all of its customers’ demands Optimize sourcing, manufacturing plans Establish inventory levels Identifying transportation modes– Supply chain execution systems manage the flow of products through distribution centers andwarehouses to ensure that products are delivered to the rightlocations in the most efficient manner. track the physical status of goods, the management of materials,warehouse and transportation operationsEng. Rasha Al Ababseh

Supply Chain Management Systems Global supply chain issues– Global supply chains typically span greatergeographic distances and time differences– More complex pricing issues (local taxes,transportation, etc.)– Foreign government regulations Internet helps companies manage many aspects ofglobal supply chains– Sourcing, transportation, communications,international financeEng. Rasha Al Ababseh

Supply Chain Management Systems Supply chain management systems– Push-based model (build-to-stock) Schedules based on best guesses of demand– Pull-based model (demand-driven) Customer orders trigger events in supply chain– Sequential supply chains Information and materials flow sequentially fromcompany to company– Concurrent supply chains Information flows in many directions simultaneouslyamong members of a supply chain network- enabled byInternet and Internet technology.Eng. Rasha Al Ababseh

Supply Chain Management SystemsTHE BULLWHIP EFFECTThe difference between push- and pull-based models is summarized by the slogan, “Make what we sell, not sellwhat we make.”Eng. Rasha Al Ababseh

Supply Chain Management Systems Business value of SCM systems–––––––Match supply to demandReduce inventory levelsImprove delivery serviceSpeed product time to marketUse assets more effectivelyReduced supply chain costs lead to increased profitabilityIncreased sales, More precise control of the supply chainenhances the firm’s ability to have the right productavailable for customer purchases at the right time.Eng. Rasha Al Ababseh

Customer Relationship Management Systems Knowing the customer– In large businesses, too many customers and too many wayscustomers interact with firm– you’d want to make sure you knew each of your customers well, as ifyou were running a small town store. And you’d want to make yourgood customers feel special. Customer relationship management (CRM) systems– Capture and integrate customer data from all over the organization– Consolidate and analyze customer data– Distribute customer information to various systems and customertouch points across enterprise– Provide single enterprise view of customersEng. Rasha Al Ababseh

Customer Relationship Management SystemsCUSTOMER RELATIONSHIPMANAGEMENT (CRM)CRM systems examine customersfrom a multifaceted perspective.These systems use a set ofintegrated applications to address allaspects of the customerrelationship, including customerservice, sales, and marketing.Eng. Rasha Al Ababseh

Customer Relationship Management SystemsGood CRM systems provide data and analytical tools for answeringquestions such as: What is the value of a particular customer to the firm over his orher lifetime?Who are our most loyal customers?Who are our most profitable customers?What do these profitable customers want to buy?Firms use the answers to these questions: to acquire new customers, provide better service and support to existing customers, customize their offerings more precisely to customerpreferences, and provide ongoing value to retain profitable customers.Eng. Rasha Al Ababseh

Customer Relationship Management Systems CRM software CRM packages range from niche tools (perform limitedfunctions, such as personalizing Web sites for specificcustomers) to large-scale enterprise applications.– More comprehensive CRM have modules for: Partner relationship management (PRM)– to enhance collaboration between a company and its sellingpartners.– If a company does not sell directly to customers but ratherworks through distributors or retailers, PRM helps thesechannels sell to customers directly.– Integrating lead generation, pricing, promotions, orderconfigurations, and availability.– Tools to assess partners’ performancesEng. Rasha Al Ababseh

Customer Relationship Management Systems Employee relationship management (ERM)– deals with employee issues that are closely related to CRM,such as employee performance management, performancebased compensation, and employee training.Eng. Rasha Al Ababseh

Customer Relationship Management Systems CRM packages typically include tools for:– Sales force automation (SFA) A module in CRM systems help sales staff increase theirproductivity by focusing sales efforts on the most profitablecustomers E.g. sales prospect and contact information, order processing, andorder tracking.– Customer service provide information and tools to increase the efficiency of callcenters, help desks, and customer support staff. E.g. assigning and managing customer service requests; Webbased self-service capabilitiesEng. Rasha Al Ababseh

Customer Relationship Management Systems Improved access to consistent and accurate customer informationhelps call centers:– handle more calls per day and decrease the duration of each call.– achieve greater productivity,– reduced transaction time, and higher quality of service at lowercost.– Marketing CRM systems support direct-marketing campaigns by:– providing capabilities for capturing prospect and customer data,scheduling and tracking direct-marketing mailings or e-mail, tools for analyzing marketing and customer data, identifying profitableand unprofitable customers, designing products and services to satisfyspecific customer needs and interests, and identifying opportunitiesfor cross-selling.Eng. Rasha Al Ababseh

Customer Relationship Management SystemsHOW CRM SYSTEMSSUPPORT MARKETINGCustomer relationshipmanagement softwareprovides a single point forusers to manage and evaluatemarketing campaigns acrossmultiple channels, including email, direct mail, telephone,the Web, and wirelessmessages.Eng. Rasha Al Ababseh

Customer Relationship Management SystemsCRM SOFTWARE CAPABILITIESThe major CRM softwareproducts support businessprocesses in sales, service, andmarketing, integrating customerinformation from many differentsources. Included are support forboth the operational andanalytical aspects of CRM.Eng. Rasha Al Ababseh

Customer Relationship Management SystemsCUSTOMER LOYALTY MANAGEMENT PROCESS MAPThis process map shows how a best practice for promoting customer loyalty through customer service would be modeledby customer relationship management software. The CRM software helps firms identify high-value customers forpreferential treatment.Eng. Rasha Al Ababseh

Customer Relationship Management Systems Operational CRM:– Customer-facing applications E.g. sales force automation, call center and customer service support, andmarketing automation Analytical CRM:– Analyze customer data output from operational CRM applications toprovide information for improving business performance.– Based on data warehouses populated by operational CRM systems andcustomer touc

CRM packages typically include tools for: –Sales force automation (SFA) A module in CRM systems help sales staff increase their productivity by focusing sales efforts on the most profitable customers E.g. sales prospect and contact information, order processing, and order tracking. –Customer service