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e-Business Systems Chapter 7 Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

E-business Systems

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e-Business SystemsChapter 7Copvright 21 bv the McCraw-Hill Companies, Inc. All rights reserved.McCraw-Hill/Irwin7-2Learning Objectives dentify these cross-functional enterprise systems, and give examples of how they can provide business value to a company Resource planning Customer Relationship Management Supply chain management Enterprise application integration Transaction processing systems Enterprise collaboration systems7-3Learning Objectives Give examples of how the nternet and other information technologies support business processes within the business functions of Accounting Finance Human resource management Marketing Production Operations management7-4Learning Objectives Understand the need for enterprise application integration to improve the support of business interactions across multiple e-business applications7-5Enterprise Business SystemsE-business Using the nternet, other networks, and T to support.Electronic commerceEnterprise communicationsand collaborationWeb-enabled business processesE-commerce Buying, selling, and marketing of products, services, and information over the nternet and other networks7-6Case 1: NetSuite, Berlin Packaging, Churchill Downs. CRM software helps sales and marketing professionals increase sales revenue by providing more and better services to customers and prospects CRM implementation Often fails due to difficulty of migrating data s easier to do early in a company's history Companies must ensure data are in order before launching any major CRM initiative7-7Case Study Questions What are the business benefits of CRM implementations for organizations such as Berlin Packaging and Churchill Downs? What other uses of CRM would you recommend to the latter? Do you agree that smaller organizations are better positioned to be more effective users of CRM than larger ones?7-8Case Study Questions One of the main issues in the case is the importance of "good data to the success of CRM implementations n Chapter 5, we compared the file processing and database management approaches to data resource management Which of the problems discussed theredo you see in this case? How do CRM applications attempt to address them?7-9Cross-Functional SystemsCross-functional systems cross the boundaries of traditional business functions7-10Enterprise Application Architecture7-11Managing at the Enterprise Level Getting the whole business to fly in the same direction, as efficiently as possible Customer relationships Back-office operations Movement of raw materials & finished goods7-12Customer Relationship Management A customer-centric focus Customer relationships are a company's most valued asset Every company should find and retain the most profitable customers possible7-13What is CRM?Managing the full range of the customer relationship involves two related objectivesManaging the full range of the customer relationship involves two related objectives(2) Providing the customer with a single, complete view of the company and its extended channels(1) Providing customer-facing employees with a single, complete view of every customer,at every touch point, across all channelsCRM uses T to create a cross functional enterprise system that integrates and automates customer-serving processes7-14Application Clusters in CRM7-15Contact and Account Management CRM helps sales, marketing, and service professionals capture and track relevant data about Every past and planned contact with prospects and customers Other customer business & life-cycle events Data are captured through touchpoints Telephone, fax, e-mail, Websites Retail stores, kiosks, personal contact7-16Sales A CRM system provides sales reps with the tools and data resources they need to Support and manage sales activities Optimize cross- and up-selling CRM also provides the means to check on a customer's account status and history before scheduling sales calls7-17Marketing and FulfillmentCRM systems help with direct marketingcampaigns by automating tasksQualifying leads for targeted marketingScheduling and tracking mailingsCapturing and managing responsesAnalyzing the business value of a campaignFulfilling responses & requests7-18Customer Service and Support CRM helps customer service managers create, assign and manage customers' requests for service Call center software Help desk software Web-based self-service7-19Retention and Loyalty ProgramsBoosting customer retention 5% can boost profits 85%t costs 6 times more to sell to a new customerAn unhappy customer will tell 8-10 othersThe odds of selling to an existing customer are 50%; a new one 15%70% of complaining customers will do business with the company again if it quickly fixes a problem7-20Retention and Loyalty Programs Enhancing and optimizing customer retention and loyalty is a primary objective of CRM dentify, reward, and market to the most loyal and profitable customers Evaluate targeted marketing and relationship programs7-21Three Phases of CRM7-22Benefits and Challenges of CRMReal-time customization and personalization of products and servicesTrack when and how a customer contacts the companydentify and target the best customersProvide a consistent customer experienceProvide superior service and supportacross all customer contact pointsenefits of CRM7-23CRM Failures Business benefits of CRM are not guaranteed 50% of CRM projects did not produce promised results 20% damaged customer relationships Reasons for failure Lack of understanding and preparation Not solving business process problems first No participation on part of involved business stakeholders7-24What is ERP?Facilitates business,supplier, and customerinformation flowsFacilitates business,supplier, and customerinformation flowsSupports basicinternal businessprocessesSupports basicinternal businessprocessesAn integratedsuite of softwaremodulesAn integratedsuite of softwaremodulesThe backbone ofbusiness processesThe backbone ofbusiness processesA cross-functionalenterprise systemA cross-functionalenterprise system7-25ERP Application Components7-26Benefits and Challenges of ERPERP Business Benefits1. Quality & efficiency2. Decreased costs3. Decision support4. Enterprise agilityERPCosts1. High risk & cost2. Hardware and software are a small part of overall project3. Failure can cripple or kill a business7-27Costs of mplementing a New ERP7-28Causes of ERP FailuresCommon Causes of ERP FaiIureOver-reliance on ERP vendor or consultantsUnder-estimating the complexity of planning, development, trainingFailure to involve affected employees in planning and developmentTrying to do too much, too fastnsufficient trainingnsufficient data conversion and testing7-29Supply Chain Management (SCM) Supply chain management helps a company Get the right products To the right place At the right time n the proper quantity At an acceptable cost7-30Goals of SCMForecast demandEnhance relationshipswith customers,suppliers, distributors,and othersReceive feedback onthe status of everylink in the supplyControl inventory7-31What is a Supply Chain? The interrelationships With suppliers, customers, distributors, and other businesses Needed to design, build, and sell a product Each supply chain process should add value to the products or services a company produces Frequently called a value chain7-32Supply Chain Life Cycle7-33Electronic Data nterchangeThe electronic exchange of business transaction documents between supply chain trading partnersOne of the earliest uses of information technologyfor supply chain managementMany transactions occur over the nternet,using secure virtual private networksThe almost complete automation of ane-commerce supply chain process7-34Typical ED Activities7-35Roles and Activities of SCM in Business7-36Planning & Execution Functions of SCMSupply chain designCollaborative demand & supply planningPlanningMaterials managementCollaborative manufacturingCollaborative fulfillmentExecutionSupply chain event managementSupply chain performance management7-37Benefits and Challenges of SCMey enefitsFaster, moreaccurate orderprocessingStrategicrelationshipswith supplierLowertransaction andmaterials costQuicker timesto marketReductions ininventory levels7-38Goals and Objectives of SCM7-39Benefits and Challenges of SCM Key Challenges Lack of demand planning knowledge, tools, and guidelines naccurate data provided by other information systems Lack of collaboration among marketing, production, and inventory management SCM tools are immature, incomplete, and hard to implement7-40Enterprise Application ntegration EA software connects cross-functional systems Serves as middleware to provide Data conversion Communication between systems Access to system interfaces7-41How EA Works7-42Transaction Processing Systems Cross-functional information systems that process data resulting from the occurrenceof business transactions %ransactions include sales, purchases, deposits, withdrawals, refunds, and payments OnIine transaction processing (OLTP) is a real-time system that captures transactions immediately7-43Transaction Processing Systems7-44The Transaction Processing Cycle7-45Enterprise Collaboration Systems (ECS) EC systems are cross-functional information systems that enhance team and workgroup Communication Coordination Collaboration Systems may include Networked PC workstations Servers Databases Groupware and application packages7-46ECS Tools7-47Functional Business Systems'arious types of information systems that support the business functions of.AccountingFinanceMarketingOperations managementHuman resource management7-48Case 2: OHSU, Sony, Novartis, and Others Oregon Health & Science University uses Oracle's iRecruitment application, which is part of its E-Business HR Management System suite Managers can request a new employee and process applications electronically Handles most administrative work, including routing forms and posting jobs on the Web site The university fills job openings two weeks fasterand saves $1,500 per job More and more HR is being called to be a strategic business partner, and professionals in this area are turning to T for innovative solutions7-49Case Study Questions What are some of the business benefits of the technologies described in the case? Provide examples beyond the automation of transaction-oriented processes Do you think the business value of these strategic HRM applications depends on the type of business a company is in? For instance, consulting, manufacturing, or professional services? 7-50Case Study Questions What are some of the challenges and obstacles in developing and implementing HRM systems? Are these unique to this type of system? What strategies would you recommend for companies to meet those challenges? 7-51T in Business7-52Marketing SystemsMarketing systems are concerned with.Planning, promotion, and sale of existing products in existing markets Development of new products and new marketsBetter attracting and serving present and potential customers7-53Marketing nformation Systems7-54nteractive Marketing nteractive Marketing A customer-focused marketing process Uses the nternet, intranets, and extranets Establishes two-way transactions betweena business and its customers or potential customers Goal Profitably use networks to attract and keep customers Get customers to help create, purchase, and improve products and services7-55Targeted MarketingAdvertising and promotion managementconcept with five targeting components7-56Sales Force Automation Outfit sales force with notebook computers, web browsers, and sales contact software Connect them to marketing websites and the company intranet Goals ncrease personal productivity Speed up capture and analysis of sales data Gain strategic advantage7-57Manufacturing nformation Systems Supports production/operations functions All activities concerned with planning and control of the processes tied to producing goods or services7-58Computer-ntegrated Manufacturing7-59CM Objectives $impIify. production processes, product designs, and factory organization utomate. production processes and the business functions that support them ntegrate. all production and support processes using Networks Cross-functional business software Other information technologies7-60CM ObjectivesCM supports the concepts of.AgilemanufacturingTotal qualitymanagement(TQM)Flexiblemanufacturingsystems7-61Manufacturing nformation Systems Computers help engineers design products Computer-aided engineering (CAE) Computer-aided design (CAD) Computer-aided manufacturing (CAM) Manufacturing also uses software Computer-aided process planning Material requirements planning (MRP) Manufacturing resource planning Manufacturing execution systems (MES) Process and machine control7-62Human Resource Management (HRM) nformation systems support Planning to meet personnel needs Development of employees to their full potential Control of all personnel policies and programs7-63HRM Systems7-64HRM and the nternetRecruitment viathe company website& commercialrecruiting servicesPosting messagesin selected nternetnewsgroupsCommunicating withjob applicantsvia e-mail7-65HRM and Corporate ntranetsCorporate intranet usesDisseminate information faster than previous company channelsProcess common HRM transactionsAround-the-clock HRM servicesTrainingCollect information from employees onlineAllow HRM tasks to be performed with little HRM dept. intervention7-66Employee Self-Servicentranet applications can allow employees toView benefitsEnter travel and expense reportsVerify employment and salary informationAccess and update personal informationEnter time-sensitive dataReceive trainingProduce automated pay sheets7-67Accounting nformation SystemsOldest and most widely used information system in businessRecords and reports business transactions and economic eventsProduces financial statementsForecasts future conditions7-68Accounting nformation Systems7-69Financial Management Systems Supports business managers and professionals making decisions concerning Financing of a business Allocation and control of financial resources within a business7-70Financial Management Systems7-71Case 3: Perdue Farms and Others Even the best companies are challenged by supply chain pressures during holidays The holiday season is difficult for manufacturers and retailers because they're making educated guesses and bets on what demand is going to be They're not going to get it right every time Delivering the right number of products to the right customers at the right time is very important Businesses are turning to forecasting and supply chain management tools7-72Case Study Questions What key factors determine the success or failure of supply chains during the holiday season? Which of these are, or could be, under the control of companies, and which are inherent in the end-consumer business? Consider the increasing use of gift cards in lieu of gifts during the holiday season What effects does this new practice introduce into demand planning and supply chain management? 7-73Case Study Questions Consider that virtually nothing is known about the recipients of gift cards What strategies can retailers and their suppliers consider to accommodate these effects? Prof. Brian Tomlin says that smart companies substitute information for inventory What do you think he means by this? How do you think companies can take advantage of more extensive and accurate information to improve their inventory and logistic practices?