Enterprise Systems Group Assigment - 2015

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GHANA TECHNOLOGY UNIVERSITY COLLEGE

MSC. MANAGEMENT INFORMATION SYSTEMS

ENTERPRISE SYSTEMS GTUM06EKM

Group Assignment

Kwabena Twum-Barimah 05AG0915073

Seth Ampoma Brako 05AG0915166

David Abeku Fynn 05AG0915029

2nd

October, 2015


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PART ONE

Abstract

Customer Relationship Management (CRM) system (Injazz and Karan 2003), mentioned as a

technological system that uses the business processes in combination with the people and

technology to evaluate and understand the behavior of customers of a business. It is an

established fact that the difference in performance of businesses today is the best use of the

mix of technology and marketing strategies. The best marketing strategy requires knowledge

about customers and their behavior. Trends of customer behavior can be obtained with the

use of proper Customer Relationship Management (CRM) system.

The write up provided analysis on sources of CRM software through netsourcing and

categorize the software into three categories, namely high end, mid range, and in-

expensive ranges. Secondly this work used relevant academic journal articles as point of

reference in evaluating the above mentioned categories of the CRM software using the

criterion such as System costs (hard-ware/software licenses), Business Intelligent

(Reporting), Contact & Account Management, Sales Management, Marketing

Management, Tele-marketing/Tele-sales (Internet), Customer Service, Data Integration,

Customizability, and Training & Support

Lastly, this work provided recommendations on systems requirements for a secured ERP

implementation. Here we looked at Server or Providers Side Security, Secured Connectivity, and

Secured Clients Systems.


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Table of Contents

PART ONE ...................................................................................................................................... 2

Abstract ......................................................................................................................................... 2

1. Introduction ....................................................................................................................... 5

2. Alternative Sources via Netsourcing ................................................................................... 62.1. Market Shares .................................................................................................................... 7

2.2. Customer Satisfaction ........................................................................................................ 7

3. Evaluation of Alternate CRM Software ............................................................................... 8

3.1. Evaluation Criteria .............................................................................................................. 8

3.2. Analysis of Criteria for CRM Evaluation ........................... ....... ............... .............. ....... ....... .. 9

3.2.1. System Costs ...................................................................................................................... 9

3.2.2. Business Intelligent (BI)/Reporting ..................................................................................... 9

3.2.3. Contact & Account Management ....................................................................................... 9

3.2.4. Sales Management ........................................................................................................... 10

3.2.5. Marketing Management................................................................................................... 10

3.2.6. Tele-marketing/Tele-sales ................................................................................................ 10

3.2.7. Customer Service ............................................................................................................. 10

3.2.8. Data Integration ............................................................................................................... 11

3.2.9. Customizability................................................................................................................. 11

3.2.10. Training and Support ........................................................................................................ 11

4. Recommendation on Systems Requirements.................................................................... 11

4.1. Recommendation for Server or Providers Side Security ............. ....................................... 12

4.2. Recommendation for Secured Connectivity ...................................................................... 12

4.3. Recommendation for Secured Clients Systems ................... ....................................... ....... 12

5. References ....................................................................................................................... 14

PART TWO ................................................................................................................................... 15

6. Introduction ..................................................................................................................... 15

6.1. Pros and Cons of Vanilla ERP Implementation .................... .............................................. 15

6.2. Pros and Cons of Customized ERP Implementation ........................... ....... ...................... ... 15

6.3. Sales Order Process Module ............................................................................................. 156.4. Pre Sales Activities ........................................................................................................... 16

6.5. Sales Order Entry ............................................................................................................. 17

6.6. Check Availability ............................................................................................................. 17

6.7. Pick Materials................................................................................................................... 18

6.8. Pack Materials .................................................................................................................. 18

6.9. Post Goods issues ............................................................................................................. 18


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6.10. Invoice Customer ............................................................................................................. 18

6.11. Receipt of Customer Payment .......................................................................................... 19

7. Sales Order Process Flow.................................................................................................. 20

8. Conclusion ....................................................................................................................... 21

9. References ....................................................................................................................... 21


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1. Introduction

Melcom Superstore is a chain of retail department stores which has over 10 branches in

Ghana, and is constantly on the lookout to expand to other countries in West Africa. To

improve on profitability, customer retention and loyalty in a challenging economy, Melcom

superstore is preparing to acquire Customer Relationship Management (CRM) software.

The acquisition of CRM software by Melcom is to make the superstore customer centric and

also improve CRM capabilities for their current and future businesses as it plans to expand to

other countries in the West African sub-region.

This study will first, analyze three alternative sources of CRM via netsourcing arrangements,

then it will evaluate these three providers of CRM using ten specific criteria to ascertain the

best option.

Lastly, we will recommend system requirements guidelines needed by Melcom to implement

a secured ERP solution for the best option after the evaluation of the providers.


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2. Alternative Sources via Netsourcing

The increase in number of service providers in the Internet Service Providers (ISP) spaces in

Ghana has improved the quality of service (QoS) and has also lowered the prices of Internet

services. Using the Internet, companies can have access to achieving IT infrastructures

which can support their ERP systems. (Shehab, Thomassin and Badawy, 2011, p1). The

lowering of prices and improvement of QoS has created opportunity for companies in Ghana

to source best in class software and systems to create world class companies via netsourcing.

Netsourcing is the practice of renting or paying as you use access to centrally managed

business applications, made available to multiple users from a shared facility over the Internet

or other networks via browser-enabled devices. (Kern, Lacity, &Willcock, 2002 p.1)

The netsourcing space provides business applications like CRM has a number of service

model options like software as a Service and Software onDemand

For the purposes of analyzing sources via netsourcing for Melcom Superstore to choose from,this study will analyze three providers. The three vendors are Oracle providers of Oracle

CRM onDemand, Salesforces.com providers of Salesforce CRM, and SugarCRM suppliers of

SugarCRM. Oracle CRM onDemand, Salesforce.com and SugarCRM will be analyzed as

high-end, mid-range and inexpensive alternatives of CRM packages respectively.

Zoho.com in comparing the cost of the three CRM vendors for the same 20 users with its

CRM package indicates that Oracle CRM onDemand is the most expensive followed by

Salesforce.com, with SugarCRM being the least expensive.

Number of Users 20

Vendor Annual Cos t

Zoho CRM Professional Edition $4,800

SugarCRM Professional Edition $8,400

Salesforce Professional Edition $15,600

Oracle CRM OnDemand $16,800

Table 1.Cost of 20 user license for four CRM software compared

Source: www.zoho.com(September 2015)


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2.1. Market Shares

Oracle CRM onDemand is perceived to be relatively expensive compared to salesforce.com

and SurgarCRM, Gartner research shows that Oracle CRM market share is less than that of

salesforces. In addition the revenue growth of Oracle CRM onDemandis less than 5% from

2012 to 2013 as compared to that of Salesforce.com. Although SugarCRM is less expensive,

its market share and revenue growth is insignificant compared to the two vendors. Tables 2

below shows the CRM market share of Salesforce.com, Oracle and the others.

Company 2013 Revenue 2013 Market

Share

2012 Revenue 2012-2013

Growth (%)

Salesforce.com 3,290.3 16.1 2,525.6 30.3

SAP 2,621.5 12.8 2,327.1 12.7

Oracle 2,096.5 10.2 2,015.2 4.0

Microsoft 1,392.4 6.8 1,134.0 22.8

IBM 792.1 3.9 649.1 22.0

Others 10,283.5 50.2 9,351.2 9.9

20,476.3 100.0 18,002.2 13.7

Table 2CRM Software spending by vendor, Total Software Revenue Worldwide, (Millions

of Dollars)

Source: Gartner (May 2014)

2.2. Customer Satisfaction

Customer Satisfaction measurement or assessment on a product or service on a market is

important as it provides a good sense of a fit to purpose and fit to use of the product or

service. Customer satisfaction for the three selected vendors was difficult to measure or

ascertain prior to this study. Mihelis and Grigoroudis (2001) argue that measuring customer

satisfaction offers an immediate, meaningful, and objective feedback about customer

preferences and expectations. We agree with this argument and prescribes that this exercise

be taken prior to making final decision on the selection of a software package.


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3. Evaluation of Alternate CRM Software

To realize a successful implementation of CRM software, business and IT executives should

implement CRM processes and technologies and also create employee behavior that supports

coordinated and more effective customer interactions throughout all customer channels. The

effectiveness of a CRM application can be measured as a satisfaction level achieved by CRM

activities (Kim et al. 2003).

3.1. Evaluation Criteria

There are several criteria one could choose to evaluate a CRM application. Friedrich,

Sprenger and Breitner (2010) argued that there are three major criteria for evaluating and

selecting CRM applications. The list below shows the major and the minor criteria:

A. Cost Criteria

1. System costs (hard-ware/software licenses)

2. Preparation and installation costs

3. Maintenance costs

4. Resources (consulting, internal)

5. Training and support

6. Upgrade costs

B. CRM Functionality Criteria

1. Business Intelligent (Reporting)

2. Contact & Account Management

3. Campaign Management

4. Call Center

5. Relationship Management

6. Field Service

7. Sales Management

8. Marketing Management

9. Lead/Opportunity Management

10.Customer Service

11.Tele-marketing/Tele-sales (Internet)


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C. Technical (Quality) Criteria:

1. Portability

2. Usability (user friendliness)

3. Data Integration

4. Customizability

5. Resources

6. Training & Support

7. Reliability & Robustness

8. Performance & Practicability

9. Security

10.Timeliness

The priority or weighting of the sub criteria will vary from organization to organization. In

the case of Melcom Superstore, the ten criteria selected below are used for the evaluation of

the CRM application for the purposes of this study.

3.2. Analysis of Criteria fo r CRM Evaluation

3.2.1. System Costs

Since the software will be rented (due to the nature of netsourcing) there will be no hardware

cost for the setting up of the software but Melcom will be paying license fees for each user

account. The license initial and renewal fees can be expensive and tricky from CRM vendors.

3.2.2. Business Intelligent (BI)/Reporting

The CRM application should be able to produce good report for management to plan and

make strategic decision. The business process should be well represented so that proper

analytics tools can be used. The BI functionality should be able to produce predefined & ad

hoc reporting. It must also list management, dashboard, alerts & alarms scheduling and real-

time productivity monitoring.

3.2.3. Contact & Account Management

The application should be able to manage customer account and contact. Here we look at

contact profile, activity history, organization chart, business relationships, order entry, history


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& tracking, proposal & sales contract generation, internet account management, email

application integration, native calendar and multi-platform data synchronization.

3.2.4. Sales Management

Good CRM software should be able to deal with sales management activities without much

difficulty. Sales process capture and track progress whiles following up on leads and closing

sales. Sales pipeline management capabilities provide an aggregated view of all opportunities

by sales stage or potential close date.

Sales management comprises of many activities such as opportunity management,

forecasting, sales cycle analysis, sales metrics, activity reporting, mapping tools & territory

alignment and expense reporting.

3.2.5. Marketing Management

Marketing management represents the marketing strategy, process automation and

technologies required to integrate people, processes, campaigns, channels, resources and

technologies across the marketing ecosystem. The marketing ecosystem includes internal

marketing staff and external stakeholders to the company. The CRM application should

satisfy marketing needs such as campaign planning and budgeting, marketing event

management, marketing encyclopedia, literature fulfillment, database marketing and

customer retention.

3.2.6. Tele-marketing/Tele-sales

The CRM application should be able to do call planning, call list assembly, dynamic branch

scripting, call history & statistics, auto-dialing, productivity & performance analysis and

literature fulfillment. With this functionality, prospective sales deal can be reach without

customers physically moving to Melcom shops.

3.2.7. Customer Service

The whole objective of CRM is to manage customers. Customers can include not only those

who buy from Melcom, but also suppliers, partners, employees and investors of Melcom.

Now focusing on people who buy form Melcom, the CRM application should be able to do


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incident analysis, incident assignment & escalation, incident tracking, multiple issues per

incident and order tracking.

3.2.8. Data Integration

Data integration in CRM applications is not straight forward. The challenge is that

companies implement multiple applications for a reason; each is designed to support the

needs of a particular user group to perform their specific tasks. Each of these systems has

different priorities, different data structures, different user interactions, and different levels of

importance to the business operations. The case of Melcom Superstore is no different from

these facts. There are already two application installed. The CRM application to be used

should make data replication, data synchronization and process integration levels easier. Each

of these levels has its characteristics, requirements, benefits, risks, and costs.

3.2.9. Customizability

One of the best criteria is the flexibility and customizability of a CRM application. Since the

Melcom Superstore has the capacity to grow and will have some dynamic operational needs,

it will be prudent to select the CRM with best methods for using Rapid Application

Development Toolkits, Multi-Platform SQL Database Support, Cross platform Data

Synchronization, Multi-level Security for Users and Data, Online Help System, Scalable,

Best Fit Database Platform For the Job and Real-time Integration with Other Applications.

3.2.10. Training and Support

A good CRM vendor should have a strong team to training the users of Melcom Superstore

and provide support for the application. The training and support should include online

support team, online manuals and up to date online demo database for simulation.

4. Recommendation on Systems RequirementsReasonable threat to implementing an alternative source of Enterprise Resource Planning

(ERP) via netsourcing is systems security. Hence it is important to have adequate security on

the provision of service via netsourcing.

The systems security to be considered by Melcom superstore should be holistic covering

server side, connectivity and client side in the provision and use of the ERP.


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4.1. Recommendation for Server or Providers Side Securi ty

Since Melcom superstores database will be hosted by the CRM software provider, there is

the need to verify that the provider encrypts all sensitive data in the CRM database. The

encryption of the sensitive data like payment (credit/debit card) details, login credentials

(passwords), etc. will ensure unauthorized users do not have access to the sensitive data ifthey should get direct access to the CRM database.

For reliability of systems at all times, Melcom must also ensures that the CRM provider has

adequate Disaster Recovery and Business Continuity Plans (BCP/DRP) that get tested

periodically. These plans should be reviewed and aligned to Melcoms BCP and DRP.

We also recommend that, Melcom ensures that the CRM package has an adequate audit trail

feature that will provide Melcom the ability to review any foiled or success security attacks

that may occur as they use the package.

4.2. Recommendation for Secured Connectivi ty

Since Melcom superstores will be using the Internet to access the CRM package in its offices,

it is important that the connectivity between the CRM package hosting provider and the staff

or client using the package is secured. A secured connection will prevent hackers to retrieve

clear data whiles data is in transit between the CRM provider and Melcom.

We recommend that Melcom uses a Virtual Private Network (VPN) connectivity between the

provider and Melcoms head office. The creation of a VPN, a secured tunnel over the

Internet, will ensure a secured data transmission from provider to Melcom superstore.

In addition Melcom should deploy Secure Socket Layer (SSL) for all users of the system who

utilizes the system via a web browser. The use of SSL will ensure that data being used by

staff or clients of Melcom is not compromised.

4.3. Recommendation for Secured Clients Systems

The advantage of an Enterprise Resource Planning like the CRM software is to have

customers and staff of the company to use the same software at the same time. To this extent

it is important that the CRM package has the feature of insolating the back office modules


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from the customer (front end) module. The front end module which is mostly rendered

through a browser should have SSL activated.

Cloud and mobile computing capabilities have extended accessing of software to smart

phones and tablets. The use of these devices to access corporate information has introduced a

number of risks including data loss. To prevent data loss and unauthorized access to backend

data of the CRM software on staff devices, we recommend that Melcom provides a securedcontainerization for all devices that will be accessing the CRM package. This will ensure that

staff of Melcom uses complex passwords on devices (desktops, smartphones, tablets) and

also prevent data loss due to loss of devices, etc.


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5. References

Kern, T., Lacity, M. C., &Willcock L.P. (2002) Netsourcing: Renting Business

Applications and Servives over a Network. Upper Saddle River, NJ:Prentice Hall

Huyskens, C. &Loebbecke., LOEBBECKE, C., (2006) Determinants of Netsourcing: An

Empirical Evaluation.Journal of Information Technology Management. 17(3). p.1-7

Kern, T., Lacity, M., Willcock L. (2002) Application Service Provision: Risk Assessment

and Mitigation.MIS QuarterlyExecutive.1(2). p.115 125.

Mihelis, G., Grigoroudis, E., Siskos, Y., Politis, Y. &Malandrakis, Y.(2001)Customer

Satisfaction Measurement in the Private Bank Sector. European Journal of Operational

Research. 1. p.347-360

Kim, J., Suh, E. &Hwang, Y. (2003) A Model for Evaluating The Effectiveness of CRM

Using The Balanced Scorecard.Journal of Interactive Marketing. 17(2). p.6-14

Injazz, JC and Karen, P (2003) Understanding customer relationship management (CRM)

People, process and technology.Business Process Management Journal, Vol. 9 No. 5, pp

672-688

http://www.crmodyssey.com/Documentation/Documentation_PDF/Critical_Steps-

to_Successful_CRM.pdf

Jonghyeok K et al. (2003) A model for evaluating the effectiveness of CRM using the

balanced scorecard.Journal Of Interactive MarketingVol. 17 No. 2

Colombo, E., Francalanci, C., (2004) Selecting CRM packages based on architectural,

functional, and cost requirements: Empirical validation of a hierarchical ranking model.

Requirements Engineering. 9 (3). p.186 203

Friedrich, I., Sprenger, J., Breitnet, M.H. (2010) CRM Evaluation, an Approach for

Selecting Suitable Software Packages. MKWI 2010 Unternehmensberatungim IT-

Umfeldpp.p. 611 - 622

Farbey, B., Land, F., & Targett, D. (1999) Moving IS evaluation forward: learningthemes and research issues.In: Journal of Strategic Information Systems. 8(2). p.189-207


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PART TWO

6. Introduction

Project Managers are faced with the dilemma of balancing schedule and budget goals against

the benefits of customization in ERP software implementations. It has been found out (Jeffrey

W. Noyes, 2003) that, one of the most significant variables in determining project success is

the degree of customization done to the system.

The two implementation strategies; Vanilla (out-of-the box ) and Chocolate (customized)

ERP implementations all have some pros and cons for ERP implementation.

6.1. Pros and Cons o f Vanil la ERP Implementation

Implementing a system without customization yields the most benefits and is the most cost

effective solution. The advantages of using a non customized implementation strategy include

lower costs, easier and less time consuming upgrades, and retaining full vendor support. The

disadvantage of this strategy is the company must make use of the default system processes

and functions and have little control over functionality.

6.2. Pros and Cons of Customized ERP Implementation

Customized ERP Implementation strategy gives users the chance not to depart so much from

their known process and procedures. The advantages of this strategy are that the software will

better meet the needs of the company and their unique processes and business processes.

Users will also not have major changes and therefore adjust to the new system more readily.The advantages are that upgrading to a newer version of the software will be more time

consuming and expensive. Customizations may not readily be supported by the vendor and

customizing can cause delays in the project and possibly destabilize the software.

6.3. Sales Order Process Module

A sales function is responsible for negotiating sales conditions and distributing goods and

services to customers. The sales order process module has the following activities:

1. Pre Sales Activities

2. Sales Order Entry

3. Inventory

4. Pick Materials

5. Pack Materials

6. Post Goods issues


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7. Invoice Customer

8. Receipt of Customer Payment

The figure below shows the sales order process.

Figure 6.3Sales order process (Source: The Rushmore Group, LLC, January 2007)

6.4. Pre Sales Act iv it ies

Sales Support is a component of sales and distribution that assists in the sales, distribution,

and marketing of a companys products and services to its customers. It contains the

following functionality:

Creating and tracking customer contacts and communications (sales activity)

o Phone call records

o On-site meeting

o Letters

o Campaign communication

Implementing and tracking direct mailing, internet, and trade fair campaigns based on

customer attributes


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Pre-sales documents need to be managed within the pre sales activities: Inquiries and

Quotations. These documents help identify possible sales related activity and determine sales

probability.

6.5. Sales Order Entry

Sales order processing can originate from a variety of documents and activities.

Customers contact the company for order through phone, internet, email etc.

Existing Contract.

Quotations.

The electronic document created contains the following basic information:

Customer Information

Material/service and quantity

Pricing (conditions)

Specific delivery dates and quantities

The sales order contains all of the information needed to process customers request, the

following information is determined for each sales order:

Delivering Schedule

Shipping point and route determination

Availability Check

Transfer of requirements to MRP

Pricing

Credit limit check

Shipping information

Billing Information

6.6. Check Availabil ity

Availability check activity determines the material availability date and considers all inward

and outward inventory movements. It proposes three methods of delivery:

One-time delivery

Complete delivery

Delayed proposal


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6.7. Pick Materials

The picking process involves taking goods from a storage location and staging the right

quantity in a picking area where the goods will be prepared for shipping.

Depending on the picking procedure being used, you can either determine delivery-relevant

data before picking or wait until after picking is completed to record it. Delivery-relevant

data may be made up of the following:

Which batches a material is picked from

Which serial numbers are picked

Which valuation types the stock is taken from

6.8. Pack Materials

The Packing component and related packing information enables you to:

Update the stock situation of packing materials.

Monitor returnable packaging stocks at the customer's or forwarding agent's place of

business.

Find what was in a particular container (for example, if a customer maintains that they

have received an incomplete delivery)

Make sure that the weight and volume limits have been adhered to.

Ensure that products have been packed correctly.

6.9. Post Goods issues

Goods issues activity is the event that indicates the legal change in ownership of the products.

It reduces inventory and enters Cost of Goods Sold, automatically updates the General

Ledger (G/L) accounts, and ends the shipping process and updates the status of the shipping

documents. As soon as the goods leave the company, the shipping business activity is

finished.

6.10. Invoice Customer

Invoicing represents the final processing stage for a business transaction in Sales and

Distribution. Information on billing is available at every stage of order processing and

delivery processing.

The invoicing activity includes the following functions:

Creation of:

Invoices based on deliveries or services


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Issue credit and debit memos

Pro forma invoices

Cancel billing transactions

Comprehensive pricing functions

Issue rebates

Transfer billing data to Financial Accounting (FI)

6.11. Receipt of Customer Payment

Payment is the final step in the sales order process. This step is managed by the Financial

Accounting department.

Final payment includes:

Posting payments against invoices.

Reconciling differences between payment and invoice.


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7. Sales Order Process Flow

No

Start

Pre Sales Activity

(Customer Enquiries)

Pack Materials

Invoice Customer

Customer Payment

Amend invoice

Pick Materials

Sales Order Entry

(Generate Invoice)

Does Company deals

in the good/service?

Yes

No

Yes

No

Yes

Post goods issues

(are goods ok?)

End

Availability Check

(is product

available?)


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8. Conclusion

To conclude we will state here that both vanilla and customized ERP implementations have

some pros and cons, therefore the management of the company will have to decide which of

the implementation strategy is best for them after the explanation given above.

9. References

Jeffrey W. Noyes (2003) The ERP Dilemma: Plain Vanilla verse Customer Satisfaction.

Motiwalla & Thompson (2012) Enterprise Systems for Management Instructors Manual.

Pearson Education, Inc. Publishing as Prentice Hall pp

Ashish K. D. and Om p (2011) A study of issues affecting ERP implementation in SMEs.

International Refereed Research Journal Vol. 2 , Issue 2, pp 77-85

,

Documents

Enterprise Systems Group Assigment - 2015