Other Enterprise Systems

Customer Relationship Management &

Supply Chain Management

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A Supply Chain

The flow of materials, information, money and services from raw material suppliers, through factories and warehouses, to the end customers.

A network of facilities for procuring materials, transforming raw materials into finished products,' and distributing finished produce to customers.

S upplier M anufac turer D is tr ibutorRetailO utlet

Cus tom er

Capac ity , inventory level, delivery s c hedule, paym ent term s

O rders , return reques ts , repair and s erv ic e reques ts , paym ents

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Structure & Components of Supply Chains

A supply chain involves three segments: Upstream, where sourcing or procurement from external

suppliers occurs; Internal, where packaging, assembly or manufacturing takes

place; Downstream, where distribution takes place, frequently by

external distributors.

Tiers of suppliers Suppliers may have one or more subsuppliers, and the

subsupplier may have its own subsupplier(s) and so on.

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Structure & Components of Supply Chains

Material flows The physical products, raw materials, supplies and so forth that

flow along the chain. Reverse flows – returned products, recycled products and

disposal of materials or products. Information flows

All data related to demand, shipments, orders, returns and schedules as well as changes in any of these data.

Financial flows all transfers of money, payments and credit-related data.

A supply chain involves a product life cycle approach, from raw material to shop shelf.

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Supply Chain Management

A strategic objective for many firms The right products The right place The right time In the proper quantity At an acceptable cost = more happy customers = more profit

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Supply Chain Problems Types of problems

Poor customer service – not delivering products or services when and where the customers need them.

Poor quality product High inventory costs Loss of revenues Technology failure

Problems stem mainly from two sources: Uncertainties due to demand forecast, delivery times, quality problems in

materials and parts that can create production delays; The need to coordinate several activities, internal units and business

partners.

Supply chains are often chaotic systems: small changes amplify

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Supply Chain Management Systems

Supply chain management (SCM) The function of planning, organizing and optimizing the supply

chain’s activities.

A supply chain management system A cross-functional inter-enterprise system To help support and manage the links between a company’s key

business processes And those of its suppliers, customers & business partners

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Role of SCM

Supply chain management (SCM) provides capabilities at all levels of enterprise systems pyramid.

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SCM business benefits and blockers

Visibility Enhanced visibility - trading

partners have the info needed for planning (win/win)

Collaboration with Suppliers When supplies run low,

replenish message to supplier who sends goods directly to shelves bypassing warehousing costs

Trust Between trading partners is

NOT the norm Zero-sum game, like politics,

Resistance Competition from traditional

communication media, hunches, human to human interaction

Planning was naïve Sales force inertia

SCM technology benefits and blockers

Exercise

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SCM Architecture

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Large scale SCM systems

Interorganisational information system (IOS) involves information flows among two or more organizations.

Global information systems are interorganizational information systems that connect

companies located in two or more countries.

Typical problems Cultural differences Localization Economic and Political Differences Legal issues Cross-border data transfer which refers to the flow of corporate

data across nations’ borders.

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Customer Relationship Management

Move from a ‘transactional’ model of marketing to a ‘relationship’ model

An enterprise wide effort to acquire and retain customers. Includes a one-to-one relationship between a customer and a

seller. One simple idea “Treat different customers differently”. Helps keep profitable customers and maximizes lifetime revenue

from them. Identify/acquire/retain most profitable prospects 20/80 rule (20% customers generate 80% revenues) Acquisition is far more expensive that retention.

Integrating information from sales, customer service, marketing and any other service points

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Customer Relationship Management (CRM): Technology

Create a cross-functional enterprise system That integrates and automates many of the processes

in sales, marketing & customer service that interact with customers (Customer touchpoints) Customer touch point is any method of interaction with a

customer, such as telephone, e-mail, a customer service or help desk, conventional mail, Web site and store.

Create a framework of software & databases that integrate these processes with the rest of the company’s processes.

Provides analytic capabilities to optimise the customer relationship across all touchpoints

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CRM Functional Solutions Contract and Account Management

Helps sales, marketing & service professionals Capture & track data about past/planned contacts with

customers/prospects

Sales Force Automation Provides sales reps with software tools & data they need to

support & manage sales activities Cross-selling is trying to sell a customer of one product with a

related product Up-selling is trying to sell customer a better product than they

are currently seeking

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CRM Functional Solutions

Direct Marketing Help marketing professionals accomplish direct marketing

campaigns by tasks such as Qualifying leads for targeted marketing & scheduling & tracking

direct marketing mailings

Retention and Loyalty Programs Try to help a company identify, reward, & market to their most

loyal and profitable customers Data mining tools & analytical software Customer data warehouse

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CRM Functional Solutions

Customer Service and Support Provides sales reps with software tools & database access

to customer database shared by sales & marketing professions

Helps create, assign and manage requests for service Call center software routes calls to customer support agents

based upon their skills and type of call Help desk software provides relevant service data &

suggestions for resolving problems for customer service reps helping customers with problems

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CRM cycle Identify customer Analyse and differentiate

customer behaviour to identify propensity to buy specific products.

Customise customer plan to optimise revenue

Customise customer touchpoints to optimise revenue.

© HP

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Supports integrated & collaborative relationship between a business & it’s customers

CRM: The Business Architecture

CustomerLife Cycle

CRMFunctionalSolutions

CRMIntegratedSolution

The Internet

Acquire Enhance Retain

Direct Marketing Account management Retention and Loyalty Programmes

Sales Force Automation Customer Support

CollaborativeService

SharedCustomer Data

Partner Company Customer

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An example of a CRM technical architecture

N-tier architecture Database server hosting data

warehouse Application logic servers with

process models (multiple servers, distributed )

Integration server to integrate with external applications

Web/Internet server Presentation level

Browsers Mobile phones

© Sage

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CRM Benefits and risks

Benefits Single view of customer

data Immediate availability of

real-time information Better knowledge of

customers Better understanding of

customer needs Knowledge retention

improved

Risks Difficult implementation Expense Scalability No guarantee on

effectiveness– hard to prove that CRM works

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Alternative CRM architecture: Software as a Service (SaaS)

E.g. Salesforce.com

Provides complete CRM capabilities with limited customisation and integration.

Particularly suited to smaller organisations or organisations with simpler CRM capabilities

Charge on a monthly all-in fee.

© Salesforce.com

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Trends in Enterprise Computing: SaaS

Software as a Service (SaaS) is a model of Software Delivery where the software company provides maintenance, daily technical operation, and support for the software provided to their client

Examples:Salesforce.com – widely used sales force automation + CRM system

Oracle and SAP have web interfaces

Office Productivity: Google Writely and spreadsheet – not used in the enterprise

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Trends in Enterprise Computing: SaaS

Benefits No large upfront costs No install costs – low one-

time costs

Anywhere, anytime, anyone - mobility

Operating costs only; Usage can be easily

scaled up or down as needed

Weaknesses Core functionality out-

sourced Broadband risk Limited

personalisation/tailoring No competitive

uniqueness advantage Not suited to high volume

data entry.

SaaS most likely to be used in SME market