Intro to Information Systems

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					  Chapter 8

Business Across the
Enterprise
Getting All the Geese Lined Up:
Managing at the Enterprise Business
Level

Customer Relationship Management,
 Enterprise Resource Planning, and Supply
 Chain Management all share the same Goal: to
 get the organization to line up and head in the
 same direction (like geese).




                                                   2
             Section 1
Customer Relationship Management:
       The Business Focus




                                    3
I. Introduction

Businesses today must be
 Customer-centric/Customer-focused –
 Customer, Customer, Customer!




                                       4
II. What Is CRM?

Providing the organization with a single
 complete view of every customer, and
 providing the customer with a single complete
 view of the organization and its extended
 channels

Contact and Account Management – capture
 and track relevant data about past and
 planned contacts



                                                 5
II. What Is CRM?

  Sales – providing software tools and data
   sources to manage sales activities, and
   optimize cross-selling and up-selling
    Cross-selling – selling related products to
     current customers
    Up-selling – selling better products than the
     one currently purchased




                                                     6
II. What Is CRM?

  Marketing and Fulfillment – automate
   direct marketing, scheduling, and tracking,
   and assist in scheduling responses and
   requests, while capturing relevant
   information for the marketing database




                                                 7
II. What Is CRM?

  Customer Service and Support – provide
   customer service software tools, and real-
   time access to the customer database
     Call Center Software – routes calls to customer
      support agents
     Help Desk Software – provides assistance for
      customer service agents having problems with a
      product/service




                                                        8
II. What Is CRM?
  Retention and Loyalty Programs – enhancing and
   optimizing customer retention and loyalty is a
   major business strategy because:
     It costs 6 times more to sell a new customer than an
      existing one
     Dissatisfied customers will tell 8–10 people about bad
      experiences
     A firm can boost sales 85% by increasing customer
      retention 5%
     Odds of selling a new customer – 15%; Odds of selling a
      current customer – 50%
     If a firm resolves a service problem quickly, 70% of
      complaining customers will do business with the firm
      again

                                                                9
  Zip Realty: E-Mail and CRM Integration
         with Open-Source Zimbra

What was the problem with the systems used
 by Zip?
What benefit did Zimbra offer that other
 systems being considered did not?
What benefits does the system offer to users?
How do the costs of the various systems
 compare?


                                                 10
III. The Three Phases of CRM
  Acquire – CRM helps a new customer
   perceive value of a superior product/service
  Enhance – CRM supports superior customer
   service, and cross-selling/up-selling
  Retain – CRM helps proactively identify and
   reward the most loyal and profitable
   customers




                                                  11
Hard Rock Hotel and Casino: Drinks – and
           CRM – Go Mobile

What is the usual problem at a Las Vegas bar?
What idea has Hard Rock come up with?
What technologies are involved?
What other customer services can it provide?
What other benefits does it accrue for Hard
 Rock?



                                                 12
IV. Benefits and Challenges of CRM

CRM helps identify and reward the best
 customers




                                          13
V. CRM Failures
Although over 70% of firms plan to implement
 CRM, over 50% of CRM projects fail to produce
 promised results due to:
  Lack of senior management sponsorship
  Improper change management
  Projects take on too much too fast
  Poor integration between CRM and core business
   systems
  Lack of end-user incentives leading to low user
   adoption rates


                                                     14
   Unum Group: The Long Road to CRM


What was Unum’s problem?
How many systems were originally involved?
 How many did they get rid of?
What is the difference between CRM and CDI?
What is the intention of Unum for the future?




                                                 15
VI. Trends in CRM
Firms must create tighter linkages with
 customers while enhancing the customer
 experience
  Operational CRM – supports/synchronizes
   customer interactions
  Analytical CRM – extracts customer information
   and predicts customer behavior
  Collaborative CRM – enables collaboration with
   customers, suppliers, and business partners
  Portal-Based CRM – enables access to customer
   information and CRM tools

                                                    16
  Integrated CRM: Hilton’s Welcome Mat
            Starts on the Web

In what ways is Hilton customer-oriented?
What is Hilton’s goal?
How does Hilton view technology?
What is SuiteSelection and how is it customer-
 oriented?




                                                  17
          Section 2
Enterprise Resource Planning:
   The Business Backbone




                                18
I. Introduction
ERP is a multifunctional enterprisewide
 backbone that integrates/automates
 business processes and information
 systems

II. What is ERP?
A cross-functional software suite
 supporting basic internal business
 processes of a firm

                                           19
 Colgate-Palmolive: The Business Value of
                  ERP

What were Colgate’s needs?
What solutions did SAP provide?
What results have occurred with this
 installation? What impact does this have
 on business?




                                            20
III. Benefits and Challenges of ERP

  Major Business Value from ERP
     Quality and Efficiency – significant improvements in
      quality and efficiency of customer service, production,
      and distribution
     Decreased Costs – significant reductions in transaction
      costs, hardware and software, and IT support staff
     Decision Support – provides cross-functional information
      that enables better decision making across the enterprise
     Enterprise Agility – breaks down departmental/functional
      walls and enables more flexible, adaptive organizational
      structures




                                                                  21
III. Benefits and Challenges of ERP

  Costs of ERP – if you do not do ERP properly
   you can kill the firm
  Causes of ERP Failures
     #1 cause – underestimating the complexity of
      planning, development, and training necessary
      for success
     Failure to involve affected employees
     Trying to do too much too fast
     Overreliance on claims of software
       vendors/consulting firms


                                                      22
  ERP Implementations: When They Fail,
             They Fail Big
How is an “ERP Failure” define?
What was the original budget? What
 was the last cost?
If the project was a failure, why did they
 go ahead with it?
What part did the users have in the
 failure?


                                              23
 Capital One Financial: Success with ERP
                Systems
In the old system, how many people had
 to sign off on an address change?
Which ERP system did they choose?
 (NOTE: also see the Imperial Sugar case)

What cultural change was effected? Why
 is that important?
How are software applications
 accessed?

                                            24
IV. Trends in ERP

  Improvements in Integration and Flexibility
   – ERP modules have become more flexible
   and easier to install
  Extensions to Business Applications –
   access to intranets/extranets
  Broader Reach to New Users – use of the
   Internet, intranets and extranets provides
   new links to customers, suppliers, and
   partners
  Adoption of Internet Technologies –enables
   all the above
                                                 25
 VISA International: Implementing the e-
             Business Suite
What were the problems with VISA’s
 internal systems?
What did the solution do?




                                           26
         Section 3
Supply Chain Management:
  The Business Network




                           27
              I. What is SCM?

A cross-functional interenterprise system
 using IT to support/manage links between key
 business processes and suppliers, customers,
 and business partners
  Electronic Data Interchange (EDI) – an early SCM
   methodology for exchanging information between
   partners using standard document message
   formats, still very popular but being replaced by
   .xml-based Web services




                                                       28
PC Connection: Learning to Stop, Drop, and
                  Ship

What was the problem with PC
 Connection’s ERP system?
What was their solution?
How well has it worked?
What does the system have to do with
 customer satisfaction?



                                             29
       Telefonica TSAI: Internet EDI


How much of Spain’s EDI traffic does
 TSAI handle?
What service does TSAI offer smaller
 customers?
How does this help these smaller
 customers?



                                        30
            II. The Role of SCM

• To optimize the effective/efficient movement
  of materials between suppliers, customers,
  and other partners




                                                 31
Imperial Sugar: Supply Chain Management
              to the Rescue
What was Imperial’s problem following
 the refinery explosion?
What software did they use to help?
What did this software offer them to
 help with the problem?
Which ERP system failed them? Why did
 it not work?


                                          32
  III. Benefits and Challenges of SCM

SCM solutions are becoming more complex

Benefits:
     Faster, More Accurate Order Processing
     Reductions in Inventory Levels
     Quicker Times to Market
     Lower Transaction and Materials Costs
     Strategic Relationships with Suppliers




                                               33
  III. Benefits and Challenges of SCM

Challenges – SCM Failures Caused By:
  Lack of Knowledge about Demand Planning
  Inaccurate/Overly Optimistic Demand Forecasts
  Inaccurate Production, Inventory, and Other
   Business Data
  Lack of Adequate Collaboration Among Marketing,
   Production, and Inventory Management
   Departments




                                                     34
 Emerson Transaction Hub: A Bright Idea
           That’s Paying Off
What problem did Emerson identify?
What was the solution to this problem?
How was the solution implemented?
What percentage of costs was saved by
 shipping in the same container?
How much did Emerson invest in the
 communications hub? Have they
 recovered their costs?
                                          35
Nike Inc.: Failure (and Bouncing Back) with
        Supply Chain Management

How much did Nike’s “speed bump”
 cost, and in what areas?
How does Nike use historical models?
What have the benefits of the ERP
 system been?




                                              36
           IV. Trends in SCM

3 Stages to SCM Implementation
  Improve Internal Supply Chain Processes
   and Improve Relationships with Suppliers
   and Customers
  Use Supply Chain Software, Intranets, and
   Extranets with Trading Partners
  Develop and Implement Collaborative SCM
   Applications



                                               37
CVS, McKesson, and MPT: Web-Based SCM
              Integration

Why does CVS prefer push to pull
 promotions?
What do both CVS and McKesson
 achieve through this relationship?
What was MPT’s problem?
What solutions does i-Supply offer?


                                        38

				
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