MIS 5

ENTERPRISE SYSTEMS

11

BIDGOLI

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LEARNING OUTCOMES

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1 Explain how supply chain management is used

2 Describe customer relationship management systems

3 Describe knowledge management systems

4 Describe enterprise resource planning systems

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Enterprise System

• Application used in all the functions of a business which supports decision making throughout the organization

• Supply chain • Integrated network consisting of an

organization, its suppliers, transportation companies, and brokers

• Used to deliver goods and services to customers

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Exhibit

11.1 Supply Chain Configuration

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Supply Chain Management (SCM)

• Process of working with suppliers and other partners in the supply chain to improve procedures for delivering products

• Functions• Procuring materials• Transforming materials into intermediate and

finished products• Distributing finished products to customers

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Supply Chain Management (SCM)

• Communication in SCM system takes place among• Product flow• Information flow• Finances flow

• Key decisions in SCM• Location• Inventory• Production• Transportation

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Electronic Data Interchange (EDI)

• Enables business partners to exchange information• Expedites delivering accurate information• Web-based EDI: Using the Internet and Web

protocols to transmit documents• Lowers cost• Platform independent and easy to use

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Drawbacks of EDI

• Uses proprietary standards• Cost per partner is higher when the number

of partners is small• Organizations can use the Internet and

Open EDI to perform the same function as EDI

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Internet-Enabled SCM

• Improves information sharing throughout the supply chain

• Improves SCM activities• Purchasing/procurement• Inventory management• Transportation• Order processing• Customer service• Production scheduling

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E-Marketplaces

• Third-party exchange that provides a platform for buyers and sellers to interact and trade efficiently

• Helps maintain a competitive edge in the supply chain• Provides opportunities for sellers and buyers to

establish partnerships • Offers a single platform for prices, availability,

and stock levels that’s accessible to all participants

www.Alibaba.com

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E-Marketplaces

• Solves time constraint problems for international trade

• Makes it easy to compare prices and products from a single source instead of spending time contacting each seller

• Reduces marketing costs more than traditional sales channels

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E-Distributor http://www.powersourceonline.com/http://www.farms.com/

• Marketplace owned and operated by a third party that provides an electronic catalog of products

• Maintenance, repair, and operations (MROs) services including services from different vendors

• Example of a horizontal market• Offers fast delivery of a wide selection of products

and services, at lower prices• Helps companies reduce the time and expense of

searching for goods

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Online Auctions

• Brings traditional auctions to customers around the globe • Makes it possible to sell far more goods and

services than at a traditional auction • Based on the brokerage business model which

brings buyers and sellers together• Cost-effective for selling excessive inventory

• Reverse auctions• Invite sellers to submit bids for products and

services• One-to-many relationship (choose the seller)

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Collaborative Planning, Forecasting, and Replenishment

• Used to coordinate supply chain members through point-of-sale (POS) data sharing and joint planning

• Aims to improve operational efficiency and manage inventory

• Advantages: Decreases merchandising, inventory, and logistics costs

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Collaborative Planning, Forecasting, and Replenishment

• Ensures that inventory and sales data are shared across the supply chain

• Exception management: Planning for handling unforeseen problems• Lessons learned during the process can be used

in future planning

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Exhibit

11.2 CPFR Process

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Customer Relationship Management (CRM)

• Consists of the processes a company uses to track and organize its contacts with customers

• Improves services offered to customers• Uses customer contact information for

targeted marketing• Involves marketing strategies which focus

on long-term relationships• Identifying customer segments

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Customer Relationship Management (CRM)

• Improving products to meet customers’ needs• Improving customer retention• Identifying a company’s profitable and loyal

customers• Helps organizations make use of data, and

knowledge to understand customers• Gives organizations complete picture of

their customers

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CRM Activities

• Sales automation• Order processing• Marketing automation• Customer support• Knowledge management• Personalization technology

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CRM Applications

• Implemented with either on-premise CRM or Web-based CRM approach

• Software packages available for setting up a CRM system• Amdocs CRM• Optima Technologies ExSellence• Infor CRM• SAP mySAP• Oracle PeopleSoft CRM• Oracle Siebel

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Features of Software Packages

• Salesforce automation• eCRM or Web-based CRM• Survey management• Automated customer service

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Personalization Technology

• Personalization: Process of satisfying customers’ needs, building customer relationships, and increasing profits• Design goods and services that meet customers’

preferences better• Customization: Allows customers to modify

the standard offering• Selecting a different home page to be displayed

each time you open your Web browser

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Personalization Technology

• Using personalization requires gathering customer information• Preferences and shopping patterns

• Used by companies to improve customer service• Implementation requires• Internet, databases• Data warehouse/data marts• Data-mining tools• Mobile networks

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Collaborative Filtering (CF)

• Search for specific information or patterns, using input from multiple business partners and data sources• Identifies groups of people based on common

interests and recommends products• Works well for a single product category• Drawback: Needs a large sample of users and

content to work well• Fails to make recommendations across unrelated

categories

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Knowledge Management (KM)

• Draws on concepts of organizational learning, culture, and best practices to convert tacit knowledge into explicit knowledge

• Creates a knowledge sharing culture in an organization

• Eliminates obstacles to sharing knowledge• Technique to improve CRM systems• Identifying, storing, and disseminating facts about

how to perform tasks

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Knowledge Management (KM)

• Knowledge repository • Stores knowledge of experts• Created for employees to refer to when needed

• Knowledge management system consists of using groupware

• Other tools and technologies• DBMSs, data-mining tools, decision support

systems

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Contributions of Knowledge Management System to Organizations• Promote innovation by encouraging free

exchange of ideas • Improve customer service by reducing

response time • Increase revenue by reducing the delivery

time for products and services • Improve employee retention rates by

rewarding employees for their knowledge

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Chief Knowledge Officer (CKO)

• Position created by organizations because of the importance of• Knowledge• Knowledge management• Knowledge management systems

• Responsible for overseeing knowledge management within an organization

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Chief Knowledge Officer (CKO)

• Ensures knowledge resources are properly collected stored, and disseminated among the decision-makers

• Ensures organization profits from knowledge resources

• Tries to maximize the return on investment (ROI) related to KM, KMS and processes

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Enterprise Resource Planning (ERP)

• Integrated system that collects and processes data

• Manages and coordinates resources, information, and functions throughout an organization

• Includes hardware, software, procedures, and input from all functional areas

• Uses a unified database to store data for various functions

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Exhibit

11.3 ERP Configuration

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Table 11.1 ERP Components

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Benefits of a Well-designed ERP System

• Increased:• Availability and timeliness of information • Data accuracy and improved response time

• Improved:• Customer satisfaction • Employee satisfaction • Planning and scheduling • Supplier relationship • Reliability of information

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Benefits of a Well-designed ERP System

• Reduced:• Inventory costs • Labor costs • Order-to-fulfillment time

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ERP Systems

• Drawbacks• High cost• Difficulties in installation• Needs extensive training• Compatibility problems with legacy systems

• Available as modules so an organization can purchase only required components• Keeps costs down for organizations

KEY TERMS

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• Collaborative filtering (CF)• Collaborative planning, forecasting, and

replenishment (CPFR)• Customer relationship management (CRM)• Customization• e-marketplace• Electronic data interchange (EDI)• Enterprise resource planning (ERP)

KEY TERMS

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• Enterprise system• Knowledge management (KM)• Online auction• Personalization• Reverse auction• Supply chain• Supply chain management (SCM)

SUMMARY

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• Supply chains exist in both service and manufacturing organizations, although the chain’s vary in different organizations and industries

• CRM system helps organizations make better use of data and knowledge to understand their customers

• ERP systems use a unified database to store data for various functions

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