Chp05 Enterprise Apps
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Transcript of Chp05 Enterprise Apps
Chapter Five Chapter Five Constructing the e-Business Architecture: Enterprise Apps
www.ebstrategy.com- 2 -© e-Business Strategies, Inc.
The PremiseThe Premise
CEOs want next gen enterprise apps that make their businesses more competitive and deliver quicker benefits
CIOs challenge: develop e-business architecture– Bridge chasm between customers, back-office operations
and supply chain– Cost of the chasm: several million dollars in higher service
costs and longer order-fulfillment cycles
Application design and business design irrevocably linked– How you manage information determines whether you win or
lose
Companies manage information through business apps
Central theme of e-business execution: Linking isolated business apps into a cohesive architecture
www.ebstrategy.com- 3 -© e-Business Strategies, Inc.
The VisionThe Vision
Enterprise apps (ERP, CRM , SCM): well-integrated, modular building blocks for modern business designs
– Common platform for apps in a given functionality– Backbone of modern enterprise
Emphasis on enterprise apps grew in mid 1990s – To root out old legacy apps incapable of meeting stresses of
the global economy
Today, as companies race towards information economy, their structures are made up of interlocking business apps
– Isolated, standalone apps are history
Vision of e-business– How to integrate an intricate set of apps to manage, organize,
route and transform information, like a well-oiled machine
www.ebstrategy.com- 4 -© e-Business Strategies, Inc.
The ChallengeThe Challenge
Not an easy to achieve vision– Failures more frequent that successes– TCI, Hershey Foods
Reason: many solutions dead-on-arrival– Complexity of problems implies long lead times for
solutions– But rapid morphing of problems demands short
lifetime solutions
App investment decisions rising to the top of mgmt agenda
– Actual cost of enterprise apps greater than what firms anticipate
www.ebstrategy.com- 5 -© e-Business Strategies, Inc.
The ImplicationThe Implication
When businesses apply technology to address new opportunities, bond between business design and application architecture grows closer
– Steering this relationship urgent
Senior managers must become corporate architects to shape the app infrastructure
– Meet customers demands– Build lasting value by connecting business strategy
with operational reality– Cannot afford to leave the task to developers and
lower-level managers who don’t see big picture
www.ebstrategy.com- 6 -© e-Business Strategies, Inc.
In This Chapter …In This Chapter …
Take a multiyear planning perspective to– Identify important business and technology
megatrends driving app architecture– Identify key areas of investment necessary to
harness and exploit business apps
www.ebstrategy.com- 7 -© e-Business Strategies, Inc.
Trends Driving e-Business ArchitectureTrends Driving e-Business Architecture
Velocity of business increasing
Enterprise boundaries disappearing
Expectations for technology solutions rising
Other internal IT events also happening– Integrating apps from mergers and acquisitions– Moving apps to the Internet– Moving apps from legacy systems to new
platforms– Upgrading network infrastructure to handle high-
bandwidth traffic– Building an integrated data model
www.ebstrategy.com- 8 -© e-Business Strategies, Inc.
New Customer-Care ObjectivesNew Customer-Care Objectives
Integrated application architecture key to serving the customer seamlessly
Amazon.com – Seamless buying and order fulfillment– Can potentially enable frequent inventory turnover
For richer customer experience, firms need to integrate Web sites with their back-office systems
– Inventory mgmt, order processing, financials, and customer service
Companies must practice fundamentals of fast, error-free service
– As customer become Internet savvy, their tolerance for wasted time and lack of integrated processes diminishes
– Companies must refine business processes
www.ebstrategy.com- 9 -© e-Business Strategies, Inc.
New Competitive ConditionsNew Competitive Conditions
The changing competitive environment is driving the need for integrated apps
New Brunswick Power– Deregulation and demand for better customer
service began to strain existing apps– Forced to reevaluate business processes, esp.
customer service functions
www.ebstrategy.com- 10 -© e-Business Strategies, Inc.
Fast Moving CompetitorsFast Moving Competitors
Established firms forced to scrutinize existing app architecture
– M&As– Compete with new entrants
Norwest MortgageTraditional Norwest Systems
Required For Future Success
Norwest’s Challenge Design the Future
• Business and customer focused proactive
• Structured in line with business support objectives
• Shift in emphasis to front office support
• Emphasis on business skills
• Customer knowledge• Business knowledge• Strategic planning• Customer service
philosophy
• E-business must become a partner to the Business Units
• E-business must be the engine for sales and growth
• E-business must develop a customer focus and embed business knowledge
• E-business must be the operational enabler of efficiency
• Internally focused; reactive
• Structured around technical
• Chief role in providing back
• Emphasis on technology skills
www.ebstrategy.com- 11 -© e-Business Strategies, Inc.
Problems Caused by Lack of IntegrationProblems Caused by Lack of Integration
Careful design of app architecture essential for business survival
– Oxford Health Plans, praised for use of the Web, lost more than 80% in stock value because of a computer problem in accounting and billing system in 1997
– W.L.Gore & Associates sued PeopleSoft for failing to properly install its HRMS, resulting in damage to its business
Getting integration right even more important– But there are minefields: system related and
organization related
www.ebstrategy.com- 12 -© e-Business Strategies, Inc.
Contd …Contd …
Organizational barriers– Too much focus on
cost cutting and efficiency
– Getting business units to understand why they need to use s/w
– Rehashing competitors’ ideas
– Frequently reorganizing
– Placing too much emphasis on outside consultants
Business Trends
l Proprietary l Developed in the 60’s or 70’sl Mainframe basedl Developed in Cobol, Assemblerl Not real timel Missing documentationl No integrationl Lacking customer focus
Existing Legacy Systems
l Business model restructuring
l The customer centric company
l Many new channelsMultiple products
l Integrated customer information
l Integration of many legacy systems
l Process integration
l Structural reorganizing
Slows down change and often impossible
to change
System-related barriers
www.ebstrategy.com- 13 -© e-Business Strategies, Inc.
New Era of Cross-Functional Integrated New Era of Cross-Functional Integrated AppsApps
Successful e-business companies overcome chaos in their e-product development by embracing app frameworks
– Various companies can independently design and develop app modules, as ERP and CRM, but those modules will be molded to fit into a complex, smoothly functioning product
Business apps have evolved to app frameworks– Complex, cross-functional integrated apps– Core is application modularity
Stage 1:Task Oriented
Applications(Order Entry)
Stage 2:Functional Applications(Logistics)
Stage 3:Integrated
Cross-Functional
Applications(Customer Care)
www.ebstrategy.com- 14 -© e-Business Strategies, Inc.
CRM Apps: Charles SchwabCRM Apps: Charles Schwab
Realization – Execution of stock
market trades fast becoming commodity
Strategy – Become customer centric– Offer sales and service
reps enough information to best serve customers
Execution Challenge– Existing systems
fragmented, expensive to integrate
Solution – Buy Siebel’s Sales
Enterprise System, which has a wide array of CRM functionality
www.ebstrategy.com- 15 -© e-Business Strategies, Inc.
Benefits– Real-time access to cust
profiles and histories– Improved
responsiveness– Cross selling
Lesson: – Customer service no
longer an isolated function
– Link sales and cust service organizations with one another and with all customer-facing parts of the company
CRM Apps: Charles SchwabCRM Apps: Charles Schwab
Sales
Service
Marketing
Customer Relationship Management
www.ebstrategy.com- 16 -© e-Business Strategies, Inc.
ERP Apps: Nestle’ERP Apps: Nestle’
Realization– Worldwide operations
costly and inefficient
Strategy– Standardize business
processes to closely link international locations
Execution Challenge– Integrate systems and
business activities to gain high quality, consistent and efficient management of information
Solution– Buy ERP app suite from
SAP for order entry, purchasing, invoicing, and inventory control
www.ebstrategy.com- 17 -© e-Business Strategies, Inc.
ERP Apps: Nestle’ERP Apps: Nestle’
Benefits– Integration of worldwide
logistics– Shorter turnaround time
from inquiries to delivery– Shift towards demand-
driven production
Forecasting & Planning
Warehousing & Inventory
Management
Enterprise Resource Planning
Finished Product
Distribution
Accounting/ Finance
Purchasing & Material
Management
www.ebstrategy.com- 18 -© e-Business Strategies, Inc.
SCM Apps: VisteonSCM Apps: Visteon
Realization– Streamline business to
power recent entry into competitive auto parts market
Strategy– Cut production
development times – Reduce manufacturing
time for parts– Gain more business from
non-Ford sources
Execution Challenge:– Current Excel sheets for
production scheduling difficult to manage and time consuming
• Efficiency and throughput not optimal
• Inventory higher than needed
Solution– Integrated SCM
application
www.ebstrategy.com- 19 -© e-Business Strategies, Inc.
SCM Apps: VisteonSCM Apps: Visteon
Benefits– Perform scheduling
independently over 10 sequential prodn depts
– Integrate scheduling with suppliers functions
Multi-company SCM becoming a way of life
Market Demand
Resource & Capacity
Constraints
Supply Chain
Management
Real-Time Scheduling
www.ebstrategy.com- 20 -© e-Business Strategies, Inc.
Selling Chain Management Apps: WhirlpoolSelling Chain Management Apps: Whirlpool
Realization– Pricing process is stifling
profits and frustrating customers
Strategy– Streamline sales process– Sell products more
quickly and profitably at reduced overall costs
Execution Challenge– Existing Excel
spreadsheet system too cumbersome to maintain
Solution– Enterprise software suite
to integrate each function in sales and marketing
• Pricing mgmt• Product mgmt• Sales• Commissions• Promotions• Contract mgmt• Channel mgmt
www.ebstrategy.com- 21 -© e-Business Strategies, Inc.
Mass customization requires configuring custom solutions from enormous range of changing products and pricing them accordingly
– Traditional sales and pricing processes not prepared for this challenge
New cross-functional app cluster called selling chain mgmt necessary
Selling Chain Management Apps: WhirlpoolSelling Chain Management Apps: Whirlpool
Product Customization
Quote & Proposal
Generation
Selling-Chain
Management
Commission Management
Promotion Management
Pricing & Contract
Management
www.ebstrategy.com- 22 -© e-Business Strategies, Inc.
e-Procurement Systems Apps: CIBCe-Procurement Systems Apps: CIBC
Realization– Empowering employees
by automating purchasing processes can cut purchasing overhead costs and help negotiate better deals with suppliers
Strategy– Implement e-
procurement system
Office Supplies
Procurement
Business Travel Procurement
E-Procurement Applications
Computer Equipment/Soft
ware/Networking
MRO Procurement
Service Procurement (courier, catering, contract workers)
www.ebstrategy.com- 23 -© e-Business Strategies, Inc.
EAI Apps: Nortel NetworksEAI Apps: Nortel Networks
Realization– Need better support for
global customer service operations, to support multiple sales channels and reseller partners
Strategy– Link CRM and ERP apps
to ensure product deliverables to customers recorded in ERP get recorded in CRM for contract and warranty validation
Solution– Custom interface
Nortel’s interface an example of new breed of apps called connectors or EAI apps
EAI apps essential in multivendor setting
– When there are different vendors for front- and back-office apps
www.ebstrategy.com- 24 -© e-Business Strategies, Inc.
BI, DSS, and KM Apps: Nortel NetworksBI, DSS, and KM Apps: Nortel Networks
Enable both active and passive delivery of information from large scale databases
– Providing enterprises and managers with timely answers to mission-critical questions
Growth driven by demand for more competitive intelligence and increases in electronic data capture and storage
– Emergence of Internet enabled cost-effective access to and delivery of information to remote users throughout world
Business Analytics (Filtering, Reporting)
Decision Support Systems
Business Intelligence
Applications
Push-Based Delivery Systems
Wireless/Mobile Communications
Data Capture & Datawarehousing
www.ebstrategy.com- 25 -© e-Business Strategies, Inc.
E-Business Architecture = Integrated App E-Business Architecture = Integrated App FrameworksFrameworks
Stakeholders
Customers, Resellers
Selling Chain Management
EMPLOYEES
Enterprise Resource Planning (ERP)L
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Customer Relationship Management (CRM)
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Partners, Suppliers, Distributors
Supply Chain Management Supply Chain Management
Business IntelligenceBusiness
Intelligence
Enterprise Application Integration
Enterprise Application Integration
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E-Business E-Business Strategies, Inc.Strategies, Inc.
www.ebstrategy.comwww.ebstrategy.com
[email protected]@ebstrategy.com
678-339-1236 x201678-339-1236 x201
Fax - 678-339-9793Fax - 678-339-9793