E-Business - 1 © Minder Chen, 1996-2005 ERP & SCM & CRM Information Technology and Business Minder...

E-Business - 1 © Minder Chen, 1996-2005

ERP & SCM & CRMInformation Technology and Business

Minder Chen, [email protected]

Martinique Landscape, Paul Gauguin

mailto:[email protected]


The Extended Enterprise

E-Business: Virtual and Dynamic Enterprise

SuppliersBackOffice

FrontOffice

Customers

Buy Make/Add Value Sell

Supply Chain Back Office Integration Demand Chain

ManufacturingFinance, HREngineering

SalesSupport/Service

Marketing

Supply Chain Management Customer Relationship Management

Enterprise Resource Planning

© Minder Chen, 2001-2002


A Federation of Information Systems

Customer Relationship Management (CRM)

(Service)

B2B

B2CB2B


E R P

Harvard Business Review article: "Putting the enterprise into the Enterprise System" by Thomas H. Davenport


ERP Market

• One of the fastest growing markets in software industry

• 34.5% of companies with revenues over $1 billion plan to purchase or upgrade

• $180 billion in sales in 2002

• Maybe as much as $1 trillion by 2010


ERP Systems

• Major investment– Cost between $50,000 and $100,000,000+

• Variety of business justifications– Replace legacy systems

– Reduce cycle times

– Lower operating costs

– Enables better management decisions» Real-time

» On-line


What is ERP?

• Software application packages

• Manage business processes and functions – Supply chain, receiving, inventory, customer

orders, production planning, shipping, accounting, HR

• Allow automation and integration of business processes

• Enable data and information sharing

• Enterprise-wide system

• Introduces “best practices”


Evolution of ERP• 1960s: software packages with inventory

control

• 1970s: MRP systems– Production schedule with materials management

• 1980s: MRPII systems– Adds financial accounting system

• 1990s: MRPII– Integrated systems for manufacturing execution

• Late 1990s: ERP– Integrated manufacturing with supply chain

• Late 1990s and 200X: SCM & CRM


Integrated Systems Approach

• Common set of applications/modules• Usually requires the reengineering business

processes according to ERP package’s underlying business model (reference model)

– Better alignment

• Limit your customization– Easier during version upgrades

• Overcomes inefficiencies of independent systems

• Integrated data supports multiple business functions


Major Vendors• Microsoft Dynamics

– http://www.microsoft.com/dynamics/default.mspx

– http://www.microsoft.com/dynamics/product/experience.mspx#EWC

– http://www.microsoft.com/dynamics/ax/product/demos.mspx

• Oracle e-Business Suite– PeopleSoft

• SAP – SAP Business One http://en.wikipedia.org/wiki/SAP_Business_One – http://www.sap.com/solutions/business-suite/erp/demos/index.epx

http://en.wikipedia.org/wiki/List_of_ERP_vendorshttp://panorama-consulting.com/resource-center/2010-erp-vendor-analysis/

http://www.microsoft.com/dynamics/default.mspx

http://www.microsoft.com/dynamics/product/experience.mspx#EWC

http://www.microsoft.com/dynamics/ax/product/demos.mspx

http://en.wikipedia.org/wiki/SAP_Business_One

http://www.sap.com/solutions/business-suite/erp/demos/index.epx

http://en.wikipedia.org/wiki/List_of_ERP_vendors

http://panorama-consulting.com/resource-center/2010-erp-vendor-analysis/


Major Vendors

• Salesforce.com – Software as a service (SaaS)

– http://www.salesforce.com

• NetSuite – http://www.netsuite.com/portal/home.shtml– http://www.netsuite.com/portal/resource/edemo_main.shtml

• QuickBooks– http://quickbooks.intuit.com/index.jsp

• Microsoft Accounting Express– http://office.microsoft.com/en-us/accountingexpress/default.aspx

http://www.salesforce.com/

http://www.netsuite.com/portal/home.shtml

http://www.netsuite.com/portal/resource/edemo_main.shtml

http://quickbooks.intuit.com/index.jsp

http://office.microsoft.com/en-us/accountingexpress/default.aspx


ERP Market Share

Sample Vendors

Tier I Tier II Tier IIII

SAPOracle

Oracle eBusiness SuiteOracle JD EdwardsOracle Peoplesoft

Misrosoft Dynamics

EpicorSageInforIFS

QADLawson

CDC Software

ABASActivant Solutions Inc.

Bowen and GrovesCompiere

ExactNetSuiteVisibility

CGSHansa World

ConsonaSyspro

http://whatiserp.net/erp-comparison/erp-vendor-evaluation-2010/

http://whatiserp.net/erp-comparison/erp-vendor-evaluation-2010/


/ Web-enabled architecture


The Basic Instance of SAP


Candidate HR Instance of SAP


Sap modules


ERP: Business Processes Overview

SalesSalesSales

ProductionProductionProductionProduction

PurchasingPurchasingPurchasingPurchasing

CustomerCustomerCustomerCustomerorderorderorderorder

SOPSOPSOPSOP MPSMPSMPSMPS MRPMRPMRPMRPPlannedPlannedPlannedPlanned

orderorderorderorder

DeliveryDeliveryDeliveryDelivery InvoicingInvoicingInvoicingInvoicing

Prod.Prod.Prod.Prod.controlcontrolcontrolcontrol

PurchasePurchasePurchasePurchaserequisite.requisite.requisite.requisite.

VendorVendorVendorVendorselectionselectionselectionselection

GoodsGoodsGoodsGoodsissueissueissueissue

InvoiceInvoiceInvoiceInvoiceverificat.verificat.verificat.verificat.

Financial ControllingFinancial ControllingFinancial ControllingFinancial Controlling

Cost ControllingCost ControllingCost ControllingCost Controlling

Logistics ControllingLogistics ControllingLogistics ControllingLogistics Controlling Sales, Production, Purch., Warehouse MgmtSales, Production, Purch., Warehouse Mgmt

Sales orderSales order CustomerCustomerCustomerCustomerpaymentpaymentpaymentpayment

VendorVendorVendorVendorpaymentpaymentpaymentpayment

InitialInitialInitialInitialContactContactContactContact

InventoryInventoryInventoryInventorySourcingSourcingSourcingSourcing

Prod.Prod.Prod.Prod.orderorderorderorder

PurchPurchPurchPurch ....orderorderorderorder

http://134.198.33.115/sap/1000.htm

SOP: Sales and Operations Planning MPS: Master Production Schedule; MRP: Material Requirements Planning


R/3 Logistics Process Flow


Collaborative Business Map


E-Business Building Blocks


The Flow of Your Implementation Process

Define project scope & organization

Install software

Define & build technical infrastructures

Train project team

Perform fit/gap analysis

Build and test prototypes

Convert data

Develop interfaces

Perform testing

Go live

Support system after conversion

Create end-user procedures documentation & training

Evolve system

Tune system performance

Please also refer to for Selection ERP Softwarehttp://en.wikipedia.org/wiki/ERP_System_Selection_Methodology

http://en.wikipedia.org/wiki/ERP_System_Selection_Methodology


Commercial Application Package Implementation Strategy

• Commercial application package – a software application that can be purchased and customized to meet the business requirements of a large number of organizations or a specific industry. A synonym is commercial off-the-shelf (COTS) system.

– Request for proposal (RFP) – a formal document that communicates business, technical, and support requirements for an application software package to vendors that may wish to compete for the sale of that application package and services.

– Request for quotation (RFQ) – a formal document that communicates business, technical, and support requirements for an application software package to a single vendor that has been determined as being able to supply that application package and services.

– Gap analysis – a comparison of business and technical requirements for a commercial application package against the capabilities and features of a specific commercial application package for the purpose of defining the requirements that cannot be met.


Implementation Success Factors

• Understand your business objectives

• Assemble a dedicated project team with the appropriate skills

• Recognize and capitalize on re-engineering opportunities

• Leverage the experience of others

• Understand the system’s capabilities


Implementation Success Factors

• Explore new technology solutions

• Execute your implementation In phases

• Customize by prototyping

• Maintain a close relationship with your vendors

• Follow a proven formula


Benefits achieved by organizations

2

5

1

8

4

9

7

3

6

10

Improved financial management

Faster, more accurate transactions

Improved inventory & asset mgt

Ease of expansion & incr. flexibility

Cycle time reduction

Improved customer service

Headcount reduction

Improved logistics

Increased revenue

Better managerial decision making


Maximizing Benefits from Enterprise Systems

Evolving Functionality

Sophisticated Knowledge

Application Infrastructure

Packaged SoftwareFeatures

Operational Benefits

Managerial Benefits

Strategic Benefits

IT infrastructure Benefits

Organizational Benefits

Distinctive Characteristics of Packaged EnterpriseApplication Software (PEAS)

Evolutionary Spiral of PEAS & Process Change and Management Initiatives

Net Benefits from ES Use

Use ES to Generate Benefits

Monitor Changing Conditions & Reevaluate Benefits

Initiatives to Manage the Distinctive Characteristics of the PEA Software

Another cycle of ES Exploration, Redesign and Use

Changes to Process

Assess and Explore Processes

Agree on RedesignedProcesses

Assess and Explore PEAS Changes

to PEAS

Achieving Fit between PEAS and Business needs

Source: http://www.dis.unimelb.edu.au/staff/peter/615-260webraft/pub/index.html

Customize the package

Reengineer processes

Gap

http://www.dis.unimelb.edu.au/staff/peter/615-260webraft/pub/index.html


When, in the years after "go live", are net benefits realized?

• One of the most consistent findings reported in the literature is that there is a dip in organizational performance in the six to twelve months after "go live".

Design

ImplementationStabilization

ContinuousImprovement

TransformationRoss & Vitale (1998)

• A possible explanation for the above pattern is organizational learning, the time taken for people in the organization to really understand their role in the new processes.


Why do benefits and problems occur in the years after "go live"?

Factors that might explain why benefits and problems occur after go live:

1. Poor project management including poor design-stage decisions during the implementation project

2. Inappropriate software choice and configuration, resulting in poor fit

3. Lack of knowledge on part of implementation team and users

4. Poor change management


SCOR Reference Model

The Supply Chain Council (SCC) developed a Supply Chain Operations Reference Model (SCOR) as a cross-industry process reference model for supply chain management.


Supply Chain Management

Procurement


A Case Study

• Used CNET.com for reviews and vendors list of a Tablet PC via

• Called BestBuy government and education sale

• Confirmed order

• Later told that they it did not have it in stock at the promised delivery date.

• Order cancelled but then shipped by UPS without obtaining a signiture.

• Took two days to get authorized return

• Ordered from another vendor, and shipped by FedEx, missed the delivery, went to FedEx station to pickup


Fulfillment by Amazon

• http://www.amazonservices.com/content/fulfillment-by-amazon.htm#how-it-works


Bullwhip Effect in Supply Chain


Demand-Driven Supply ChainSCM ERP CRM


Increasing Variability of Orders up the Supply Chain

The Bullwhip Effect in Supply Chains, Hau L. Lee, V. Padmanabhan and Seungjin Whang, Sloan Management Review, April 15, 1997


Higher Variability in Orders from Dealer to Manufacturer than Actual Sales


Bullwhip Effect due to Seasonal Sales of Soup


A Framework for Supply Chain Coordination Initiatives


B2B Data Exchange: Existing Methods - EDI messages

• UN standard format (EDIFACT) or X.12

• Compact strings, with numeric qualifiers. Strict limitation on the number of characters and position of data in a document.

• Example:

• UNH+900576+ORDERS:D:93A:UN:EAN007’BGM+220+H940568’DTM+137:19940201:102’NAD+BY+5412345000176::9’NAD+SU+4012345000094::9’LIN+2’PIA+5_1857990455:IB’IMD+F+BAU+:::Farell J G’IMD+F+BTI+:::The Singapore Grip’QTY+21:1’PRI+XXX:7.99’UNS+S’CNT+2:2’UNT+15+900576’

• Rules for data type control


XML

eXtensible Markup Language


EDI and XML

EDI VAN

EDI EDI

XML XML


BizTalk


Trading PartnersSuppliersDistributorsBusiness Partners

E-Business Integration Imperatives

Heterogeneous PlatformsERP Application PackagesProprietary ApplicationsLegacy Applications

Consumers

REQUIREMENTSStandards based integrationConfigurable across applicationsBusiness process orientedLoosely coupledSupports an incremental approachScaleable, available, secure, manageable

B2BIntegration

EAI

B2CInternet /

Virtual Private Network

SouthWest.com

Dollars.com


ProcurementWeb services

Registry

Web Services Repository Interfaces

RepositoryManagementSubsystem

Public UDDI

eProcurementAgent

(implemented in Web Services)

eProcurementApplication

(Mobile Interface)

eProcurementApplication

(Windows Interface)

eProcurementUser Interface Subsystem

(Web Interface)

Web Services Provided by supplier 1

Web Services Provided by supplier …

Web Services Provided by supplier N

Internet

e-Procurement Case Study


Data Model of the Private Web Services Registry


Prototype


Customer Relationship Management (CRM)

The measures an organization takes to – identify,

– select,

– acquire,

– work with, and

– retain

its customers


Objectives of CRM

• The right offer (products or services)

• To the right person (target marketing)

• At the right time (spacing outbound calls)

• Through the right channel (direct vs. channel)

• Via appropriate media (phone, email, Web)


Highest Level Business Flow

Source: Oracle.


CRM Framework

Key EventsThe Moment of Truth (MOT)==KPI and continuously improvement


RFM and LTV

• Recency - How recently a customer has purchased?

• Frequency - How often he purchases?

• Monetary Value - How much does she spend?

Source: http://en.wikipedia.org/wiki/RFM and http://www.jimnovo.com/RFM-tour.htm

• Life Time Value(LTV) or Lifetime Customer Value (LCV)

Source: http://en.wikipedia.org/wiki/Customer_lifetime_value http://www.jimnovo.com/LTV.htm

http://en.wikipedia.org/wiki/RFM

http://www.jimnovo.com/RFM-tour.htm

http://www.jimnovo.com/LTV.htm

http://www.jimnovo.com/LTV.htm


CRM Architecture


Digital Dashboard for Sales Process

Advertise your business on Google

Take five minutes to write your ad and select a couple keywords—even target your ad locally.

People click on your ad

When people search on Google, your ad is displayed and traffic is driven to your site.

Convert leads into customers

Update deal information, track opportunity milestones, and record all opportunity-related interactions.

Capture leads from your Web site

Prospects fill out a Web form, which creates a lead in Salesforce that is routed to your sales team.

Manage customer relationships

Acquire deep knowledge of every account, facilitate collaboration, and build and maintain strong, lasting customer relationships.

Manage the follow-up process

Log calls, send emails, and update the status of your leads so that you never miss an opportunity.

Month-to-Date Trending Closed Business by Month Top Sales RepsTop 10 Deals

Presentation Proposal Negotiation WonYesNo

Open Opportunities

You can monitor your opportunities reports and dashboards to keep track of your top deals and prioritize your time.

Customize Salesforce to fit your internal sales methodologies and processes, making it easier to monitor your sales pipeline.

Use email marketing and call downs to re-market to your archived opportunities.

Keep an archive of your dead opportunities.

Salesforce gives your entire company a 360-degree view of your customers and facilitates collaboration across your organization, helping you build strong, lasting customer relationships.

Sales

Support

Marketing

New Customers

Close More Deals

Close deals faster by providing a single place for updating deal information, tracking opportunity milestones, and recording interactions.Easily analyze your sales pipeline so you can quickly identify and eliminate any bottlenecks in the sales cycle.


ERP, CRM, SCM Implementation

Software

• Package (proprietary or open source)

• Hosting Solution (SaaS)

• Custom-build

Staffing

• In house staff

• Systems integration/Consulting firm

• Onsite / onshore / near shore/ offshore outsourcing

• Reshoring


Classification of Outsourcing: Service Types

• Manufacturing Outsourcing– FoxConn’s eCMMS stands for e-enabled

Components, Modules, Moves and Services

– TSMC emphasizes collaborative services*

• Information Technology Outsourcing

• Business Process Outsourcing

• Knowledge Processing Outsourcing

• Innovation Outsourcing

*See http://www.tsmc.com/english/c_services/c00_Service_Guide/c0100_Service_Guide.htm

Smart sourcing: Beyond “lift and shift”.


Backup Slides


A Taxonomy for System

Development Methodologies &

Strategies


Commercial Application Package Implementation Strategy


R

Procurement Tasks

MaterialsPlanning

Invoice Verification

InternalInternal and and ExternalExternalAccountingAccounting

Sales andDistribution

Master Data

MaterialBatchesVendorsG/L accountsStorage bins Goods Receipt Transfer

Posting

GoodsIssue

InvoiceReceipt

Inventory Management

Internal ProcurementProduction

External Procurement

Purchasing


SAP pursues a global purchasing strategy


http://upload.wikimedia.org/wikipedia/en/6/6a/Manufacturating_Resource_Planning.jpg


Strategy Development

Process

Value Creation

Process

Multi-channel Integration

Process

Performance Assessment

Process

Information Management Process

E-Business - 1 © Minder Chen, 1996-2005 ERP & SCM & CRM Information Technology and Business Minder...

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Transcript of E-Business - 1 © Minder Chen, 1996-2005 ERP & SCM & CRM Information Technology and Business Minder...