MIS James A. O'Brian Chap 07

8/4/2019 MIS James A. O'Brian Chap 07

1/67

7-1

McGraw-Hill/Irwin Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.


2/67

Electronic Business Systems

Cross-functional Enterprise Systems

Functional Business Systems

apter

7

McGraw-Hill/Irwin Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.


3/67

7-3

Learning Objectives

1. Identify the following cross-functional enterprisesystems, and give examples of how they canprovide significant business value to a company:

a. Enterprise resource planningb. Customer relationship management

c. Supply chain management

d. Enterprise application integration

e. Transaction processing systems

f. Enterprise collaboration systems


4/67

7-4

Learning Objectives

2. Give examples of how Internet and otherinformation technologies support businessprocesses within the business functions of

accounting, finance, human resource management,marketing, and production and operationsmanagement.

3. Understand the need for enterprise application

integration to improve support of businessinteractions across multiple e-business applications.


5/677-5

Case 1: Hilton Hotels CorporationData-Driven Hospitality

OnQ the IT piece of a customers really matterstrategy

Goal to

Build customer loyalty More revenue per visit

Customer profiles


6/677-6

Case Study Questions

1. What are the benefits and drawbacks of the OnQsystem at Hilton?

2. What does Hilton have to do to create a competitive

advantage through OnQ? Provide some specificexamples.

3. Is it possible to have too much information about acustomer? Explain.


7/677-7

Real World Internet Activity

1. The concept of customer relationship managementis rooted in the idea that more information about acustomer will ultimately result in better service to

the customer. Using the Internet, See if you can find examples of other companies that

have found ways in which to apply the gathering ofcustomer data to the management of customer

relationships?


8/677-8

Real World Group Activity

CRM raises issues of invasion of privacy sinceconclusions can be drawn about a customersbehavior from the data commonly collected. In small

groups, Discuss these potential privacy issues.

How can an organization meet the needs of serving itscustomers while simultaneously protecting their

privacy?


9/677-9

Cross-functional Systems

Cross the boundaries of traditional businessfunctions

In order to reengineer and improve vital business

processes all across the enterprise


10/677-10

Enterprise Application Architecture

Source: Adapted from Mohan Sawhney and Jeff Zabin, Seven Steps to Nirvana: Strategic

Insights into e-Business Transformation(New York: McGraw-Hill,2001), p. 175.


11/677-11

Customer Relationship

Management (CRM)

CRM uses technology to

Create a cross-functional enterprise system

That integrates and automates many of the processes in

sales, marketing and customer service that interact withcustomers

Create a framework of web-enabled software anddatabases that integrate these processes with the rest of

the companys processes


12/677-12

CRM Applications Clusters


13/677-13

CRM applications

Contract and Account Management

Helps sales, marketing and service professionals

Capture and track data about past and planned

contacts with customers and prospectsSales

Provides sales reps with software tools and data theyneed to support and manage sales activities

Cross-selling is trying to sell a customer of one productwith a related product

Up-selling is trying to sell customer a better productthan they are currently seeking


14/677-14

CRM applications

Marketing and Fulfillment

Help marketing professionals accomplish directmarketing campaigns by tasks such as

Qualifying leads for targeted marketing and schedulingand tracking direct marketing mailings


15/677-15

CRM applications

Customer Service and Support

Provides sales reps with software tools and databaseaccess to customer database shared by sales and

marketing professions Helps create, assign and manage requests for service

Call center software routes calls to customer supportagents based upon their skills and type of call

Help desk software provides relevant service data andsuggestions for resolving problems for customerservice reps helping customers with problems


16/677-16

CRM applications

Retention and Loyalty Programs

Try to help a company identify, reward, and market totheir most loyal and profitable customers

Data mining tools and analytical software Customer data warehouse


17/67

7-17

CRM supports customer life cycle


18/67

7-18

CRM benefits

Identify and target best customers

Real-time customization and personalization ofproducts and services

Track when a customer contacts a companyProvide consistent customer experience and superior

service and support


19/67

7-19

Reasons for CRM failures

Lack of understanding and preparation

Rely on application to solve a problem without firstchanging the business processes

Business stakeholders not participating and notprepared


20/67

7-20

Enterprise Resource Planning (ERP)

Cross-functional enterprise system

with an integrated suite of software modules

that support the basic internal business processes of a

company


21/67

7-21

ERP application components


22/67

7-22

Business benefits of ERP

Quality and efficiency

Decreased costs

Decision support

Enterprise agility


23/67

7-23

Costs of implementing a new ERP


24/67

7-24

Causes of ERP failure

Underestimating the complexity of planning,development and training

Failure to involve affected employees in planning

and developmentTrying to do too much too fast

Insufficient training in new work tasks

Failure to do enough data conversion and testing

Over reliance on ERP vendor or consultingcompanies


25/67

7-25

Supply Chain Management (SCM)

A cross-functional interenterprise system

To help support and manage the links between acompanys key business processes

And those of its suppliers, customers and businesspartners


26/67

7-26

SCM goal

Fast, efficient, low-cost network of businessrelationships or supply chainto get a companysproducts from concept to market

A supply chain:

Interrelationships with suppliers, customers,distributors, and other businesses that are needed to

design, build and sell a product


27/67

7-27

SCM


28/67

7-28

Electronic Data Interchange (EDI)

EDI:

The electronic exchange of business transactions

Over the Internet and other networks

Between supply chain trading partners


29/67

7-29

EDI Examples


30/67

7 30

Role of SCM


31/67

7 31

Goals and Objectives of SCM


32/67

7 32

Causes of problems in SCM

Lack of proper demand-planning knowledge, toolsand guidelines

Inaccurate or overoptimistic demand forecasts

Inaccurate production, inventory, and other dataLack of adequate collaboration within the company

and between partners

SCM software considered immature, incomplete and

hard to implement

E t i A li ti I t ti


33/67

7 33

Enterprise Application Integration

(EAI)

EAI connects cross-functional systems

Serves as middleware to Provide data conversion

Communication between systems Access to system interfaces


34/67

7 34

How EAI works

Enterprise Collaboration Systems


35/67

7 35

Enterprise Collaboration Systems

(ECS)

ECS

Cross-functional IS that enhance communication,coordination and collaboration among the members ofbusiness teams and workgroups


36/67

7 36

ECS Goals

Communicate: share information with each other

Coordinate: coordinate individual work efforts anduse of resources with each other

Collaborate: work together cooperatively on jointprojects and assignments


37/67

7-37

ECS Tools


38/67

7-38

Case 2: The Business Case for EAI

EAI involves using software to connect a variety ofapplications into a cohesive unit

Helps enterprises align systems more closely with

business processesExpect to spend $200,000 - $400,000 on an EAI project

EAI is costly and complex

Technical staff need lots of training


39/67

7-39


1. Why has EAI recently become a critical part of theIT strategy at many organizations, and a high-ranking project of top IT executives? Use BaxterInternational, GE Power and Corporate Express asexamples.

2. What is the major difference in the business valueof the EAI projects at Baxter International, GE

Power and Corporate Express?3. What are some of the challenges in developing and

implementing EAI systems? How can companiesmeet this challenge?


40/67

7-40


1. Integrating applications at the enterprise level,while desirable, is often associated with manysignificant challenges to the organization. Usingthe Internet,

See if you can find examples of other companies thathave found ways to meet these challenges andsuccessfully integrate their applications on anenterprise level.

Are there companies that specialize in assisting suchintegration projects?


41/67

7-41


2. One of the challenges associated with applicationintegration on an enterprise level is determiningwhich applications to integrate and which to leaveas is. In small groups,

Discuss how an organization should approach anintegration project.

What criteria should be used in determining acandidate application for enterprise integration?


42/67

7-42

Functional Business Systems

A variety of information systems (transactionprocessing, management information systems,decision support, etc.)

That support the business functions of Accounting, finance, marketing, operations

management and human resource management

Examples of functional information


43/67

7-43

Examples of functional information

systems

k i f i S


44/67

7-44

Marketing Information Systems

I t ti k ti


45/67

7-45

Interactive marketing

Interactive marketing: A customer-focused marketing process

Using the Internet, intranets, and extranets

To establish two-transactions

Between a company and its customers or potentialcustomers

Goal: to profitably attract and keep customers

who will become partners with the business in creating, purchasing and improving products and

services

T t d M k ti


46/67

7-46

Targeted Marketing

An advertising and promotion management conceptthat includes five targeting components

Targeted Marketing


47/67

7-47

Targeted MarketingComponents

Community customize advertising to appeal topeople of specific virtual communities

Content advertising placed on a variety of selectedwebsites aimed at a specific audience

Context advertising placed on web pages that arerelevant to the content of a product or service

Demographic/Psychographic web marketingefforts aimed at specific types or classes or people

Online Behavior promotion efforts tailored to eachvisit to a site by an individual, e.g., using cookies files

S l F A t ti


48/67

7-48

Sales Force Automation

Outfit sales force with notebook computers, webbrowsers and sales contract management software

Connect them to marketing websites and companyintranet

Goal:

Increase personal productivity

Speeds up capture and analysis of sales data from the

field to marketing managers Gain strategic advantage

M f t i I f ti S t


49/67

7-49

Manufacturing Information Systems

Support the production/operations function Includes all activities concerned with planning and

control of producing goods or services

Computer-Integrated


50/67

7-50

p g

Manufacturing

CIM Objectives


51/67

7-51

CIM Objectives

Simplify production processes, product designs, andfactory organization as a vital foundation toautomation and integration

Automate production processes and the businessfunctions that support them with computers,machines, and robots

Integrate all production and support processes using

computer networks, cross-functional businesssoftware, and other information technologies

CIM Systems


52/67

7-52

CIM Systems

Computer-aided manufacturing (CAM) - automatethe production process

Manufacturing execution systems (MES)performance monitoring information systems forfactory floor operations

Process Control control ongoing physical processes

Machine Control controls the actions of machines

Human Resource Management


53/67

7-53

g

(HRM)

Information systems designed to support Planning to meet the personnel needs of the business

Development of employees to their full potential

Control of all personnel policies and programs

HRM Systems


54/67

7-54

HRM Systems

HRM and the Internet


55/67

7-55

HRM and the Internet

Recruiting employees using the corporate websiteand commercial recruiting services

Posting messages in selected Internet newsgroups

Communicating with job applicants via e-mail

HRM and Corporate Intranets


56/67

7-56

HRM and Corporate Intranets

Process common HRM applicationsAllow HRM department to provide around-the-clock

services

Disseminate valuable information faster thanthrough previous company channels

Collect information from employees online

Allow managers and other employees to perform

HRM tasks with little intervention by the HRMdepartment

Training tool

Employee Self Service (ESS)


57/67

7-57

Employee Self-Service (ESS)

Intranet applications that allow employees to View benefits

Enter travel and expense reports

Verify employment and salary information

Update their personal information

Enter data that has a time constraint to it

Accounting Information Systems


58/67

7-58


Record and report the flow of funds through anorganization

Produce financial statements

Forecasts of future conditions



59/67

7-59


Six essential Accounting


60/67

7-60

Information SystemsOrder Processing Captures and processes customer

orders and produces data for inventory control andaccounts receivable

Inventory Control Processes data reflecting changesin inventory and provides shipping and reorderinformation

Accounts Receivable Records amounts owed by

customers and produces customer invoices, monthlycustomer statements, and credit management reports

Six essential Accounting


61/67

7-61

Information SystemsAccounts Payable Records purchases from,

amounts owed to, and payments to suppliers, andproduces cash management reports

Payroll Records employee work and compensationdata and produces paychecks and other payrolldocuments and reports

General Ledger Consolidates data from other

accounting systems and produces the periodicfinancial statements and reports of the business

Financial Management Systems


62/67

7-62

Financial Management Systems

Support business managers and professionals indecisions concerning

The financing of a business

The allocation and control of financial resources withina business

Financial Management System

l


63/67

7-63

Examples

Case 3: Improving Supply-ChainR lt


64/67

7-64

Results

Supply chains are a kludge of systems including Internally: manufacturing, warehousing, inventory

control, planning, shipping, and logistics

Relationships with suppliers and partners

Increasing dependence on the input of customers

Companies are replacing this kludge with state-of-the-art software

Two major software types: Supply-chain execution

Supply-chain planning



65/67

7-65


1. What is the business value of SCM systems forBrunswick and Whirlpool?

2. Does the business value of SCM depend upon whattype of business a company is in? Explain.

3. How does Brunswicks approach to SCM differfrom that of Whirlpools? Is one approach superiorto all others? Why or why not?



66/67

7-66


1. Supply chain management involves more thansimply automating and networking all of theparticipants and stakeholders. Often the first stepis to rationalize the various steps in the supply

chain to determine their necessity. Using theInternet,

See if you can find examples of other companies thathave reengineered their supply chains by first looking

at the current method and changing its steps beforeautomating and networking the partners.



67/67

7-67


When supply chain relationships are reviewed for streamlining,longtime supply chain partners may no longer be viable. Thenthe organization must decide between:

preserving a longstanding relationship with a supply chainpartner and sacrificing the benefits of a more rational

process, or terminating a longtime relationship in favor of a more

beneficial supply chain.

In small groups,

Discuss the pros and cons of this decision.

What criteria should an organization use in determining theappropriate action with regard to longstanding supply chainpartners?

MIS James A. O'Brian Chap 07

Documents

Transcript of MIS James A. O'Brian Chap 07