MIS BIDGOLI 6 11 ENTERPRISE SYSTEMS Copyright 2016

LEARNING OUTCOMES 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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 5 | CH 11 2

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 3

Exhibit 11. 1 Supply Chain Configuration Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 5 | CH 11 4

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 5

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 6

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 7

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 8

Internet-Enabled SCM • Improves information sharing throughout the supply chain • Improves SCM activities • • • Purchasing/procurement Inventory management Transportation Order processing Customer service Production scheduling Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 9

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 10

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 11

E-Distributor • Marketplace owned and operated by a third party that provides an electronic catalog of products • Maintenance, repair, and operations (MROs) services • 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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 12

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 13

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 14

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 15

Exhibit 11. 2 CPFR Process Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 5 | CH 11 16

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 17

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 18

CRM Activities • • • Sales automation Order processing Marketing automation Customer support Knowledge management Personalization technology Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 19

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 Ex. Sellence Infor CRM SAP my. SAP Oracle People. Soft CRM Oracle Siebel Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 20

Features of Software Packages • • Salesforce automation e. CRM or Web-based CRM Survey management Automated customer service Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 21

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 22

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 23

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 24

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 25

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 26

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 27

Chief Knowledge Officer (CKO) • Position created by organizations because of the importance of • Knowledge management systems • Responsible for overseeing knowledge management within an organization Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 28

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 29

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 30

Exhibit 11. 3 ERP Configuration Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 5 | CH 11 31

Table 11. 1 ERP Components Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 5 | CH 11 32

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 33

Benefits of a Well-designed ERP System • Reduced: • Inventory costs • Labor costs • Order-to-fulfillment time Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 34

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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 6| CH 11 35

KEY TERMS • Collaborative filtering (CF) • Collaborative planning, forecasting, and replenishment (CPFR) • Customer relationship management (CRM) • Customization • e-marketplace • Electronic data interchange (EDI) • Enterprise resource planning (ERP) Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 5 | CH 11 36

KEY TERMS • Enterprise system • Knowledge management (KM) • Online auction • Personalization • Reverse auction • Supply chain management (SCM) Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 5 | CH 11 37

SUMMARY • 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 Copyright © 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MIS 5 | CH 11 38