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Enterprise Business Systems
Chapter8
McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
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• Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource manage-ment, and supply chain management systems:– Business processes supported– Customer and business value provided– Potential challenges and trends
• Understand the importance of managing at the enterprise level to achieve maximum efficiencies and benefits.
Learning Objectives
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Managing at the Enterprise Level
• Lessons from Geese – Importance of team work – Encourage passion and energy
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Customer Relationship Management (CRM)
• Customer focused– Customer relationships – most valued asset
– Find and retain most profitable customers possible
• Company has – Single, complete view of every customer
• Customers have– Single, complete view of the company
• Integrates and automates customer-serving processes
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Contact and Account Management
• Track relevant data about– Every past and planned contact with
prospects and customers– Other business and life cycle events
• Data captured from touchpoints– Telephone, fax, e-mail– Websites, retail stores, kiosks– Personal contact
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RWC 1: CRM Goes Mobile
• Sales people
– Autonomous and don’t play by rules
– Ignore new processes unless direct benefit
• More sales
• Better time efficiency
• Designing Mobile Applications– What are the common tasks
– What are the priorities
– What are the pain points
– Less is more
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Application Clusters in CRM
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Sales
• A CRM system provides:– Support and manage sales activities– Optimize cross-selling and up-selling– Method to check account status and history
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Customer retention evaluation report
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Marketing and Fulfillment
• Automate direct marketing campaigns
– Qualifying leads for targeted marketing
– Scheduling and tracking mailings
– Capturing and managing responses
– Analyzing the business value of the campaign
– Fulfilling responses and requests
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Customer Service and Support
• Shared database
– Requests for service are created, assigned, and managed
– Call center software routes calls to agents
– Help desk software provides service data and suggestions for solving problems
• Personalized support information
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Retention and Loyalty Programs
• Statistics
– Costs 6 times more to sell to a new customer
– Unhappy customer will tell 8-10 others
– Boosting customer retention by 5 percent can boost profits by 85 percent
– Odds of selling:
• Existing customer - 50 percent
• New - 15 percent
– 70 percent of customers will do business again if problems are quickly resolved.
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• Primary objective - enhancing and optimizing customer retention and loyalty
– Identify, reward, and market to the most loyal and profitable customers
– Evaluate targeted marketing and relationship programs
Retention and Loyalty Programs
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The Three Phases of CRM
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Benefits of CRM
• Identify and target the best customers
• Real-time customization and personalization of products and services
• Track when and how a customer contacts the company
• Provide a consistent customer experience
• Provide superior service and support
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CRM Failures
• Reasons for Failure– Lack of senior management sponsorship
– Improper change management
– Elongated projects that take on too much, too fast
– Lack of or poor integration between CRM and core business systems
– Lack of end-user incentives leading to poor user adoption rates
– Lack of understanding and preparation -- # 1
– Not solving business process problems first
– No participation on part of business stakeholders involved
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Trends in CRM
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What is ERP?
• Cross-functional enterprise system – Integrated suite of software modules– Supports basic internal business processes
• Manufacturing• Logistics• Distribution• Accounting• Finance• Human resources
– Facilitates information flows• Business• Supplier• Customer
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RWC 2: ERPs Get a Second Lease on Life
• Old ERPs customized to fit individual needs
• Upgrades can’t be applied without testing and modification
• New ERPs have new features and capability
• Some companies stay with old systems
• Some companies buy new, but avoid customization
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ERP Application Components
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ERP Process and Information Flows
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Business processes and functions of ERP
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ERP at Colgate
• Needed to coordinate globally, act locally
• Order-to-delivery time cut in half
– Order acquisition and process
• 7 days cut to 4 hours
– Distribution
• 4 days cut to 14 hours
• Increased on-time deliveries
• Domestic inventories dropped by 1/3
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Costs of Implementing a New ERP
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Causes of ERP Failures
• Most common causes of ERP failure
– Under-estimating complexity
• Planning, development, training
– Failure to involve affected employees
– Too much too fast
– Insufficient training
– Insufficient data conversion and testing
– Over-reliance on ERP vendor or consultants
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Trends in ERP
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ERP application components
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Supply Chain Management (SCM)
• Helps a company– Get the right products– To the right place– At the right time– In the proper quantity– At an acceptable cost
• Goal of SCM is to efficiently…– Forecast demand– Control inventory– Enhance relationships– Receive feedback
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RWC 3: Supply Chains Adapt to Tough Times
• Old push model uses best-guess forecasts– High inventory levels– Supply chain stops during down-turn
• Key to survival in down-turn– Reduced inventory– Increased working capital
• Pull system– Information to build inventory comes from supply
chain partners– Inventory based on “demand signals”
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Supply Chain Life Cycle
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EDI Activities
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Roles and Activities of SCM in Business
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Functions and Benefits of SCM
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Benefits of SCM
• Key Benefits
– Faster, more accurate order processing
– Reductions in inventory levels
– Quicker times to market
– Lower transaction and materials costs
– Strategic relationships with supplier
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Challenges of SCM
• Key Challenges
– Lack of knowledge, tools, and guidelines
– Inaccurate data
– Lack of collaboration
– SCM tools are immature, incomplete, and hard to implement
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SCM at Emerson
• Emerson Transaction Hub– Different orders in separate containers– Created Transaction Hub (& Logistics Hub)– Combine multiple orders into single
shipments/containers
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Goals and Objectives of SCM
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Trends in SCM
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Trends in SCM
• CVS, McKesson
– CVS leading drug retail chain
– McKesson largest pharmaceutical distributor
– Point-of-sale data
– Agreed on service levels
– Reduced replenishment time
• Modern Plastics, SupplySolution, Inc.– Upraded reactive system to proactive system
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RWC 4: The Secret to CRM is in the Data
• CRM enables increased sales revenue • CRM provides more and better services to
customers and prospects. • CRM – better earlier than later.• “Without accurate, complete, and
comprehensive data, any CRM effort will be less than optimal.”