8/2/2019 MIS442-Chap008

1/39

1

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Chapter - 8

8/2/2019 MIS442-Chap008

2/39

2

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives

Identify and give examples to illustrate the

following aspects of customer relationship

management, enterprise resource management,

and supply chain management systems:

Business processes supported

Customer and business value provided

Potential challenges and trends

8/2/2019 MIS442-Chap008

3/39

3

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Section I

Customer Relationship Management:The Business Focus

8/2/2019 MIS442-Chap008

4/39

4

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management

Provides customer-facing employees with a

single, complete view of every customer at every

touch point and across all channels

Provides the customer with a single, complete

view of the company and its extended channels

8/2/2019 MIS442-Chap008

5/39

5

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

CRM

Uses information technology to create a cross-

functional enterprise system that integrates and

automates many of the customer serving processes insales, marketing, and customer services that interact

with a companys customers.

Creates an IT framework of Web-enabled software &

databases that integrates these processes with the rest

of the companys business operations

8/2/2019 MIS442-Chap008

6/39

6

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Includes software modules that provide tools that

enable a business & its employees to provide fast,

convenient, dependable, consistent service to itscustomers.

8/2/2019 MIS442-Chap008

7/39

7

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Major Application Components of CRM

Contact & Account Management

Helps capture and track relevant data about past and plannedcontacts with prospects & customers.

Information is captured from all customer touchpoints such

as phone, fax, email, retail stores, company website etc.

Stores the data in a common customer database that

integrates all customer account information and makes it

available throughout the company via internet, intranet and

other network links.

8/2/2019 MIS442-Chap008

8/39

8

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Sales

Provides sales reps with software tools &

company data needed to support & manage

their sales activities.

Helps optimize cross-selling & up-selling

8/2/2019 MIS442-Chap008

9/39

9

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Marketing & Fulfillment

Helps accomplish direct marketing campaigns by

automating tasks

Helps capture & manage prospect & customer response

data in CRM database

Helps in the fulfillment of prospect and customerresponses and requests by quickly scheduling sales

contacts & providing appropriate information on

products & services to them

8/2/2019 MIS442-Chap008

10/39

10

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Customer Service and Support

Provides service reps with software tools & real-

time access to the common customer databaseshared by sales and marketing professionals

Helps customer service managers create, assign, &

manage requests for service from customers

Call center software

Help desk software

8/2/2019 MIS442-Chap008

11/39

11

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Retention and Loyalty Programs

Helps the company identify, reward, and marketto their most loyal and profitable customers

8/2/2019 MIS442-Chap008

12/39

12

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

8/2/2019 MIS442-Chap008

13/39

13

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Three Phases of CRM

Acquire (new customers)

A business relies on CRM software tools anddatabases to help it acquire new customers by doing

a superior job of contact management, sales

prospecting, selling, direct marketing, & fulfillment.

The goal of these CRM functions is to help

customers perceive the value of a superior product

offered by an outstanding company.

14

8/2/2019 MIS442-Chap008

14/39

14

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Enhance (customer satisfaction)

By supporting superior service from aresponsive networked team of sales and service

specialists.

15

8/2/2019 MIS442-Chap008

15/39

15

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Retain (your customers)

CRM analytical software and databases help acompany proactively identify and reward its

most loyal, profitable customers to retain

16

8/2/2019 MIS442-Chap008

16/39

16

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Benefits and Challenges of CRM

Allows a business to identify its best customers

those who are the most profitable

Makes possible real-time customization &

personalization of products & services based on

customer wants, needs, buying habits, & lifecycles

17

8/2/2019 MIS442-Chap008

17/39

17

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Benefits and Challenges (continued)

Enables a company to provide a consistent

customer service experience

Failures

Due to lack of understanding & preparation.CRM is not a silver bullet

18

8/2/2019 MIS442-Chap008

18/39

18

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management (continued)

Trends

Operational CRM

Supports customer interaction with greater

convenience through a variety of channels,including phone, fax, email, chat, mobile devices

Analytical CRM

Extracts in-depth customer history, preferences andprofitability information from your data warehouse

and other databases

19

8/2/2019 MIS442-Chap008

19/39

19

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Customer Relationship Management ( continued )

Collaborative CRM

Enables easy collaboration with customers,

suppliers, and partners.

Portal-based CRM

Provides all users with the tools and information

that fit their individual roles and preferences.

20

8/2/2019 MIS442-Chap008

20/39

20

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Section II

Enterprise Resource Planning:The Business Backbone

21

8/2/2019 MIS442-Chap008

21/39

21

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource Planning

Serves as a cross-functional enterprise backbone

that integrates & automates many internal

business processes and information systems

Help companies gain the efficiency, agility, &

responsiveness needed to succeed today

22

8/2/2019 MIS442-Chap008

22/39

22

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource Planning (continued)

Gives a company an integrated real-time view of its

core business processes

ERP software suites typically consist of integrated

modules ofManufacturing

Distribution

Sales

Accounting

Human Resource Management

23

8/2/2019 MIS442-Chap008

23/39

23

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource Planning (continued)

Benefits and Challenges

Quality and efficiency

Helps improve the quality and efficiency of

customer service, production, & distribution

by creating a framework for integrating and

improving internal business processes

24

8/2/2019 MIS442-Chap008

24/39

24

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource Planning (continued)

Decreased Costs

Reductions in transaction processing costsand hardware, software, and IT support staff

25

8/2/2019 MIS442-Chap008

25/39

25

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource Planning (continued)

Decision Support

Provides vital cross-functional information onbusiness performance to assist managers in

making better decisions

26

8/2/2019 MIS442-Chap008

26/39

26

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource Planning (continued)

Enterprise agility

Results in more flexible organizationalstructures, managerial responsibilities, and

work roles

27

8/2/2019 MIS442-Chap008

27/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource Planning (continued)

Costs of ERP

The costs and risks of failure in implementing anew ERP system are substantial.

28

8/2/2019 MIS442-Chap008

28/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource Planning (continued)

29

8/2/2019 MIS442-Chap008

29/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource Planning (continued)

Causes of ERP failures

Underestimating the complexity of the planning,

development, and training required

Failure to involve affectedemployees in the

planning & development phases and change

management programs

30

8/2/2019 MIS442-Chap008

30/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource Planning (continued)

Trying to do too much, too fast

Insufficient training

Believing everything the software vendors

and/or consultants say

31

8/2/2019 MIS442-Chap008

31/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Resource Planning (continued)

Trends

Flexible ERP

Web-enabled ERP

Interenterprise ERP

E-Business Suites

32

8/2/2019 MIS442-Chap008

32/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Section III

Supply Chain Management:The Business Network

33

8/2/2019 MIS442-Chap008

33/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Supply Chain Management

A cross-functional interenterprise system that

uses IT to help support & manage the links

between some of a companys key business

processes and those of its suppliers, customers, &business partners.

Goal is to create a fast, efficient, & low-costnetwork of business relationships.

34

8/2/2019 MIS442-Chap008

34/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Supply Chain Management (continued)

35

8/2/2019 MIS442-Chap008

35/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Supply Chain Management (continued)

Electronic data interchange

Exchanging business transaction documents

over the Internet & other networks between

supply chain trading partners

36

8/2/2019 MIS442-Chap008

36/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Supply Chain Management (continued)

The Role of SCM

37

8/2/2019 MIS442-Chap008

37/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Supply Chain Management (continued)

Benefits and Challenges

Can provide faster, more accurate order

processing, reductions in inventory levels,

quicker time to market, lower transaction and

materials costs, & strategic relationships with

suppliers

38

8/2/2019 MIS442-Chap008

38/39

McGraw-Hill/Irwin Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Supply Chain Management (continued)

Problem causes

Lack of proper demand planning knowledge,

tools, and guidelines

Inaccurate or overoptimistic demand forecasts

Inaccurate production, inventory, and other

business data

Lack of adequate collaboration

39

8/2/2019 MIS442-Chap008

39/39

Supply Chain Management (continued)

Trends