Unit Three – Enhancing Business Decisions Decision-enabling, problem-solving, and opportunity-seizing systems

Ch. 9: Model-based Decision Making Model – a simplified representation or abstraction of reality The following systems use models to support decision making, problem solving, and opportunity capturing: – Decision support systems (DSS) – Executive information systems (EIS) – Artificial intelligence (AI) – Data mining

DECISION SUPPORT SYSTEMS Decision support system (DSS) – models information to support managers and business professionals during the decision-making process Three quantitative models typically used by DSSs: 1. Sensitivity analysis – the study of the impact that changes in one (or more) parts of the model have on other parts of the model 2. What-if analysis – checks the impact of a change in an assumption on the proposed solution 3. Goal-seeking analysis – finds the inputs necessary to achieve a goal such as a desired level of output

EXECUTIVE INFORMATION SYSTEMS Executive information system (EIS) – a specialized DSS that supports senior level executives within the organization Most EISs offering the following capabilities: – Consolidation – involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information – Drill-down – enables users to get details, and details of details, of information – Slice-and-dice – looks at information from different perspectives

EXECUTIVE INFORMATION SYSTEMS Digital dashboard – integrates information from multiple components and present it in a unified display

ARTIFICAL INTELLIGENCE (AI) Intelligent systems – various commercial applications of artificial intelligence Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn and typically can: – Learn or understand from experience – Make sense of ambiguous or contradictory information – Use reasoning to solve problems and make decisions

ARTIFICAL INTELLIGENCE (AI) The three most common categories of AI include: 1. Expert systems – computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems 2. Neural Networks – attempts to emulate the way the human brain works 3. Intelligent agents – special-purposed knowledge- based information system that accomplishes specific tasks on behalf of its users

Ch. 10: SCM Decision Making The average company spends nearly half of every dollar that it earns on production In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains Today, companies are focusing on all of the following to influence their supply chains: – Suppliers, assemblers, shipping/logistic firms, sales/marketing channels, third-party customers support firms, other business partners

SCM The supply chain has three main links: 1.Materials flow from suppliers and their “upstream” suppliers at all levels 2.Transformation of materials into semifinished and finished products through the organization’s own production process 3.Distribution of products to customers and their “downstream” customers at all levels

SCM Organizations must embrace technologies that can effectively manage and oversee their supply chains

SUPPLY CHAIN MANAGEMENT’S EXPLOSIVE GROWTH Top reasons why more and more executives are turning to SCM to manage their extended enterprises

SUPPLY CHAIN MANAGEMENT’S EXPLOSIVE GROWTH Five Factors Driving SCM’s Explosive Growth

USING SUPPLY CHAIN MANAGEMENT TO ENHANCE DECISION MAKING Numerous decision support systems (DSSs) are being built to assist decision makers in the design and operation of integrated supply chains DSSs allow managers to examine performance and relationships over the supply chain and among: – Suppliers – Manufacturers – Distributors – Other factors that optimize supply chain performance

SUPPLY CHAIN MANAGEMENT SUCCESS FACTORS 10-14

SUPPLY CHAIN MANAGEMENT SUCCESS FACTORS The following are the SCM industry best practices: 1.Make the sale to suppliers 2.Wean employees off traditional business practices 3.Ensure the SCM system supports the organizational goals 4.Deploy in incremental phases and measure and communicate success 5.Be future oriented

Ch. 11: CRM Decision Making CRM is a business philosophy based on the premise that those organizations that understand the needs of individual customers are best positioned to achieve sustainable competitive advantages in the future This chapter discusses – The reasons for CRM’s explosive growth – Using CRM to enhance decision making – CRM success factors

CRM CRM enables an organization to: – Provide better customer service – Make call centers more efficient – Cross sell products more effectively – Help sales staff close deals faster – Simplify marketing and sales processes – Discover new customers – Increase customer revenues

CUSTOMER RELATIONSHIP MANAGEMENT’S EXPLOSIVE GROWTH CRM Business Drivers

CUSTOMER RELATIONSHIP MANAGEMENT’S EXPLOSIVE GROWTH Forecasts for CRM Spending (in billions)

USING ANALYTICAL CRM TO ENHANCE DECISIONS Operational CRM – supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers

USING ANALYTICAL CRM TO ENHANCE DECISIONS Operational CRM and analytical CRM

CUSTOMER RELATIONSHIP MANAGEMENT SUCCESS FACTORS CRM Success factors include: 1.Clearly communicate the CRM strategy 2.Define information needs and flows 3.Build an integrated view of the customer 4.Implement in iterations 5.Scalability for organizational growth

Ch. 12: ERP Decision Making Enterprise resource planning systems serve as the organization's backbone in providing fundamental decision-making support This chapter discusses – ERP’s explosive growth – Using ERP to connect corporations – Integrating SCM, CRM, and ERP

ERP At the heart of all ERP systems is a database, when a user enters or updates information in one module, it is immediately and automatically updated throughout the entire system

ERP ERP systems can automate business processes

ERP ERP systems must integrate various organization processes and be: – Flexible – Modular and open – Comprehensive – Beyond the company

ENTERPRISE RESOURCE PLANNING’S EXPLOSIVE GROWTH SAP boasts 20,000 installations and 10 million users worldwide ERP solutions are growing because: – ERP is a logical solution to the mess of incompatible applications that had sprung up in most businesses – ERP addresses the need for global information sharing and reporting – ERP is used to avoid the pain and expense of fixing legacy systems

THE CONNECTED CORPORATION Top three ERP vendors and their major components

THE CONNECTED CORPORATION SCM, CRM, and ERP are the backbone of e- business Integration of these applications is the key to success for many companies Integration allows the unlocking of information to make it available to any user, anywhere, anytime

THE CONNECTED CORPORATION SCM and CRM market overviews

INTEGRATING SCM, CRM, AND ERP Many companies purchase modules from an ERP vendor, an SCM vendor, and a CRM vendor and must integrate the different modules together – Middleware – several different types of software which sit in the middle of and provide connectivity between two or more software applications – Enterprise application integration (EAI) middleware – represents a new approach to middleware by packaging together commonly used functionality, such as providing prebuilt links to popular enterprise applications, which reduced the time necessary to develop solutions that integrate applications from multiple vendors

INTEGRATING SCM, CRM, AND ERP General audience and purpose of SCM, CRM and ERP

INTEGRATING SCM, CRM, AND ERP Data points where SCM, CRM, and ERP integrate