1. 8.1 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Applications and Business Process Integration Chapter 9

2. 8.2 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Objectives 1.How do enterprise systems provide value for businesses? How does enterprise software work? 2.How do supply chain management systems provide value for businesses? What does supply chain management software do?

3. 8.3 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Objectives 3.How do customer relationship management systems provide value for businesses? What does customer relationship management software do? 4.How can enterprise applications be used in platforms for new cross-functional services? 5.What are the challenges of implementing and using the various enterprise applications?

4. 8.4 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Management Challenges 1.Thinking beyond the walls of corporation 2.Obtaining value from enterprise applications

5. 8.5 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Systems Enterprise Software: Set of integrated software modules for finance and accounting, human resources, manufacturing and production, and sales and marketing that allows data to be used by multiple functions and business processesEnterprise Software: Set of integrated software modules for finance and accounting, human resources, manufacturing and production, and sales and marketing that allows data to be used by multiple functions and business processes How Enterprise Systems Work

6. 8.6 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Systems Enterprise system architecture Figure 9-1

7. 8.7 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Systems Process map for procuring new equipment Figure 9-2

8. 8.8 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Systems Best Practices: The most successful solutions or problem-solving methods for consistently and effectively achieving a business objectiveBest Practices: The most successful solutions or problem-solving methods for consistently and effectively achieving a business objective How Enterprise Systems Work

9. 8.9 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Systems Benefits of Enterprise Systems Firm Structure and Organization: One OrganizationFirm Structure and Organization: One Organization Management: Firmwide Knowledge-Based Management ProcessesManagement: Firmwide Knowledge-Based Management Processes Benefits and Challenges of Enterprise Systems

10. 8.10 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Systems Benefits of Enterprise Systems Technology: Unified PlatformTechnology: Unified Platform Business: More Efficient Operations and Customer-Driven Business ProcessesBusiness: More Efficient Operations and Customer-Driven Business Processes Benefits and Challenges of Enterprise Systems

11. 8.11 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Systems Enterprise System Challenges Daunting ImplementationDaunting Implementation High Up-Front Costs and Future BenefitsHigh Up-Front Costs and Future Benefits InflexibilityInflexibility Realizing Strategic ValueRealizing Strategic Value Benefits and Challenges of Enterprise Systems

12. 8.12 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Plan: Balances aggregate demand and supply to develop a course of actionPlan: Balances aggregate demand and supply to develop a course of action Source: Processes that procure goods and services needed to create a specific product or serviceSource: Processes that procure goods and services needed to create a specific product or service Make: Processes that transform a product into a finished state to meet planned or actual demandMake: Processes that transform a product into a finished state to meet planned or actual demand Supply Chain Processes

13. 8.13 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Deliver: Processes that provide finished goods and services to meet actual or planned demandDeliver: Processes that provide finished goods and services to meet actual or planned demand Return: Processes associated with returning products or receiving returned productsReturn: Processes associated with returning products or receiving returned products Supply Chain Processes

14. 8.14 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Key supply chain management processes Figure 9-3

15. 8.15 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Logistics: Planning and control of all factors that will have an impact on transporting a product or serviceLogistics: Planning and control of all factors that will have an impact on transporting a product or service Supply Chain Processes

16. 8.16 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Just-in-Time: Scheduling system for minimizing inventory by having components arrive exactly at the time they are needed and finished goods shipped as soon as they leave the assembly lineJust-in-Time: Scheduling system for minimizing inventory by having components arrive exactly at the time they are needed and finished goods shipped as soon as they leave the assembly line Bullwhip Effect: Distortion of information about demand for a product as it passes from one entity to the next across the supply chainBullwhip Effect: Distortion of information about demand for a product as it passes from one entity to the next across the supply chain Information and Supply Chain Management

17. 8.17 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems The bullwhip effect Figure 9-4

18. 8.18 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Supply Chain Planning Systems: Enable a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plansSupply Chain Planning Systems: Enable a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans Demand Planning: Determining how much product a business needs to make to satisfy all its customers ’ demandsDemand Planning: Determining how much product a business needs to make to satisfy all its customers ’ demands Supply Chain Management Applications

19. 8.19 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Supply Chain Execution Systems: Manage the flow of products through distribution centers to ensure that they are delivered to the right locations in the most efficient mannerSupply Chain Execution Systems: Manage the flow of products through distribution centers to ensure that they are delivered to the right locations in the most efficient manner Supply Chain Management Applications

20. 8.20 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Supply Chain Strategy Functional Products: Typical offerings that have predictable demand, high lifecycles, and often low profit marginsFunctional Products: Typical offerings that have predictable demand, high lifecycles, and often low profit margins Innovative Products: Products with more unpredictable demand and short product lifecycles, but higher profit marginsInnovative Products: Products with more unpredictable demand and short product lifecycles, but higher profit margins Supply Chain Management Applications

21. 8.21 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Supply Chain Performance Measurement Metric: Standard measurement of performanceMetric: Standard measurement of performance Supply Chain Management Applications

22. 8.22 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Supply Chain Management and the Internet Intranet: Improve coordination among internal supply chain processesIntranet: Improve coordination among internal supply chain processes Extranet: Coordinates supply chain processes shared with an organization ’ s business partnersExtranet: Coordinates supply chain processes shared with an organization ’ s business partners Supply Chain Management Applications

23. 8.23 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Intranets and extranets for supply chain management Figure 9-5

24. 8.24 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Collaborative Logistics Pays Off for Land O ’ Lakes What are the advantages and drawbacks of collaborative logistics?What are the advantages and drawbacks of collaborative logistics? How do firms obtain value from using load-sharing systems?How do firms obtain value from using load-sharing systems? Why is Web technology so helpful?Why is Web technology so helpful? Window on Organizations

25. 8.25 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Global Supply Chain Issues Typically span greater geographic distances and time differences than domestic supply chainsTypically span greater geographic distances and time differences than domestic supply chains Strategy may need to reflect foreign government regulations and cultural differencesStrategy may need to reflect foreign government regulations and cultural differences Supply Chain Management Applications

26. 8.26 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Demand-Driven Supply Chains: From Push to Pull Manufacturing and Efficient Customer Response Push-Based Model: Supply chain driven by production master schedules based on forecasts of demand, and products are “ pushed ” to customersPush-Based Model: Supply chain driven by production master schedules based on forecasts of demand, and products are “ pushed ” to customers Pull-Based Model: Supply chain driven by actual customer orders so that members only produce what is orderedPull-Based Model: Supply chain driven by actual customer orders so that members only produce what is ordered Supply Chain Management Applications

27. 8.27 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Push versus pull-based supply chain models Figure 9-6

28. 8.28 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Supply Chain Management Benefits Improved customer service and responsivenessImproved customer service and responsiveness Cost reductionCost reduction Cash utilizationCash utilization Benefits and Challenges of Supply Chain Management Systems

29. 8.29 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems Supply Chain Management Challenges If the software is implemented atop flawed processes, it can actually make matters worseIf the software is implemented atop flawed processes, it can actually make matters worse Businesses must identify exactly how processes must change to take advantage of the softwareBusinesses must identify exactly how processes must change to take advantage of the software Benefits and Challenges of Supply Chain Management Systems

30. 8.30 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Supply Chain Management Systems The future Internet-driven supply chain Figure 9-7

31. 8.31 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Customer Relationship Management (CRM): Helps firms maximize the benefits of their customer assetsCustomer Relationship Management (CRM): Helps firms maximize the benefits of their customer assets Partner Relationship Management (PRM): Automation of the firm ’ s relationships with its selling partners using customer data and analytical toolsPartner Relationship Management (PRM): Automation of the firm ’ s relationships with its selling partners using customer data and analytical tools Customer Relationship Management and Partner Relationship Management

32. 8.32 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Touch Point: Method of firm interaction with a customer, such as telephone, e- mail, customer service desk, conventional mail, or point-of purchaseTouch Point: Method of firm interaction with a customer, such as telephone, e- mail, customer service desk, conventional mail, or point-of purchase Customer Relationship Management Applications

33. 8.33 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Customer Data May Come From: Responses to direct mail campaignsResponses to direct mail campaigns Web site interactionsWeb site interactions Bricks-and-mortar stores or branchesBricks-and-mortar stores or branches Call centersCall centers Sales force staffSales force staff Customer Relationship Management Applications

34. 8.34 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Customer Data May Come From: Advertising and marketing activitiesAdvertising and marketing activities Sales and purchase dataSales and purchase data Account dataAccount data Service and support recordsService and support records Legacy dataLegacy data Customer Relationship Management Applications

35. 8.35 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Customer Data May Be Acquired From External Sources Customer lists from direct marketing campaignsCustomer lists from direct marketing campaigns Demographic dataDemographic data Psychographic dataPsychographic data Customer Relationship Management Applications

36. 8.36 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Customer Relationship Management (CRM) Application Software Packages contain modules for partner relationship management (PRM) and employee relationship management (ERM)Packages contain modules for partner relationship management (PRM) and employee relationship management (ERM) Customer Relationship Management Applications

37. 8.37 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Cross-Selling: Marketing complimentary products to customersCross-Selling: Marketing complimentary products to customers Up-Selling: Marketing higher-value products or services to new or existing customersUp-Selling: Marketing higher-value products or services to new or existing customers Bundling: Cross-selling in which a combination of products is sold as a bundle at a lower priceBundling: Cross-selling in which a combination of products is sold as a bundle at a lower price Customer Relationship Management Applications

38. 8.38 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems CRM software capabilities Figure 9-8

39. 8.39 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Churn Rate: Measurement of number of customers who stop using or purchasing products or services from a companyChurn Rate: Measurement of number of customers who stop using or purchasing products or services from a company Operational CRM: Customer-facing applications, such as sales force automation, call center and customer service support, and marketing automationOperational CRM: Customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation Operational and Analytical CRM

40. 8.40 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Analytical CRM: Application dealing with the analysis of customer data to provide information for improving business performanceAnalytical CRM: Application dealing with the analysis of customer data to provide information for improving business performance Operational and Analytical CRM

41. 8.41 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Customer loyalty management process map Figure 9-9

42. 8.42 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Market Segmentation: Dividing a heterogeneous market into smaller, more homogeneous subgroups where marketing efforts can be more specifically targeted and effectiveMarket Segmentation: Dividing a heterogeneous market into smaller, more homogeneous subgroups where marketing efforts can be more specifically targeted and effective Operational and Analytical CRM

43. 8.43 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Analytical CRM data warehouse Figure 9-10

44. 8.44 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Firms could analyze customer data to focus on: Profitability levelsProfitability levels Numbers, types, or usage of multiple productsNumbers, types, or usage of multiple products Product pricingProduct pricing Total revenue anticipatedTotal revenue anticipated Likelihood of acquiring a new productLikelihood of acquiring a new product Operational and Analytical CRM

45. 8.45 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Benefits of Customer Relationship Management Systems Increased customer satisfactionIncreased customer satisfaction Reduced marketing costs and more effective marketingReduced marketing costs and more effective marketing Lower costs for customer acquisition and retentionLower costs for customer acquisition and retention Benefits and Challenges of Customer Relationship Management Systems

46. 8.46 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Customer Relationship Management Systems Challenges Costs run higher for organizations with global operationsCosts run higher for organizations with global operations Failure rate for CRM systems can run as high as 55% to 75% because of cost overruns, integration challenges, and poor user acceptance of the new systemFailure rate for CRM systems can run as high as 55% to 75% because of cost overruns, integration challenges, and poor user acceptance of the new system Benefits and Challenges of Customer Relationship Management Systems

47. 8.47 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Metrics for Customer Relationship Management Cost per leadCost per lead Cost per saleCost per sale Number of repeat customersNumber of repeat customers Reduction of churnReduction of churn Benefits and Challenges of Customer Relationship Management Systems

48. 8.48 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Metrics for Customer Relationship Management Customer satisfactionCustomer satisfaction Number or percentage of problems/complaintsNumber or percentage of problems/complaints Lead generation rateLead generation rate Lead conversion rateLead conversion rate Sales closing rateSales closing rate Benefits and Challenges of Customer Relationship Management Systems

49. 8.49 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Customer Lifetime Value (CLTV): Difference between revenues produced by a specific customer and the expenses for acquiring and servicing that customer minus the cost of promotional marketing over the lifetime of the customer relationship expressed in today ’ s dollarsCustomer Lifetime Value (CLTV): Difference between revenues produced by a specific customer and the expenses for acquiring and servicing that customer minus the cost of promotional marketing over the lifetime of the customer relationship expressed in today ’ s dollars Benefits and Challenges of Customer Relationship Management Systems

50. 8.50 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Customer Relationship Management Systems Canadian Firms Show How to Succeed with Customer Relationship Management What management and organizational factors explain these companies ’ success with customer relationship management?What management and organizational factors explain these companies ’ success with customer relationship management? Why is it that all companies cannot duplicate their success?Why is it that all companies cannot duplicate their success? Window on Management

51. 8.51 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Integration Trends Major software vendors have developed Web-enabled software for: Customer relationship managementCustomer relationship management Supply chain managementSupply chain management Decision supportDecision support Enterprise portalsEnterprise portals Extending Enterprise Software

52. 8.52 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Integration Trends Service Platform: Integration of multiple applications from multiple business functions, units, or partners to deliver a seamless experience for the customer, employee, manager, or business partnerService Platform: Integration of multiple applications from multiple business functions, units, or partners to deliver a seamless experience for the customer, employee, manager, or business partner Service Platforms and Business Process Management

53. 8.53 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Integration Trends Business Process Management: Methodology for revising the organization ’ s business processes to use business processes as fundamental building blocks of corporate information systemsBusiness Process Management: Methodology for revising the organization ’ s business processes to use business processes as fundamental building blocks of corporate information systems Service Platforms and Business Process Management

54. 8.54 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Integration Trends Enterprise Portal: Web interface providing a single entry point for accessing organizational information and servicesEnterprise Portal: Web interface providing a single entry point for accessing organizational information and services Enterprise Portals

55. 8.55 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Enterprise Integration Trends Order-to-cash service Figure 9-11

56. 8.56 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Chapter 8 Case Study 1.Analyze PepsiCo using the value chain and competitive forces models. How did the company respond to its competitive environment? 2.Were the “ power of one ” principle and preselling good ideas for PepsiCo? Why or why not? Enterprise Integration: The Pepsi Challenge

57. 8.57 Essentials of Management Information Systems Chapter 9 Enterprise Applications and Business Process Integration Chapter 8 Case Study 3.What were the challenges the company faced in installing enterprise systems? Was PepsiCo successful in implementing these, and why? 4.Describe PepsiCo ’ s attempt to change its delivery systems. What problems did it encounter? Do they relate to its challenges in attempting to install enterprise systems? Do you think it will be successful? Explain your answer. Enterprise Integration: The Pepsi Challenge