1. STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES
CHAPTER THREE
STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

2. LEARNING OUTCOMES
Identify how an organization can use business process reengineering to improve its business
Explain supply chain management and its role in business
Explain customer relationship management systems and how they can help organizations understand their customers
Summarize the importance of enterprise resource planning systems

3. STRATEGIC INITIATIVES
Organizations can undertake high-profile strategic initiatives including:
Business process reengineering (BPR)
Supply chain management (SCM)
Customer relationship management (CRM)
Enterprise resource planning (ERP)

4. BUSINESS PROCESS REENGINEERING
Business process – a standardized set of activities that accomplish a specific task, such as processing a customer’s order
Business process reengineering (BPR) – the analysis and redesign of workflow within and between enterprises

5. USING MIS TO IMPROVE BUSINESS PROCESSES
Workflow – Includes the tasks, activities, and responsibilities required to execute each step in a business process

6. MANAGING BUSINESS PROCESSES
Businesses gain a competitive edge when they minimize costs and streamline business processes

7. MANAGING BUSINESS PROCESSES
Business facing process - Invisible to the external customer but essential to the effective management of the business
Customer facing process - Results in a product or service that is received by an organization’s external customer

8. MANAGING BUSINESS PROCESSES
The Order-to-Delivery Process

9. BUSINESS PROCESS MODELING
Business process modeling (or mapping) - The activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence
Business process model - A graphic description of a process, showing the sequence of process tasks, which is developed for a specific
As-Is process model
To-Be process model

10. BUSINESS PROCESS MODELING

11. BUSINESS PROCESS MODELING

12. BUSINESS PROCESS MODELING

13. BUSINESS PROCESS MODELING

14. BUSINESS PROCESS MODELING

15. BUSINESS PROCESS MODELING

16. USING MIS TO IMPROVE BUSINESS PROCESSES

17. USING MIS TO IMPROVE BUSINESS PROCESSES

18. SUPPLY CHAIN MANAGEMENT
Supply Chain Management (SCM) – The management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and profitability

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

20. BASICS OF SUPPLY CHAIN
Organizations must embrace technologies that can effectively manage supply chains

21. SUPPLY CHAIN MANAGEMENT
Five basic supply chain activities

22. SUPPLY CHAIN MANAGEMENT
Supply Chain Example

23. SUPPLY CHAIN MANAGEMENT
Walmart and Procter & Gamble SCM Example

24. SUPPLY CHAIN MANAGEMENT
Effective and efficient SCM systems can enable an organization to
Decrease the power of its buyers
Increase its own supplier power
Increase switching costs to reduce the threat of substitute products or services
Create entry barriers thereby reducing the threat of new entrants
Increase efficiencies while seeking a competitive advantage through cost leadership

25. SUPPLY CHAIN MANAGEMENT
Effective and Efficient SCM Systems Effect on Porter’s Five Forces

26. CUSTOMER RELATIONSHIP MANAGEMENT
Customer relationship management (CRM) – involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization's profitability
Many organizations, such as Charles Schwab and Kaiser Permanente, have obtained great success through the implementation of CRM systems

27. CUSTOMER RELATIONSHIP MANAGEMENT
CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprisewide level
CRM can enable an organization to:
Identify types of customers
Design individual customer marketing campaigns
Treat each customer as an individual
Understand customer buying behaviors

28. CUSTOMER RELATIONSHIP MANAGEMENT

29. EVOLUTION OF CRM
CRM reporting technology – Help organizations identify their customers across other applications
CRM analysis technologies – Help organization segment their customers into categories such as best and worst customers
CRM predicting technologies – Help organizations make predictions regarding customer behavior such as which customers are at risk of leaving

30. EVOLUTION OF CRM

31. ENTERPRISE RESOURCE PLANNING
Enterprise resource planning (ERP) – integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprisewide information on all business operations
Keyword in ERP is
“enterprise”

32. ENTERPRISE RESOURCE PLANNING
Sample data from a sales database A B C D E F G 1
OrderDate
ProductName
Quantity
Unit Price
Unit Cost
Customer ID
SalesRepID 2
Monday, January 04, 2010
Mozzarella cheese
41 5
$ 24.15
S15.35
AC45
EX-107 3
Monday, January
Romaine lettuce
90.65
$15.06
$14.04
EX-109 4
Tuesday, January
Red onions
27.15
$12.08
$10.32
ACS7
EX-104 5
Wednesday January
67.25
$15.16
$10.54
A096 6
Thursday, January
Black olives
79.26
$12.18
$9.56
A044 7
Thursday. January
46.52
$15.24
$11.54
AC32 8
Thursday January
52.5
$15.26
$11.12
AC84 9
Friday January
39.5
$12.55
$9.54
A0103 10
Saturday January
66.5
$15.98
AC4 11
Sunday, January 10, 2010
58.26
$15.97
$9.50
A0174 12
Sunday January
Pineapple
40.15
$33.54
$22.12
EX-I04

33. ENTERPRISE RESOURCE PLANNING
Sample data from an accounting database A B C D E F G H I J 1
OrderDate
ProductName
Quantity
Unit Price
Total Sales
Unit Cost
Total Cost
Profit
Customer
SalesRep 2
04-Jan-10
Mozzarella cheese 41 24
984 18
738
246
The Station
Debbie Fernandez 3
Romaine lettuce 90 15
1,350 14
1,260
Roberta Cross 4
05 Jan-10
Red onions 27 12
324 8
216
108
Bert’s Bistro
Loraine Schultz 5
06-Jan-10 67
1,005
938
Smoke House 6
07-Jan-10
Black olives 79
948
474
Flagstaff House 7 46
690
644
Two Bitts 52
780
728
Pierce Arrow 9
08-Jan-10 39
468
312
156
Mamma’s Pasta Place 10
09-Jan-10 66
990
924
The Dandelion 11
10-Jan-10 58
870
812
Carmens

34. ENTERPRISE RESOURCE PLANNING
ERP systems collect data from across an organization and correlates the data generating an enterprisewide view

35. LEARNING OUTCOME REVIEW
Now that you have finished the chapter please review the learning outcomes in your text