1. CHAPTER EIGHT ENTERPRISE APPLICATIONS: BUSINESS COMMUNICATIONS

2. BUILDING A CONNECTED CORPORATION THROUGH INTEGRATIONS
Allows separate systems to communicate directly with each other,
eliminating the need for manual entry into multiple systems
dramatically increases quality of information & info sharing
Integration methods:
Forward and backward integration (Fig 8.1)
Build a central repository (Fig 8.2)

3. Forward and backward customer info integration

4. Integrating customer info among databases

5. SUPPLY CHAIN MANAGEMENT (SCM)
Five basic supply chain activities

6. 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

7. SUPPLY CHAIN MANAGEMENT

8. SUPPLY CHAIN MANAGEMENT

9. THE BENEFITS OF SCM: IMPROVED VISIBILITY
Supply chain visibility – The ability to view all areas up and down the supply chain in real time
Supply chain planning system – Uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory
Supply chain execution system – Automates the different activities of the supply chain
Bullwhip effect – Occurs when distorted product demand information ripples from one partner to the next throughout the supply chain

10. THE BENEFITS OF SCM: IMPROVED PROFITABILITY
Companies can respond faster and more effectively to consumer demands through supply chain enhances
Demand planning system – Generates demand forecasts using statistical tools and forecasting techniques, so companies can respond faster and more effectively to consumer demands through supply chain enhancements

11. THE CHALLENGES OF SCM Primary challenges include
Cost – An SCM system can cost millions of dollars for the software and millions more for help implementing the system
Complexity - The move towards globalization is increasing complexity in the supply chain

12. 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

13. Customer Intimacy?
You
Your competition
Your customer
Your problem

14. The Need for CRM
It costs six times more to sell to a new customer than to sell to an existing one.
A typical dissatisfied customer will tell 8-10 people.
By increasing the customer retention rate by 5%, profits could increase by 85%.
Odds of selling to new customers = 15%, compared to the odds of selling to existing customers (50%)
70% of complaining customers will remain loyal if their problem is solved

15. Defining CRM (Rainer’s textbook)
Customer relationship management (CRM) is an organizational strategy that is customer-focused and customer-driven.
Tenets of CRM
One-to-one relationship between a customer and a seller.
“Treat different customers differently.”
Keep profitable customers and maximize
lifetime revenue from them.
Customer relationship management (CRM) is an organizational strategy that is customer-focused
and customer-driven.

16. THE BENEFITS OF CRM
Organizations can find their most valuable customers through “RFM” - Recently, Frequency, and Monetary value
How recently a customer purchased items
How frequently a customer purchased items
The monetary value of each customer purchase

17. EVOLUTION OF CRM

18. OPERATIONAL AND ANALYTICAL CRM
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

19. Operational CRM - Sales

20. ENTERPRISE RESOURCE PLANNING
Enterprise resource planning – Integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprisewide decisions by viewing enterprisewide information on all business operations

21. Purpose of ERP (Rainer’s textbook)
The major objective of ERP systems is to tightly integrate the functional areas of the organization and to enable seamless information flows across the functional areas.
Tight integration means that changes in one functional area …
Enterprise Resource Planning (ERP) systems integrate the planning, management and
use of all resources of the organization. That is, ERP systems are designed to break down
the information silos of an organization.
Many information systems were developed for specific functional areas and did not communicate
with systems in other functional areas. Therefore, these systems are referred to as information silos. 21

22. Problems with information silos

23. THE BENEFITS OF ERP

24. CORE ERP COMPONENTS Three most common core ERP components
Accounting and finance
Production and materials management
Human resource

25. ERP Systems

26. SAP Modules
SAP is moving away from describing their system as a set of modules, and now is using
the term “solutions.” On their Website, SAP has structured their Solutions tab as follows:
Customer Relationship Management
Human Resources
Financials
Product Lifecycle Management
Supplier Relationship Management
Business Intelligence
Supply Chain Management
FI Financial Accounting – essentially your regulatory ‘books of record’
SAP modules:
Tax
Book close
General ledger
Consolidation
Accounts payable
Accounts receivable
Cost elements
CO Controlling – basically your internal cost/management accounting
Special ledgers
Cost centers
Activity based costing
Internal orders
Profit centers
AM Asset Management – track, value and depreciate your assets
Product costing
Depreciation
Sale
Purchase
PS Project Systems – manage your projects, large and small
Tracking
Third party billing (on the back of a project)
Plant shut downs (as a project)
Make to order
Employment history
HR Human Resources – people
Career management
Training
Payroll
Succession planning
Material
Labor
PM Plant Maintenance – maintain your equipment
MM Materials Management – underpins the supply chain
Down time and outages
Goods receipts
Purchase orders
Requisitions
Bills of Material
Inventory management
Planning
QM Quality Management – improve the quality of your goods
Master raw materials, finished goods etc
Inspections
Execution
Capacity planning
PP Production Planning – manages your production process
Certificates
Master production scheduling
SD Sales and Distribution – from order to delivery
Shop floor
Material requirements planning
Sales orders
RFQ
Packing
Picking (and other warehouse processes)
Pricing
CA Cross Application – these lie on top of the individual modules
Shipping
Office – for
BW – business information warehouse
WF – workflow
Industry solutions
Workplace
New Dimension products such as CRM, PLM, SRM, APO etc 26

27. THE CHALLENGE OF ERP
ERP systems contain multiple complex components that are not only expensive to purchase, but also expensive to implement
Costs include
Software expenses
Hardware expenses
Consulting fees
Training fees

28. THE FUTURE OF ENTERPRISE SYSTEMS: INTEGRATING SCM, CRM, AND ERP