1. Minggu ke-8
Chapter 9:
Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

2. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
LEARNING OBJECTIVES
Demonstrate how enterprise systems achieve operational excellence by integrating and coordinating diverse functions and business processes in the firm.
Demonstrate how supply chain management systems coordinate planning, production, and logistics with suppliers.
Demonstrate how customer relationship management systems achieve customer intimacy by integrating all customer information and making it available throughout the firm.

3. Management Information Systems LEARNING OBJECTIVES (cont’d)
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
LEARNING OBJECTIVES (cont’d)
Assess the challenges posed by enterprise applications.
Describe how enterprise applications can be used in platforms for new cross-functional services.

4. Management Information Systems Whirlpool Fixes Its Supply Chain
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Whirlpool Fixes Its Supply Chain
Problem: Uncontrollable supply chain, outdated systems.
Solutions: Eliminate manual procedures and implement supply chain software suite to allocate inventory more accurately and forecast demand.
i2 Technologies forecasting software and SAP ERP software reduce inventory and increase sales.
Demonstrates IT’s role in coordinating supply chains.
Illustrates digital technology as part of a solution that can benefit both a firm and its customers.

5. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Enterprise Systems
What are enterprise systems?
Enterprise software
Best practices
Business value of enterprise systems

6. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Enterprise Systems
Enterprise system:
Systems which are based on a suite of integrated software modules and a common central database.
The database collects data from many different divisions and departments in a firm, making data available for applications that support nearly all of an organization’s internal business activities.
When new information is entered by one process, the information is made immediately available to other business processes.

7. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Enterprise Systems
Enterprise software:
Is built around thousands of predefined business processes that reflect best practices.
Look at table 9-1

8. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Table 9-1 Business Processes supported by Enterprise Systems
Area
Process
Financial & accounting
GL, AP, AR, fixed assets, cash management & forecasting, product-cost accounting, cost-center accounting, asset accounting, tax accounting, credit management, and financial reporting.
Human resource
Personnel administration, time accounting, payroll, personnel planning & development, benefits accounting, application tracking, time management, compensation, workforce planning, performance management, and travel expense reporting.
Manufacturing & production
Procurement, inventory management, purchasing shipping, production planning, production scheduling, material requirements planning, quality control, distribution, transportation execution, and plant & equipment maintenance,

9. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Table 9-1 Business Processes supported by Enterprise Systems (cont.)
Area
Process
Sales & marketing
Order processing, quotations, contracts, product configuration, pricing, bills, credit checking, incentive and commission management, and sales planning.

10. Management Information Systems How Enterprise Systems Work
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Enterprise Systems
How Enterprise Systems Work
Figure 9-1
Enterprise systems feature a set of integrated software modules and a central database that enables data to be shared by many different business processes and functional areas throughout the enterprise.

11. Management Information Systems Business Value of Enterprise Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Business Value of Enterprise Systems
Increasing operational efficiency
Providing firm-wide information to help managers make better decisions
Large companies with many operating units in different locations have used enterprise systems to enforce standard practices and data so that everyone does business the same way worldwide.
E.g : Coca Cola implemented a SAP enterprise system to standardize & coordinate important business processes in 200 countries.

12. Management Information Systems Supply Chain Management Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Supply Chain Management Systems
The supply chain
Information and supply chain management
Supply chain management applications
Supply chain management and the Internet
Demand-driven supply chains: From push to pull manufacturing and efficient customer response
Business value of supply chain management systems

13. Management Information Systems Supply Chain Management Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Supply Chain Management Systems
The supply chain: a network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to customers.
It links suppliers, manufacturing plants, distribution centers, retail outlets, and customers.

14. Management Information Systems Supply Chain Management Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Supply Chain Management Systems
Nike’s Supply Chain
This figure illustrates the major entities in Nike’s supply chain and the flow of information upstream and downstream to coordinate the activities involved in buying, making, and moving a product. Shown here is a simplified supply chain, with the upstream portion focusing only on the suppliers for sneakers and sneaker soles.
Figure 9-2

15. Management Information Systems Supply Chain Management Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Supply Chain Management Systems
Upstream : includes the company’s suppliers, the suppliers’ suppliers, and the processes for managing relationship with them.
Downstream: consists of the organizations and processes for distributing and delivering products to the final customers.

16. Management Information Systems Information and supply chain management
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Information and supply chain management
Just in time strategy (JIT)
If a manufacturer had perfect information about exactly how many units of product customers wanted, when they wanted them, and when they could be produced, it would be possible to implement a highly efficient JIT strategy.
Problem in SCM: bullwhip effect
Information about demand for a product gets distorted as it passes from one entity to the next across the supply chain.

17. Management Information Systems Figure 9-3 The BullWhip Effect
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Figure 9-3 The BullWhip Effect
Inaccurate information can cause minor fluctuations in demand for a product to be amplified as one moves further back in the supply chain.
Minor fluctuations in retail sales for a product can create excess inventory for distributors, manufacturers, and suppliers.

18. Management Information Systems Information and supply chain management
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Information and supply chain management
Example:
Procter & Gamble (P&G) found it had excessively high inventory of its Pampers disposable diapers at various points along its supply chain because of such distorted information.
Although customer purchases in stores were fairly stable, orders from distributors would spike when P&G offered aggressive price promotion.
Pampers & Pampers components accumulated in warehouses along the SC to meet demand that did not actually exist.
To eliminate this problem, P&G revised its marketing, sales, and SC processes, and used more accurate demand forecasting.

19. Management Information Systems How does I.S. facilitate SCM ?
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
How does I.S. facilitate SCM ?
Information from SCM systems Helps Firms
Decide when and what to produce, store and move
Rapidly communicate orders
Track the status of orders
Check inventory availability and monitor inventory levels
Reduce inventory, transportation, and warehousing costs
Track shipments
Plan production based on actual customer demand
Rapidly communicate changes in product design

20. Management Information Systems Supply Chain Management (SCM) Software
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Supply Chain Management (SCM) Software
Supply chain planning system
Enable firm to model its existing supply chain, generate demand forecasts for products, and develop optimal sourcing and manufacturing plans.
One of the most important & complex SC planning function:
Demand planning  determines how much product a business needs to make to satisfy all of its customers’ demands.

21. Management Information Systems Supply Chain Management (SCM) Software
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Supply Chain Management (SCM) Software
Example : Whirlpool Corporation
Produces washing: machines, dryers, refrigerators, ovens, and other home appliances
Use SCP systems to make sure what it produces matches customer demand.
Use SCP from i2 Technologies, that includes modules for Master Scheduling, Deployment Planning, and Inventory Planning.
Also installed i2’s Web based tool for Collaborative Planning, Forecasting, and Replenishment (CPFR) for sharing and combining its sales forecasts with those of its major sales partners.

22. Management Information Systems Supply Chain Management (SCM) Software
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Supply Chain Management (SCM) Software
Example : Whirlpool Corporation
Improvements in supply chain planning helped Whirlpool increase availability of products in stock when customers needed them to 97 percent, while reducing the number of excess finished goods in inventory by 20 percent and forecasting errors by 50 percent.
Supply Chain Execution Systems
Manage the flow of products through distribution centers and warehouses to ensure the products are delivered to the goods, the management of materials, warehouse and transportation operations, and financial information involving all parties.

23. Management Information Systems Supply Chain Management (SCM) Software
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Supply Chain Management (SCM) Software
Example of major SCM software vendors:
Manugistics and i2 Technologies (both acquired by JDA Software)
Enterprise software vendors SAP and Oracle-PeopleSoft offer SCM modules.

24. Management Information Systems Global Supply Chain & Internet
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Global Supply Chain & Internet
Before the Internet:
SC coordination was hampered by the difficulties of making information flow smoothly among disparate internal SC systems for purchasing, material management, manufacturing, and distribution
Difficult to share information with external SC partners because the systems of suppliers, distributors, or logistics providers were based on incompatible technology platforms and standards.

25. Management Information Systems Global Supply Chain & Internet
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Global Supply Chain & Internet
Using Internet technology :
Firms use intranets to improve coordination among their internal SC processes, and they use extranets to coordinate SC processes shared with their business partners.
Using intranet & extranets, all member of SC are instantly are able to communicate with each other, using up-to-date information to adjust purchasing, logistics, manufacturing, packaging, and schedules.
A manager will use a Web interface to tap into suppliers’ systems to determine whether inventory and production capabilities match demand for the firm’s products.

26. Management Information Systems Global Supply Chain & Internet
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Global Supply Chain & Internet
Using Internet technology :
Business partners will use Web based SCM tools to collaborate online on forecasts.
Sales representatives will access suppliers’ production schedules and logistics information to monitor customers’ order status.

27. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Figure 9-4 Intranet & Extranet for Supply Chain Management

28. Management Information Systems Push vs Pull-based SC Models
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Push vs Pull-based SC Models
In a push model (build-to-stock):
Production master schedules are based on forecasts or best guesses of demand for products, and products are ‘pushed’ to customers.
With new flows of information made possible by Web-based tools, SCM more easily follows a push-based model.
In a pull model (demand-driven model or build-to-order):
Actual customer orders or purchases trigger events in the SC.
Transactions to produce and deliver only what customers have ordered move up the supply chain from retailers to distributors to manufacturers and eventually to suppliers.

29. Push- Versus Pull-Based Supply Chain Models
Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Supply Chain Management Systems
Push- Versus Pull-Based Supply Chain Models
The difference between push- and pull-based models is summarized by the slogan “Make what we sell, not sell what we make.”
Figure 9-5

30. Management Information Systems Business Value of SCM Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Business Value of SCM Systems
Companies match supply to demand
Reduce inventory levels
Improve delivery service
Speed product time to market
Use assets more effectively
Facts: total SC costs represent the majority of operating expenses for many businesses and in some industries approach 75% of the total operating budget.
More precise control of the SC enhances the firm’s ability to have the right product available for customer purchases at the right time.

31. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Figure 9-6 The Future Internet-Driven Supply Chain

32. What is customer relationship management
Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Customer Relationship Management Systems
What is customer relationship management
Customer relationship management software
Sales force automation (SFA)
Customer service
Marketing
Operational and analytical CRM
Business value of customer relationship management sytems

33. Customer relationship management
Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Customer Relationship Management Systems
Customer relationship management
Business and technology discipline that uses IS to coordinate all the ways in which a company interacts with its customers and analyze these interactions to optimize revenue, profitability, customer satisfaction and customer retention.
Touch-point (contact point) : a method of interaction with the customer, such as telephone, , customer service desk, conventional mail, web site, wireless device, or retail store.

34. Management Information Systems Customer Relationship Management (CRM)
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Customer Relationship Management (CRM)
Figure 9-7
CRM systems examine customers from a multifaceted perspective. These systems use a set of integrated applications to address all aspects of the customer relationship, including customer service, sales, and marketing.

35. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Customer Relationship Management Systems
Good CRM system provides data and analytical tools for answering the questions such as:
“What is the value of a particular customer to the firm over his or her lifetime?
“Who are our most loyal customers?” (it can cost six times more to sell to a new customer than to an existing customer.)
“Who are our most profitable customers?”
“What do these profitable customers want to buy?”

36. Firms use the answers to:
Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Customer Relationship Management Systems
Firms use the answers to:
Acquire new customers
Provide better service
Support to existing customers
Customize their offerings more precisely to customer preferences
Provide ongoing value to retain profitable customers.

37. CRM packages contain modules:
Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Customer Relationship Management Software
CRM packages contain modules:
PRM (Partner Relationship Management)
Enhance collaboration between company and its selling partners.
Provide with tools to assess its partners’ performances so it can make sure its best partners receive the support they need to close more business.
ERM (Employee Relationship Management)
Deals with employee issues such as setting objectives, employee performance management, performance-based compensation, and employee training.
Major CRM applications software vendors: Oracle-owned Siebel systems and PeopleSoft, SAP, Salesforce.com, and Microsoft Dynamics CRM.

38. Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Customer Relationship Management Software
Sales Force Automation (SFA):
Help sales staff increase their productivity by focusing sales efforts on the most profitability customers, those who are candidates for sales and service.
Customer service
Provide information and tools to increase the efficiency of call centers, help desks, and customer support staff.
Marketing
CRM systems support direct-marketing campaigns by providing capabilities for capturing prospect and customer data, for providing product & service information, for qualifying leads for targeted marketing, and for scheduling and tracking direct-marketing mailings or .

39. Management Information Systems How CRM Systems Support Marketing ?
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
How CRM Systems Support Marketing ?
Figure 9-8
The CRM software provides a single point for users to manage and evaluate marketing campaigns across multiple channels, including , direct mail, telephone, the Web, and wireless messages.

40. Management Information Systems CRM Software Capabilities
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
CRM Software Capabilities
Figure 9-9
The major CRM software products support business processes in sales, service and marketing, integrating customer information from many different sources. Included are support for both the operational and analytical aspects of CRM.

41. Management Information Systems CRM Software Capabilities
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
CRM Software Capabilities
Figure 9-10
The process map shows how a best practice for promoting customer service would be modeled by CRM software. The CRM software helps firm identify high value customers for preferential treatment.

42. Management Information Systems Analytical CRM Data Warehouse
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Analytical CRM Data Warehouse
Figure 9-11
Analytical CRM uses a customer data warehouse and tools to analyze customer data collected from the firm’s customer touch points and from other sources.

43. IHOP Cooks Customer Data to Order
Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Customer Relationship Management Systems
IHOP Cooks Customer Data to Order
Read the Interactive Session: Technology, and then discuss the following questions:
How does knowledge of customers impact IHOP’s business performance?
Why did IHOP have trouble getting to know its customers?
How has the company chosen to improve its knowledge of customers? Analyze the management, organization, and technology dimensions of the solution.
Did IHOP choose the best solution? Explain your answer.

44. Enterprise application challenges Extending enterprise software
Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Enterprise Applications: New Opportunities and Challenges
Enterprise application challenges
Extending enterprise software
Service platforms
Security outsourcing

45. Management Information Systems Order-To-Cash Service
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Order-To-Cash Service
Figure 9-12
Order-to-cash is a composite process that integrates data from individual enterprise systems and legacy financial applications. The process must be modeled and translated into a software system using application integration tools.

46. Invacare Struggles with Its Enterprise System Implementation
Management Information Systems
Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Enterprise Applications: New Opportunities and Challenges
Invacare Struggles with Its Enterprise System Implementation
Read the Interactive Session: Organizations, and then discuss the following questions:
How did problems implementing the Oracle enterprise software affect Invacare’s business performance?
What management, organization, and technology factors affected Invacare’s ERP implementation?
If you were Invacare’s management, what steps would you have taken to prevent these problems?