1. Enterprise Business Systems Chapter 8 McGraw-Hill/IrwinCopyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 8-2 Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource manage- ment, and supply chain management systems: –Business processes supported –Customer and business value provided –Potential challenges and trends Understand the importance of managing at the enterprise level to achieve maximum efficiencies and benefits. Learning Objectives

3. 8-3 Managing at the Enterprise Level Lessons from Geese –Importance of team work –Encourage passion and energy

4. 8-4 Customer Relationship Management (CRM) Customer focused –Customer relationships – most valued asset –Find and retain most profitable customers possible Company has –Single, complete view of every customer Customers have –Single, complete view of the company Integrates and automates customer-serving processes

5. 8-5 Contact and Account Management Track relevant data about –Every past and planned contact with prospects and customers –Other business and life cycle events Data captured from touchpoints –Telephone, fax, e-mail –Websites, retail stores, kiosks –Personal contact

6. 8-6 RWC 1: CRM Goes Mobile Sales people –Autonomous and don’t play by rules –Ignore new processes unless direct benefit More sales Better time efficiency Designing Mobile Applications –What are the common tasks –What are the priorities –What are the pain points –Less is more

7. 8-7 Application Clusters in CRM

8. 8-8 Sales A CRM system provides: –Support and manage sales activities –Optimize cross-selling and up-selling –Method to check account status and history

9. 8-9 Customer retention evaluation report

10. 8-10 Marketing and Fulfillment Automate direct marketing campaigns –Qualifying leads for targeted marketing –Scheduling and tracking mailings –Capturing and managing responses –Analyzing the business value of the campaign –Fulfilling responses and requests

11. 8-11 Customer Service and Support Shared database –Requests for service are created, assigned, and managed –Call center software routes calls to agents –Help desk software provides service data and suggestions for solving problems Personalized support information

12. 8-12 Retention and Loyalty Programs Statistics –Costs 6 times more to sell to a new customer –Unhappy customer will tell 8-10 others –Boosting customer retention by 5 percent can boost profits by 85 percent –Odds of selling: Existing customer - 50 percent New - 15 percent –70 percent of customers will do business again if problems are quickly resolved.

13. 8-13 Primary objective - enhancing and optimizing customer retention and loyalty –Identify, reward, and market to the most loyal and profitable customers –Evaluate targeted marketing and relationship programs Retention and Loyalty Programs

14. 8-14 The Three Phases of CRM

15. 8-15 Benefits of CRM Identify and target the best customers Real-time customization and personalization of products and services Track when and how a customer contacts the company Provide a consistent customer experience Provide superior service and support

16. 8-16 CRM Failures Reasons for Failure –Lack of senior management sponsorship –Improper change management –Elongated projects that take on too much, too fast –Lack of or poor integration between CRM and core business systems –Lack of end-user incentives leading to poor user adoption rates –Lack of understanding and preparation -- # 1 –Not solving business process problems first –No participation on part of business stakeholders involved

17. 8-17 Trends in CRM

18. 8-18 What is ERP? Cross-functional enterprise system –Integrated suite of software modules –Supports basic internal business processes Manufacturing Logistics Distribution Accounting Finance Human resources –Facilitates information flows Business Supplier Customer

19. 8-19 RWC 2: ERPs Get a Second Lease on Life Old ERPs customized to fit individual needs Upgrades can’t be applied without testing and modification New ERPs have new features and capability Some companies stay with old systems Some companies buy new, but avoid customization

20. 8-20 ERP Application Components

21. 8-21 ERP Process and Information Flows

22. 8-22 Business processes and functions of ERP

23. 8-23 ERP at Colgate Needed to coordinate globally, act locally Order-to-delivery time cut in half –Order acquisition and process 7 days cut to 4 hours –Distribution 4 days cut to 14 hours Increased on-time deliveries Domestic inventories dropped by 1/3

24. 8-24 Costs of Implementing a New ERP

25. 8-25 Causes of ERP Failures Most common causes of ERP failure –Under-estimating complexity Planning, development, training –Failure to involve affected employees –Too much too fast –Insufficient training –Insufficient data conversion and testing –Over-reliance on ERP vendor or consultants

26. 8-26 Trends in ERP

27. 8-27 ERP application components

28. 8-28 Supply Chain Management (SCM) Helps a company –Get the right products –To the right place –At the right time –In the proper quantity –At an acceptable cost Goal of SCM is to efficiently… –Forecast demand –Control inventory –Enhance relationships –Receive feedback

29. 8-29 RWC 3: Supply Chains Adapt to Tough Times Old push model uses best-guess forecasts –High inventory levels –Supply chain stops during down-turn Key to survivalin down-turn –Reduced inventory –Increased working capital Pull system –Information to build inventory comes from supply chain partners –Inventory based on “demand signals”

30. 8-30 Supply Chain Life Cycle

31. 8-31 EDI Activities

32. 8-32 Roles and Activities of SCM in Business

33. 8-33 Functions and Benefits of SCM

34. 8-34 Benefits of SCM Key Benefits –Faster, more accurate order processing –Reductions in inventory levels –Quicker times to market –Lower transaction and materials costs –Strategic relationships with supplier

35. 8-35 Challenges of SCM Key Challenges –Lack of knowledge, tools, and guidelines –Inaccurate data –Lack of collaboration –SCM tools are immature, incomplete, and hard to implement

36. 8-36 SCM at Emerson Emerson Transaction Hub –Different orders in separate containers –Created Transaction Hub (& Logistics Hub) –Combine multiple orders into single shipments/containers

37. 8-37 Goals and Objectives of SCM

38. 8-38 Trends in SCM

39. 8-39 Trends in SCM CVS, McKesson –CVS leading drug retail chain –McKesson largest pharmaceutical distributor –Point-of-sale data –Agreed on service levels –Reduced replenishment time Modern Plastics, SupplySolution, Inc. –Upraded reactive system to proactive system

40. 8-40 RWC 4: The Secret to CRM is in the Data CRM enables increased sales revenue CRM provides more and better services to customers and prospects. CRM – better earlier than later. “Without accurate, complete, and comprehensive data, any CRM effort will be less than optimal.”