1. Ch.10 Enterprise Information Systems Lecture 8

2. They integrate the functional systems such as finance, marketing, and operations. Key types of enterprise systems ERP: Enterprise Resource Planning SCM: Supply Chain Management CRM: Customer Relationship Management KM: Knowledge Management 10-2 10.1 Enterprise Systems

4. Why ERP?

5. 10.2 Enterprise Resource Planning (ERP) Systems ERP: infrastructure that links an enterprise’s internal applications and supports its external business processes, e.g., Under Armour Managers can stay informed of what’s going on in other departments that impact their operations or performance. ERP can create a competitive edge 10-5

6. 10-6 Figure 10.5 Experts identify what’s most important to the success of an ERP

7. Managing the Flow of Materials, Data, and Money Material or product flow: For example, chipmaker Intel supplies computer chips to its customer Dell. Dell supplies its computers to end-users. Products that are returned make up what is called the reverse supply chain because goods are moving in the reverse direction. Information flow: Movement of detailed data among members of the supply chain, e.g., order information, customer information, order fulfillment, delivery status, and proof-of-delivery confirmation. Financial flow: Transfer of payments and financial arrangements, e.g., billing payment schedules, credit terms, and payment via electronic funds transfer (EFT). 10-7 10.3 Supply Chain Management (S CM) Systems

9. SCM & ERP

10. 10.5 Customer Relationship Management (CRM) Systems According to management guru Peter Drucker: Those companies who know their customers, understand their needs, and communicate intelligently with them will always ha ve a competitive advantage over those that don’t. 10-10

11. IT at Work 10.4 1-800-Flowers.com Uses Data Mining for CRM The company decided to cultivate brand loyalty. Using SAS Enterprise Miner, 1-800-FLOWERS.C OM sifts through data (such as historical purchase s) to discover trends, explain outcomes, and predi ct results so that the company can increase respo nse rates and identify profitable customers. Collecting data at all customer contact points, the company turns those data into knowledge for unde rstanding and anticipating customer behavior, mee ting customer needs, and building more profitable customer relationships. 10-11

12. 12 1). Explicit knowledge Explicit knowledge (or leaky knowledge) deals with objective, ratio nal, and technical knowledge –Data –Policies –Procedures –Software –Documents –Products –Strategies –Goals –Mission –Core competencies Explicit knowledge has been codified (documented) in a form that can be distributed to others or transformed into a process or strategy without requiring interpersonal interaction. The more that knowledge is made explicit, the more economically it can be transferred. 10.6 Knowledge Management (KM) Systems Knowledge has two types

13. 13 2). Tacit knowledge Tacit knowledge is the cumulative store –of the corporate experiences –Mental maps –Insights –Acumen –Expertise –Know-how –Trade secrets –Skill sets –Learning of an organization –The organizational culture Tacit knowledge is usually in the domain of subjective, cognitive, and experie ntial learning; it is highly personal and difficult to formalize. It is also referred to as embedded knowledge since it is usually either localized within the brain of an individual or embedded in the group interactions within a department or business unit. Tacit knowledge is generally slow and costly to transfer and can be plagued by ambiguity.

14. 10-14 Create Capture Refine Store KNOWLEDG E Manage Disseminate Figure 10.12 KM Systems Cycle 1. Create knowledge. Knowledge is created as people learn new ways of doing things 2. Capture knowledge. New knowledge is represented in a reasonable way 3. Refine knowledge. New knowledge is put into context 4. Store knowledge. Useful knowledge is stored so that others can access it 5. Manage knowledge. Knowledge must be kept current and accurate 6. Disseminate knowledge. Knowledge must be made available