Ki Ho Kim

E-Business Systems

What is e-Business System?

The conducting of business using the Internet, other networks and information technologies, not just the buying and selling of goods but also servicing customers, collaborating with business partners, conducting e-learning and processing electronic transactions.

1. E-tailing, or virtual storefronts on Web sites.

2. Online business-to-business transactions.

3. Electronic data interchange (EDI), the business-to-business exchange of data using compatible software.

4. Email, instant messaging, and other Web-enabled communication tools and their use as media for reaching prospective and existing customers.

5. The gathering and use of demographic, product and other information through Web contacts.

E-commerce vs. E-business

• e-Commerce is defined as buying and selling over digital media.

• e-Business encompasses e-commerce, but also includes both font-and back –office applications that form the engine for modern business. It also redefines old business models, with the aid of technology, to maximize customer value.

What is Cross-Functional Enterprise System?

• It cross the boundaries of traditional business functions in order to reengineer and improve vital business processes all across the enterprise.

• It provides significant business value to a company, its customers and partners.

• Examples: Customer Relationship Management (CRM) Partner Relationship Management (PRM) Supply Chain Management (SCM) Knowledge Management (KM)

Enterprise Application Architecture

How does a business interconnect some of the cross-functional enterprise systems?

Enterprise Application Integration (EAI) software• Enables users to model the business processes involved in the

interactions that should occur between business applications.

• Provides middleware that performs data conversion and coordination, application communication and messaging services and access to the application interfaces involved

• Integrate a variety of enterprise application clusters by letting them exchange data according to rules derived from the business process models developed by users.

• Integrate the front-office and back-office applications of a business so they worked together in a seamless, integrated way.

Enterprise Application Integration

• Figure show that, how EAI software can integrate the front office & back office applications of an E-business.

Enterprise Application Integration

• Here, EAI software connects major e-business applications like CRM & ERP. That’s because EAI integrates access to the entire customer and product data representative need to quickly serve customers.

• EAI also streamlines sales order processing so products and services can be delivered faster. Thus, EAI improves customer & supplier experience with the business because of its responsiveness.

9

Transactional Processing Systems

49

What is Transaction Processing Systems (TPS)?

• Are cross-functional information systems designed to process routine business transactions.

• It support business processes mainly accounting & finance transactions e.g, Purchases & Orders, banking, financial, stocks, airline reservation system.

Transactions• are events that occur as part of doing business such as sales, purchases,

deposits withdrawals, refunds and payments.Online transaction processing systems

• Plays a strategic role in electronic commerce.• These real-time systems, which capture and process transactions

immediately, can help them provide superior service to customers and other trading partners.

• Many firms are using the Internet, extranets and other networks that tie them electronically to their customers or suppliers for online transaction processing (OLTP).

Value of Transaction Processing System (TPS)

Efficiency• Paperless Transactions• Reduce manual data entry • Speed up transaction process• Elimination of redundant steps

Online Transaction Processing (OLTP)• Real – Time systems, immediate feedback• Real – time Reports and databases updates

The Transaction Processing Cycle

5 Basic Activities of Transaction Processing Cycle :

1) Data Entry

2) Transaction Processing

3) Database Maintenance

4) Document and Report Generation

5) Inquiry Processing

5 Basic Activities of Transaction Processing Cycle :

1) Data Entry• The process of collecting and capturing transactions. The data is collected by

scanning, recording, coding and editing activities.

• Examples of devices used in data automation include: Point-of-Sale (POS) transaction terminals ATM (Automated Teller Machine) terminals Optical character recognition (OCR) scanners and wands PCs and network computers with cash drawers as intelligent POS terminals. Portable digital radio terminals and pen-based tablet for remote data entry PC’s equipped with touch screens and voice recognition systems for data

entry. Bar coded tags Magnetic stripe cards Electronic website on the Internet.

5 Basic Activities of Transaction Processing Cycle :

2) Transaction Processing

Two basic ways that Transaction Processing systems process the data:• Batch Processing – All transactions for a period of time would be collected

in a group (called a batch), input & processed as a unit.• This was normally done at regular intervals, such as every hour, day• or week.

• Real-time Processing - also called online transaction processing (OLTP) where each transaction is processed immediately as it occurs. The drawback to OLTP is the high costs because of its fault tolerance features that can continue to operate even if the parts of the system fail.

5 Basic Activities of Transaction Processing Cycle :

3) Database Maintenance• It is designed to keep a database running smoothly. It is also used to keep the

database clean and well organized so that it will not lose functionality.

• TPS helps ensure the databases are up-to-date and correct.

4) Document and Report Generation• Transaction processing systems produce a variety of documents and reports.

Examples of transaction documents include: Purchase Orders Pay checks Sales receipts Invoices Bank statements

5 Basic Activities of Transaction Processing Cycle :

5) Inquiry Processing• Many transaction processing systems allow you to use the Internet, intranets,

extranets and Web browsers or database management query languages to make inquiries and receive responses concerning the results of transaction processing activity

Examples of queries: Checking on the status of a sales order Checking on the balance in an account Checking on the amount of stock inventory

What is Enterprise Collaboration Systems (ECS)?

• Its main objective is to provide each user with the tools that enhance communication ,coordination and collaboration to specific team and individual with the enterprise.

• Operational employees can work together more easily and effectively.

Example of software tools that enhance enterprise collaboration:• Electronic Communication Tools

Help user share everything from voice and text messages to copies of project documents and data files within workgroup.

• Electronic Conferencing Tools Help people communicate and collaborate as they worked together. It

enable the embers of the team and workgroups at different locations to exchange ideas interactively at the same time or at different times.

• Collaborative Work Management Tools Help people accomplish or manage group work activities

Diagram

The EndT h a n k y o u f o r y o u r a t t e n t i o n !

Functional Business Systems

Joy Ngo

Functional Business Systems

Various types of information systems that support the business functions of:

Accounting

Finance

Marketing

Operations management

Human resource management

How Information Systems can be grouped into business functions categories

Real World Case 2: Nationwide Insurance- Unified Financial Reporting and “One Version of the Truth”

• Nationwide Insurance, a diversified insurance and financial services companyHeadquarters: Columbus, Ohio CEO: Jerry Jurgensen CFO: Robert A. Rosholt CIO: Michael Keller

• Revenue: $160 billion in assets; $21 billion in annual revenues

• Employees: 36,000

• IT Employees: 5,500

• Focus Project Fast Facts: 280 team members worked 1.2 million man hours (including overtime) over 24 months

• Started transformation in early 2004

• Master Data Management that would alter: How every Nationwide business reported its financials How accounting personnel did their jobs How data were governed and by whom How the company’s information systems would pull all that

together

• Financial transformation program called FOCUS used 14 general ledgers 12 reporting tools 17 financial data repositories 300,000 spreadsheets

Real World Case 2: Nationwide Insurance- Unified Financial Reporting and “One Version of the Truth

Real World Case 2: Nationwide Insurance- Unified Financial Reporting and “One Version of the Truth

• Followed 80/20 rule

• Get roughly 80% of the project up and running in 24 hours then fix the remaining 20% later.

• The requirements, definitions and parameters were mapped out:

• Two rules Financial-related systems had to be subscribers to the central book of

record None of the master data in any of the financial applications could ever be

out of sync. Final step is to evaluate technologies that would follow and enforce the

rules.

• March 2005 – the team started rolling out the new Focus System

• Fall of 2005 – new business processes and financial data governance mechanisms actually being used by Nationwide employees and it all was working.

Marketing Information Systems

Marketing Information Systems• The business function of marketing is concerned with the following to better

serve present and potential customers. planning, promotion sale of existing products in existing markets development of new products and new markets

• Marketing information systems integrate the information flow required by many marketing activities. Provide information for:

Marketing Information Systems

Interactive Marketing is a type of marketing that is based on using the internet, intranets and extranets to establish two-way interaction between a business and its customers.

GOAL: to enable a company to profitably use the networks to attract and keep customers who will become partners with the business in creating, purchasing and improving products and services.

Targeted Marketing has become an important tool in developing advertising and promotion strategies for a company’s electronic commerce websites.

Five targeting components:

Marketing Information Systems• Sales Force Automation

• The sales force is being outfitted with notebook computers that connect them to Web browsers and sales contact management software that connect them to marketing websites on the internet, extranets and their company intranets

GOAL:

• Increase the personal productivity of sales people

• Speeds up the capture and analysis of sales data

• Allows marketing and sales management to improve the delivery of information and the support they provide to their sales people

• Gain a strategic advantage in sales productivity and marketing responsiveness.

Manufacturing Systems

Manufacturing Systems• Supports production/operations functions

• All activities concerned with planning and control of the processes that produce goods or services

• Computer-Integrated Manufacturing (CIM) is an overall concept that stresses that the goals of computer use in factory-automation must be to:

Simplify/ReengineerAutomate Integrate

• Goal: Flexible manufacturing systems Agile manufacturing Total quality management

Manufacturing Systems• Results of CIM- enables a company to quickly respond to and fulfill customer

requirements with high-quality products and services

• Uses of CIM: Computer-aided engineering (CAE) Computer-aided design (CAD) Computer-aided process planning (CAPP) Material requirements planning (MRP) Manufacturing resource planning (MRP-II) Computer-aided manufacturing (CAM)

• Manufacturing execution systems- performance monitoring information systems for factory floor operations. Monitor, track and control five essential components: Material Equipment Personnel Instructions and specification Production facilities

Manufacturing SystemsBenefits of CIM:

• Increased efficiency through: Work simplification and automation Better production schedule planning Better balancing of production workloads in production capacity

• Improved utilization of facilities, higher productivity, better quality control through: Continuous monitoring Feedback and control of factory operations, equipment and robots

• Reduced investments in production inventories and facilities through: Work simplification Just-in-time inventory policies Better planning and control

Production Finished goods requirements

Manufacturing SystemsBenefits of CIM:

Improved customer service through:

• Reducing out-of-stock situations

• Producing high-quality products that better meet customer requirements

Process Control

• Use of computers to control an ongoing physical process

• Requires the use of special sensing devices that measure physical phenomena such as temperature of pressure changes

• These continuous physical measurement are converted to digital form by analog-to-digital converters and relayed to computers for processing

Machine Control (Numerical control)

• Use of computers to control the actions of machines

• The computer-based control of machine tools to manufacture products of all kinds.

Human Resource Systems

Human Resource Systems• Involves recruiting, placement, evaluation, compensation and development of the

employees of an organization.

• GOAL: effective and efficient use of human resources of a company

Human Resource SystemsHRM and the Internet

• Major force for change in HR management

• Recruiting employees through recruitment sections of corporate websites

• Using commercial recruiting services and databases on the world wide web

• Posting messages in Internet newsgroups

• Communicating with job applicants by Internet e-mail

HRM and the Corporate Intranet

• Allows HRM Dept. provide services to employees

• Allows the dissemination of valuable information faster

• Collect information online from employees

• Enables employees to perform HRM tasks

• Serve as a superior training tool

• Enables employees to produce automated paycheck

True or False

1. One component of targeted marketing is tracking the online behavior of customers who visit a company’s website.Answer: TRUE

2. Computer-aided manufacturing systems can include both process control and machine control.

Answer: TRUE

3. Employee self-service intranet applications frequently allow employees to view their benefits, enter travel and expense reports and compare the salaries of different employees.

Answer: FALSE

Accounting SystemFinancial Management

Systems

Harry HJ Yang

Accounting SystemAccounting Information System record and report business transaction and other economic events that report:

• Flow of fund through an organization;

• Financial statements; and

• Projected financial statements

Operational accounting systems include:

• Transaction processing systems such as order processing;

• Inventory control systems;

• Accounts receivable systems;

• Accounts payable systems;

• Payroll systems; and

• General ledger systems

Accounting System

<Important Accounting Information System>

sales order

processingbilling

sales analysis

accounts receiv-able

cashreceiv-able

cash disburs-ement

accountspayable

generalledger

financialreporting

purchase

inventoryprocessing

payroll

timekee-ping

1

cash receipts and dis-bursements transaction processing systems

purchase transaction processing system

sales transaction processing system

general ledger processing and reporting system

payroll transaction processing system

Financial Management Systems

Support company concerning:

• Financing of a business; and

• Allocation and control of financial resources

Information Systems in

Finance

cashManagement

cashManagement

cashManagement

cashManagement

Forecast and manage cash position

Forecast fi-nancial per-formance and financ-ing needs

Evaluate risk/return of capital ex-penditures

Manage short-term and other securities

Financial Management Systems

Outline of the System

• Uses financial forecasts concerning the economic situation, business operation, types of financing available, interest rates, and stock and bond prices to develop an optimal financing plan for the business.

• Electronic spreadsheet packages, DSS software, and Web-based groupware can be used to build and manipulate financial model.

• Answers to what-if and goal-seeking questions can be explored as financial analysts and managers evaluate their financing and investment alternatives.

REAL WORLD CASE Cisco Systemsx : Telepresence and the Future of Collaboration

Collaborative Technology

• Cisco 1.0 – People could be connected by truckloads of routers and switches.

• Cisco 2.0 – According to Chambers, the CEO of Cisco, this became centered on business process change.

• Cisco 3.0 – Chamber said that it will fundamentally change the nature of work, enabling productivity growth.

REAL WORLD CASE Cisco Systemsx : Telepresence and the Future of Collaboration

What did they do for revolution?

Cisco has deployed telepresence rooms in 160 of its offices worldwide since late 2006 when it began to roll out the conferencing technology.

It created an environment of directed participation, in which the tools are adapted, refined, and sharpened to drive innovation and growth.

Cisco changed company structure also toward more horizontal: instead of command- and –control structure, to collaboration.

Cisco says that telepresence itself will be offered as an on-demand managed service at off-site locations for companies that can’t or don’t want to invest in their own systems.

REAL WORLD CASE Cisco Systems : Telepresence and the Future of Collaboration

Keen Competition

Polycom

Offers high-end telepresence system with merged, seamless displays

Uses standards-based system that will interoperate with any standards based video codex on the market.

HP

introduced its Halo telepresence system before the Cisco product launched.

Cisco

Cisco 3.0 having three screen, high-definition, surround-sound theater.

Though it doesn’t use standards-based system, it expect its method will be de facto standard due to its installed base, brand power and marketing muscle.

REAL WORLD CASE HR’s Turn

Introduction

• In recent years, HR departments have focused their technology efforts on driving down cost by automation or outsourcing.

• HR is being urged not only to reduce the cost of hiring, retaining, and compensating employees but also to optimize the corporate talent pool.

• Most corporate executives like having a tool that helps them evaluate and promote people on purely objective criteria.

REAL WORLD CASE HR’s Turn

Oregon Health & Science University (OHSU)

• Uses Oracle Corp.’s iRecruitment software

• Routes requisition forms to the appropriate managers and posts the job opening on the Web site.

• It is filling job opening two weeks faster than before and saving $1,500 per job.

• OHSU recently added Oracle’s Manager Self-Service module for logging changes to employees status such as promotions or use of family leave.

• Uses Oracle Employee Self-Service application for benefits management.

REAL WORLD CASE HR’s TurnSony Computer Entertainment America Inc.

• Uses recruitment software from WorkforceLogic to automate its process for hiring contract workers.

• Particularly useful for ensuring that hiring managers understand and comply with the legal distinctions between contract and salaried employees.

• By answering a series of questions through the WorkforceLogic interface, the application renders a recommendation on whether the position is best filled by a contractor or by someone on the payroll

Tyco International Ltd.

• Employee performance management, career development, and succession planning are the functions that can be automated with human capital management (HCM) applications.

• Tyco uses Kenexa’s CareerTracker to track employee performance and promotion.

• Provides objective criteria.

Customer Relationship Management

Jeanie de la Rama

• What is CRM?

1

• The three phases of CRM

2

• Benefits and challenges of CRM

3

• Trends in CRM

4

IntroductionCustomer-focused business is one of the top business strategies that can be supported by information technology. Many companies are implementing customer relationship management (CRM) business initiatives and information systems as part of a customer-focused or customer centric strategy to improve their chances for success in today’s competitive business environment.

What is CRM?

• CRM is described as a cross-functional e-business application that integrates and automates many customer-serving processes in sales, direct marketing, accounting and order management, and customer service and support.

• CRM systems create an IT framework that integrates all the functional processes with the rest of a company’s business operations.

• CRM systems consist of a family of software modules that perform the business activities involved in such front office processes.

• CRM software provides the tools that enable a business and its employees to provide fast, convenient, dependable, and consistent service to its customers.

What is CRM?

Contract and Account Management

• CRM software helps sales, marketing, and service professionals capture and track relevant data about every past and planned contact with prospects and customers, as well as other business and life cycle events of customers.

Sales

• CRM software tracks customer contacts and other business and life cycle events of customers for cross-selling and up-selling.

What is CRM?

Marketing and Fulfilment

• CRM software can automate tasks such as qualifying leads, managing responses, scheduling sales contacts, and providing information to prospects and customers.

Customer Service and Support

• CRM helps customer service managers quickly create, assign, and manage service requests. Help desk software assists customer service reps in helping customers whom are having problems with a product or service, by providing relevant service data and suggestions for resolving problems.

What is CRM?

Retention and Loyalty Programs

• It costs six times more to sell to a new customer than to sell to an existing one.

• A typical dissatisfied customer will tell eight to ten people about his or her experience.

What is CRM?Retention and Loyalty Programs

• A company can boost its profits 85% by increasing its annual customer retention by only 5%.

• The odds of selling a product to a new customer are 15%, whereas the odds of selling a product to an existing customer are 50%.

• 70%of complaining customers will do business with the company again if it quickly takes care of a service snafu.

• More than 90% of existing companies don’t have the necessary sales and service integration to support e-commerce.

Examples of benefits of CRM

• CRM allows a business to identify and target their best customers; those who are the most profitable to the business, so they can be retained as lifelong customers for greater and more profitable services.

• CRM enables real-time customization and personalization of products and services based on customer wants, needs, buying habits, and life cycles.

• CRM can keep track of when a customer contacts the company, regardless of the contact point.

• CRM enables a company to provide a consistent customer experience and superior service and support across all the contact points a customer chooses.

Acquire

Enhance

Retain

The three phases of CRM

CRM can be viewed as an integrated system of Web-enabled software tools and databases accomplishing a variety of customer-focused business processes that support the three phases of the relationship between a business and its customers.

The three phases of CRM

Acquire – a business relies on CRM software tools and databases to help it acquire new customers by doing a superior job of contract management, sales prospecting, selling, direct marketing, and fulfilment.

• The goal of these CRM functions is to help customers perceive the value of a superior product offered by an outstanding company.

The three phases of CRM

Enhance – Web-enabled CRM account management and customer service and support tools help keep customers happy by supporting superior service from a responsive networked team of sales and service specialists and business partners. CRM sales force automation and direct marketing and fulfilment tools help company’s cross-sell and up-sell to their customers, thus increasing their profitability to the business.

• The value perceived by customers is the convenience of one-stop shopping at attractive prices.

The three phases of CRM

Retain – CRM analytical software and databases help a company proactively identify and reward its most loyal and profitable customers to retain and expend their business via targeted marketing and relationship marketing programs.

• The value perceived by customers is of a rewarding personalized business relationship with “their company”.

Benefits and challenges of CRM

• CRM allows a business to identify and target their best customers; those who are the most profitable to the business, so they can be retained as lifelong customers for greater and more profitable services.

• CRM enables real-time customization and personalization of products and services based on customer wants, needs, buying habits, and life cycles.

• CRM can keep track of when a customer contacts the company, regardless of the contact point.

• CRM enables a company to provide a consistent customer experience and superior service and support across all the contact points a customer chooses.

CRM Failures:

• Major reason for the failure of CRM systems is the lack of understanding and preparation.

4 key ingredients of successful customer management strategies

Trends in CRM

One

• Operational CRM

Two

• Analytical CRM

Three

• Collaborative CRM

Four

• Portal-based CRM

Trends in CRM

• Operational CRM – most businesses start out with operational CRM systems such as sales force automation and customer service centers.

• Analytical CRM – analytical CRM applications are implemented using several analytical marketing tools, such as data mining, to extract vital data about customers and prospects for targeted marketing campaigns.

Trends in CRM

• Collaborative CRM – CRM systems to involve business partners as well as customers in collaborative customer service.

• Portal-based CRM – Internet, intranet, and extranet Web-based CRM portals as a common gateway for various levels of access to all customer information, as well as operational, analytical, and collaborative CRM tools for customers, employees, and business partners.

Trends in CRM

Increasingly, businesses are moving to collaborative CRM systems, to involve business partners as well as customers in collaborative customer services. This includes systems for customer self-service and feedback, as well as partner relationship management (PRM) systems.

Trends in CRM

Source: http://soshable.com/

ENTERPRISE RESOURSE PLANNING

The Business Backbone

Sheilla G. Capuchino

INTRODUCTION• Enterprise resource planning (ERP) systems serve as a cross-

functional enterprise backbone.

• It integrates and automates many internal business processes and information systems within the manufacturing, logistics, distribution, accounting, finance, and human resource functions of a company.

APPLICATION COMPONENTS

ERP SOFTWARE

• ERP software is a family of software modules that supports the business activities involved in vital back-office processes.

• ERP gives a company an integrated real-time view of its core business processes.

• ERP systems track business resources, and the status of commitments made by the business no matter what department has entered the data into the system.

BENEFITS AND CHALLENGES

Quality and Efficiency

• ERP creates a framework for integrating and improving a company’s internal business processes that results in significant improvements in the quality and efficiency of customer service, production, and distribution.

BENEFITS AND CHALLENGES

Decreased Costs

• Many companies report significant reductions in transaction processing costs and hardware, software, and IT support staff compared to the non-integrated legacy systems that were replaced by their new ERP systems.

BENEFITS AND CHALLENGES

Decision Support

• ERP provides vital cross-functional information on business performance quickly to managers to significantly improve their ability to make better decisions in a timely manner across the entire business enterprise.

BENEFITS AND CHALLENGES

Enterprise Agility

• ERP can be used in breaking down many former departmental and functional walls, which results in more flexible organizational structures, managerial responsibility, and work roles.

THE COST OF ERP

• Costs and risks involved in implementing ERP are considerable.

• Hardware and software costs are a small part of the total costs. The costs of developing new business processes (reengineering) and preparing employees for the new system (training and change management) make up the bulk of implementing a new ERP system.

• Converting data from previous legacy systems to the new cross-functional ERP system is another major category of ERP implementation costs.

THE COST OF ERP

43%

15%15%

15%

12%

ReengineeringData ConversionsTraining and Change ManagementSoftwareHardware

CAUSES OF ERP FAILURES

• Business managers and IT professionals underestimate the complexity of the planning, development, and training that are needed to prepare for a new ERP system that would radically change their business processes and information systems.

CAUSES OF ERP FAILURES

• Failure to involve affected employees in the planning and development phases and change management programs

• Trying to do too much too fast in the conversion process.

• Insufficient training in the work tasks required by the ERP system.

CAUSES OF ERP FAILURES

• Failure to do enough data conversion and testing.

• Overreliance by company or IT management on claims of ERP software vendors or the assistance of prestigious consulting firms hired to lead the implementation

FOUR TRENDS IN ERP

• ERP software packages are gradually being modified into more flexible products.

• In relation to the growth of the Internet and corporate intranets and extranets prompted software companies to use Internet technologies to build Web interfaces and network capabilities into ERP systems.

• Development of interenterprise ERP systems that provide Web-enabled links between key business systems of a company and its customers, suppliers, distributors, and others.

FOUR TRENDS IN ERP• ERP software companies have developed

modular, Web-enabled software suites that integrate ERO, customer relationship management, supply chain management, procurement, decision support, enterprise portals, and other business applications and functions.

REAL WORLD CASE: BUSINESS VALUE OF ERP

• Auto systems produce headlamps for major automobile manufacturers

• Until a few years ago, the manufacturing process was managed with paper documents.

• An ERP system was installed, but did not extend to the shop floor.

• Significant research was done before deciding to add the shop floor reporting module.

REAL WORLD CASE: BUSINESS VALUE OF ERP

Installing PC’s and ERP software on the shop floor allows Auto Systems to

• Enter timely, and accurate information.

• Plan more efficiently.

• Make production changes in order to avoid labor or scrap problems.

• Discuss these issues with employees while they are still current and meaningful.

KNOWLEDGE CHECK

• Please cite at least two causes of Enterprise Resource Planning failure.

Benefits and challenges of ERP

Trends in ERPKlems Antonio

Learning Objectives

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.

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

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

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

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

Retention and Loyalty Programs

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

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

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

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

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

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

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

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

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.• Upgraded reactive system to proactive

system

The CRM implementations in this case highlight the critical importance of information about customers, their preferences and activities, and how to use it to understand and develop better marketing solutions. The benefits are well-understood but the risks and concerns for customers are not well addressed especially with regards to customer privacy.

CRM in Action: NetSuite, Berlin Packaging and Churchill Downs REAL W

ORLD CASE

REAL WORLD

CASE

NetSuite:The Secret to CRM is in the Data

NetSuite Inc. is a leading provider of on-demand enterprise applications, including CRM. Other important players in this market include Salesforce.com and Siebel On Demand.

REAL WORLD

CASE

Churchill Downs:The Secret to CRM is in the Data

Churchill Downs Incorporated is the parent company of Churchill Downs. The company owns several other thoroughbred and standard bred racetracks. Churchill Downs Incorporated is listed on the NASDAQ as CHDN. The company is the most profitable track owner in the horse racing industry.

REAL WORLD

CASE

Churchill Downs:The Secret to CRM is in the Data

Before installing CRM, it was previously thought that there were 4 customer types but after using CRM it was discovered that there were 9 customer types indicating that previous marketing efforts were not targeted or useful as should have been.

REAL WORLD

CASE

Berlin Packaging:The Secret to CRM is in the Data

Berlin Packaging is a major North American supplier of packaging, closures and related services to manufacturers in a wide array of industries, including beverage, food, personal care, pharmaceutical, household care, and industrial and coatings sectors. of more than $600 million. At the end of 2011, the firm had 32 U.S. sales offices in 21 U.S. states and Puerto Rico as well as over 50 dedicated or third-party warehouse locations across the United States.

REAL WORLD

CASE

Berlin Packaging:The Secret to CRM is in the Data

The company realized that it had many data silos due to disparate systems (Supply Chain, ERP, Sales database, etc.). Customer data was balkanized. So Berlin opted to use the PeopleTools programming code in the ERP system to build bolt-on applications that convert financial and supply chain management functions into CRM processes. Benefit: The knowledge that there are no other collec- tions of customer data elsewhere in the company provides significant peace of mind.

• Why did Eastern need CRM?

• Eastern’s customer relationship management platform and other systems were expensive to maintain and develop; difficult to customise; and hard to get to talk to one-another

• Eastern needed a pre-sales order system that could work with a new business support system and sales tool was needed to allow the organisation to monitor and track all opportunities being worked on by the sales team

LOCAL C

ASE Eastern’s business slogan is “Connecting you Faster, Better and with Sales Cloud from Salesforce.com we are

living up to our promise.”

With a history of over 100 years, Eastern Communications has evolved into a full service provider of world-class telecommunication services of Internet, Data, full-service Telephony and business-enabling solutions.

BENEFITS AND CHALLENGES OF SUPPLY CHAIN MANAGEMENT (SCM)

Karen B. Reyes

• Creating a real-time SCM infrastructure is a daunting and ongoing issue and often a point of failure for several reasons

• The chief reason is: planning, selection, and implementation of SCM solutions are becoming more complex as the pace of technological change accelerates and the number of company’s partners increases

Benefits of SCM systems• Faster, more accurate order processing

• Reductions in inventory levels

• Quicker times to market

• Lower transaction and material costs

• Strategic relationships with their suppliers

Aim:increase agility and responsiveness in meeting the

demands of its customers and the needs of its business partners

Objectives of SCM:

BUSINESS VALUE GOALSRapid demand fulfillment

Collaborative supplyChain planning and

execution

CUSTOMER VALUE GOALS

Give customers what they want, when and how they want it, at the lower cost

Inter-enterpriseCoordination of Manufacturing and Business Process

Effective Distribution and

Channel Partnerships

Responsiveness and Accountability to Customers

Emerson Transaction Hub: A Bright Idea that’s Paying off

• St. Louis manufacturer that ships supplies to Asia and North America and Europe

• Emerson executives: “Why pay to send inventory from one supplier on one ship and goods from a second supplier on another ship, when both deliveries are coming from the same place and could be loaded into a single container?”

REAL WORLD

CASE

Emerson Transaction Hub

2005 pilot program:

• Logistics provider (specializes in transporation management for freight carriers) worked with two divisions to consolidate multiple orders into the same shipping container

• The pilot saved money

• Global supply chains tightened by better tracking shipments and mapping inventory

REAL WORLD

CASE

Emerson Transaction Hub

• Wanted to expand the program

• Emerson has 70 business units that purchase goods from 35,000 suppliers

• Each unit communicates with its own suppliers via combination of e-mail, spreadsheets, faxes, and phone calls

REAL WORLD

CASE

Emerson Transaction Hub

Vision: SINGLE HUB that everyone would link to using communications mechanisms and data formats

• To serve as a unified gateway that Emerson’s business, logistics providers, and suppliers could use to exchange information

• For a single communications hub to work, everyone has to speak the same language

REAL WORLD

CASE

Emerson Transaction Hub• Decided to conduct transactions via two data formats: EDI (using

the ANSSI ASC X12 formats) and OAGIS XML

REAL WORLD

CASE

A business unit initiates transaction, such as purchase order, through its ERP system

The order is sent to the transaction hub which translates the message into OAGIS XML

Providers and suppliers then coordinate shippings

Providers communicate shipment status to the Emerson division through the hub

Putting 10 suppliers in the same shipping container cuts cost by 35%

Emerson Transaction Hub

• With information such as purchase orders and shipping notices in a common format, Emerson has more visibility into its supply chain, increasing inventory control efficiency by ensuring that materials aren’t over- or under-stocked

REAL WORLD

CASE

Challenges of SCM systems

• Lack of proper demand planning knowledge, tools, and guidelines

• Inaccurate or overoptimistic demand forecasts will cause major production, inventory, and other business problems, no matter how efficient the rest of the SCM process is constructed

• In accurate production inventory, and other business data provided by a company’s other information systems

Challenges of SCM

• Lack of adequate collaboration among marketing, production, and inventory management

departments within a company, and with suppliers, distributors, and others

• Companies consider even the SCM software tools themselves to be immature, incomplete, and hard to implement

Nike Inc.

In the athletic footwear business, Nike has

• 32% worldwide market share (almost double Adidas, its nearest rival)

• Market cap that’s more than the rest of the manufacturers and retailers in the industry combined

REAL WORLD

CASE

Nike Inc.• 2000, installed i2 Tech. SCM software

• Upset Nike's inventory– Inventory shortages reduced Nike's fiscal third-

quarter sales by as much as $100 million

– Ultimately forced the footwear maker to slash earnings estimates.

• i2 supply-and-demand-planning application didn't perform as expected, resulting in shortages of some footwear models and excess stock of others

– Nike chose to customize the software and did not use the implemented methodology

REAL WORLD

CASE

Roland Wolfram Nike vice-president of global operations and technology“i2problem glitch is a speed bump”

Nike Inc.i2 software glitch that cost Nike:

• >$100million in lost sales

• Depressed its stock price by 20% triggered a flurry of class-action law suits

REAL WORLD

CASE

Phil Knight, its chairman president, and CEO,

famously lamented “This is what you get for $400 million, huh?”

Nike Inc.• Nike’s demand-planning strategy was and continues to be a

mixture of art and technology

• Nike sells too many products (120,000) in too many cycles (four per year) to do things by intuition alone.

• Six years later, better collaboration with Far East factories has reduced the amount of “prebuilding” of shoes from 30% to 3%

REAL WORLD

CASE

• Importance of increasing domestic demand and encouraging investment in more suppliers for the auto industry, a Department of Trade and Industry (DTI) official said.

• "The suppliers base, the quality is there, the workers are there. We have the basic ingredients to be competitive but we have to grow this base of suppliers... What we have to do is map out clearly in next 5-10 years the gaps in our supply chain, technological needs if we are to become an important player in the region," Cristobal told ANC's Business Nightly.

LOCAL C

ASE Ford plant closure highlights gaps in PH auto industry

http://www.philippines.scmtimes.com/p/2064463971/ford-plant-closure-highlights-gaps-in-ph-auto-industry?tag=Supply+Chain

Trends in SCM

The supplier-facing applications arena:• Continued growth of public as well as private networks that

transform linear and inflexible supply chains into nonlinear and dynamic fulfillment networks

• From automation and integration of supply chains to collaborative sourcing, planning, and design across their supplier networks

Stages in SCMInformation SharingProduct/Sales Data

Sourcing HelpLogistics

Order Fulfillment

Order ManagementInventory

ManagementResource AllocationSystems Use and

Integration

Collaborative Marketing

Sales and ServiceSCM Optimization

Collaborative Design and Delivery

SCM Stage 1• Current supply chain

improvement• Supply chain, e-

commerce loosely coupled

SCM Stage 2• Intranet/extranet links to

trading partners• Supplier network

expansion

SCM Stage 3• Collaborative planning

and fulfillment• Extranet and exchange-

based collaboration

Stages in SCM: Stage 1Information SharingProduct/Sales DataSourcing HelpLogisticsOrder Fulfillment

SCM Stage 1• Current supply chain

improvement• Supply chain, e-

commerce loosely coupled

• A company concentrates on making improvements:– To its internal supply chain processes– External processes – Relationships with suppliers and

customers

• It’s e-commerce Web site and those of some its trading partners provide access to online catalogs and useful supply chain information as they support limited online transactions.

Stages in SCM: Stage 2Order ManagementInventory ManagementResource AllocationSystems Use and Integration

SCM Stage 2• Intranet/extranet links to

trading partners• Supplier network

expansion

• A company accomplishes:– Internally: substantial supply chain

management applications by using selected SCM software programs internally,

– Externally: via intranet and extranet links among suppliers, distributors, customers, and other trading partners.

• Expanding the business network of Web-enabled SCM-capable trading partners in their supply chain– To increase its operational efficiency

and effectiveness in meeting their strategic objectives

Stages in SCM: Stage 3Collaborative MarketingSales and ServiceSCM OptimizationColaborative Design and Delivery

SCM Stage 3• Collaborative planning

and fulfillment• Extranet and exchange-

based collaboration

• Begins to develop and implement cutting-edge collaborative supply chain management applications– Using advanced SCM software, full-

service extranet links, and private and public e-commerce exchanges.

– Ex: collaborative supply chain planning and fulfillment application like collaborative product design and delivery, and collaborative planning, forecasting, and replenishment (CPFR)

Stages in SCM: Stage 3Collaborative MarketingSales and ServiceSCM OptimizationColaborative Design and Delivery

SCM Stage 3• Collaborative planning

and fulfillment• Extranet and exchange-

based collaboration

• Collaborative marketing sales and service applications with trading partners– Including customer and partner

relationship management systems– Management of their supply chains

• in order to meet their strategic customer value and business value goals.

Stages in SCMInformation SharingProduct/Sales DataSourcing HelpLogisticsOrder Fulfillment

Order ManagementInventory ManagementResource AllocationSystems Use and Integration

Collaborative MarketingSales and ServiceSCM OptimizationColaborative Design and Delivery

SCM Stage 1• Current supply chain

improvement• Supply chain, e-

commerce loosely coupled

SCM Stage 2• Intranet/extranet links to

trading partners• Supplier network

expansion

SCM Stage 3• Collaborative planning

and fulfillment• Extranet and exchange-

based collaboration

RECAP

• Better Integration with McKesson is a key strategic move for CVS significant potential for improving sales and margins through its enhanced

pricing and promotional forecasting systems

• Supply chain integration allows marketing managers to plan promotions more effectively, using historical point-of-sale data on a store-by-store basis

• Substantially reduces the amount of time needed to plan to stock inventory for individual promotions

REAL WORLD

CASE

CVS, Mc Kesson, and MPT: Web-based SCM Integration

McKesson is the largest distributor of pharmaceuticals, health care products, and medical/surgical supplies with annual sales in excess of $ 20 billion

CVS is a leading drug retail chain

Due to a three-year transformation strategy:

• Working very closely with JFC’s Store Operations, Information Technology (IT) and purchasing groups.

LOCAL C

ASE Jollibee bags Asia-Pacific supply chain management-logistics award

Homegrown food giant Jollibee Foods Corp. (JFC)

Vice president for Corporate Supply Chain William Lorenzana Jr. said. “JFC was recognized for its leading strategies in reducing cost, optimizing lead times, collaborating with suppliers and partners, and increasing customer satisfaction and market share…”

JFC was able to increase the efficiency levels in its commissaries, satellite commissaries and distribution centers, helping them better serve the corporation’s 1,500 stores.

• By automating processes, streamlining tasks and the logistics network, forging partnerships with third party logistics providers, and unifying forecast figures, With the help of such efforts and innovations,

LOCAL C

ASE Jollibee bags Asia-Pacific supply chain management-logistics award

Homegrown food giant Jollibee Foods Corp. (JFC)

http://www.philstar.com/business-usual/434345/jollibee-bags-asia-pacific-supply-chain-management-logistics-award

Thank youWe hope you enjoyed our presentation. We would love to hear from you.