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EssentialsofManagementInformationSystemsFourteenthEditionChapter9AchievingOperationalExcellenceandCustomerIntimacy:EnterpriseApplicationsCopyright©2021,2019,2017PearsonEducation,Inc.

AllRightsReservedLearningObjectives9.1

Howdoenterprisesystemshelpbusinessesachieveoperationalexcellence?9.2

Howdosupplychainmanagementsystemscoordinateplanning,production,andlogisticswithsuppliers?9.3

Howdocustomerrelationshipmanagementsystemshelpfirmsachievecustomerintimacy?9.4

Whatarethechallengesthatenterpriseapplicationspose,andhowareenterpriseapplicationstakingadvantageofnewtechnologies?9.5

HowwillMIShelpmycareer?VideoCasesCase1:MaerskDevelopsaGlobalShippingManagementSystemInstructionalVideo:GSMSProtectsPatientsbySerializingEveryBottleofDrugsAvonBeautifiesItsSupplyChain(1of2)Problem

VolatiledemandGlobaloperationsComplexsupplychainManualprocessesSolutionsRevisesupplychainprocessesDeployJDAManufacturingIntelligentfulfillmentAvonBeautifiesItsSupplyChain(2of2)AvonusesJDA’sManufacturingandIntelligentFulfillmentsystemtogaincontroloveritssupplychainandinventory,andestimatefutureneedstointegratebusinessprocessesanddecisionmakingDemonstrateswhycompaniesneedenterpriseapplicationsIllustratestheabilityofERPsystemstodramaticallyimproveoperationaleffectivenessanddecisionmakingonaglobalscaleEnterpriseSystemsEnterpriseresourceplanning(ERP)systemsSuiteofintegratedsoftwaremodulesandacommoncentraldatabaseCollectsdatafrommanydivisionsoffirmforuseinnearlyalloffirm’sinternalbusinessactivitiesInformationenteredinoneprocessisimmediatelyavailableforotherprocessesFigure9.1HowEnterpriseSystemsWorkEnterpriseSoftwareBuiltaroundthousandsofpredefinedbusinessprocessesthatreflectbestpracticesFinanceandaccountingHumanresourcesManufacturingandproductionSalesandmarketingToimplement,firms:SelectfunctionsofsystemtheywishtouseMapbusinessprocessestosoftwareprocessesUsesoftware’sconfigurationtablesforcustomizingBusinessValueofEnterpriseSystemsIncreaseoperationalefficiencyProvidefirm-wideinformationtosupportdecisionmakingEnablerapidresponsestocustomerrequestsforinformationorproductsIncludeanalyticaltoolstoevaluateoverallorganizationalperformanceandimprovedecision-makingTheSupplyChainNetworkoforganizationsandprocessesfor:ProcuringmaterialsTransformingmaterialsintoproductsDistributingtheproductsUpstreamsupplychainDownstreamsupplychainInternalsupplychainFigure9.2Nike’sSupplyChainSupplyChainManagementInefficienciescutintoacompany’soperatingcostsCanwasteupto25percentofoperatingexpensesJust-in-timestrategyComponentsarriveastheyareneededFinishedgoodsshippedafterleavingassemblylineSafetystock:bufferforlackofflexibilityinsupplychainBullwhipeffectInformationaboutproductdemandgetsdistortedasitpassesfromoneentitytonextacrosssupplychainFigure9.3TheBullwhipEffectSupplyChainManagementSoftwareSupplychainplanningsystemsModelexistingsupplychainEnabledemandplanningOptimizesourcing,manufacturingplansEstablishinventorylevelsIdentifytransportationmodesSupplychainexecutionsystemsManageflowofproductsthroughdistributioncentersandwarehousesGlobalSupplyChainsandtheInternetGlobalsupplychainissuesGreatergeographicaldistances,timedifferencesParticipantsfromdifferentcountriesDifferentperformancestandardsDifferentlegalrequirementsInternethelpsmanageglobalcomplexitiesWarehousemanagementTransportationmanagementLogisticsOutsourcingDemand-DrivenSupplyChains:FromPushtoPullManufacturingandEfficientCustomerResponsePush-basedmodel(build-to-stock)EarlierSCMsystemsSchedulesbasedonbestguessesofdemandPull-basedmodel(demand-driven)Web-basedCustomerorderstriggereventsinsupplychainInternetenablesmovefromsequentialsupplychainstoconcurrentsupplychainsComplexnetworksofsupplierscanadjustimmediatelyFigure9.4Push-VersusPull-BasedSupplyChainModelsFigure9.5TheEmergingInternet-DrivenSupplyChainBusinessValueofSupplyChainManagementSystemsMatchsupplytodemandReduceinventorylevelsImprovedeliveryserviceSpeedproducttimetomarketUseassetsmoreeffectivelyTotalsupplychaincostscanbe75percentofoperatingbudgetIncreasesalesInteractiveSession–Organizations:SomaBayProsperswithERPintheCloudClassdiscussionIdentifyanddescribetheproblemdiscussedinthiscase.Whatmanagement,organization,andtechnologyfactorscontributedtotheproblem?WhywasanERPsystemrequiredforasolution?Howdidhavingacloud-basedERPsystemcontributetothesolution?WhatwerethebusinessbenefitsofSomaBay’snewenterprisesystem?Howdiditchangedecisionmakingandthewaythecompanyoperated?CustomerRelationshipManagementKnowingthecustomerInlargebusinesses,toomanycustomersandtoomanywayscustomersinteractwithfirmCRMsystemsCaptureandintegratecustomerdatafromallovertheorganizationConsolidateandanalyzecustomerdataDistributecustomerinformationtovarioussystemsandcustomertouchpointsacrossenterpriseProvidesingleenterpriseviewofcustomersFigure9.6CustomerRelationshipManagement(CRM)CustomerRelationshipManagementSoftware(1of2)Packagesrangefromnichetoolstolarge-scaleenterpriseapplicationsMorecomprehensivepackageshavemodulesfor:Partnerrelationshipmanagement(PRM)Integratingleadgeneration,pricing,promotions,orderconfigurations,andavailabilityToolstoassesspartners’performancesEmployeerelationshipmanagement(ERM)Settingobjectives,employeeperformancemanagement,performance-basedcompensation,employeetrainingCustomerRelationshipManagementSoftware(2of2)CRMpackagestypicallyincludetoolsfor:Salesforceautomation(SFA)SalesprospectandcontactinformationSalesquotegenerationcapabilitiesCustomerserviceAssigningandmanagingcustomerservicerequestsWeb-basedself-servicecapabilitiesMarketingCapturingprospectandcustomerdata,schedulingandtrackingdirect-marketingmailingsoremailCross-sellingFigure9.7HowCRMSystemsSupportMarketingResponsesbyChannelforJanuary2019PromotionalCampaignFigure9.8CRMSoftwareCapabilitiesFigure9.9CustomerLoyaltyManagementProcessMapOperationalandAnalyticalCRMOperationalCRMCustomer-facingapplicationsSalesforceautomationcallcenterandcustomerservicesupportMarketingautomationAnalyticalCRMBasedondatawarehousespopulatedbyoperationalCRMsystemsandcustomertouchpointsAnalyzescustomerdata(OLAP,datamining,etc.)Customerlifetimevalue(CLTV)Figure9.10AnalyticalCRMInteractiveSession–People:CRMHelpsAdidasKnowItsCustomersOneShoeBuyerataTimeClassdiscussionAnalyzeAdidasusingthecompetitiveforcesandvaluechainmodel.WhatisAdidas’sbusinessstrategy?Whatistheroleofcustomerrelationshipmanagementinthatstrategy?HowdoinformationsystemssupportAdidas’sstrategy?HowdidusingSmakeAdidasmorecompetitive?Howdiditchangethewaythecompanyranitsbusiness?GiveanexampleoftwobusinessdecisionsthatwereimprovedbyusingS.BusinessValueofCustomerRelationshipManagementSystemsBusinessvalueofCRMsystemsIncreasedcustomersatisfactionReduceddirect-marketingcostsMoreeffectivemarketingLowercostsforcustomeracquisition/retentionIncreasedsalesrevenueChurnrateNumberofcustomerswhostopusingorpurchasingproductsorservicesfromacompanyIndicatorofgrowthordeclineoffirm’scustomerbaseEnterpriseApplicationChallengesExpensivetopurchaseandimplemententerpriseapplicationsMulti-milliondollarprojectsin2018LongdevelopmenttimesTechnologychangesBusinessprocesschangesOrganizationallearning,changesSwitchingcosts,dependenceonsoftwarevendorsDatastandardization,management,cleansingNext-GenerationEnterpriseApplications(1of2)Enterprisesolutions/suitesMakeapplicationsmoreflexible,web-enabled,integratedwithothersystemsSOAstandardsOpen-sourceapplicationsOn-demandsolutionsCloud-basedversionsFunctionalityformobileplatformNext-GenerationEnterpriseApplications(2of2)SocialCRMIncorporatingsocialnetworkingtechnologiesCompanysocialnetworksMonitorsocialmediaactivity;socialmediaanalyticsManagesocialandweb-basedcampaignsBusinessin

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