Amity School of Engineering & Technology

Enterprise Applications
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Enterprise Systems
• Enterprise Systems

• Also called “enterprise resource planning (ERP) systems”

• Suite of integrated software modules and a common central

database

• Collects data from many divisions of firm for use in nearly

all of firm’s internal business activities

• Information entered in one process is immediately available

for other processes
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Enterprise Systems
• Enterprise Software
• Built around thousands of predefined business processes that
reflect best practices
• Finance/accounting: general ledger, accounts payable, and so on
• Human resources: personnel administration, payroll, and so on
• Manufacturing/production: purchasing, shipping, and so on
• Sales/marketing: order processing, billing, sales planning, and so on

• To implement, firms:
• Select functions of system they wish to use.
• Map business processes to software processes.
• Use software’s configuration tables for customizing.
 Amity School of Engineering & Technology

Enterprise Systems
How Enterprise Systems Work
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

Figure 8-1
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Enterprise Systems
• Business value of enterprise systems

• Increase operational efficiency.

• Provide firm wide information to support decision making.
• Enable rapid responses to customer requests for information
or products.
• Include analytical tools to evaluate overall organizational
performance.
 Amity School of Engineering & Technology

Supply Chain Management Systems

The Supply Chain
• Network of organizations and processes for:
• Procuring raw materials
• Transforming them into products
• Distributing the products
• Upstream supply chain:
• Firm’s suppliers, suppliers’ suppliers, processes for managing
relationships with them
• Downstream supply chain:
• Organizations and processes responsible for delivering products to
customers
 Amity School of Engineering & Technology

Supply Chain Management Systems

Information and Supply Chain Management

• Inefficiencies cut into a company’s operating costs

• Can waste up to 25 percent of operating expenses
• Just-in-time strategy:
• Components arrive as they are needed
• Finished goods shipped after leaving assembly line
• Safety stock
• Buffer for lack of flexibility in supply chain
• Bullwhip effect
• Information about product demand gets distorted as it passes from one
entity to next across supply chain
 Amity School of Engineering & Technology

Supply Chain Management Systems

The Bullwhip Effect

Inaccurate
information can
cause minor Figure 8-3
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.
 Amity School of Engineering & Technology

Supply Chain Management Systems

Supply Chain Management Software

• Supply chain planning systems

• Model existing supply chain.
• Demand planning.
• Optimize sourcing, manufacturing plans.
• Establish inventory levels.
• Identify transportation modes.
• Supply chain execution systems
• Manage flow of products through distribution centers and warehouses.
 Amity School of Engineering & Technology

Supply Chain Management Systems

Global Supply Chains and the Internet
• Before Internet, supply chain coordination hampered by difficulties of using
disparate internal supply chain systems.
• Enterprise systems supply some integration of internal supply chain processes but
not designed to deal with external supply chain processes.
• Intranets and Extranets
• Intranets: to improve coordination among internal supply chain
processes
• Extranets: to coordinate supply chain processes shared with their
business partners
 Amity School of Engineering & Technology

Supply Chain Management Systems

Intranets and Extranets for Supply Chain Management
Intranets integrate
information from
isolated business
processes within the
firm to help manage its
internal supply chain.
Access to these private
intranets can also be
extended to authorized
suppliers, distributors,
logistics services, and,
sometimes, to retail
customers to improve
coordination of external
supply chain processes.

Figure 8-4
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Supply Chain Management Systems

Global Supply Chains and the Internet

• Global supply chain issues:

• Global supply chains typically span greater geographic distances
and time differences.
• More complex pricing issues (local taxes, transportation, etc.).
• Foreign government regulations.
• Internet helps companies manage many aspects of global supply chains.
• Sourcing, transportation, communications, international finance
 Amity School of Engineering & Technology

Supply Chain Management Systems

Global Supply Chains and the Internet

• Supply chain management systems

• Push-based model (build-to-stock)
• Schedules based on best guesses of demand
• Pull-based model (demand-driven)
• Customer orders trigger events in supply chain
• Sequential supply chains
• Information and materials flow sequentially from company to
company
• Concurrent supply chains
• Information flows in many directions simultaneously among
members of a supply chain network
 Amity School of Engineering & Technology

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 8-5
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Supply Chain Management Systems

The Future Internet-Driven Supply Chain

The future Internet-

driven supply chain
operates like a digital
logistics nervous
system. It provides
multidirectional
communication
among firms,
networks of firms, and
e-marketplaces so
that entire networks of
supply chain partners
can immediately
adjust inventories,
orders, and
capacities.
Figure 8-6
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Supply Chain Management Systems

Business Value of Supply Chain Management Systems

• Match supply to demand.

• Reduce inventory levels.
• Improve delivery service.
• Speed product time to market.
• Use assets more effectively.
• Reduced supply chain costs lead to increased profitability.
• Increase sales.
 Amity School of Engineering & Technology

Customer Relationship Management Systems

What Is Customer Relationship Management(CRM)?

• Knowing the customer
• In large businesses, too many customers and too many ways customers
interact with firm
• Customer relationship management (CRM) systems
• Capture and integrate customer data from all over the organization.
• Consolidate and analyze customer data.
• Distribute customer information to various systems and customer
touch points across enterprise.
• Provide single enterprise view of customers.
 Amity School of Engineering & Technology

Customer Relationship Management Systems

Customer Relationship Management (CRM)

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.

Figure 8-7
 Customer Relationship Management Systems

CRM Software

• CRM packages range from niche tools to large-scale enterprise

applications.
• More comprehensive have modules for:
• Partner relationship management (PRM)
• Integrating lead generation, pricing, promotions, order
configurations, and availability

• Tools to assess partners’ performances

• Employee relationship management (ERM)

• E.g., setting objectives, employee performance management,
performance-based compensation, employee training
 Customer Relationship Management Systems

CRM Software

• CRM packages typically include tools for:

• Sales force automation (SFA)
• E.g., sales prospect and contact information, and sales quote
generation capabilities
• Customer service
• E.g., assigning and managing customer service requests; Web-
based self-service capabilities
• Marketing
• E.g., capturing prospect and customer data, scheduling and
tracking direct-marketing mailings or e-mail
 Amity School of Engineering & Technology

Customer Relationship Management Systems

How CRM Systems Support Marketing

Customer relationship
management software
provides a single point
for users to manage and
evaluate marketing
campaigns across
multiple channels,
including e-mail, direct
mail, telephone, the Web,
and wireless messages.

Figure 8-8
 Amity School of Engineering & Technology

Customer Relationship Management Systems

CRM Software Capabilities

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.

Figure 8-9
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Customer Relationship Management Systems

Customer Loyalty Management Process Map

Figure 8-10

This process map shows how a best practice for promoting customer
loyalty through customer service would be modeled by customer
relationship management software. The CRM software helps firms identify
high-value customers for preferential treatment.
 Customer Relationship Management Systems

Operational and Analytical CRM

• Operational CRM:
• Customer-facing applications such as sales force automation, call
center and customer service support, and marketing automation

• Analytical CRM:
• Analyzes customer data output from operational CRM applications
• Based on data warehouses populated by operational CRM systems and
customer touch points
• Customer lifetime value (CLTV)
 Amity School of Engineering & Technology

Customer Relationship Management Systems

Analytical CRM Data Warehouse

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.

Figure 8-11
 Amity School of Engineering & Technology

Customer Relationship Management Systems

Business Value of Customer Relationship Management

• Business benefits:
• Increased customer satisfaction
• Reduced direct-marketing costs
• More effective marketing
• Lower costs for customer acquisition/retention
• Increased sales revenue
• Churn rate:
• Number of customers who stop using or purchasing products or
services from a company
• Indicator of growth or decline of firm’s customer base
 Amity School of Engineering & Technology

Enterprise Applications: New Opportunities and Challenges

• Enterprise application challenges

• Highly expensive to purchase and implement enterprise
applications
• Average “large” system—$12 million +
• Average “small/midsize” system—$3.5 million
• Technology changes
• Business process changes
• Organizational learning, changes
• Switching costs, dependence on software vendors
• Data standardization, management, cleansing
» Next-generation enterprise applications
– Enterprise solutions/suites:
• Make applications more flexible, Web-enabled,
integrated with other systems
– SOA standards
– Open-source applications
– On-demand solutions
– Cloud-based versions
– Functionality for mobile platform
– What types of companies are most likely to adopt cloud-
based CRM software services? What companies might not
be suited for this type of software?
– What are the advantages and disadvantages of using cloud-
based enterprise applications?
– What management, organization, and technology issues
should be addressed in deciding whether to use a
conventional CRM system versus a cloud-based version?
» Next-generation enterprise applications (cont.)
– Social CRM
• Incorporating social networking technologies
• Company social networks
• Customer interaction via Facebook
• For example: Buzzient platform integrates social media
with enterprise applications
– Business intelligence
• Inclusion of BI with enterprise applications
• Flexible reporting, ad hoc analysis, “what-if” scenarios,
digital dashboards, data visualization