CISB113 CISB113 Fundamentals of Information Fundamentals of Information

SystemsSystems

Cross Functional Cross Functional Enterprise SystemsEnterprise Systems

RecapRecap

• Porter’s Five Forces– Assess your business or potential business from

the perspectives of the 5 forces• Buyers (bargaining power)• Suppliers (bargaining power)• Competitors• Substitutes• New Entrants

Discussing Porter’s Five Forces (on a Discussing Porter’s Five Forces (on a private college)private college)

Forces Explanation Impact of the forces

Buyers • The buyers do have choices from so many private colleges that offer similar courses at competitive rates

High

Suppliers • Suppliers for services such as facilities, food, books, manpower are many. The private college have many options and should not have any issues in settling for the best and most suitable choice.

Low

Competitors • There many privates colleges offering similar courses at highly competitive rates as well as extra benefits such as industry certifications, better campus environment etc

High

Discussing Porter’s Five Forces (on a Discussing Porter’s Five Forces (on a private college)private college)

Forces Explanation Impact of the forces

Substitutes • Is it possible for people to substitute the type of service and product offered by this private college?

• People will continue to pursue their education, therefore replacing a degree programme with something else is not very likely to happen.

Low

New Entrants • To open a new private college requires a big investment, license and preparation for the infrastructure. Hence it is not easy for new private colleges to break into the market.

Low

So what can we do based on this knowledge ?•Identify focus area for improvement•Help identify opportunities for strategic IT

The Porter’s Value ChainThe Porter’s Value Chain

Another concept to help identify opportunities for strategic IT Value chain is a network of value-creating processes One activity may affect the cost or performance of others

E.g. product design change reduces manufacturing costs & improves reliability, service costs decrease.

Supportprocesses

Primaryprocesses

Summary of Types of ISSummary of Types of IS

Types of IS Description

Transaction Processing Systems Automates routine and repetitive tasks that are critical to the operation of the organizatione.g. payroll system, customer billing, Point-of-Sale

Office Automation Systems Used by data workers for clerical type of works and basic communication e.g. email, word-processing, presentation, desktop publishing

Knowledge Management Systems

Supports knowledge workers who are responsible for finding or developing new knowledge for the organization and integrating it with existing knowledge e.g. web-based computer aided information seeking, learning management systems

Summary of Types of ISSummary of Types of IS

Types of IS Description

Management Information Systems

These systems access, organize, summarize, and displayed information for producing periodic reports e.g. daily list of employees and the hours they work, or a monthly report of expenses as compared to a budget

Decision Support Systems Used by managers to support complex non-routine decisions. e.g . Answering query such as ‘which female permanent employee sells the most product in the last quarter?’

Executives Support Systems

Enterprise-wide DSS that help top-level executives (senior management) analyze, compare, and highlight trends in important variables so that they can monitor performance and identify opportunities and problems.

Emphasizes graphical displays and easy-to-use user interfaces

Now back to today’s lecture…..

Learning OutcomesLearning Outcomes

At the end of this lesson, you should be able to:• Discuss Business Process Re-engineering• Describe Cross Functional Enterprise Systems

• Processes that span across several different departments of one business.

• Advancement in IT results in conversion from functional processes to cross functional processes

• Many companies today are using IT to develop integrated cross functional enterprise systems

• Purpose : – Reengineer and improve important business

process across the enterprise

Cross Functional Business ProcessCross Functional Business Process

Business Process Reengineering:• Rethinking and redesign of business process

• Goals : Efficient, Effective, Customer Satisfaction• High potential payback vs. high risk

Business Process Re-engineeringBusiness Process Re-engineering

Taco Bell created the K-Minus program (Kitchenless restaurant) based on their belief that they are a retail service company, not a manufacturing company. In the new process, meat, beans, corn shells, lettuce, tomatoes and cheese for their products are prepared outside of the restaurant in central commissaries. At the Taco Bell restaurants, the food ingredients that had been prepared will be put together when ordered for customer consumption. Taco Bell cites the following results: greater quality control, better employee morale, fewer employee accidents and injuries (due to preparation task off-site), big savings and more time to focus on the customer business processes.

(Hammer and Champy 1993, p 178-179).

• The above diagram is an example of a business process that must be supported by cross-functional enterprise Information Systems

• Scenario : A new product development process in a manufacturing company.

Cross Functional Enterprise Cross Functional Enterprise SystemsSystems

• Enterprise systems focused on accomplishing fundamental business process with involvement of company’s customer, supplier, partner, employees from different departments and stakeholders

• The key term is “enterprise-wide”

Cross Functional Enterprise Cross Functional Enterprise SystemsSystems

• Customer Relationship Management (CRM)– Focuses on acquiring and retaining profitable customers

via marketing, sales, and services– CRM application integrates all of the primary business

activities in the Porter’s Value Chain.– Tracks all interactions with the customer from prospect

through follow up service and support– Customer centric

Cross Functional Enterprise Cross Functional Enterprise Systems (CRM)Systems (CRM)

Cross Functional Enterprise Cross Functional Enterprise Systems (CRM)Systems (CRM)

Looking from the 4 phases of customer life cycle • Marketing :

– Marketing sends messages to prospect customers, attracting them to buy

• Customer Acquisition :– Selling and buying takes place

• Relationship management :– When prospect customers made order, they become customers who

need to be supported– Supporting and reselling

• Loss/Churn :– Analyze and Categorize customer, win back high value customer

Kroenke, D,M. (2010)Experiencing MIS, 2nd EditionPearson

Cross Functional Enterprise Cross Functional Enterprise Systems (CRM)Systems (CRM)

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

Business benefits of CRM are not guaranteed50 percent of CRM projects did not produce promised results20 percent damaged customer relationships

Reasons for CRM failure•Lack of understanding and preparation•Not solving business process problems first•No participation on part of business stakeholders involved

Cross Functional Enterprise Cross Functional Enterprise Systems (CRM)Systems (CRM)

What is Supply Chain?A supply chain is a system of organizations, people, activities,

information, and resources involved in moving a product or service from supplier to customer.

Supply chain activities transform natural resources, raw materials, and components into a finished product that is delivered to the end customer.

Wikipedia.com

Comprises of all the businesses and individual contributors involved in creating a product from raw materials to finished merchandise

Cross Functional Enterprise Cross Functional Enterprise Systems (SCM)Systems (SCM)

About.com

• Supply Chain Management (SCM)– Focuses on developing the most efficient and effective sourcing and

procurement processes– Fundamentally, supply chain management helps a company

• Get the right products• To the right place• At the right time• In the proper quantity• At an acceptable cost

– The goal of SCM is to efficiently forecast demand, control inventory, enhance relationships with customers, suppliers, distributors, and receive feedback on the status of every link in the supply chain

Cross Functional Enterprise Cross Functional Enterprise Systems (SCM)Systems (SCM)

– Key Challenges

• Lack of demand planning knowledge, tools, and guidelines

• Inaccurate data provided by other information systems

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

• SCM tools are immature, incomplete, and hard to implement

Cross Functional Enterprise Cross Functional Enterprise Systems (SCM)Systems (SCM)

• Enterprise Resource Planning (ERP)– A cross functional enterprise system that integrates the

primary value chain activities with human resources and accounting/infrastructure

– Allows an organization to use a system of integrated applications to manage the business

– Truly enterprise wide– Track customers, process orders, manage inventory, pay

employees, and other accounting functions– SAP and ORACLE are the major vendors

Cross Functional Enterprise Cross Functional Enterprise Systems (ERP)Systems (ERP)

Cross Functional Enterprise Cross Functional Enterprise Systems (ERP)Systems (ERP)

• ERP Characteristics– Provides cross-functional, process

view of organization– Maintains data in centralized

database– Offers large benefit but very

challenging to implement– VERY expensive

Scriptcase.net

Cross Functional Enterprise Cross Functional Enterprise Systems (ERP)Systems (ERP)

Typical Cost of Implementing a New ERP

• The biggest challenge of ERP is Costs and risks• Most common causes of ERP failure

– Under-estimating the complexity of planning, development, training

– Failure to involve affected employees in planning and development

– Trying to do too much too fast

– Insufficient training

– Insufficient data conversion and testing

– Over-reliance on ERP vendor or consultants

Cross Functional Enterprise Cross Functional Enterprise Systems (ERP)Systems (ERP)

Test your knowledgeTest your knowledge

• Describe Business Process Re-engineering• Describe enterprise systems.• Describe CRM• Describe SCM• Describe ERP

Learning OutcomesLearning Outcomes

At the end of this lesson, you should be able to:• Discuss Business Process Re-engineering• Describe Cross Functional Enterprise

Applications

Questions?Questions?