session#8; organizational is

1 N.Karami, MIS-Spring 2012

Management Information Systems

Organizational Information Systems

Graduate School of

Management & Economics

Organizational

Information Systems




Graduate School of


Learning Objectives

• Describe enterprise resource planning

systems.

• Describe supply chain management systems.

• Describe customer relationship management

systems.

• Discuss electronic data interchange and

extranets.




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Chapter Opening Case

Toyota

Production

System

http://www.toyota.com/





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Toyota Production System (continued)

Electronic dashboard showing

status of assembly line






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Toyota Production System (continued)

Toyota’s

proprietary

Assembly

Line Control

System (ALCS)

software






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Enterprise Application Systems

Enterprise Resourcing Planning Systems

(ERP)

Supply Chain Management Systems

(SCM)

Customer Relationship Management

Systems (CRM)




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0

2

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8

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12

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1997

1998

1999

2000

2001

2002E

2003E

2004E

2005E

US

D B

illi

on

s

ERP

CRM

SCM

Total

Global EAS Sales




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• ERP is a cross-functional enterprise backbone that

integrates and automates processes within: Manufacturing & Production

Sales & Marketing

Distribution

Finance & Accounting

Human resources

• 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

• Enterprise software’s vendors: SAP, Oracle, SSA Global

Enterprise Resource Planning

Systems (ERP)




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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

How Enterprise Systems Work




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SAP Modules

http://www.sap.com/

http://www.sap.com/




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Costs of Implementing a New ERP




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Causes of ERP Failures

• 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




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Supply Chain Management

Systems (SCM)

refers to the flow of materials,

information, money, and services from raw

material suppliers, through factories and

warehouses, to the end customers.

is the

function of planning, organizing and optimizing

the supply chain’s activities




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Supply Chain




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Generic Supply Chain




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Problems Along the Supply

Chain• Poor customer service

• Poor quality product

• High inventory costs

• Loss of revenues

• New technologies




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Problems Along the Supply Chain (continued)

• Problems stem mainly from two sources:

– Uncertainties due to demand forecast, delivery

times, quality problems in materials and parts that

can create production delays;

– The need to coordinate several activities, internal

units and business partners.

• Bullwhip effect refers to erratic shifts in

orders up and down the supply chain.




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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.”




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Goals of SCM

• The goal of SCM is to efficiently

– Forecast demand

– Control inventory

– Enhance relationships with customers, suppliers,

distributors, and others

– Receive feedback on the status of every link in the

supply chain




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SCM Applications

• Supply chain planning systems

• Model existing supply chain

• Demand planning

• Optimize sourcing, manufacturing plans

• Establish inventory levels

• Identifying transportation modes

• Supply chain execution systems

• Manage flow of products through distribution centers and

warehouses

• Software’s vendors: Manugistics, i2 Technologies




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Global Supply Chains &

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




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Customer Relationship

Management• 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

• Help keep profitable customers and maximizes lifetime

revenue from them.




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CRM = Customer Relationship Management

Attracting, developing and maintaining

successful customer relationships over time

A strategy for identifying, satisfying, retaining

and maximizing the value of a company’s

best customers

All processes and technologies that

organizations use to identify, select, acquire,

develop, retain, and better serve customers

CRM Definition




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Four Levels of CRM

• Strategic CRM

– A top-down perspective on CRM which views CRM as a core customer-centric business strategy that aims at winning and keeping profitable customers

• Operational CRM– Customer-facing applications that integrate the front, back and mobile

offices, including sales-force automation, enterprise marketing automation, and customer service and support

• Analytical CRM– Applications that analyze customer data generated by operational

tools for the purpose of business performance management

• Collaborative/ Communicational/Interactive CRM– Collaborative services that facilitate interactions between customers

and businesses

– Help to establish the lifetime value of customers beyond the transaction by creating a partnering relationship




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Three Areas in Operational CRM




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Customer Touch Points

Telephone

Conventional mailHelp desk

Web site

E-mail

Store




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Software as a Service for CRM

• Software’s Vendors: Siebel Systems, PeopleSoft, SAP,

Salesforce.com

http://www.salesforce.com/

http://www.salesforce.com/




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• Analyze customer data output from operational CRM

applications

• Based on data warehouses populated by operational

CRM systems and customer touch points

• Customer lifetime value (CLTV)

• Analytical CRM is inextricably tied to a Data

Warehouse architecture, and use analytical

applications to leverage optimized functionality for

analysis and reporting

Analytical CRM




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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.




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CRM Failures

• Business benefits of CRM are not guaranteed

– 50 percent of CRM projects did not produce promised

results

– 20 percent damaged customer relationships

• Reasons for failure

– Lack of understanding and preparation

– Not solving business process problems first

– No participation on part of business stakeholders

involved




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Putting it all together

The relationships among SCM, ERP, and CRM




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Electronic Data Interchange (EDI)

& Extranets

is a

communication standard that enables

business partners to exchange routine

documents, such as purchase orders,

electronically.

link business partners to one

another over the Internet by providing

access to certain areas of each other’s

corporate intranets.




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EDI Benefits

• Minimize data entry errors

• Length of messages are shorter

• Messages are secured

• Reduces cycle time

• Increases productivity

• Enhances customer service

• Minimizes paper usage and storage




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The Structure of an Extranet




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Types of Extranets

A company and its dealers, customers or

suppliers

An industry’s extranet

Joint ventures and other business partnerships

http://www.anx.com/

http://www.anx.com/

http://www.fedex.com/

http://www.fedex.com/

http://www.lendingtree.com/

http://www.lendingtree.com/

session#8; organizational is

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