HarrisFall 2006

Electronic Business Systems

O’Brien Chapter Five

ObjectivesCross-functional e-business systems

Provide significant business value to company, its customers & partnersExamplesEnterprise resource planning (ERP)Customer relationship management (CRM)Supply chain management (SCM)Integrated SystemsOnline transaction processingEnterprise collaboration

How Internet & other technologies support business processes

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Case 1: Hilton Hotels CorporationData-Driven Hospitality

OnQ the IT piece of a “customers really matter” strategyGoal to

Build customer loyaltyMore revenue per visit

Customer profiles

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Case Study Questions

1. What are the benefits and drawbacks of the OnQ system at Hilton?

2. What does Hilton have to do to create a competitive advantage through OnQ? Provide some specific examples.

3. Is it possible to have too much information about a customer? Explain.

Major E-Business Applications

EnterpriseCommunicationCoordination &Collaboration

EnterpriseCommunicationCoordination &Collaboration

Electronic BusinessApplications

TelecommunicationsNetworks

ElectronicCommerceElectronicCommerce

Internal BusinessSystems

Internal BusinessSystems

IntranetsExtranetsThe Internet

& other networks

Front End Back End

Cross-functional SystemsCross the boundaries of traditional business functionsIn order to reengineer and improve vital business processes all across the enterprise

New Product Development ProcessNew Product Development Process

Suppliers

Customers

Empl

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Part

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Supply Chain ManagementSourcing - Procurement

Enterprise Resource PlanningInternal Business Processes

Customer Relationship ManagementMarketing – Sales - Service

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Enterprise Application ArchitectureEnterprise Application Architecture

Enterprise Business Systems

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Customer Relationship Management (CRM)

CRM uses technology toCreate a cross-functional enterprise systemThat integrates and automates many of the processes in sales, marketing & customer service that interact with customersCreate a framework of web-enabled software & databases that integrate these processes with the rest of the company’s processes

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CRM Uses IT to Create a CrossCRM Uses IT to Create a Cross--Functional Functional Enterprise SystemEnterprise System

Customer Relationship Management

Marketing andFulfillment Customer

Service andSupport

Retentionand LoyaltyPrograms

Contact andAccount

Management

Sales•Cross-Sell•Up-Sell

Prospect orEmployee

Fax e-Mail

Telephone Web

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CRM applicationsContract and Account Management

Helps sales, marketing & service professionalsCapture & track data about past/planned contacts with customers/prospects

SalesProvides sales reps with software tools & data they need to support & manage sales activitiesCross-selling is trying to sell a customer of one product with a related productUp-selling is trying to sell customer a better product than they are currently seeking

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CRM applications

Marketing and FulfillmentHelp marketing professionals accomplish direct marketing campaigns by tasks such as Qualifying leads for targeted marketing & scheduling & tracking direct marketing mailings

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CRM applicationsCustomer Service and Support

Provides sales reps with software tools & database access to customer database shared by sales & marketing professionsHelps create, assign and manage requests for serviceCall center software routes calls to customer support agents based upon their skills and type of callHelp desk software provides relevant service data & suggestions for resolving problems for customer service reps helping customers with problems

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CRM applications

Retention and Loyalty ProgramsTry to help a company identify, reward, & market to their most loyal and profitable customersData mining tools & analytical softwareCustomer data warehouse

Supports integrated & collaborative relationship Supports integrated & collaborative relationship between a business & itbetween a business & it’’s customerss customers

CRM: The Business Focus

CustomerLife Cycle

CRMFunctionalSolutions

CRMIntegratedSolution

The Internet

Acquire Enhance Retain

Direct Marketing Cross-sell and Up-sell Proactive Service

Sales Force Automation Customer Support

CollaborativeService

SharedCustomer Data

Partner Company Customer

Benefits & Challenges of CRM

CRM BenefitsIdentify and target the best customersCustomization & personalization of products & servicesTrack customer contactsProvide consistent customer experience & superior service/support

CRM failures50% of applications fail to meet expectations20% of the time CRM damaged customer relationshipsLack of understanding & preparation is blamed

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Enterprise Resource Planning (ERP)

Cross-functional enterprise system with an integrated suite of software modules that support the basic internal business processes of a company

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Enterprise Resource Planning

SalesDistribution,OrderManagement

Accountingand Finance

ProductionPlanning

Human Resources

IntegratedLogistics

Customer/Employee

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Quality and EfficiencyDecreased CostsDecision SupportEnterprise Agility

Benefits of ERP

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Costs of implementing a new ERP

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SAP AG’s Software Installation Problems of ERP Integrated Suite into a Retail EnvironmentJo-Ann Stores and Petsmart Blamed Software for Poor Financial PerformanceSobey’s Grocer Had Problems with Number of TransactionsSobey’s is Replacing System

Failures in ERP Do Exist

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Underestimating complexity of planning, development & training needed

Failure to involve affected employees

Trying to do too much too fast

Insufficient training in new work tasks

Failure to do enough data conversion & testing

Over reliance by company on claims of ERP vendors or consultants

Causes of ERP Failures

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Supply Chain Management (SCM)

A cross-functional interenterprise systemTo help support and manage the links between a company’s key business processesAnd those of its suppliers, customers & business partners

Supply Chain Management

Schedule Make Deliver

TransportationPlanning

DemandPlanningDemandPlanning

OrderCommitment

OrderCommitment

AdvanceSchedulingAdvance

Scheduling

ManufacturingPlanning

ManufacturingPlanning

DistributionPlanning

DistributionPlanning

Internetworked Supply Chain ManagementInternetworked Supply Chain Management

SupplyChainLife Cycle

SCMFunctionalProcesses

SCMIntegratedSolution

Commit

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Supply Chain Management

SCM – A top strategic objective for many firmsThe right productsThe right placeThe right timeIn the proper quantityAt an acceptable cost

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Role of SCM

SCM Software Helps Firms Reengineer and SCM Software Helps Firms Reengineer and Integrate The Functional SCM ProcessesIntegrate The Functional SCM Processes

Supply ChainLife Cycle

SCMFunctionalProcesses

SCMIntegratedSolution

Supplier Manufacturer CustomerRetailer

The Internet

CollaborativeFulfillment

SharedMarket Data

Commit Schedule Make Deliver

Strategic Sourcingand Procurement

Forecast and Demand Planning

Customer Order Fulfillment Service

Distribution Network and Warehouse Operations

Transportation and ShipmentManagement

ProductionLogistics

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SCM goalFast, efficient, low-cost network of business relationships or supply chain to get a company’s products from concept to marketA supply chain:

Interrelationships with suppliers, customers, distributors, and other businesses that are needed to design, build and sell a product

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Causes of problems in SCMLack of proper demand-planning knowledge, tools & guidelinesInaccurate or overoptimistic demand forecastsInaccurate production, inventory & other dataLack of adequate collaboration within the company & between partnersSCM software considered immature, incomplete & hard to implement

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SCM

Cross-Functional Integrated Systems

Front OfficeApplications

CRM Application•Customer Service•Field Service•Sales Order•Product Config

Back OfficeApplications

ERP Application•Distribution•Manufacturing•Scheduling•Finance

EnterpriseApplicationIntegration

Enterprise ApplicationCluster

Enterprise ApplicationCluster

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Suppliers

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EAI Software Connects Major eEAI Software Connects Major e--Business ApplicationsBusiness ApplicationsLike CRM and ERPLike CRM and ERP

HarrisFall 2006

Survey of 75 related companies revealed 18 different software packagesLack of integration reduces cost and speed savings that might be realizedUse of webmethods EAI to coordinate processesNew system generated cost savingsOrders for product automatically orders parts

Dell Computer:Dell Computer:Enterprise Application IntegrationEnterprise Application Integration

page 207 (253)page 207 (253)

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How EAI works

Enterprise Application Integration (EAI)EAI connects cross-functional systemsServes as middleware to

Provide data conversionCommunication between systemsAccess to system interfaces