7-1 McGraw-Hill/Irwin

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1 7-1McGraw-Hill/Irwin

2 7 Chapter Electronic Business Systems Cross-functional Enterprise Systems Functional Business Systems McGraw-Hill/Irwin Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

3 Learning Objectives 1. Identify the following cross-functional enterprise systems, and give examples of how they can provide significant business value to a company: a. Enterprise resource planning (ERP) b. Customer relationship management (CRM) c. Supply chain management (SCM) d. Enterprise application integration (EAI) e. Transaction processing systems (TPS) f. Enterprise collaboration systems (ECS) 7-3

4 Learning Objectives 2. Give examples of how Internet and other information technologies support business processes within the business functions of accounting, finance, human resource management, marketing, and production and operations management. 3. Understand the need for enterprise application integration to improve support of business interactions across multiple e-business applications. 7-4

5 Cross-Functional e-business Systems Cross-functional Systems Cross the boundaries of traditional business functions In order to reengineer and improve vital business processes all across the enterprise. Integration is the key for success. Is the key for unlocking the information and make it available to any user, anywhere, any time. 7-5

6 Cross-Functional e-business Systems Enterprise Application Architecture 7-6

7 Cross-Functional e-business Systems Customer Relationship Management (CRM) CRM uses technology to Create a Cross-Functional e-business system That integrates and automates many of the processes in sales, marketing and customer service that interact with customers Create a framework of web-enabled software and databases that integrate these processes with the rest of the company s processes The customer is always right 7-7

8 7-8 CRM Applications Clusters

9 Cross-Functional e-business Systems CRM applications Contract and Account Management Helps sales, marketing and service professionals Capture and track data about past and planned contacts with customers and prospects Sales Provides sales reps with software tools and data they need to support and manage sales activities Cross-selling is trying to sell a customer of one product with a related product Up-selling is trying to sell customer a better product than they are currently seeking i.e. Bank Sales Rep 7-9

10 Cross-Functional e-business Systems CRM applications Marketing and Fulfillment Help marketing professionals accomplish direct marketing campaigns by tasks such as Qualifying leads for targeted marketing and scheduling and tracking direct marketing mailings 7-10

11 Cross-Functional e-business Systems CRM applications Customer Service and Support Provides sales reps with software tools and database access to customer database shared by sales and marketing professions Helps Customer Services Managers to create, assign and manage requests for service Call center software routes calls to customer support agents based upon their skills and type of call Help desk software provides relevant service data and suggestions for resolving problems for customer service reps helping customers with problems 7-11

12 Cross-Functional e-business Systems CRM applications Retention and Loyalty Programs Try to help a company identify, reward, and market to their most loyal and profitable customers Data mining tools and analytical software Customer data warehouse 7-12

13 Cross-Functional e-business Systems CRM Integrated Solutions 7-13 Analytical CRM uses a customer data warehouse and tools to analyze customer data collected from the firm s sources.

14 Cross-Functional e-business Systems CRM supports customer life cycle 7-14

15 Cross-Functional e-business Systems CRM benefits Identify and target best customers Real-time customization and personalization of products and services Track when a customer contacts a company Provide consistent customer experience and superior service and support SAP, Oracle, Salesforce.com, 7-15

16 Cross-Functional e-business Systems Reasons for CRM failures Lack of understanding and preparation Rely on application to solve a problem without first changing the business processes Business stakeholders not participating and not prepared 7-16

17 Cross-Functional e-business Systems Supply Chain Management (SCM) A cross-functional enterprise system To help support and manage the links between a company s key business processes And those of its suppliers, customers and business partners Example:

18 Cross-Functional e-business Systems Nike s SCM(only for Sneakers) 7-18 This figure illustrates the major entities in Nike s supply chain and the flow of information upstream and downstream to coordinate the activities involved in buying, making, and moving a product. Shown here is a simplified supply chain, with the upstream portion focusing only on the suppliers for sneakers and sneaker soles.

19 Cross-Functional e-business Systems SCM goal Fast, efficient, low-cost network of business relationships or supply chain to get a company s products from concept to market A supply chain: Interrelationships with suppliers, customers, distributors, and other businesses that are needed to design, build and sell a product 7-19

20 Cross-Functional e-business Systems SCM 7-20

21 7-21 Role of SCM

22 Cross-Functional e-business Systems Goals and Objectives of SCM 7-22

23 Cross-Functional e-business Systems Causes of problems in SCM Lack of proper demand-planning knowledge, tools and guidelines Inaccurate or overoptimistic demand forecasts Inaccurate production, inventory, and other data Lack of adequate collaboration within the company and between partners SCM software considered immature, incomplete and hard to implement 7-23

24 Cross-Functional e-business Systems Enterprise Application Integration (EAI) EAI connects cross-functional systems Serves as middleware to Provide data conversion Communication between systems Access to system interfaces 7-24

25 7-25 How EAI works

26 Real World Group Activity 2. One of the challenges associated with application integration on an enterprise level is determining which applications to integrate and which to leave as is. In small groups, Discuss how an organization should approach an integration project. What criteria should be used in determining a candidate application for enterprise integration? 7-26

27 Functional e-business Systems Functional Business Systems A variety of information systems (transaction processing, management information systems, decision support, etc.) That support the business functions of Accounting, finance, marketing, operations management and human resource management 7-27

28 7-28 Examples of functional information systems

29 Functional e-business Systems Marketing Information Systems 7-29

30 Functional e-business Systems Interactive marketing Interactive marketing: A customer-focused marketing process Using the Internet, intranets, and extranets To establish two - way transactions between a business and its customers or potential customers Goal: to profitably attract and keep customers who will become partners with the business in creating, purchasing and improving products and services 7-30

31 Functional e-business Systems Targeted Marketing An advertising and promotion management concept that includes five targeting components 7-31

32 Functional e-business Systems Targeted Marketing Components 7-32 Community customize advertising to appeal to people of specific virtual communities, Arts, Sports Content advertising placed on a variety of selected websites aimed at a specific audience, e-billboards, banners Context advertising placed on web pages that are relevant to the content of a product or service, vocational travel, car rental service Demographic/Psychographic web marketing efforts aimed at specific types or classes or people, middle income, unmarried, college graduate Online Behavior promotion efforts tailored to each visit to a site by an individual, e.g., using cookies files

33 Sales Force Automation Outfit sales force with notebook computers, web browsers and sales contract management software Connect them to marketing websites and company intranet Goal: Chapter 7 Electronic Business Systems Functional e-business Systems Increase personal productivity Speeds up capture and analysis of sales data from the field to marketing managers Gain strategic advantage 7-33

34 Functional e-business Systems Manufacturing Information Systems Support the production/operations function Includes all activities concerned with planning and control of producing goods or services 7-34

35 7-35 Computer-Integrated Manufacturing

36 Functional e-business Systems CIM Objectives Simplify production processes, product designs, and factory organization as a vital foundation to automation and integration Automate production processes and the business functions that support them with computers, machines, and robots Integrate all production and support processes using computer networks, cross-functional business software, and other information technologies 7-36

37 Functional e-business Systems CIM Systems Computer-aided manufacturing (CAM) 7-37

38 Functional e-business Systems CIM Systems 7-38 Computer-aided manufacturing (CAM) - automate the production process Manufacturing execution systems (MES) performance monitoring information systems for factory floor operations, controls five essential components in production process( material, equipment, personal, instruction and specifications) Process Control control ongoing physical processes, petroleum refines, cement plants, steel mils, thermostat, valves, switches. Machine Control controls the actions of machines, weaving machine, other industrial machines

39 Functional e-business Systems Human Resource Management (HRM) Information systems designed to support Planning to meet the personnel needs of the business Development of employees to their full potential Control of all personnel policies and programs 7-39

40 7-40 HRM Systems

41 Functional e-business Systems HRM and the Internet Recruiting employees using the corporate website and commercial recruiting services Posting messages in selected Internet newsgroups Communicating with job applicants via 7-41

42 HRM and Corporate Intranets Process common HRM applications Allow HRM department to provide around-the-clock services Disseminate valuable information faster than through previous company channels Collect information from employees online Allow managers and other employees to perform HRM tasks with little intervention by the HRM department Training tool Chapter 7 Electronic Business Systems Functional e-business Systems 7-42

43 Functional e-business Systems Employee Self-Service (ESS) Intranet applications that allow employees to View benefits Enter travel and expense reports Verify employment and salary information Update their personal information Enter data that has a time constraint to it 7-43

44 Functional e-business Systems Accounting Information Systems Record and report the flow of funds through an organization Produce financial statements Forecasts of future conditions 7-44

45 7-45 Accounting Information Systems

46 Functional e-business Systems Six essential Accounting Information Systems Order Processing Captures and processes customer orders and produces data for inventory control and accounts receivable Inventory Control Processes data reflecting changes in inventory and provides shipping and reorder information Accounts Receivable Records amounts owed by customers and produces customer invoices, monthly customer statements, and credit management reports 7-46

47 Six essential Accounting Information Systems Accounts Payable Records purchases from, amounts owed to, and payments to suppliers, and produces cash management reports Payroll Records employee work and compensation data and produces paychecks and other payroll documents and reports General Ledger Consolidates data from other accounting systems and produces the periodic financial statements and reports of the business 7-47

48 Functional e-business Systems Financial Management Systems Support business managers and professionals in decisions concerning The financing of a business The allocation and control of financial resources within a business 7-48

49 7-49 Financial Management System Examples

50 Analyzing Enterprise Application Vendors With a group of three students, use the Web to research and evaluate the products of two vendors of enterprise applications software. You could compare, for example, the SAP and Oracle enterprise systems, the supply chain management systems from i2 and SAP, or the customer relationship management systems of Oracle s and Salesforce.com. Use what you have learned from these companies Web sites to compare the software packages you have selected in terms of business functions supported, technology platforms, cost, and ease of use. Which vendor would you select? Why? Would you select the same vendor for a small business as well as a large one Conduct your search on the Internet for the Web sites listed below

51 Case Study Questions 1. What is the business value of SCM systems for Brunswick and Whirlpool? 2. Does the business value of SCM depend upon what type of business a company is in? Explain. 3. How does Brunswick s approach to SCM differ from that of Whirlpool s? Is one approach superior to all others? Why or why not? 7-51