Enterprise Resource Planning and Customer Relationship Management (ERP and CRM)

1. Enterprise Resource Planning and Customer Relationship Management (ERP and CRM) Minder Chen, Ph.D. Professor of MIS Martin V. Smith School of Business and Economics CSU Channel Islands Minder.Chen@CSUCI.EDU

2. ERP Market ERP: Enterprise Resource Planning http://www.forbes.com/sites/louiscolumbus/2013/05/12/2013-erp-market-share-update-sap-solidifies-market-leadership/

3. Major Global Software Firms Source: http://www.forbes.com/global2000/list/ under software and programming

4. ERP Systems • Major investment • Cost between $50,000 and $100,000,000+ • Variety of business justifications • Replace legacy systems • Reduce cycle times • Lower operating costs • Enables better management decisions • Real-time • On-line

5. What is ERP? • Enterprise-wide application packages • Manage business processes/functions via various modules • Supply chain, receiving, inventory, customer orders, production planning, shipping, accounting, HR • Allow automation and integration of business processes • Enable data and information sharing • Incorporate and implement “best practices”

6. Evolution of ERP • 1960s: software packages with inventory control • 1970s: MRP systems • Production schedule with materials management • 1980s: MRPII systems • Adds financial accounting system • 1990s: MRPII • Integrated systems for manufacturing execution • Late 1990s: ERP • Integrated manufacturing with supply chain • Late 1990s and 200X: SCM & CRM

7. Major Vendors • SAP • SAP Business One http://en.wikipedia.org/wiki/SAP_Business_One • http://www.sap.com/solutions/business-suite/erp/demos/index.epx • Oracle e-Business Suite • PeopleSoft • Microsoft • Microsoft Dynamics http://www.microsoft.com/dynamics/default.mspx • http://www.microsoft.com/dynamics/product/experience.mspx#EWC • http://www.microsoft.com/dynamics/ax/product/demos.mspx http://en.wikipedia.org/wiki/List_of_ERP_vendors

8. Other Vendors (II) • QAD: Providing innovative enterprise software and services for global manufacturers • http://www.qad.com/erp/ • Salesforce.com for CRM • Software as a service (SaaS)  Cloud computing • http://www.salesforce.com • NetSuite • http://www.netsuite.com/portal/home.shtml • http://www.netsuite.com/portal/resource/edemo_main.shtml • QuickBooks • http://quickbooks.intuit.com/index.jsp • Microsoft Accounting Express • http://office.microsoft.com/en-us/accountingexpress/default.aspx

9. Anatomy of an Enterprise System Harvard Business Review article: "Putting the enterprise into the Enterprise System" by Thomas H. Davenport

10. Integrated Systems Approach • Common set of applications/modules • Overcomes inefficiencies of independent systems • Integrated data supports multiple business functions • Limit your customization • Easier upgrades • Consider reengineering business processes according to ERP package’s underlying business model (reference model / blueprint) • Better alignment, best practices, less customization

11. / Web-enabled architecture

12. R Procurement Tasks Materials Planning External Procurement Internal Procurement Production Purchasing Master Data Invoice Verification Inventory Management Material Goods Batches Issue Vendors G/L accounts Invoice Receipt Storage bins Transfer Goods Receipt Posting Internal and External Internal and External Sales and Accounting Accounting Distribution

13. ERP: Business Processes Overview Financial Controlling Financial Controlling Cost Controlling Cost Controlling Sales Sales Customer Inventory Initial Customer Inventory Initial Customer Customer Sales order Delivery Invoicing Delivery Invoicing order Sourcing Contact order Sourcing Contact payment payment Production Production Prod. Prod. Planned Prod. Planned Prod. MPS SOP MPS SOP MRP MRP control control order order order order Purchasing Purchasing Purchase Purchase Vendor Goods Invoice Purch . Vendor Vendor Goods Invoice Purch . Vendor requisite. requisite. order payment order payment selection issue verificat. selection issue verificat. Logistics Controlling Logistics Controlling Sales, Production, Purch., Warehouse Mgmt SOP: Sales & Operations Planning; MPS: Master Production Schedule http://134.198.33.115/sap/1000.htm

14. MRP Information Flow Outstanding Purchase Orders Purchase Requisition Demand Management (MPS) MRP Stock (Inventory) Sales Planning & Forecasting Bill of Materials (BOM) LT: Lead Time

15. SAP R/3 Typical Business Blueprint R/3 Logistics Process Flow

16. Commercial Application Package’s Implementation Strategy • Commercial application package – a software application that can be purchased and customized to meet the business requirements of a large number of organizations or a specific industry. A synonym is commercial off-the-shelf (COTS) system. • Request for proposal (RFP) – a formal document that communicates business, technical, and support requirements for an application software package to vendors that may wish to compete for the sale of that application package and services. • Request for quotation (RFQ) – a formal document that communicates business, technical, and support requirements for an application software package to a single vendor that has been determined as being able to supply that application package and services. • Gap analysis – a comparison of business and technical requirements for a commercial application package against the capabilities and features of a specific commercial application package for the purpose of defining the requirements that cannot be met. Source: Preparing and Evaluating A Request for Proposals: How to Select a Vendor (link)

17. Gap Analysis and Strategies to Reduce Gaps Assess and explore ERP Packages’ functionality & its underlying Reference Model Develop a custom-built solution Big gap Gap Analysis Consider costs of customization and future upgrades Select the best fit ERP package Small gap Customize the package Define business requirements and the firm’s processes / procedures / business rules Conduct detailed gap analysis & Determine ways to reduce the gap Redesign the firm’s business processes AS-IS vs.TO-BE Assume the selected ERP package has the best practices

18. The Flow of Your Implementation Process This process assumes that a software package has been selected. Define project scope & organization Define & build technical infrastructures Install software Tune system performance Perform fit/gap analysis Build and test prototypes Convert data Develop interfaces Train project team Support system after conversion Perform testing Go live Evolve system Create end-user procedures documentation & training

19. Why Do ERP Projects Often Fail? • Under-estimate the complexity of planning, development, and training for ERP implementation. • Fail to involve affected employees in planning and implementation • Try to do too much too fast • Provide insufficient training for ERP users • Do not conduct sufficient data conversation and testing • Rely too much on ERP vendors or consultants (you cannot outsource your problems away) http://ramialsindi.wordpress.com/2011/10/24/week-10-enterprise-resource-planning/

20. Implementation Success Factors • Understand your business objectives • Assemble a dedicated project team with the appropriate skills • Recognize and capitalize on re-engineering opportunities • Leverage the experience of others and follow a proven formula • Understand the system’s capabilities • Explore new technology solutions • Execute your implementation in phases • Customize by prototyping • Maintain a close relationship with your vendors

21. ERP Benefits Framework Source: Shari Shang & Peter Seddon, Assessing and managing the benefits of enterprise systems: the business manager’s Perspective, Info Systems Journal, (2002) 12, pp. 271–299 at http://cba.uah.edu/guptaj/m680/erpbenefits.pdf

22. Benefits Achieved by Organizations Improved financial management Faster, more accurate transactions Better managerial decision making Improved inventory & asset mgt Ease of expansion & increased flexibility Improved logistics Cycle time reduction Improved customer service Headcount reduction Increased revenue

23. Maximizing Benefits from Enterprise Systems Operational Benefits Managerial Benefits Strategic Benefits IT infrastructure Benefits Organizational Benefits Evolutionary Spiral of PEAS & Process Change and Management Initiatives Distinctive Characteristics of Packaged Enterprise Application Software (PEAS) Another cycle of ES Exploration, Redesign and Use Net Benefits from ES Use Packaged Software Features Achieving Fit between PEAS and Business needs Assess and Explore PEAS Changes to PEAS Agree on Redesigned Processes Evolving Functionality Changes to Process Assess and Explore Processes Sophisticated Knowledge Initiatives to Manage the Distinctive Characteristics of the PEA Software Monitor Changing Conditions & Reevaluate Benefits Application Infrastructure Use ES to Generate Benefits Source: Shari Shang and Peter Seddon

24. When, in the years after "go live", are net benefits realized? One of the most consistent findings reported in the literature is that there is a dip in organizational performance in the six to twelve months after "go live". Under Promise and over Deliver Transformation Continuous Improvement Implement Design Stabilization Low employee morale due to extra work, mismatched processes, data errors and change pressures Source: Ross & Vitale (1998) • A possible explanation for the above pattern is organizational learning, the time taken for people in the organization to really understand their role in the new processes.

25. Why Do Problems Occur after "Go Live"? Factors that might explain why problems occur after go live (packages or websites): • Poor project management including poor decisions regarding requirements and design specifications during the implementation project • Inappropriate software choice and configuration, resulting in poor fit • Lack of business and technical knowledge on part of implementation team and users • Lack of testing before “go live” • Poor change management The star witness  HealthCare.Gov went live Oct. 1, 2013

26. Customer Relationship Management (CRM) “The purpose of a business is to get and keep customers. ”* - Peter Drucker Watch https://www.salesforce.com/form/conf/crm-sales-indexpage-demo.jsp *Source: http://www.forbes.com/sites/petercohan/2012/10/01/four-ways-start-ups-can-get-and-keep-customers/print/

27. Customer Relationship Management (CRM) The measures an organization takes to • Identify, • Select, • Acquire, • Work with, • Retain • Grow its customers Companies spend two to 20 times as much finding new customers as they do keeping old ones.

28. Customer Relationship in Business Model Canvas Source: Steve Blank, The Startup Owners Manual. http://www.businessmodelgeneration.com/canvas

29. Objectives of CRM • The right offer (products or services) • To the right person (target marketing) • At the right time (spacing outbound calls) • Through the right channel (direct vs. channel) • Via appropriate media (phone, email, Web)

30. Customer Management Activities Touch Points Moments of Truth (MOT)

31. Highest Level Business Flow Source: Oracle. http://barnraisersllc.com/2012/06/21-experts-define-crm-words-pictures/

32. Get, Keep, and Grow Customers Source: Steve Blank, The Startup Owners Manual.

33. Complexity of CRM /service Source: http://barnraisersllc.com/2012/06/21-experts-define-crm-words-pictures/

34. CRM Architecture Collaborative CRM Operational CRM Analytical CRM ODS: Operational Data Stores

35. An Open Source CRM Solution Source: http://www.sugarforge.org/screenshots/screenshot.php/6/1861/fullsize/Accounts.jpg

36. http://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpghttp://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpg

37. Salesforce.Com Example Convert leads into customers Update deal information, track opportunity milestones, and record all opportunity-related interactions. Manage customer relationships Acquire deep knowledge of every account, facilitate collaboration, and build and maintain strong, lasting customer relationships. Manage the follow-up process Log calls, send emails, and update the status of your leads so that you never miss an opportunity. Capture leads from your Web site Prospects fill out a Web form, which creates a lead in Salesforce that is routed to your sales team. People click on your ad When people search on Google, your ad is displayed and traffic is driven to your site. Advertise your business on Google Take five minutes to write your ad and select a couple keywords—even target your ad locally.

38. Close More Deals Close deals faster by providing a single place for updating deal information, tracking opportunity milestones, and recording interactions. Easily analyze your sales pipeline so you can quickly identify and eliminate any bottlenecks in the sales cycle. Top 10 Deals Month-to-Date Trending Closed Business by Month Top Sales Reps Sales Marketing Open Opportunities Presentation Proposal Negotiation Won Yes No You can monitor your opportunities reports and dashboards to keep track of your top deals and prioritize your time. New Customers Support Customize Salesforce to fit your internal sales methodologies and processes, making it easier to monitor your sales pipeline. Salesforce gives your entire company a 360-degree view of your customers and facilitates collaboration across your organization, helping you build strong, lasting customer relationships. Keep an archive of your dead opportunities. Use email marketing and call downs to re-market to your archived opportunities.

39. E-Business Integration Imperatives Internet / Virtual Private Network SouthWest.com B2C Trading Partners Suppliers Distributors Business Partners Consumers B2B Integration Dollars.com REQUIREMENTS Standards based integration Configurable across applications Business process oriented Loosely coupled Supports an incremental approach Scaleable, available, secure, manageable EAI Heterogeneous Platforms ERP Application Packages Proprietary Applications Legacy Applications

40. ERP-CRM-SCM Implementation Software • Package (proprietary or open source) • Hosting Solution (SaaS) • Custom-built Development Teams/Staffing • In-house staff • Outsourcing firms: • Systems integrator/IT consulting firm (onsite vs. offsite) • Offshoring: SI firms outside US (e.g., Tata Consultancy Services, Wipro, Infosys) • BPO (Business Process Outsourcing) vs. ITO

41. Backup Slides

42. A Taxonomy for System Development Methodologies & Strategies

43. Sucessive Platforms for Enterprise Applications Source: IDC, at http://resources.idgenterprise.com/original/AST-0104779_IDC_SAP_and_the_transition_to_the_3rd_platform_for_enterprise_applicatio_.pdf

44. http://www.flickr.com/photos/softwareinsider/10670994216/sizes/o/in/photostream/http://www.flickr.com/photos/softwareinsider/10670994216/sizes/o/in/photostream/

45. Commercial Application Package Implementation Strategy

47. Social Media CRM • "Companies have departments dedicated to surfing the Internet and making sure their brands are protected," says Sherry. • Many firms have separate Twitter handles for help, such as @ComcastCares, @DeltaAssist, and @Zappos_Service. AT&T invites consumers to use Facebook and Twitter to reach the company, calling the service "social media customer care."

48. Customer Management Activities