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Chapter 9

Chapter 9. Building Organizational Partnerships Using Enterprise Information Systems. We have this beautiful, elegant, high-I.Q. part of our business that we have been working hard on for many years.” Jeff Bezos, Founder and CEO of Amazon.com. External & Internal Focus.

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Chapter 9

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  1. Chapter 9 Building Organizational Partnerships Using Enterprise Information Systems We have this beautiful, elegant, high-I.Q. part of our business that we have been working hard on for many years.” Jeff Bezos, Founder and CEO of Amazon.com

  2. External & Internal Focus • Interorganizational systems – External focus • Streamlines data exchange between organizations • Information Flows • Upstream data flow—data received from another company • Downstream data flow—data produced by a company & sent to another organization • Intraorganizational systems – Internally focused • Streamlines data exchange within an organization

  3. Legacy System Approach • Problem: Information systems growing over time • Lack of integration • Different computing platforms • Difficult to integrate • Data must be reentered from one system to another • Same pieces of data stored in several versions

  4. Enterprise System Approach

  5. Enterprise Systems • Enterprise Resource Planning Software • Supply Chain Management Software • Customer Relationship Management Software • Advantages of packaged enterprise applications • Written by third-party vendors • Based upon best practices • Business Process Reengineering • Useful for standardized, repetitive tasks • Cost effective • Disadvantages • Must adapt business processes to software • Use the plain vanilla package

  6. Enterprise Resource Planning (ERP) • Data warehouse • Large, centralized data repository • Single place for data storage and access

  7. Core and Extended ERP Components • Core components—support primary internal activities • Extended components—support primary external activities

  8. Supply Chain Management • Upstream activities • Improvement of business processes spanning organizational boundaries • Adopted by large organizations • Collaboration with suppliers (supply network) • Ability to compete more effectively in the market place • Cost reduction • Increased responsiveness to market demands • Focus on upstream information flows • Acceleration of product development • Reduction of costs of raw materials procurement

  9. Customer Relationship Management • Concentrates on the downstream information flow • To attract potential customers • Creation of customer loyalty • Unified face to customers

  10. Emerging SCM Trends • Enterprise portals—B2B marketplace • Access point to proprietary information • Productivity gains and cost savings • Distribution portals • Products from single supplier to many buyers • Procurement portals • Procurement of products between single buyer and multiple suppliers

  11. Trading Exchanges • Small companies don’t have funds for SCM • Trading exchanges provide a solution • Operated by third-party vendors • Revenue model • Commission for each transaction • Usage and association fees • Advertising • Many buyers and many sellers can come together • Popular trading exchanges: • www.scrapsite.com (steel) • www.paperspace.com (paper) • www.sciquest.com (medical equipment)

  12. Key Technologies for Enhancing SCM • Extensible Markup Language (XML) • Specifies rules for tagging elements • Specifies how information should be interpreted and used • Customizable • XML variations • Extensible Business Reporting Language (XBRL) • Publishing of financial information

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