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Chapter 8

Chapter 8. Business Across the Enterprise. Learning Objectives. Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource management, and supply chain management systems: Business processes supported

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Chapter 8

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  1. Chapter 8 Business Across the Enterprise

  2. Learning Objectives Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource management, and supply chain management systems: Business processes supported Customer and business value provided Potential challenges and trends

  3. Learning Objectives Understand the importance of managing at the enterprise level to achieve maximum efficiencies and benefits.

  4. Getting All the Geese Lined Up: Managing at the Enterprise Business Level Customer Relationship Management, Enterprise Resource Planning, and Supply Chain Management all share the same Goal: to get the organization to line up and head in the same direction (like geese).

  5. Section 1 Customer Relationship Management: The Business Focus

  6. I. Introduction Businesses today must be Customer-centric/Customer-focused – Customer, Customer, Customer!

  7. II. What Is CRM? Providing the organization with a single complete view of every customer, and providing the customer with a single complete view of the organization and its extended channels Contact and Account Management – capture and track relevant data about past and planned contacts

  8. II. What Is CRM? Sales – providing software tools and data sources to manage sales activities, and optimize cross-selling and up-selling Cross-selling – selling related products to current customers Up-selling – selling better products than the one currently purchased

  9. II. What Is CRM? Marketing and Fulfillment – automate direct marketing, scheduling, and tracking, and assist in scheduling responses and requests, while capturing relevant information for the marketing database

  10. II. What Is CRM? Customer Service and Support – provide customer service software tools, and real-time access to the customer database Call Center Software – routes calls to customer support agents Help Desk Software – provides assistance for customer service agents having problems with a product/service

  11. II. What Is CRM? Retention and Loyalty Programs – enhancing and optimizing customer retention and loyalty is a major business strategy because: It costs 6 times more to sell a new customer than an existing one Dissatisfied customers will tell 8–10 people about bad experiences A firm can boost sales 85% by increasing customer retention 5% Odds of selling a new customer – 15%; Odds of selling a current customer – 50% If a firm resolves a service problem quickly, 70% of complaining customers will do business with the firm again

  12. Zip Realty: E-Mail and CRM Integration with Open-Source Zimbra What was the problem with the systems used by Zip? What benefit did Zimbra offer that other systems being considered did not? What benefits does the system offer to users? How do the costs of the various systems compare?

  13. III. The Three Phases of CRM Acquire – CRM helps a new customer perceive value of a superior product/service Enhance – CRM supports superior customer service, and cross-selling/up-selling Retain – CRM helps proactively identify and reward the most loyal and profitable customers

  14. Hard Rock Hotel and Casino: Drinks – and CRM – Go Mobile What is the usual problem at a Las Vegas bar? What idea has Hard Rock come up with? What technologies are involved? What other customer services can it provide? What other benefits does it accrue for Hard Rock?

  15. IV. Benefits and Challenges of CRM CRM helps identify and reward the best customers

  16. V. CRM Failures Although over 70% of firms plan to implement CRM, over 50% of CRM projects fail to produce promised results due to: Lack of senior management sponsorship Improper change management Projects take on too much too fast Poor integration between CRM and core business systems Lack of end-user incentives leading to low user adoption rates

  17. Unum Group: The Long Road to CRM What was Unum’s problem? How many systems were originally involved? How many did they get rid of? What is the difference between CRM and CDI? What is the intention of Unum for the future?

  18. VI. Trends in CRM Firms must create tighter linkages with customers while enhancing the customer experience Operational CRM – supports/synchronizes customer interactions Analytical CRM – extracts customer information and predicts customer behavior Collaborative CRM – enables collaboration with customers, suppliers, and business partners Portal-Based CRM – enables access to customer information and CRM tools

  19. Integrated CRM: Hilton’s Welcome Mat Starts on the Web In what ways is Hilton customer-oriented? What is Hilton’s goal? How does Hilton view technology? What is SuiteSelection and how is it customer-oriented?

  20. Section 2 Enterprise Resource Planning: The Business Backbone

  21. I. Introduction ERP is a multifunctional enterprisewide backbone that integrates/automates business processes and information systems II. What is ERP? • A cross-functional software suite supporting basic internal business processes of a firm

  22. Colgate-Palmolive: The Business Value of ERP What were Colgate’s needs? What solutions did SAP provide? What results have occurred with this installation? What impact does this have on business?

  23. III. Benefits and Challenges of ERP Major Business Value from ERP Quality and Efficiency – significant improvements in quality and efficiency of customer service, production, and distribution Decreased Costs – significant reductions in transaction costs, hardware and software, and IT support staff Decision Support – provides cross-functional information that enables better decision making across the enterprise Enterprise Agility – breaks down departmental/functional walls and enables more flexible, adaptive organizational structures

  24. III. Benefits and Challenges of ERP Costs of ERP – if you do not do ERP properly you can kill the firm Causes of ERP Failures #1 cause – underestimating the complexity of planning, development, and training necessary for success Failure to involve affected employees Trying to do too much too fast Overreliance on claims of software vendors/consulting firms

  25. ERP Implementations: When They Fail, They Fail Big How is an “ERP Failure” define? What was the original budget? What was the last cost? If the project was a failure, why did they go ahead with it? What part did the users have in the failure?

  26. Capital One Financial: Success with ERP Systems In the old system, how many people had to sign off on an address change? Which ERP system did they choose? (NOTE: also see the Imperial Sugar case) What cultural change was effected? Why is that important? How are software applications accessed?

  27. IV. Trends in ERP Improvements in Integration and Flexibility – ERP modules have become more flexible and easier to install Extensions to Business Applications – access to intranets/extranets Broader Reach to New Users – use of the Internet, intranets and extranets provides new links to customers, suppliers, and partners Adoption of Internet Technologies –enables all the above

  28. VISA International: Implementing the e-Business Suite What were the problems with VISA’s internal systems? What did the solution do?

  29. Section 3 Supply Chain Management: The Business Network

  30. I. Introduction Successful SCM is based on accurate order processing, JIT inventory management, and timely order fulfillment; this was theoretical 10 years ago, but is now a competitive weapon

  31. II. What is SCM? A cross-functional interenterprise system using IT to support/manage links between key business processes and suppliers, customers, and business partners Electronic Data Interchange (EDI) – an early SCM methodology for exchanging information between partners using standard document message formats, still very popular but being replaced by .xml-based Web services

  32. PC Connection: Learning to Stop, Drop, and Ship What was the problem with PC Connection’s ERP system? What was their solution? How well has it worked? What does the system have to do with customer satisfaction?

  33. Telefonica TSAI: Internet EDI How much of Spain’s EDI traffic does TSAI handle? What service does TSAI offer smaller customers? How does this help these smaller customers?

  34. III. The Role of SCM To optimize the effective/efficient movement of materials between suppliers, customers, and other partners

  35. Imperial Sugar: Supply Chain Management to the Rescue What was Imperial’s problem following the refinery explosion? What software did they use to help? What did this software offer them to help with the problem? Which ERP system failed them? Why did it not work?

  36. IV. Benefits and Challenges of SCM SCM solutions are becoming more complex Benefits: Faster, More Accurate Order Processing Reductions in Inventory Levels Quicker Times to Market Lower Transaction and Materials Costs Strategic Relationships with Suppliers

  37. IV. Benefits and Challenges of SCM Challenges – SCM Failures Caused By: Lack of Knowledge about Demand Planning Inaccurate/Overly Optimistic Demand Forecasts Inaccurate Production, Inventory, and Other Business Data Lack of Adequate Collaboration Among Marketing, Production, and Inventory Management Departments

  38. Emerson Transaction Hub: A Bright Idea That’s Paying Off What problem did Emerson identify? What was the solution to this problem? How was the solution implemented? What percentage of costs was saved by shipping in the same container? How much did Emerson invest in the communications hub? Have they recovered their costs?

  39. Nike Inc.: Failure (and Bouncing Back) with Supply Chain Management How much did Nike’s “speed bump” cost, and in what areas? How does Nike use historical models? What have the benefits of the ERP system been?

  40. V. Trends in SCM 3 Stages to SCM Implementation Improve Internal Supply Chain Processes and Improve Relationships with Suppliers and Customers Use Supply Chain Software, Intranets, and Extranets with Trading Partners Develop and Implement Collaborative SCM Applications

  41. CVS, McKesson, and MPT: Web-Based SCM Integration Why does CVS prefer push to pull promotions? What do both CVS and McKesson achieve through this relationship? What was MPT’s problem? What solutions does i-Supply offer?

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