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EIU BUS 3500 - Information Systems for Business Integration

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11Information Systems forBusiness Integration: EDI, SCM, CRM SystemsBUS3500 - Abdou Illia, Spring 2009(April 2, 2009)2LEARNING GOALS Discuss Supply Chain Management systems Discuss Customer Relationship Management systems.3Business Integration?SalesDepartmentLogisticsDepartmentProductionDepartmentHorizontalIntegrationVerticalIntegrationSuppliersCustomers24Supply Chain Management - SCM5Vertical Integration with suppliers Possible consequences of bad vertical integration with suppliers: Raw material shortage Receiving more raw material than needed Etc.SuppliersCompany’s Internal processesLack of good integrationSalesDepartmentProcess1Process2DeliveryDepartmentProcess1Process2ProductionDepartmentProcess1Process2 Good integration implies good Supply Chain Management6Supply Chain Supply Chain includes parties involved in the procurement of product or raw material Upstream parties Downstream parties37Supply Chain Management SCM SCM implies the management of information flow between a company and upstream and downstream parties of the supply chain Which of the following is NOT a potential benefit of SCM?a) It helps avoid shortage of raw materialb) It could shorten the time for delivering finished products to distributorsc) It could help organizations better forecast their production of goods and servicesd) It could help organizations better forecast the needs of their distributorse) None of the above8SCM Process Stages of SCM (SC Council’s Reference Model):1) Planning: develop and implement processes that attempt to forecast demand for products and services Goal: Balance demand with supply of raw material2) Sourcing: determine who should supply the items required Goal: Be supplied on time, within budget3) Production: make the product1) Schedule production2) Ensure raw materials are on hand when needed4) Product delivery (logistics) 1) Everything from receiving a customer inquiry to invoicing2) Warehouse management is one very important factor5) Returns: managing returns of raw materials as well as finished goods9EDI: SCM Technology Electronic Data Interchange (EDI): A network technology that allows the transfer and processing of business documents (usually orders) between a company and its suppliers Private network connections or Value Added networks specially designed for EDI SuppliersCompany’s Internal processesSalesDepartmentProcess1Process2DeliveryDepartmentProcess1Process2ProductionDepartmentProcess1Process2EDI SystemValue Added Network (VAN)orPrivate network connectionEDI Sys.410EDI: SCM Technology EDI documents must be formatted according to specific standards ANSI X12 – used in North America EDIFACT – international, but widely used in Europe Advantages: Eliminates paperwork Reduces errors Speeds supply process Disadvantages: Provides connection only between two companies Limits freedom of comparing prices.11SCM information system Part of extended ERP components Could be bought separatelyCompany’s Internal processesSalesDepartmentProcess1Process2DeliveryDepartmentProcess1Process2ProductionDepartmentProcess1Process2SCM SystemNetwork connectionSuppliersSCM Sys.-Forecast demand- Handle purchase of supply- Manage storage + shippingThree main functions12Customer Relationship Management - CRM513Vertical Integration with customers Possible consequences of bad vertical integration with customers: Out of product Poor customer support Etc.CustomersLack of good integrationCompany’s Internal processesSalesDepartmentProcess1Process2DeliveryDepartmentProcess1Process2ProductionDepartmentProcess1Process214CRM systems CRM systems are systems that can help manage all aspects of organizations’relations with their customers.  Which of the following is NOT a potential benefit of CRM systems?a) Provide better customer serviceb) Make call centers more efficientc) Simplify marketing and sales processesd) Get a better knowledge of customers needse) None of the above15Systems for Vertical Integration Goal of CRM is to increase sales and repeat business by learning the customer Determine the customer’s needs and preferences Determine the customer’s satisfaction with service Determine which customers are in the magic 20 percent (or have the potential to become part of it) Recency, Frequency, Monetary value (RFM) at heart of CRM systems. CRM helps in determining: How recently a customer purchased items (Recency) How frequently a customer purchased items (Frequency) How much a customer spends on each purchase (Monetary Value616CRM software CRM software modules include Personalization Marketing automation Sales force automation Service and support17CRM Module Functions Personalization One-to-one marketing through personalized products and services Marketing automation Determine market segments Planning and implementing campaigns Analyzing results Segment customers  Demographics Past purchases Preferred method of shopping18CRM Module Functions (continued) Sales force automation  Managing contacts and leads by storing customers’ basic demographic data Provide to-do lists and calendars Recognize early customer trends Forecasts of future sales Service and support  After-sales support Complaint resolution Returns719Summary Questions145) What are the potential benefit of CRM systems?115) Are SCM systems part of ERP systems? Are SCM systems sold as separate system from ERP systems? 155) What is the main goal of using CRM systems? What is meant by RFM?94) What is EDI? What is the EDI message standard used in the U.S.? In Europe?72) What are the potential benefit of SCM systems?61) Is the information flow between a company and its retailers part of its supply


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