Information Systems for Business Integration: EDI, SCM, CRM SystemsLEARNING GOALSBusiness Integration?Supply Chain Management - SCMVertical Integration with suppliersSupply ChainSupply Chain Management SCMSCM ProcessEDI: SCM TechnologySlide 10SCM information systemCustomer Relationship Management - CRMVertical Integration with customersCRM systemsSystems for Vertical IntegrationCRM softwareCRM Module FunctionsCRM Module Functions (continued)Summary Questions1Information Systems forBusiness Integration: EDI, SCM, CRM SystemsBUS3500 - Abdou Illia, Spring 2009(April 2, 2009)2LEARNING GOALSDiscuss Supply Chain Management systemsDiscuss Customer Relationship Management systems.3Business Integration?SalesDepartmentLogisticsDepartmentProductionDepartmentHorizontalIntegrationVerticalIntegrationSuppliersCustomers4Supply Chain Management - SCM5Vertical Integration with suppliersPossible consequences of bad vertical integration with suppliers:Raw material shortageReceiving more raw material than neededEtc.SuppliersCompany’s Internal processesLack of good integrationSalesDepartmentProcess1Process2DeliveryDepartmentProcess1Process2ProductionDepartmentProcess1Process2Good integration implies good Supply Chain Management6Supply ChainSupply Chain includes parties involved in the procurement of product or raw materialUpstream partiesDownstream parties7Supply Chain Management SCMSCM implies the management of information flow between a company and upstream and downstream parties of the supply chainWhich 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 ProcessStages of SCM (SC Council’s Reference Model):1) Planning: develop and implement processes that attempt to forecast demand for products and servicesGoal: Balance demand with supply of raw material2) Sourcing: determine who should supply the items requiredGoal: 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 TechnologyElectronic Data Interchange (EDI):A network technology that allows the transfer and processing of business documents (usually orders) between a company and its suppliersPrivate network connections or Value Added networks specially designed for EDI SuppliersCompany’s Internal processesSalesDepartmentProcess1Process2DeliveryDepartmentProcess1Process2ProductionDepartmentProcess1Process2EDI SystemValue Added Network (VAN)orPrivate network connectionEDI Sys.10EDI: SCM TechnologyEDI documents must be formatted according to specific standardsANSI X12 – used in North AmericaEDIFACT – international, but widely used in EuropeAdvantages:Eliminates paperworkReduces errorsSpeeds supply processDisadvantages:Provides connection only between two companiesLimits freedom of comparing prices.11SCM information systemPart of extended ERP componentsCould be bought separatelyCompany’s Internal processesSalesDepartmentProcess1Process2DeliveryDepartmentProcess1Process2ProductionDepartmentProcess1Process2SCM SystemNetwork connectionSuppliersSCM Sys.- Forecast demand- Handle purchase of supply- Manage storage + shippingThree main functions12Customer Relationship Management - CRM13Vertical Integration with customersPossible consequences of bad vertical integration with customers:Out of productPoor customer supportEtc.CustomersLack of good integrationCompany’s Internal processesSalesDepartmentProcess1Process2DeliveryDepartmentProcess1Process2ProductionDepartmentProcess1Process214CRM systemsCRM 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 IntegrationGoal of CRM is to increase sales and repeat business by learning the customerDetermine the customer’s needs and preferencesDetermine the customer’s satisfaction with serviceDetermine 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 Value16CRM softwareCRM software modules includePersonalizationMarketing automationSales force automationService and support17CRM Module FunctionsPersonalizationOne-to-one marketing through personalized products and servicesMarketing automationDetermine market segmentsPlanning and implementing campaignsAnalyzing resultsSegment customers DemographicsPast purchasesPreferred method of shopping18CRM Module Functions (continued)Sales force automation Managing contacts and leads by storing customers’ basic demographic dataProvide to-do lists and calendarsRecognize early customer trendsForecasts of future salesService and support After-sales supportComplaint resolutionReturns19Summary QuestionsBook Notes1) Is the information flow between a company and its retailers part of its supply chain?62) What are the potential benefit of SCM systems?74) What is EDI? What is the EDI message standard used in the U.S.? In Europe?95) Are SCM systems part of ERP systems? Are SCM systems sold as separate system from ERP systems? 115) What are the potential benefit of CRM systems?145) What is the main goal of using CRM systems? What is meant by
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