ITM 309 Spring 2013 Exam Three Topics Review Outline 4 24 13 Enterprise Applications SCM CRM and ERP Chapter 8 Dell Case and Class Discussion Dell one of the largest direct PC manufacturers less inventory and faster deliveries than its competitors Dell though they could customize every order for every customer but they cant so then offered preconfigured models that cant be changed Retailers recommend specific models to customers so the channel cannot be bypassed Dell skips the retailer in value chain because it is direct Business Models Conceptual framework that expresses the underlying economic logic and system that prove how a business can deliver value to customers at an appropriate cost and make money Specifies value products services prices organization operation all essential components that fit into a complete system BUSINESS MODEL KEY QUESTIONS SCM Definition and Activities SCM definition involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability Visibility the ability to view all areas up and down the supply chain in real time chain Planning system uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory Execution system automates the different activities of the supply Bullwhip effect occurs when distorted product demand information ripples from one partner to the next throughout the supply chain SCM Benefits and Challenges Benefits Companies can respond faster and more effectively to consumer demand through supply chain enhances Demand planning system generates demand forecasts using statistical tools and forecasting techniques so companies can respond faster and more effectively to consumer demands through supply chain enhancements Supply chain metrics back order inventory cycle time customer cycle time inventory turnover Challenges Cost an SCM system can cost millions of dollars for the software and millions more for help implementing the system Complexity the move towards globalization is increasing complexity in the supply chain Future of SCM Collaborative demand planning Collaborative engineering Selling chain management Supply chain event management SCEM CRM Definition and Benefits CRM definition involves managing all aspects of a customer s relationship with an organization to increase customer loyalty and retention and an organization s profitability Benefits Organizations can find their most valuable customers through RFM Recency Frequency and Monetary value Identify an target their best customers to make them lifelong Real time customization and personalization based on customer needs Keep track of when customer contacts company Can enable company to provide consistent customer experience along all contact points Evolution of CRM Phases Reporting identify their customers across other applications Analysis segment their customers into categories Predicting making predictions regarding customer behavior Operational and Analytical CRM Operations supports traditional transactional processing for day to day front office customer facing areas sales mrkt service operations or systems that deal directly with the customers DAY TO DAY Front office Analytical Supports back office operations and strategic analysis and includes all systems that do not deal directly with the customers website personalization data mining to insight in their behavior quickly Operational CRM Technologies Marketing list generation campaign mgmt system cross up selling Sales prospecting contact and opportunity management sales force automation a system that automatically tracks all of the steps in the sale sales process Customer service contact center web based self service trouble shooting Challenges and Future of CRM Challenges Customer is always right and now has more power with internet Relying on CRM to solve business problems without first developing Lack of understanding and preparation the changes and management programs that are required CRM implemented without the stakeholders involved Future Collaborating and extending the enterprise o Supplier partner employee relationship management ERP Definition and Components Definition Integrates all departments and functions throughout an organization into a single IT system so that employees can make enterprise wide information on all business operations internal and back office Cross functional backbone that integrates internal processes and information systems core that holds everything together Helps companies gain efficiency agility and responsiveness Integrated real time view of core business processes Integrated modules and relies upon common database management systems Core and Extended ERP Core traditional components include in most ERP systems and they primarily focus on internal operations Most common core ERP components 1 Accounting and finance general ledger accounts payable receivable budgeting asset management 2 Production and materials management demand forecasting production scheduling job cost accounting quality control 3 Human resource payroll benefits compensation performance assessment complies with legal requirements and tax authorities Extended extra components that meet the organizational needs not covered by the core components and primarily focus on external operations Extended ERP components Business intelligence Customer relationship management Supply chain management E business logistic procurement Logical solution to incompatible applications ERP Benefits and Costs Benefits Addresses global information sharing and reporting Avoids the pain and expense of fixing legacy systems Core that holds everything together Quality and efficiency integration and improving internal processes Decreased costs significant reductions in transaction costs supply chain costs inventory and IT costs Decision Support cross functional information on business performance quickly to managers to significantly improve their ability to make better decisions in a timely manner Enterprise agility ERP breaks down many former departmental and functional walls of business processes information systems and information resources Easton bell video ERP Risks Software costs Consulting fees Process rework Customization Training Data warehouse integration and data conversion Integration and testing Failures Underestimating complexity Failure to involve employees Trying to do too much too fast in