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Electronic Business Systems

Cross-functional Enterprise SystemsFunctional Business Systems

Chapter7

McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.


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Learning Objectives1. Identify the following cross-functional enterprise

systems, and give examples of how they can provide significant business value to a company:

a. Enterprise resource planning (ERP)b. Customer relationship management (CRM)c. Supply chain management (SCM)d. Enterprise application integration (EAI)e. Transaction processing systems (TPS)f. Enterprise collaboration systems (ECS)


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Learning Objectives2. Give examples of how Internet and other

information technologies support business processes within the business functions of accounting, finance, human resource management, marketing, and production and operations management.

3. Understand the need for enterprise application integration to improve support of business interactions across multiple e-business applications.


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Cross-functional SystemslCross the boundaries of traditional business

functionsl In order to reengineer and improve vital business

processes all across the enterprise. l Integration is the key for success.l Is the key for unlocking the information and make it

available to any user, anywhere, any time.

Chapter 7 Electronic Business SystemsChapter 7 Electronic Business SystemsCrossCross--Functional eFunctional e--Business SystemsBusiness Systems


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Enterprise Application Architecture



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Customer Relationship Management (CRM)

lCRM uses technology tol Create a Cross-Functional e-Business systeml That integrates and automates many of the processes in

sales, marketing and customer service that interact with customers

l Create a framework of web-enabled software and databases that integrate these processes with the rest of the company’s processes

“The customer is always right”



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CRM Applications Clusters


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CRM applicationsl Contract and Account Managementl Helps sales, marketing and service professionalsl Capture and track data about past and planned contacts with

customers and prospectsl Salesl Provides sales reps with software tools and data they need to

support and manage sales activitiesl Cross-selling is trying to sell a customer of one product with

a related productl Up-selling is trying to sell customer a better product than

they are currently seeking l i.e. Bank Sales Rep



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CRM applications

lMarketing and FulfillmentlHelp marketing professionals accomplish direct

marketing campaigns by tasks such as lQualifying leads for targeted marketing and scheduling

and tracking direct marketing mailings



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CRM applicationslCustomer Service and Supportl Provides sales reps with software tools and database

access to customer database shared by sales and marketing professions

lHelps Customer Services Managers to create, assign and manage requests for service

l Call center software routes calls to customer support agents based upon their skills and type of call

lHelp desk software provides relevant service data and suggestions for resolving problems for customer service reps helping customers with problems



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CRM applicationslRetention and Loyalty Programsl Try to help a company identify, reward, and market to

their most loyal and profitable customerslData mining tools and analytical softwarel Customer data warehouse



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CRM Integrated Solutions


Analytical CRM uses a customer data warehouse and tools to analyze customer data collected from the firm’s sources.


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CRM supports customer life cycle



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CRM benefitsl Identify and target best customerslReal-time customization and personalization of

products and serviceslTrack when a customer contacts a companylProvide consistent customer experience and superior

service and supportlSAP, Oracle, Salesforce.com,



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Reasons for CRM failures

lLack of understanding and preparationlRely on application to solve a problem without first

changing the business processeslBusiness stakeholders not participating and not

prepared



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Supply Chain Management (SCM)lA cross-functional enterprise systemlTo help support and manage the links between a

company’s key business processeslAnd those of its suppliers, customers and business

partnerslExample: www.pgsupplier.com/



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Nike’s SCM(only for Sneakers)


This figure illustrates the major entities in Nike’s supply chain and the flow of information upstream and downstream to coordinate the activities involved in buying, making, and moving a product. Shown here is a simplified supply chain, with

the upstream portion focusing only on the suppliers for sneakers and sneaker soles.


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SCM goallFast, efficient, low-cost network of business

relationships or supply chain to get a company’s products from concept to market

lA supply chain:l Interrelationships with suppliers, customers,

distributors, and other businesses that are needed to design, build and sell a product



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SCM



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Role of SCM


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Goals and Objectives of SCM



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Causes of problems in SCMlLack of proper demand-planning knowledge, tools

and guidelinesl Inaccurate or overoptimistic demand forecastsl Inaccurate production, inventory, and other datalLack of adequate collaboration within the company

and between partnerslSCM software considered immature, incomplete and

hard to implement



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Enterprise Application Integration (EAI)lEAI connects cross-functional systemslServes as middleware to

l Provide data conversionl Communication between systemsl Access to system interfaces



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How EAI works


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Real World Group Activity2. One of the challenges associated with application

integration on an enterprise level is determining which applications to integrate and which to leave as is. In small groups,l Discuss how an organization should approach an

integration project.l What criteria should be used in determining a

candidate application for enterprise integration?


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Functional Business Systems

lA variety of information systems (transaction processing, management information systems, decision support, etc.)lThat support the business functions of lAccounting, finance, marketing, operations

management and human resource management

Chapter 7 Electronic Business SystemsChapter 7 Electronic Business SystemsFunctional eFunctional e--Business SystemsBusiness Systems


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Examples of functional information systems


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Marketing Information Systems



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Interactive marketingl Interactive marketing:lA customer-focused marketing processlUsing the Internet, intranets, and extranetsl To establish two - way transactions between a business

and its customers or potential customerslGoal: l to profitably attract and keep customerslwho will become partners with the business l in creating, purchasing and improving products and

services



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Targeted MarketinglAn advertising and promotion management concept

that includes five targeting components



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Targeted Marketing ComponentslCommunity – customize advertising to appeal to

people of specific virtual communities, Arts, Sports

lContent – advertising placed on a variety of selected websites aimed at a specific audience, e-billboards, banners

lContext – advertising placed on web pages that are relevant to the content of a product or service, vocational travel, car rental service

lDemographic/Psychographic – web marketing efforts aimed at specific types or classes or people, middle income, unmarried, college graduatelOnline Behavior – promotion efforts tailored to each

visit to a site by an individual, e.g., using cookies files



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Sales Force AutomationlOutfit sales force with notebook computers, web

browsers and sales contract management softwarelConnect them to marketing websites and company

intranetlGoal:l Increase personal productivity l Speeds up capture and analysis of sales data from the

field to marketing managerslGain strategic advantage



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Manufacturing Information Systems

lSupport the production/operations function l Includes all activities concerned with planning and

control of producing goods or services



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Computer-Integrated Manufacturing


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CIM Objectives

lSimplify production processes, product designs, and factory organization as a vital foundation to automation and integrationlAutomate production processes and the business

functions that support them with computers, machines, and robotsl Integrate all production and support processes using

computer networks, cross-functional business software, and other information technologies



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CIM SystemslComputer-aided manufacturing (CAM)



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CIM SystemslComputer-aided manufacturing (CAM) - automate

the production processlManufacturing execution systems (MES) –

performance monitoring information systems for factory floor operations, controls five essential components in production process( material, equipment, personal, instruction and specifications)

lProcess Control – control ongoing physical processes, petroleum refines, cement plants, steel mils, thermostat, valves, switches.

lMachine Control – controls the actions of machines, weaving machine, other industrial machines



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Human Resource Management (HRM)

l Information systems designed to supportl Planning to meet the personnel needs of the businesslDevelopment of employees to their full potentiall Control of all personnel policies and programs



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HRM Systems


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HRM and the InternetlRecruiting employees using the corporate website

and commercial recruiting serviceslPosting messages in selected Internet newsgroupslCommunicating with job applicants via e-mail



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HRM and Corporate IntranetslProcess common HRM applicationslAllow HRM department to provide around-the-clock

serviceslDisseminate valuable information faster than

through previous company channelslCollect information from employees onlinelAllow managers and other employees to perform

HRM tasks with little intervention by the HRM departmentlTraining tool



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Employee Self-Service (ESS)l Intranet applications that allow employees tol View benefitsl Enter travel and expense reportsl Verify employment and salary informationlUpdate their personal informationl Enter data that has a time constraint to it



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Accounting Information SystemslRecord and report the flow of funds through an

organizationlProduce financial statementslForecasts of future conditions



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Accounting Information Systems


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Six essential Accounting Information Systems

lOrder Processing – Captures and processes customer orders and produces data for inventory control and accounts receivablel Inventory Control – Processes data reflecting changes

in inventory and provides shipping and reorder informationlAccounts Receivable – Records amounts owed by

customers and produces customer invoices, monthly customer statements, and credit management reports



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Six essential Accounting Information Systems

lAccounts Payable – Records purchases from, amounts owed to, and payments to suppliers, and produces cash management reportslPayroll – Records employee work and compensation

data and produces paychecks and other payroll documents and reportslGeneral Ledger – Consolidates data from other

accounting systems and produces the periodic financial statements and reports of the business


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Financial Management SystemslSupport business managers and professionals in

decisions concerningl The financing of a businessl The allocation and control of financial resources within

a business



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Financial Management System Examples


l Analyzing Enterprise Application Vendors

l With a group of three students, use the Web to research and evaluate the products of two vendors of enterprise applications software. You could compare, for example, the SAP and Oracle enterprise systems, the supply chain management systems from i2 and SAP, or the customer relationship management systems of Oracle’s and Salesforce.com. Use what you have learned from these companies’ Web sites to compare the software packages you have selected in terms of business functions supported, technology platforms, cost, and ease of use. Which vendor would you select? Why? Would you select the same vendor for a small business as well as a large one

l Conduct your search on the Internet for the Web sites listed below.l www.sap.com, l www.oracle.com, l www.i2.com, l www.salesforce.com

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Case Study Questions1. What is the business value of SCM systems for

Brunswick and Whirlpool?2. Does the business value of SCM depend upon what

type of business a company is in? Explain.3. How does Brunswick’s approach to SCM differ

from that of Whirlpool’s? Is one approach superior to all others? Why or why not?


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