Module-6

Enterprise system

What is ERP?

• Enterprise resource planning is a cross-functional enterprise system– An integrated suite of software modules

– Supports basic internal business processes

– Facilitates business, supplier, and customer information flows

• For e.g. software for a manufacturing company will typically process the data and track the status of sales, inventory, shipping, and invoicing, as well as forecast raw material and human resource requirements.

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ERP Process and Information Flows

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ERP Application Components

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ERP

• ERP is the technological backbone of e-business, and enterprise wide transaction framework with links into sales order processing, inventory management and control, production and distribution planning, and finance.

• ERP gives a company an integrated real time view of its core business processes, such as production, order processing, and inventory management tied together by the ERP application software and a common database maintained by a database management system.

• ERP software suites typically consist of integrated modules of manufacturing, distribution, sales, accounting, and human resource applications.

• Example of manufacturing processes supported are material requirements planning, production planning and capacity planning.

• Sales and marketing processes supported by ERP are sales analysis, sales planning, and pricing analysis.

• ERP support many vital human resource processes, from personnel requirements planning to salary and benefits administration, and accomplish most required financial record keeping and managerial accounting applications

Benefits of ERP

• ERP Business Benefits– Quality and efficiency: ERP creates a framework for

integrating and improving a company’s internal business processes that results in significant improvements in the quality and efficiency of customer service, production, and distribution.

– Decreased costs: companies significant reductions in transaction processing costs and hardware, software, and IT support staff compared to the nonintegrated legacy systems that were replaced by their new ERP systems

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Benefits of ERP

– Decision support: ERP provides vital cross functional information on business performance to managers quickly to significantly improve their ability to make better decisions in a timely manner across the entire business enterprise.

– Enterprise agility: implementing ERP systems breaks down many former departmental and functional walls of business processes, information systems, and information resources. This results in more flexible org structures, managerial responsibilities, and work roles and therefore a more adaptive organization and workforce that can work more easily capitalize on new business requirements.

Challenges of ERP

• ERP Costs– Risks and costs are considerable– Hardware and software are a small part

of total costs, and that the costs of developing new business processes and preparing emp for the new system make up the bulk of implementing a new ERP system.

– Converting data from previous legacy systems to the new cross functional ERP system is another major category of ERP implementation costs.

– Failure in implementing a new ERP system can cripple or kill a business

Costs of Implementing a New ERP

Causes of ERP Failures

• Most common causes of ERP failure– Under-estimating the complexity of planning,

development, training

– Failure to involve affected employees in planning and development

– Trying to do too much too fast

– Insufficient training

– Insufficient data conversion and testing

– Over-reliance on ERP vendor or consultants

ERP Implementation

• Erp implementation, generally follows the waterfall mode approach.

• Once a firm order is received, the implementation begins with meeting between the vendor and the org.

• ERP implementation process model, it is a nine step approach for successful implementation of ERP

Nine steps approach to ERP implementation

1. RDD ( requirement definition and description)2. Product mapping to RDD3. Gap analysis for review4. ERP product configuration5. Functional implementation6. Technical implementation7. User feedback and review8. Deploy fully and go live as planned9. Project and process review

ERP implementation

RDD (1)

Product mapping to

RDD (2)

GAP Analysis for review (3)

ERP product configuration

(4)

Functional implementation (5)

Technical implementation (6)

User training*

Hand holding*

Critical process testing

*User feedback and review (7)

Deploy fully and go live

as planned

(8)

Project and

process review

(9)

ERP implementation• The model is built on three reviews.

– First review product vs. RDD results into ‘gap analysis’ showing what ERP package offers and RDD states. This confirms the utility of ERP product and makes a clear prescription of changes, which are must in the ERP solution.

– Second review is ERP ‘ configuration review’ to confirm that configured ERP for customer specific requirement is useful to the users.

– Third and final review is after six months usage, to confirm that RDD is fully implemented and the solution meets all requirements, namely functions, features, facilities, technology interface, information requirements and reports and queries.

• Nine steps implementation model is dynamic where each step is checked, reviewed and confirmed.

What is a Supply Chain?

• The interrelationships– With suppliers, customers, distributors, and

other businesses

– Needed to design, build, and sell a product

• Each supply chain process should add value to the products or services a company produces– Frequently called a value chain

Supply Chain Management (SCM)

• Fundamentally, supply chain management helps a company– Get the right products

– To the right place

– At the right time

– In the proper quantity

– At an acceptable cost

SCM

• Major functions of supply chain are marketing, manufacturing, procurement, operations, inventory, warehousing, distribution and customer service.

• The process begins with customer order and ends with delivery of goods and services.

• These functions are managed through supply chain participants who could be many at each stage in the chain.

SCM

• Supply chain consist of all stages involved in servicing the customer to fulfill the expectations.

• A supply chain is an extended enterprise where participants in the chain have specific contributing roles to the goal of reaching the customer.

• Table shows supply chain models and participantsManufacturing

business•Customer•Retailer•Distributor•Transporter•warehouse•supplier

Trading•Customer•Retailer•Transporter•warehouse•supplier

Service •Customer•consultant•Service provider

Supply Chain Life Cycle

Goals of SCM

• The goal of SCM is to efficiently– Forecast demand

– Control inventory

– Enhance relationships with customers, suppliers, distributors, and others

– Receive feedback on the status of every link in the supply chain

Objectives of SCM

Roles and Activities of SCM in Business

Planning Function of SCM

• Planning– Supply chain design

• optimize network of suppliers, plants and distribution centers

– Collaborative demand and supply planning• Develop an accurate forecast of customer demand by sharing

demand and supply forecasts instantaneously across multiple tiers• Internet enabled collaborative scenarios, such as collaborative

planning, forecasting and replenishment (CPFR), and vendor managed inventory

Execution function of SCM

• Execution– Materials management

• Share accurate inventory and procurement order information

• Ensure materials required for production are available in the right place at the right time

• Reduce raw material spending, procurement costs, safety stocks, and raw material and finished goods inventory

– Collaborative manufacturing• Optimize plans and schedules while considering resources,

material, and dependency constraints

Execution function of SCM– Collaborative fulfillment

• Commit to delivery dates in real time

• Fulfill orders from all channels on time with order management, transportation planning, and vehicle scheduling

• Support the entire logistics process, including picking, packing, shipping, and delivery in foreign countries.

– Supply chain event management• Monitor every stage of the supply chain process, form price quotation

to the moment the customer receives the product, and receive alerts when problem arises

– Supply chain performance management• Report key measurements in the supply chain, such as filling rates,

order cycle times, and capacity utilization.

Benefits of SCM

• Key Benefits– Faster, more accurate order processing

– Reductions in inventory levels

– Quicker times to market

– Lower transaction and materials costs

– Strategic relationships with supplier

Challenges of SCM

• Key Challenges– Lack of demand planning knowledge, tools,

and guidelines

– Inaccurate data provided by other information systems

– Lack of collaboration among marketing, production, and inventory management

– SCM tools are immature, incomplete, and hard to implement

Integrated Supply Chain

Suppliers Purchasing Production Distribution Customers

Phase 1:Independent supply-chain entities

Suppliers Customers

Internal supply chainMaterials management department

ProductionPurchasing DistributionPhase 2:Internal integration

Integrated supply chain

CustomersSuppliersInternal supply chain

Phase 3:Supply-chain integration

• Today supply chain management has become a matter of survival for corporate sector

• Companies are discovering this much to their dismay. • Real time decision making • Rapid changes in supply & demand

SCM – SUCCESSTHE STEPS TO SUCCESS IN SUPPLY CHAIN MANAGEMENT

1.Integrating Information 2.Analyzing This Information To Trigger A Corresponding

Product Transition3. Creating A Nimble And Responsive Planning And

Execution Process4. Enabling Global Process Visibility And Co-ordination

Between All Supply Chain Partners 5. Improving Overall Throughput And Asset Utilization 6. Empowering People To Identify And Solve Problems

Proactively

SCM - TOOLS

• Online real-time available to promise (ATP) • Online real-time commit to promise (CTP)• Accurate forecasting (AF) • Closed loop corporate to enterprise to department to

work cell planning, optimization and execution\• Reactive dynamic scheduling • Concurrent and collaborative planning • Web-enabled communication of planning and

inventory information between suppliers and customers.

Future of Competition

My Supply Chain vs. Your Supply Chain

Supplier InboundTransport

OutboundTransport

DistributionManufacturing UltimateCustomer

Supplier InboundTransport

OutboundTransport

DistributionManufacturing UltimateCustomer

Customer Relationship Management

• A customer-centric focus– Customer relationships have become a company’s

most valued asset

– Every company’s strategy should be to find and retain the most profitable customers possible

What is CRM?• Managing the full range of the customer relationship

involves– Providing customer-facing employees with a single, complete

view of every customer at every touch point and across all channels

– Providing the customer with a single, complete view of the company and its extended channels

• CRM uses IT to create a cross-functional enterprise system that integrates and automates many of the customer-serving processes

What is Customer Relationship Management (CRM)?

CRM is “the development and maintenance of mutually beneficial long-term relationships with strategically significant customers”

(Buttle, 2000)

CRM is “an IT enhanced value process, which identifies, develops,integrates and focuses the various competencies of the firm to the‘voice’ of the customer in order to deliver long-term superiorcustomer value, at a profit to well identified existing and potentialcustomers”.

(Plakoyiannaki and Tzokas, 2001)

Customer Relationship Management

“Process of creating and maintaining relationships with business customers or consumers”

“A holistic process of identifying, attracting, differentiating, and retaining customers”

“Integrating the firm’s value chain to create enhanced customer value at every step”

“An integrated cross-functional focus on improving customer retention and profitability for the company.”

Areas of CRM Activity

Sales Force Automation (SFA) Customer Service and Support (CSS) Help Desk Field Service Marketing Automation

Application Clusters in CRM

Contact and Account Management

• CRM helps sales, marketing, and service professionals capture and track relevant data about– Every past and planned contact with prospects and customers– Other business and life cycle events of customers

• Data are captured through customer touch points– Telephone, fax, e-mail– Websites, retail stores, kiosks– Personal contact

Sales

• A CRM system provides sales reps with the tools and data resources they need to– Support and manage their sales activities

– Optimize cross- and up-selling

• CRM also provides the means to check on a customer’s account status and history before scheduling a sales call

Marketing and Fulfillment

• CRM systems help with direct marketing campaigns by automatic such tasks as– Qualifying leads for targeted marketing

– Scheduling and tracking mailings

– Capturing and managing responses

– Analyzing the business value of the campaign

– Fulfilling responses and requests

Customer Service and Support

• A CRM system gives service reps real-time access to the same database used by sales and marketing– Requests for service are created, assigned,

and managed– Call center software routes calls to agents– Help desk software provides service data

and suggestions for solving problems

• Web-based self-service enables customers to access personalized support information

Retention and Loyalty Programs

• It costs 6 times more to sell to a new customer• An unhappy customer will tell 8-10 others• Boosting customer retention by 5 percent can boost profits by

85 percent• The odds of selling to an existing customer are 50 percent; a

new one 15 percent• About 70 percent of customers will do business with the

company again if a problem is quickly taken care of

Retention and Loyalty Programs• Enhancing and optimizing customer

retention and loyalty is a primary objective of CRM– Identify, reward, and market to the most

loyal and profitable customers

– Evaluate targeted marketing and relationship programs

The three phases of CRM

• We can view CRM as an integrated system of web enabled software tools and databases accomplishing a variety of customer focused business processes that support the 3 phases of the relationship between a business and its customers.– Acquire– Enhance– Retain

The Three Phases of CRM

Acquire

• A business relies on CRM software tools and databases to help it acquire new customers by doing a superior job of contact management, sales prospecting, selling, direct marketing, and fulfillment.

• The goal of these CRM functions is to help customers perceive the value of a superior product offered by an outstanding company.

Enhance

• Web-Enabled CRM account management and customer service and support tools help keep customers happy by supporting superior service from a responsive networked team of sales and service specialists and business partners.

• CRM sales force automation and direct marketing and fulfillment tools help companies to increase their profitability to the business.

• The value of the customers perceive is the convenience of one stop shopping at attractive prices

Retain

• CRM analytical software and databases help a company proactively identify and reward its most loyal and profitable customers to retain and expand their business via targeted marketing and relationship marketing programs.

• The value the customers perceive is of a rewarding personalized business relationships with their company.

Benefits of CRM

• Benefits of CRM– Identify and target the best customers

– Real-time customization and personalization of products and services

– Track when and how a customer contacts the company

– Provide a consistent customer experience

– Provide superior service and support across all customer contact points

CRM Failures• Business benefits of CRM are not guaranteed

– 50 percent of CRM projects did not produce promised results

– 20 percent damaged customer relationships

• Reasons for failure– Lack of understanding and preparation

– Not solving business process problems first

– No participation on part of business stakeholders involved

Trends in CRM

• Operational CRM– Supports customer interaction with greater

convenience through a variety of channels

– Synchronizes customer interactions consistently across all channels

– Makes the company easier to do business with

Trends in CRM

• Analytical CRM– Extracts in-depth customer history, preferences,

and profitability from databases

– Allows prediction of customer value and behavior

– Allows forecast of demand

– Helps tailor information and offers to customer needs

Trends in CRM

• Collaborative CRM– Easy collaboration with customers,

suppliers, and partners

– Improves efficiency and integration throughout supply chain

– Greater responsiveness to customer needs through outside sourcing of products and services

Trends in CRM

• Portal-based CRM– Provides users with tools and information

that fit their needs

– Empowers employees to respond to customer demands more quickly

– Helps reps become truly customer-faced

– Provides instant access to all internal and external customer information

Knowledge management

• Knowledge is justified true belief. Ayer, A.J. (1956).

• Knowledge is a fluid mix of framed experience, values, contextual information and expert insight that provides a framework for evaluating and incorporating new experience and information.

What is Knowledge

• KM is the process of capturing and making use of a firm’s collective enterprise anywhere in the business- on paper, in document, in databases (called explicit knowledge) or in people’s heads (called tacit knowledge).

• Defined in a variety of ways.• KM in education: a strategy to enable people to

develop a set of practices to create, capture, share & use knowledge to advance.

• KM focuses on:– people who create and use knowledge.– processes and technologies by which knowledge is created,

maintained and accessed.– artifacts in which knowledge is stored (manuals, databases, intranets,

books, heads).

What is Knowledge Management?

• “Knowledge management is a discipline that promotes an integrated approach to identifying, managing and sharing all of an enterprise’s information needs.

What is Knowledge Management?

Where does KM come from?• Technology

– Infrastructure, Database, Web, Interface

• Globalization– World wide markets, North American integration

• Demographics– Aging population, workforce mobility, diversity

• Economics– Knowledge economy

• Customer relations– Quality

• Increase in information– Specialization, Volume, Order

Data, Information & Knowledge

DATA INFORMATION KNOWLEDGE

Definition Raw facts, figures and records

contained in a system.

Data placed into a form that is

accessible, timely and accurate.

Information in context to make it insightful and

relevant for human action.

Reason Processing Storing / Accessing.

Insight, innovation,

improvement.

Explicit knowledge– Formal or codified– Documents: reports, policy

manuals, white papers, standard procedures

– Databases– Books, magazines, journals

(library)

Implicit (Tacit) knowledge– Informal and uncodified– Values, perspectives & culture– Knowledge in heads– Memories of staff, suppliers and

vendors

Two types of knowledge

Documented information that can

facilitate action.

Know-how & learning embedded within the

minds people.

Knowledge informs decisions and actions.

Knowledge type Nature Owners of knowledge Source

Skills Tacit Individual Individual

Capability Tacit Individual or groups Individual or groups

Knowhow Tacit Individual or groups Individual or groups

Information Explicit Individual Individual

Organised information

Explicit Databases System

Facts Explicit Databases/individual System

Process Explicit Organisation System

Proprietary (Patent) Explicit Organisation System

• Increase profits of revenues• Retain key talent and expertise• Improve customer retention and satisfaction• Defend market share against new entrants• Accelerate time to market with product• Penetrate new market segments• Reduce costs• Develop new products and services

Need for KM

Forces driving KM initiatives

External

Cut throat competition

Insistence on customization

Continuous tech-breakthroughs

Changing capabilities of business partners

Knowledge Management

• KM has following processes– Define, capture, manipulate, store and develop.– Develop IS for knowledge creation– Design applications for improving org

effectiveness– Create knowledge set, i.e.., intellectual capital to

increase economic value of the org– Keep on upgrading to use it as a central resource– Distribute and share to concerned.

The Knowledge Process Cycle

Place knowledge in a format that enables it to be accessed (e.g., computer file/database, policy, training, or subject matter expert’s head)

Use the organisation

structure and the storage

medium to retrieve the

knowledge. This can be

automatic with “push”

technology (e.g. Portal),

where the user profile or

event triggers knowledge

retrieval and display. Store Org

anis

e

Capture

Use &

Innovate

Acc

ess

Categorise and sort knowledge (e.g., by assigning metadata, synthesising, codifying) with consideration for future Access and Use requirements.

Harvest, or extract, tacit or explicit knowledge by prompting the source, or “knower’’ to communicate and share. (Explicit knowledge is codified in paper or electronic form. Tacit knowledge is more complex that has been developed over time and internalised by the ‘’knower’’)

Apply existing knowledge to generate more knowledge, make informed decisions and (explicitly or implicitly) lead to innovation. Can happen in real-time (e.g. in conversation), or with time elapse (e.g. applying lessons learned over time).

Place knowledge in a format that enables it to be accessed (e.g., computer file/database, policy, training, or subject matter expert’s head)

Use the organisation

structure and the storage

medium to retrieve the

knowledge. This can be

automatic with “push”

technology (e.g. Portal),

where the user profile or

event triggers knowledge

retrieval and display. Store Org

anis

e

Capture

Use &

Innovate

Acc

ess

Categorise and sort knowledge (e.g., by assigning metadata, synthesising, codifying) with consideration for future Access and Use requirements.

Harvest, or extract, tacit or explicit knowledge by prompting the source, or “knower’’ to communicate and share. (Explicit knowledge is codified in paper or electronic form. Tacit knowledge is more complex that has been developed over time and internalised by the ‘’knower’’)

Apply existing knowledge to generate more knowledge, make informed decisions and (explicitly or implicitly) lead to innovation. Can happen in real-time (e.g. in conversation), or with time elapse (e.g. applying lessons learned over time).

Information management represents the foundation for effective governance. But service innovation requires integrated processes creating value from isolated data and information by the application of knowledge

Receive/Gather Data Implement Services & Policies

Capture Store Update Query Distribute Analyze Act Learn

Manage Information Analyze Information Use Knowledge

Information Value Chain

Use Knowledge to Improve Process

Knowledge management system architecture

KMS

Identification of knowledge

Definition and categorization

Surveying and locating

Knowledge creation

Processing for acquisition

Manipulation and modeling

Knowledge delivery

Access control

Application methods

Build knowledge structure Creation of KDB Storage and security

E-governance

• Before going into the question of strategies, you must be aware of WHY some country wants to put effort into e-government. Which are their motives? What driving forces make a country work with e-government?

• No matter what motive you have, you should be aware of it, because the answer to the question WHY do have a great impact on your strategy

Why e-government?“Everyone else is doing

it, so its probably important and useful”“Its hype”

“We don’t want to fall behind all others”

“We think it will provide faster, more convenient government services”

“We think it will reduce costs for

individuals and businesses to deal

with government”

”We think it will reduce costs for

government (reduced data entry

costs, lower error rates)”

“We think it will improve

democratic process”

”To reduce corruption

and fight poverty”

”We need to reach out to a broader part of population””We think it’s a tool for transformation of

public administration from bureaucracy to

service provider”

E-governance

• E-governance is the public sector's use of information and communication technologies with the aim of improving information and service delivery, encouraging citizen participation in the decision-making process and making government more accountable, transparent & effective.

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Goals

• To extend the reach of government services

• To promote equal access to government services

• To increase constituency satisfaction with government services

– in particular: to reduce transaction costs for citizens

• To reduce government costs

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E-Government Strategy

a. Defining worthwhile goals

b. Demonstrating financial feasibility and sustainability

d. Developing incentive scheme

Leadership

Policy & Institutional

Reform

Technology

Conceptual Framework for E-Government Strategy

GoalsDimensions Outputs

ECONOMY

SERVICE

EFFICIENCY

TRANSPARENCYE-Governance:

• Legal Framework,• ICT Policies -

Standards

Client-Oriented Service Applications

Back-End Government Applications

Connectivity & Data Processing infrastructure

Financing

Institutional Infrastructure for Service Delivery

Human Resource Dev.

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• Individuals: skills upgrading, professional development, increased autonomy, international exposure

• Departments: Increased budgetary control, organizational visibility, economic rewards, e.g. share of profits/savings, etc.

Incentives

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Output Indicators• Infrastructure

– Improvement in connectivity and data processing capacity

• Governance– E-government management framework in place– Policy and regulatory framework in place

• Institutional Capacity– Geographical reach of government services– Training imparted– Business processes reengineered– Number of Government systems operating at service standards

Measurement of results

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Impact Indicators

• Constituency satisfaction with government services (opinion surveys, citizen report cards)

• Access by the poor and rural population

• Client orientation in public service– Data sharing across information systems– transparency of government organization to service

recipients

Measurement of results

Example of e-government strategy

E-Bharat under preparation

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• Provision of improved, more convenient government services countrywide through on-line delivery at local service centers.

• It is fully recognized as key part of national development plans.

• Involves central and all state governments. Will be led centrally and implemented locally.

• Will be implemented over an 8-year period (FY2006-2013) at a cost of roughly USD 4 billion.

• To be supported by proposed USD 1 billion, Bank project in two phases

India’s e-Government strategy

Scope of Outputs

E-CourtsTreasuriesNational IDNational GIS for planning

Other

EDI (customs & foreigh trade)E-BIZE-Procurement

Commercial TaxesExciseCompany affairs

Services to Business (G2B)

Common Services Centres: Single-window public service delivery points eventually reaching all the 600,000 villages in India State Wide Area Network SWAN: fiber optic connectivity up to block levelCountrywide State Data CentersAll India PortalNational E-Governance Gateway

Land recordsProperty registrationRoad transportAgricultureMunicipalitiesPanchayatsPoliceEmployment ExchangeEducationHealthFood Distribution & other welfare programs

Income TaxPassport, visa and immigrationE-Posts

Services to Citizens (G2C)

IntegratedStateCentral

New Zealand e-Government Architecture

Sri Lanka e-Government Architecture

India e-Government Architecture

Australia e-Government Architecture

End of Module-6

Thank you