CHAPTER10.pptx

IT for Management: On-Demand Strategies for Performance, Growth, and Sustainability

Twelfth Edition

Turban, Pollard, Wood

Chapter 10

Enterprise Systems

Learning Objectives (1 of 5)

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Intro to Enterprise Systems

Supply Chain Management

Customer Relationship Management

Communicating and Collaborating

with Knowledge Management,

Content Management, and Enterprise

Social Platforms

Enterprise Resource Planning

Intro to Enterprise Systems

Enterprise System are large scale application software packages that supports business processes, information flows, reporting, and data analytics in complex organizations.

Core business processes: Include accounting, finance, sales, marketing, human resources, inventory, productions, and manufacturing

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Integrating Legacy Systems

Legacy systems

Older information systems maintained over decades because they fulfill critical needs

Major reasons why companies replace legacy systems:

High maintenance costs

Inflexibility

Integration obstacles (Hardwired, predefined, process flows)

Lack of staff (qualified/trained professionals)

Cloud-based enterprise systems are lower in cost

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Migrating to enterprise systems

Three typical situations where changes are most needed:

Changes in how people perform their jobs

Redesign of business processes

Integration of many types of uncoupled legacy systems

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Intro to Enterprise Systems: Questions

Explain the purpose of an enterprise system.

Describe six types of enterprise systems.

What are the five major reasons organizations migrate to enterprise systems?

What are two challenges of legacy systems?

Why do companies not replace all of their legacy systems?

Why is it difficult to implement enterprise systems?

Explain the three types of changes needed when an enterprise system is implemented.

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Learning Objectives (2 of 5)

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Intro to Enterprise Systems

Supply Chain Management

Customer Relationship Management

Communicating and Collaborating

with Knowledge Management,

Content Management, and Enterprise

Social Platforms

Enterprise Resource Planning

Automating ERP

Enterprise resource planning (ERP) is business process management software that allows an organization to use tightly integrated applications to manage business and automate business processes related to services, technology, and human resources.

The central feature of all ERP systems is a shared database that supports multiple business functions used throughout an organization.

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Enterprise Resource Planning Complexity

Figure 10.3: Overview of the complexity of ERP and its interfaces with other enterprise systems (U.S. Army Business Transformation Knowledge Center, 2009)

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ERP and the IT Infrastructure

Acquiring an ERP

ERPs are not usually built in-house or built using proprietary software because the costs and time to do so would be staggering.

Typically, ERP systems are acquired by purchasing or leasing in a software-as-a-service (SaaS) arrangement.

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Choosing an ERP Solution

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ERP Implementation Critical Success Factors

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ERP: Lessons Learned

The success of an ERP depends on organizational and technological factors that occur prior to, during, and after its implementation.

Most often when an ERP implementation fails, the ERP is eventually fixed and remains in use.

Planning, deploying, or fine-tuning these complex business software systems for your company is such a large undertaking that such projects fail more than 50% to 70% of the time.

The most important lesson to be learned from these examples of ERP failures is that when it comes to ERP selection, you either get it right or pay the price for years to come!

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What’s New in ERP Systems?

New apps and mobile add-ons enable the following:

Sales associates to process orders, take payments, and collect signatures with an iPad app

Field technicians to provide customer service from anywhere

Marketing to manage every aspect of ongoing customer relationships using a smartphone app

Production to access to the real-time information needed to reduce stockouts and excess inventory

Customers to access, pay, and view invoices online

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Selecting an ERP Vendor, Value-Added Reseller or Consultant

ERP vendors: An ERP vendor develops ERP software and implements and supports its own product(s). The two largest ERP vendors are SAP and Oracle.

Value-added reseller (VAR) customizes or adds features to a vendor’s software or equipment and resells the enhanced product.

Independent ERP consultant: An ERP consultant offers customized consulting services that include identifying and vetting different ERP options, selecting the best ERP for the task at hand, and implementing and supporting the ERP when it is in operation.

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Learning Objectives (3 of 5)

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Intro to Enterprise Systems

Supply Chain Management

Customer Relationship Management

Communicating and Collaborating

with Knowledge Management,

Content Management, and Enterprise

Social Platforms

Enterprise Resource Planning

Supply Chain Management Systems

Supply Chain Starts with the acquisition of raw materials or the procurement (purchase) of products and proceeds through manufacture, transport, and delivery—and the disposal of recycling products.

Supply chain management (SCM) is the efficient management of the flows of material, data, and payments among companies in the supply chain, from suppliers to consumers.

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Automating the Supply Chain

SCM software focuses around improving business functions such as the following:

Inventory optimization to minimize overhead costs and ensure uninterrupted delivery.

Warehouse management to track materials and goods within a warehouse or distribution center.

Forecasting to reduce uncertainty and variability associated with supply and demand.

Optimal cycle time and customer service by increasing control over processes.

Supplier management to track performance and compliance, measure risk, etc.

Procurement by managing and automating purchase orders and receipts, creating a transparent audit trail and integrating financial management systems.

Logistics planning to ensure that ready-to-ship items are delivered to the customer as quickly as possible and are handled carefully to ensure they are undamaged.

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Supply Chain Flows

Material or product flow: the movement of materials and goods from a supplier to its consumer. Products that are returned make up what is called the reverse supply chain because goods are moving in the reverse direction

Information flow: the movement of detailed data among members of the supply chain, for example, order information, customer information, order fulfillment, delivery status, and proof-of-delivery confirmation.

Financial flow: the transfer of payments and financial arrangements via electronic funds transfer (EFT).

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Electronic Data Interchange in the Order Fulfillment and Logistics Process: Terminology

Order fulfillment is the set of complex processes involved in providing customers with what they ordered on time and all customer services related to on-time delivery of a product.

Logistics entails all processes and information needed to efficiently move products from origin to destination.

Back-office operations supports accounting, inventory management and shipping processes in the fulfillment of orders.

Front-office operations involve order fulfillment activities visible to the customer, like sales and advertising.

Electronic data interchange (EDI) involves electronically communicating information such as purchase order and invoices.

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Supply Chain Management: Order Fulfillment

Step 1: Make sure the customer will pay

Step 2: Check in-stock availability and reorder as necessary

Step 3: Arrange shipments

Step 4: Insurance

Step 5: Replenishment

Step 6: In-house production

Step 7: Use suppliers

Step 8: Contacts with customers

Step 9: Returns

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Achieving a Fully Digitized Supply Chain

Always-on supply chain is an integrated set of supply networks characterized by a continuous, high-velocity flow of information and analytics creating predictive, actionable decisions to better serve the customer 24/7.

Always-on supply chains are more connected, intelligent, scalable, and agile.

Driven by social media and the IoT, digitized supply chains have 50 times more data available to them than just five years ago

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Four Technology Stages of Digital Adoption

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Lessons Learned

Changing business and customer requirements are putting new and greater pressures on organizations to improve on the “Always-On” supply chain by developing what some are calling the “NextGen” or “Thinking” supply chain.

This new form of supply chain will be proactive, predictive, and prescriptive.

It will be tightly connected to data sources such as social opinion and IoT outputs and will allow close collaboration with suppliers and customers through cloud-based commerce networks that offer a high level of security.

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Supply Chain Management: Questions

What is a supply chain?

List four functions carried out by companies in a supply chain.

List and describe the three main flows being managed in a supply chain.

Describe SCM.

What are the top two strategic priorities of SCM executives?

What are the two major barriers preventing innovation in the supply chain?

What are the top innovative digital technologies impacting SCM?

Why would companies want to achieve a fully digitized supply chain?

What are the characteristics of the NextGen SCM?

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Learning Objectives (4 of 5)

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Intro to Enterprise Systems

Supply Chain Management

Customer Relationship Management

Communicating and Collaborating

with Knowledge Management,

Content Management, and Enterprise

Social Platforms

Enterprise Resource Planning

Customer Relationship Management

Customer relationship management (CRM) is the process of choosing the most suitable and efficient approach to making and maintaining interactions with customer and clients.

Effective CRM can provide managers with a 360-degree view of the customer relationship, enable real-time responses, and improve sales productivity and predictability.

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The CRM Process

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Figure 10.10 Four CRM critical success factors and their importance

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Automating CRM

A CRM system is a widely used and mature technology that can be deployed on the premises, in the cloud, or as on-demand SaaS.

CRM refers to the methodologies and software tools to leverage customer data in order to achieve the following:

Identify the appropriate customer experience for a customer.

Predict and prevent attrition (loss) of a customer, unless he or she is not worth retaining.

Acquire new customers who are most likely to become profitable.

Up-sell or cross-sell to unprofitable customers to move them to a profit position.

Reduce inefficiencies that waste advertising dollars.

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Customer Acquisition/Retention

CRM and Customer Acquisition/Retention

CRM technologies help marketing managers run effective campaigns, promotions, commercials, and advertisements to attract new customers, or to increase sales to existing customers, or to do both.

Newly acquired customers are unprofitable until they have purchased enough products or services to exceed the cost to acquire and service them.

Some customers can be unprofitable so it’s important to determine each customer lifetime value (CLV).

Retaining customers that generate revenues in excess of the costs is critical.

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CRM for a Competitive Edge

Drucker on Marketing Effectiveness

Know your customers

Understand customer needs

Communicate intelligently with customers

5% increase in customer retention can improve profits by as much as 20%

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How to Avoid CRM Mistakes

CRM Mistakes

IT department in charge instead of business users.

Incorrect CRM requirements by not involving key business stakeholders from the outset.

Mobility CRM strategy is an afterthought.

Taking the wrong approach to CRM training.

Underestimating users’ resistance to change.

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Customer Relationship Management: Questions

Explain the four critical success factors for CRM.

Why does CRM matter?

Discuss how CRM impacts customer acquisition and retention.

According to Peter Drucker, what does marketing effectiveness depend on?

Give three reasons why CRM fails.

How can an organization justify implementing a CRM system?

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Learning Objectives (5 of 5)

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Intro to Enterprise Systems

Supply Chain Management

Customer Relationship Management

Communicating and Collaborating

with Knowledge Management,

Content Management, and Enterprise

Social Platforms

Enterprise Resource Planning

What Is Knowledge Management?

Knowledge management (KM) is the process of creating, sharing, using and managing knowledge and information in an organization to make the best use of the knowledge.

Four operational KM components:

Content management

Expertise location

Lessons learned

Community of practice (CoP)

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Dr. Michael Koenig, an expert in the origins, goals, and fundamentals of KM, describes four operational KM components (Koenig, 2018):

• Content management The goal of KM is to capture knowledge, improve access, enhance its creation, transfer, and use and manage it as a corporate asset to help deal effectively

with rapid changes, turnover, and downsizing.

• Expertise location KM is also about “rallying the troops” to get their buy-in and support in locating and retaining valuable expertise that may be lost. For example, when employees

leave the company.

• Lessons learned KM is about education and learning from past experiences. It’s a way to teach people about something they don’t know, thus eliminating the need to “reinvent the wheel” to save time and effort and ensure fewer mistakes are made. Fewer mistakes equate to less risk caused by lack of knowledge or sloppy work that can lead to dangerous long-term threats to organizational performance and reputation.

• Community of practice (CoP) is groups of people get together to share a common interest or passion and learn to perform common tasks better through knowledge sharing and regular interactions. KM can inspire people and CoPs to come up with innovative ways to see and do things differently and hopefully better.

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Koenig’s Three Stages of KM Development

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Automating EKM

Enterprise knowledge management is any solution or system that deals with organizing data into structures that create business knowledge out of existing assets while ensuring its security and managing access.

Enterprise knowledge management (EKM) system is an information system used to capture, organize and create knowledge to enhance organizational processes.

A sophisticated EKM system also has powerful search and collaboration features and can integrate seamlessly with other systems to share important information with employees and customers.

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Benefits of EKM System

Better strategic management

Increases productivity and productivity

Increases collaboration, sharing, and teamwork

Decreases gaps in learning

Increases accumulation of corporate knowledge

Accelerates productivity of new employees through better training based on existing expertise

Standardizes processes to more easily access information to improve decision-making

Protects intellectual capital

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Techniques for Managing Knowledge in Group Work

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Brainstorming is a group problem-solving technique in which group members offer up spontaneous ideas for discussion to stimulate creative thinking and develop new ideas.

Mindmapping is a creative and logical method of note-taking that maps out ideas on a graph.

Creating a Mind Map

A mind map starts with a blank sheet of paper or blank computer screen on which a central theme is drawn as a single word or image.

Next, associated representations or major ideas, called first-level associations, are added. A maximum of seven first-level associations should be used.

These are then connected back to the central concept with curved lines, and other second and third level associations are represented as branches that emanate from the related higher-level association.

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Enterprise Content Management (ECM)

Enterprise content management is a set of defined processes, strategies, and tools that allow an organization to effectively obtain, organize, store, and deliver critical information to its employees, stakeholders, and customers.

Enterprise content management (ECM) is one of the operational components of KM.

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Purpose and Benefits of an ECM System

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ECM systems enable an organization to securely store large quantities of content, distribute information, build and manage workflows, facilitate team collaboration, and integrate with other enterprise systems.

By eliminating dependence on paper documents, ECM systems empower organizations to work more efficiently.

Other benefits of an ECM system include:

Streamlining business processes by eliminating paper

Driving improved customer service

Increased productivity

Reduced risk

Using an ECM System

The first step in using an ECM system is the digital capture and import of information such as vendor invoices, customer payments, job applicant resumes, vendor contracts, correspondence with customer and vendors, and research reports.

Next, business critical documents are stored in a digital repository where they can be viewed, edited, and organized.

Now documents can be retrieved based on a full-text search, specific words or phrases, and/or preset search options such as document creation date or names of previous users.

Finally, an ECM system reduces organizational risk by providing a safe and secure repository for all corporate content.

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Enterprise Social Platforms

Enterprise social platform is a private, company-owned social media software app that promotes social connectivity and collaboration with an organization and enhances productivity and employee satisfaction.

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Greater interest in ESPs can be attributed to five major factors (Figure 10.15):

1. Networks Increased use of mobile devices and more widespread use of social networking websites.

2. Employee productivity Growing need for improved enterprise efficiencies.

3. Knowledge management Captures and reuses knowledge within the enterprise.

4. Collaboration Maintains human connections across a disparate workforce.

5. Employee pressure Pressure from workers to use the social technologies they prefer to use

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Enterprise Social Platforms: SharePoint

SharePoint is a Microsoft collaboration and document management platform currently used by 85% to 90% of Fortune 500 firms.

The platform is a back-end system that links employees’ computers and mobile devices to make it easy to communicate and to synchronize their efforts.

It has the following social capabilities:

Intranet and extranet

Documents: SharePoint provides a shared space to store documents

Collaboration and BI

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Enterprise Social Platforms: Yammer

Features similar to Facebook likes, newsfeeds, threaded conversation, and direct messaging

This private social channel helps employees, partners, and customers communicate, exchange information, and collaborate across departments, locations, and business apps.

Includes Enterprise Graph which shows how users are related to ne another, solving social network sprawl

Office Graph and Oslo App: Microsoft’s newer project, code-named Oslo, builds on the concept of the Enterprise Graph.

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Communicating and Collaborating with Knowledge Management, Content Management, and Enterprise Social Platforms : Questions

What are the basic functions of an ESP?

What are the capabilities of SharePoint?

In what ways can enterprises realize value from Yammer or other enterprise social?

Why is KM important in an organization?

How does Salesforce Chatter enable workers to solve problems?

What are three advantages of online brainstorming?

How is mindmapping different from brainstorming?

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Copyright

All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.

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