Electronic Business Systems :Harris Fall 2008 Electronic Business Systems O’Brien Chapter Seven


Objectives :Objectives Cross-functional e-business systems Provide significant business value to company, its customers & partners Examples Enterprise resource planning (ERP) Customer relationship management (CRM) Supply chain management (SCM) Integrated Systems Online transaction processing Enterprise collaboration How Internet & other technologies support business processes


Case 1: Hilton Hotels CorporationData-Driven Hospitality :Harris Fall 2008 Case 1: Hilton Hotels CorporationData-Driven Hospitality OnQ the IT piece of a “customers really matter” strategy Goal to Build customer loyalty More revenue per visit Customer profiles


Case Study Questions :Harris Fall 2008 Case Study Questions What are the benefits and drawbacks of the OnQ system at Hilton? What does Hilton have to do to create a competitive advantage through OnQ? Provide some specific examples. Is it possible to have too much information about a customer? Explain.


Major E-Business Applications :Major E-Business Applications & other networks Front End Back End


Cross-functional Systems :Cross-functional Systems Cross the boundaries of traditional business functions In order to reengineer and improve vital business processes all across the enterprise New Product Development Process


Enterprise Business Systems :Enterprise Application Architecture Enterprise Business Systems


Customer Relationship Management (CRM) :Harris Fall 2008 Customer Relationship Management (CRM) CRM uses technology to Create a cross-functional enterprise system That integrates and automates many of the processes in sales, marketing & customer service that interact with customers Create a framework of web-enabled software & databases that integrate these processes with the rest of the company’s processes


Customer Relationship Management :Harris Fall 2008 CRM Uses IT to Create a Cross-Functional Enterprise System Customer Relationship Management Marketing and Fulfillment Customer Service and Support Retention and Loyalty Programs Contact and Account Management Sales Cross-Sell Up-Sell Prospect or Employee Fax e-Mail Telephone Web


CRM applications :Harris Fall 2008 CRM applications Contract and Account Management Helps sales, marketing & service professionals Capture & track data about past/planned contacts with customers/prospects Sales Provides sales reps with software tools & data they need to support & manage sales activities Cross-selling is trying to sell a customer of one product with a related product Up-selling is trying to sell customer a better product than they are currently seeking


CRM applications :Harris Fall 2008 CRM applications Marketing and Fulfillment Help marketing professionals accomplish direct marketing campaigns by tasks such as Qualifying leads for targeted marketing & scheduling & tracking direct marketing mailings


CRM applications :Harris Fall 2008 CRM applications Customer Service and Support Provides sales reps with software tools & database access to customer database shared by sales & marketing professions Helps create, assign and manage requests for service Call center software routes calls to customer support agents based upon their skills and type of call Help desk software provides relevant service data & suggestions for resolving problems for customer service reps helping customers with problems


CRM applications :Harris Fall 2008 CRM applications Retention and Loyalty Programs Try to help a company identify, reward, & market to their most loyal and profitable customers Data mining tools & analytical software Customer data warehouse


CRM: The Business Focus :Supports integrated & collaborative relationship between a business & it’s customers CRM: The Business Focus Customer Life Cycle CRMFunctional Solutions CRMIntegrated Solution The Internet Collaborative Service Shared Customer Data


Benefits & Challenges of CRM :Benefits & Challenges of CRM CRM Benefits Identify and target the best customers Customization & personalization of products & services Track customer contacts Provide consistent customer experience & superior service/support CRM failures 50% of applications fail to meet expectations 20% of the time CRM damaged customer relationships Lack of understanding & preparation is blamed


Enterprise Resource Planning (ERP) :Harris Fall 2008 Enterprise Resource Planning (ERP) Cross-functional enterprise system with an integrated suite of software modules that support the basic internal business processes of a company


Enterprise Resource Planning :Harris Fall 2008 Enterprise Resource Planning Sales Distribution, Order Management Accounting and Finance Production Planning Human Resources Integrated Logistics Customer/ Employee


Benefits of ERP :Harris Fall 2008 Quality and Efficiency Decreased Costs Decision Support Enterprise Agility Benefits of ERP


Costs of implementing a new ERP :Harris Fall 2008 Costs of implementing a new ERP


Failures in ERP Do Exist :Harris Fall 2008 SAP AG’s Software Installation Problems of ERP Integrated Suite into a Retail Environment Jo-Ann Stores and Petsmart Blamed Software for Poor Financial Performance Sobey’s Grocer Had Problems with Number of Transactions Sobey’s is Replacing System Failures in ERP Do Exist


Causes of ERP Failures :Harris Fall 2008 Underestimating complexity of planning, development & training needed Failure to involve affected employees Trying to do too much too fast Insufficient training in new work tasks Failure to do enough data conversion & testing Over reliance by company on claims of ERP vendors or consultants Causes of ERP Failures


Supply Chain Management (SCM) :Harris Fall 2008 Supply Chain Management (SCM) A cross-functional interenterprise system To help support and manage the links between a company’s key business processes And those of its suppliers, customers & business partners


Slide 23:Supply Chain Management Commit


Supply Chain Management :Harris Fall 2008 Supply Chain Management SCM – A top strategic objective for many firms The right products The right place The right time In the proper quantity At an acceptable cost


Role of SCM :Harris Fall 2008 Role of SCM


Slide 26:SCM Software Helps Firms Reengineer and Integrate The Functional SCM Processes Supply Chain Life Cycle SCMFunctional Processes SCMIntegrated Solution The Internet Collaborative Fulfillment Shared Market Data Strategic Sourcing and Procurement Forecast and Demand Planning Customer Order Fulfillment Service Distribution Network and Warehouse Operations Transportation and Shipment Management Production Logistics


SCM goal :Harris Fall 2008 SCM goal Fast, efficient, low-cost network of business relationships or supply chain to get a company’s products from concept to market A supply chain: Interrelationships with suppliers, customers, distributors, and other businesses that are needed to design, build and sell a product


Causes of problems in SCM :Harris Fall 2008 Causes of problems in SCM Lack of proper demand-planning knowledge, tools & guidelines Inaccurate or overoptimistic demand forecasts Inaccurate production, inventory & other data Lack of adequate collaboration within the company & between partners SCM software considered immature, incomplete & hard to implement


SCM :Harris Fall 2008 SCM


Cross-Functional Integrated Systems :Cross-Functional Integrated Systems EAI Software Connects Major e-Business Applications Like CRM and ERP


Slide 31:Harris Fall 2008 Survey of 75 related companies revealed 18 different software packages Lack of integration reduces cost and speed savings that might be realized Use of webmethods EAI to coordinate processes New system generated cost savings Orders for product automatically orders parts Dell Computer: Enterprise Application Integration page 207 (253)


How EAI works :Harris Fall 2008 How EAI works


Enterprise Application Integration (EAI) :Enterprise Application Integration (EAI) EAI connects cross-functional systems Serves as middleware to Provide data conversion Communication between systems Access to system interfaces


Enterprise Collaboration Systems (ECS) :Harris Fall 2008 Enterprise Collaboration Systems (ECS) ECS Cross-functional IS that enhance communication, coordination and collaboration among the members of business teams and workgroups


ECS Goals :Harris Fall 2008 ECS Goals Communicate: share information with each other Coordinate: coordinate individual work efforts and use of resources with each other Collaborate: work together cooperatively on joint projects and assignments


ECS Tools :ECS Tools


Why Collaborate? :Harris Fall 2008 Why Collaborate? Workgroups & project teams work together efficiently & effectively regardless of location Share information, Coordinate work efforts and resources Work together cooperatively.


Slide 38:Harris Fall 2008 General Electric Co: Committed to Enterprise Collaboration page 210 (256) Committed to Lotus tools – Quickplace Quickplace-web-based work spaces Sametime (real-time online meetings) Tools streamline communication 18,000 Quickplaces for 250,000 users


Functional Business Systems :Harris Fall 2008 Functional Business Systems A variety of information systems (transaction processing, management information systems, decision support, etc.) That support the business functions of Accounting, finance, marketing, operations management & human resource management


Functional Business Systems :Functional Business Systems Examples of Functional Business Information Systems Marketing Production Operations Human Resource Management Accounting Finance Customer relationship management Interactive marketing Sales force automation Cash management Credit management Investment management Capital budgeting Financial forecasting Order processing Inventory control Accounts receivable Accounts payable Payroll General ledger Compensation analysis Employee skills inventory Personnel requirements forecasting Manufacturing resource planning Manufacturing execution systems Process control Functional Business Systems


Marketing Information Systems :Marketing Information Systems Market Information Systems


Interactive marketing :Harris Fall 2008 Interactive marketing Interactive marketing: A customer-focused marketing process Using the Internet, intranets & extranets To establish two-transactions Between a company & its customers or potential customers Goal: to profitably attract and keep customers who will become partners with the business in creating, purchasing & improving products & services


Targeted Marketing :Targeted Marketing An advertising & promotion management concept that includes five targeting components


Targeted Marketing Components :Harris Fall 2008 Targeted Marketing Components Community – customize advertising to appeal to people of specific virtual communities Content – advertising placed on a variety of selected websites aimed at a specific audience Context – advertising placed on web pages that are relevant to the content of a product or service Demographic/Psychographic – web marketing efforts aimed at specific types or classes or people Online Behavior – promotion efforts tailored to each visit to a site by an individual, e.g., using cookies files


Internet Marketing :Internet Marketing Push Pull E-Mail Web Publishing


Sales Force Automation :Harris Fall 2008 Sales Force Automation Outfit sales force with notebook computers, web browsers & sales contract management software Connect them to marketing websites & company intranet Goal: Increase personal productivity Speeds up capture & analysis of sales data from the field to marketing managers Gain strategic advantage


Slide 47:Harris Fall 2008 The End