Chapter 7 1. Discuss common types of core business processes?

Order-to-cash: Processes associated with selling a product or services are referred to as the order-to cash process. In case of Amazon, a customer needs to register with amazon prior to buying any item and complete the order by entering shipping and billing information and submitting the order. Amazon.com will then confirm that the customers address is valid and will check credit card information. Order-to cash can be further broken down into multiple sub processes such as creating a customer record, checking the customer creditworthiness, creating an order, checking and allocating stock, picking, packing and shipping, invoicing and collecting the payment.

Procure-to-pay process: Processes associated with procuring goods from external vendor are together referred to as the procure-to-pay process. In example of Amazon, in order to be able to sell books and other products amazon need to acquire these from its supplier. These processes involve managing thousands of suppliers, place purchase orders, receive the products, allocate warehouse space, receive and pay invoices and handle potential disputes. E.g. Amazons Kindle e-book reader. Make-to order/make-to-stock: In the make-to-stock process, goods are produced based on forecasts and are stocked in a warehouse: sales orders are then fulfilled from inventory. In Make to order process, raw materials, subcomponents, and accessories are procured based on forecast, but actual manufacturing does not start until sales orders are received. A good example of this process is Dell.

2. What do you mean by core and support activities? Core activities: These activities are performed by functional areas that process inputs and produce output. They mainly include inbound logistics: Activities associated with receiving and stocking raw materials, parts and products Operations and manufacturing: They involve activities such as order processing and/or manufacturing or assembly processes and transform raw materials and/or component parts into end products. Outbound logistics: They focus on the distribution of end products within the order-to cash business process.

marketing and sales: Activities involved in this process are primarily associated with presales activities(before sale) of the company and include the creation of marketing literature, communication with the potential and exiting customers and pricing of goods and services. Customer service: They focus on post-sale activities .Customers may have questions and need help from customer service representative. Many companies, such as amazon.com are utilizing information systems to provide customer service.

Support activities: Are those business activities that enable primary activities to take place. They include Administrative activities: These activities focus on the processes and decision making to manage the day to day operations of an organization, particularly those processes that span organizational function (accounts, finance etc.) and levels(executive and managerial levels.). Infrastructure activities: It refers to hardware and software that must be implemented to support the applications that primary activities use.

Human resource activities: Human resource involves the business activities associated with employee management, such as hiring, interview scheduling, payroll and benefits management. Technology development: Technology development includes the design and development of application that support the primary business activities.

Procurement activities: It allows accumulating purchase orders from different functional areas. Ordering larger volumes from its supplier means that company can achieve dramatic cost saving through volume discounts. It receives, approves and processes requests for goods and services from primary activities and coordinates the purchase of those items.

3. What are the factors gave rise to Enterprise systems? Stand-alone applications. Systems designed in such a way that they cannot communicate with other systems in the organization. Proprietary software systems: Systems from software vendor designed not to share data with other vendors system. Is manager face problem of knitting together portfolio of discordant proprietary applications into a system that share information. Resulting into inefficient process and loss of business opportunities.

4. What is enterprise-wide information system? It is an integrated suite of business application for virtually every department, process, and industry, allowing companies to integrate information across operation on company-wide basis using one large database. 5. How does an enterprise system help companies do business? Accurate on-time shipment Avoid/or anticipate shortages and weather problems. Minimize cost. Increasing customer satisfaction Increase in overall profits.

6. What are internally focused systems? These systems support functional areas, business processes and decision making within an organizations. It is referred to series of links in a chain along which information flows within organization. 7. What are externally focused systems? These systems coordinate business processes with customers, suppliers, business partners, and others who operate outside an organizations boundaries. They are also referred to as an interorganizational system. 8. What is customer relation application? It concentrates on activities involved in promoting and selling products to the customers as well as providing customer service and nourishing long term relationships. 9. What is supply chain management application? It integrates the value chains of business partners within a supply chain, improving the coordination of suppliers, product or services production and distribution. 10. What are the different types of software programs?

Packaged software: Are applications written by third party vendors for needs of many different users and organizations. They are cost effective or highly useful for standardized repetitive tasks, such as writing a report or preparing a presentation. Custom software: Are applications that are designed and developed exclusively for specific organization. Development costs of custom software are much higher than packaged software because of time, money and resources. 11. What is vanilla version? The features and modules that an enterprise system comes with out of the box are referred to as vanilla version. 12. How does customization help business? Customization provides either additional application that is integrated with the enterprise systems or consists of direct changes to the vanilla application itself. Customization can be extremely costly and maintaining and upgrading customization can be troublesome. 13. What is business process management? It is a systematic, structured improvement approach by all or part of an organization whereby people critically examine, rethink and redesign business processes in order to achieve dramatic improvements in one or more performance measures, such as quality, cycle time or cost. It involves radical redesign and drastic improvement of processes. 14. What are enterprise resource planning systems and what are its benefits? Applications that integrate business activities across departmental boundaries are often referred to as enterprise resource planning systems. They provide various modules based on a common database and similar application interfaces that service the entire enterprise rather portions of it. Information related to the various business activities is converted into a large, centralized database, which alleviates the problem associated with multiple computing platforms. With such system in place, all the members of the organization are aware of the current state of the business and it allows them to perform their job in better way.

15. What are the factors to be considered before choosing ERP systems? ERP control: Locus of control over the computing systems and data contained in these systems, as well as decision making authority.

Business requirement: Organizations must choose modules to implement from large menu of options. There are two major categories of ERP components ERP core components and ERP extended components.

16. What are the different types of ERP components? ERP core components: ERP core components support the important internal activities of the organization for producing their products and services. They support internal operations such as financial management, operations management and human resource management. ERP extended components: Support primary external activities of the organization for dealing with suppliers and customers. They primarily focus on customer relationship management and supply chain management.

17. What are some of the challenges involved in implementing enterprise systems? Secure executive sponsorship: Such systems require concentrated effort, and executive sponsorship can propel or stifle the implementation. Help from outside expert: Using consultant tends to move companies through the implementation more quickly and tends to help companies train their personnel on the application more effectively. The key factor to be considered by the organization is to facilitate user learning. Training: ERP are much more complex than stand-alone systems and requires training. By training users before the systems goes live and giving them sufficient opportunities to learn the new systems, Company can allay fears and mitigate potential productivity issues. Multidisciplinary approach to implementations: ERP affects the entire organization: Thus, companies should include personnel from different levels and departments in the implementation project. It helps organizations to capture all business requirements before selection of an enterprise solution as they are end users of the system.

Chapter 8 1. What do you mean by supply chain? It refers to a collection of companies and processes involved in moving a product from the suppliers of raw materials, to the suppliers of intermediate of components, to final production, and, ultimately, to the customer. The flow of materials from supplier to customer can thus be described as a supply network. 2. What happens when company within the network do not collaborate effectively? Distorts information Excessive inventory Inaccurate manufacturing capacity plans Missed production schedules Degradation in profitability Poor customer service

3. What is just in time production? Holding inventory is costly and does not add value, companies using JIT method are trying to optimize their ordering quantities such that parts or raw material arrive just when they are needed for production. Pioneered by Japanese automaker Toyota and is now adopted by many other businesses. E.g. Dell 4. What is vendor managed inventory? It is a business model in which the supplier to a manufacturer or retailer manages the manufacturers or retailers inventory levels based on pre-established service levels. Such arrangement can help the manufacturers or retailers inventory, both saving cost and minimizing stock out situations: the supplier, in turn benefits from intense data sharing. Which helps produce more accurate forecasts, reduce ordering errors and helps prioritize the shipment of goods.

5. What is a Bullwhip effect? One major problem affecting supply chains are ripple effect referred to as the bullwhip effect. Forecasting errors and safety stocks multiply when moving up the supply chain such that a small fluctuation in demand for an end product can lead to tremendous fluctuation in demand for parts or raw material farther up the supply chain.

6. What is supply chain management? Information systems that focus on improving supply chains with the objective of accelerating product development and innovation and to reduce costs are referred to as supply chain management. It not only helps reduce cost and enhances revenue through improved customer service but also improves coordination of suppliers, product or service production and distribution. 7. What are the key processes supported by supply chain planning module? Demand planning and forecasting Distribution planning Production scheduling Inventory and safety stock planning

8. What is supply chain execution? It is execution of supply chain planning and puts it in motion and reflects the processes involved in improving the collaboration of all members of supply chain such suppliers, producers, distributors and customers. Key elements managed by SCE are 1) product flow 2) information flow 3) financial flow. 9. What is supply chain visibility? It refers to the ability to track products as they move through the supply chain but also to foresee external events. It is tremendous help, especially when companies use JIT strategy. 10. What is the supply chain analytics? It refers to the use of key performance indicators to monitor performance of the entire supply chain, including sourcing, planning, production, and distribution.

11. What so you mean by supply chain efficiency and supply chain effectiveness? Supply chain efficiency: When companys supply chain focuses on minimizing procurement, production, and transportation costs, sometimes by sacrificing excellent customer service it is called supply chain efficiency. 12. What is supply chain effectiveness? When companys supply chain focuses on maximizing customer service regardless of procurement, production, and transportation cost.

13. What are the key technologies that can enhance SCM? EXTENSIBLE MARKUP LANGUAGE (XML): It allows designers of web documents to create their own customized tags, enabling the definition, transmission, validation, and interpretation of data between applications and between organizations.

XBRL: is an XML-based specification for publishing financial information. By using it Private and Public companies can share information with each other, with industry analysts and with shareholders .It includes tags for data such as annual and quarterly reports, SEC filings among others. Radio frequency identification: It involves use of the electromagnetic energy to transmit information between reader and a processing device or RFID tag. It has been highly used by retailors, airline industry.

14. What is CRM system? It is not only a system but a corporate level strategy to create and maintain, through the introduction of reliable systems, processes, and procedures, lasting relationships with customers by concentrating on the downstream information flows with objective to attract potential customers, to create loyalty and to portray a positive corporate image.

15. What are the benefits of a CRM system? Enables24/7/365 operation Individualized service Improved information Speed problem identification/resolution Speeds processes Improved integration Improved product development Improved planning 16. For CRM strategy to be successful what are the required enterprise wide changes? Policy and business process changes Customer service changes Employee training changes Data collection, analysis and sharing changes

17. What are the primary components of CRM? Operational CRM Analytical CRM Collaborative CRM

18. Define operational CRM and what are its components? It enables direct interaction with the customer and provides personalized and highly efficient customer service. It is a system for automating the fundamental business processes such as marketing, sales and support. Various components of operational CRM are follows Sales force automation: It refers to systems to support the day to day sales activities of an organization. It supports broad range of sales related business processes such as Order processing and tracking, account and contact management, opportunity management, sales management, territory management, customer history and sales forecasting and performance analysis. It also provides various advantages to sales personnel, marketing managers by allowing them to track sales performance, improved understanding of markets, competitors and products. Customer service and support: It refers to systems that automate service requests, complaints, products returns and information requests. A successful CSS enables faster response time, increased first-contact resolution rates, and improved productivity of service and support personnel. Enterprise marketing management: The third component of operational CRM system and helps the company in the execution of CRM strategy by improving the management of promotional campaign. It also provides extensive analytical capabilities that can help to analyze the effectiveness of marketing campaigns and can help to efficiently route sales leads to right salespeople, leading to better conversion rate. Analytical CRM: It focuses on analyzing customer behavior and perceptions in order to provide the business intelligence necessary to identify new opportunities and to provide superior customer service. It allows companies to more easily customize marketing campaign from segment level to even the individual customer. It includes technologies such as data mining, decision support and other business intelligence that create predictive models of various customer attributes.

19. What is a collaborative CRM? Collaborative CRM integrates the communication related to all aspect of marketing, sales, and support process in order to better serve and retain customer. It facilitates the sharing of information across the various departments of an organization in order to provide more streamlined customer service with fewer handoffs. 20. What are some of the ethical concerns with CRM? It might not be viewed positively by people who feel it invades customer privacy and facilitates coercive sales practices. Categorize people in way that they will exception to Too much of personalization could backfire on a company.