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2. Electronic data interchange (EDI), the business-to-business exchange of data using compatible software.
3. Email, instant messaging, and other Web-enabled communication tools and their use as media for reaching prospective and existing customers. 4. The gathering and use of demographic, product and other information through Web contacts.
e-Commerce is defined as buying and selling over digital media. e-Business encompasses e-commerce, but also includes both fontand back office applications that form the engine for modern business. It also redefines old business models, with the aid of technology, to maximize customer value.
Examples: Customer Relationship Management (CRM) Partner Relationship Management (PRM) Supply Chain Management (SCM) Knowledge Management (KM)
Integrate a variety of enterprise application clusters by letting them exchange data according to rules derived from the business process models developed by users.
Integrate the front-office and back-office applications of a business so they worked together in a seamless, integrated way.
Figure show that, how EAI software can integrate the front office & back office applications of an E-business.
Here, EAI software connects major e-business applications like CRM & ERP. Thats because EAI integrates access to the entire customer and product data representative need to quickly serve customers. EAI also streamlines sales order processing so products and services can be delivered faster. Thus, EAI improves customer & supplier experience with the business because of its responsiveness.
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Transactions are events that occur as part of doing business such as sales, purchases, deposits withdrawals, refunds and payments. Online transaction processing systems Plays a strategic role in electronic commerce. These real-time systems, which capture and process transactions immediately, can help them provide superior service to customers and other trading partners. Many firms are using the Internet, extranets and other networks that tie them electronically to their customers or suppliers for online transaction processing (OLTP).
Online Transaction Processing (OLTP) Real Time systems, immediate feedback Real time Reports and databases updates
Two basic ways that Transaction Processing systems process the data: Batch Processing All transactions for a period of time would be collected in a group (called a batch), input & processed as a unit. This was normally done at regular intervals, such as every hour, day or week.
Real-time Processing - also called online transaction processing (OLTP) where each transaction is processed immediately as it occurs. The drawback to OLTP is the high costs because of its fault tolerance features that can continue to operate even if the parts of the system fail.
Diagram
Real World Case 2: Nationwide Insurance- Unified Financial Reporting and One Version of the Truth
Nationwide Insurance, a diversified insurance and financial services company Headquarters: Columbus, Ohio CEO: Jerry Jurgensen CFO: Robert A. Rosholt CIO: Michael Keller Revenue: $160 billion in assets; $21 billion in annual revenues Employees: 36,000 IT Employees: 5,500
Focus Project Fast Facts: 280 team members worked 1.2 million man hours (including overtime) over 24 months
Real World Case 2: Nationwide Insurance- Unified Financial Reporting and One Version of the Truth
Started transformation in early 2004 Master Data Management that would alter: How every Nationwide business reported its financials How accounting personnel did their jobs How data were governed and by whom How the companys information systems would pull all that together Financial transformation program called FOCUS used 14 general ledgers 12 reporting tools 17 financial data repositories 300,000 spreadsheets
Real World Case 2: Nationwide Insurance- Unified Financial Reporting and One Version of the Truth
Followed 80/20 rule Get roughly 80% of the project up and running in 24 hours then fix the remaining 20% later. The requirements, definitions and parameters were mapped out:
Two rules
Financial-related systems had to be subscribers to the central book of record None of the master data in any of the financial applications could ever be out of sync.
Final step is to evaluate technologies that would follow and enforce the rules.
March 2005 the team started rolling out the new Focus System Fall of 2005 new business processes and financial data governance mechanisms actually being used by Nationwide employees and it all was working.
Manufacturing Systems
Manufacturing Systems
Supports production/operations functions All activities concerned with planning and control of the processes that produce goods or services
Computer-Integrated Manufacturing (CIM) is an overall concept that stresses that the goals of computer use in factory-automation must be to: Simplify/Reengineer Automate Integrate Goal: Flexible manufacturing systems Agile manufacturing Total quality management
Manufacturing Systems
Results of CIM- enables a company to quickly respond to and fulfill customer requirements with high-quality products and services Uses of CIM: Computer-aided engineering (CAE) Computer-aided design (CAD)
Personnel
Instructions and specification Production facilities
Manufacturing Systems
Benefits of CIM: Increased efficiency through: Work simplification and automation Better production schedule planning Better balancing of production workloads in production capacity Improved utilization of facilities, higher productivity, better quality control through: Continuous monitoring Feedback and control of factory operations, equipment and robots Reduced investments in production inventories and facilities through: Work simplification Just-in-time inventory policies Better planning and control Production Finished goods requirements
Manufacturing Systems
Benefits of CIM: Improved customer service through: Reducing out-of-stock situations Producing high-quality products that better meet customer requirements Process Control Use of computers to control an ongoing physical process Requires the use of special sensing devices that measure physical phenomena such as temperature of pressure changes These continuous physical measurement are converted to digital form by analog-to-digital converters and relayed to computers for processing Machine Control (Numerical control) Use of computers to control the actions of machines The computer-based control of machine tools to manufacture products of all kinds.
True or False
1. One component of targeted marketing is tracking the online behavior of customers who visit a companys website. Answer: TRUE Computer-aided manufacturing systems can include both process control and machine control. Answer: TRUE 3. Employee self-service intranet applications frequently allow employees to view their benefits, enter travel and expense reports and compare the salaries of different employees.
2.
Answer: FALSE
Accounting System
Accounting Information System record and report business transaction and other economic events that report: Flow of fund through an organization;
Accounting System
sales order accounts
receivable
processing
billing
receivable
cash
general ledger
reporting
financial
cash receipts and disbursements transaction processing systems sales analysis sales transaction processing system purchase transaction processing system
purchase
accounts payable
cash disbursement
payroll
inventory
processing
timekeeping
cash Management
cash Management
cash Management
cash Management
REAL WORLD CASE Cisco Systemsx : Telepresence and the Future of Collaboration
Collaborative Technology Cisco 1.0 People could be connected by truckloads of routers and switches. Cisco 2.0 According to Chambers, the CEO of Cisco, this became centered on business process change. Cisco 3.0 Chamber said that it will fundamentally change the nature of work, enabling productivity growth.
REAL WORLD CASE Cisco Systemsx : Telepresence and the Future of Collaboration
What did they do for revolution? Cisco has deployed telepresence rooms in 160 of its offices worldwide since late 2006 when it began to roll out the conferencing technology. It created an environment of directed participation, in which the tools are adapted, refined, and sharpened to drive innovation and growth. Cisco changed company structure also toward more horizontal: instead of command- and control structure, to collaboration.
Cisco says that telepresence itself will be offered as an on-demand managed service at off-site locations for companies that cant or dont want to invest in their own systems.
REAL WORLD CASE Cisco Systems : Telepresence and the Future of Collaboration
Keen Competition Polycom
Tyco International Ltd. Employee performance management, career development, and succession planning are the functions that can be automated with human capital management (HCM) applications. Tyco uses Kenexas CareerTracker to track employee performance and promotion. Provides objective criteria.
1 2
3
What is CRM? The three phases of CRM Benefits and challenges of CRM Trends in CRM
Introduction
Customer-focused business is one of the top business strategies that can be supported by information technology. Many companies are implementing customer relationship management (CRM) business initiatives and information systems as part of a customer-focused or customer centric strategy to improve their chances for success in todays competitive business environment.
What is CRM?
CRM is described as a cross-functional e-business application that integrates and automates many customer-serving processes in sales, direct marketing, accounting and order management, and customer service and support. CRM systems create an IT framework that integrates all the functional processes with the rest of a companys business operations. CRM systems consist of a family of software modules that perform the business activities involved in such front office processes. CRM software provides the tools that enable a business and its employees to provide fast, convenient, dependable, and consistent service to its customers.
What is CRM?
Contract and Account Management CRM software helps sales, marketing, and service professionals capture and track relevant data about every past and planned contact with prospects and customers, as well as other business and life cycle events of customers. Sales CRM software tracks customer contacts and other business and life cycle events of customers for crossselling and up-selling.
What is CRM?
Marketing and Fulfilment CRM software can automate tasks such as qualifying leads, managing responses, scheduling sales contacts, and providing information to prospects and customers. Customer Service and Support CRM helps customer service managers quickly create, assign, and manage service requests. Help desk software assists customer service reps in helping customers whom are having problems with a product or service, by providing relevant service data and suggestions for resolving problems.
What is CRM?
Retention and Loyalty Programs
It costs six times more to sell to a new customer than to sell to an existing one.
A typical dissatisfied customer will tell eight to ten people about his or her experience.
What is CRM?
Retention and Loyalty Programs A company can boost its profits 85% by increasing its annual customer retention by only 5%. The odds of selling a product to a new customer are 15%, whereas the odds of selling a product to an existing customer are 50%. 70%of complaining customers will do business with the company again if it quickly takes care of a service snafu. More than 90% of existing companies dont have the necessary sales and service integration to support e-commerce.
CRM enables real-time customization and personalization of products and services based on customer wants, needs, buying habits, and life cycles.
CRM can keep track of when a customer contacts the company, regardless of the contact point. CRM enables a company to provide a consistent customer experience and superior service and support across all the contact points a customer chooses.
Acquire
Enhance
Retain
CRM Failures: Major reason for the failure of CRM systems is the lack of understanding and preparation.
Trends in CRM
Operational CRM
One
Analytical CRM
Two
Collaborative CRM
Three
Portal-based CRM
Four
Trends in CRM
Operational CRM most businesses start out with operational CRM systems such as sales force automation and customer service centers.
Analytical CRM analytical CRM applications are implemented using several analytical marketing tools, such as data mining, to extract vital data about customers and prospects for targeted marketing campaigns.
Trends in CRM
Collaborative CRM CRM systems to involve business partners as well as customers in collaborative customer service. Portal-based CRM Internet, intranet, and extranet Web-based CRM portals as a common gateway for various levels of access to all customer information, as well as operational, analytical, and collaborative CRM tools for customers, employees, and business partners.
Trends in CRM
Increasingly, businesses are moving to collaborative CRM systems, to involve business partners as well as customers in collaborative customer services. This includes systems for customer self-service and feedback, as well as partner relationship management (PRM) systems.
Trends in CRM
Source: http://soshable.com/
Sheilla G. Capuchino
INTRODUCTION
Enterprise resource planning (ERP) systems serve as a cross-functional enterprise backbone. It integrates and automates many internal business processes and information systems within the manufacturing, logistics, distribution, accounting, finance, and human resource functions of a company.
APPLICATION COMPONENTS
ERP SOFTWARE
ERP software is a family of software modules that supports the business activities involved in vital back-office processes.
ERP gives a company an integrated real-time view of its core business processes. ERP systems track business resources, and the status of commitments made by the business no matter what department has entered the data into the system.
ERP creates a framework for integrating and improving a companys internal business processes that results in significant improvements in the quality and efficiency of customer service, production, and distribution.
Many companies report significant reductions in transaction processing costs and hardware, software, and IT support staff compared to the non-integrated legacy systems that were replaced by their new ERP systems.
ERP provides vital cross-functional information on business performance quickly to managers to significantly improve their ability to make better decisions in a timely manner across the entire business enterprise.
ERP can be used in breaking down many former departmental and functional walls, which results in more flexible organizational structures, managerial responsibility, and work roles.
Hardware and software costs are a small part of the total costs. The costs of developing new business processes (reengineering) and preparing employees for the new system (training and change management) 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.
15%
Software
Hardware
Overreliance by company or IT management on claims of ERP software vendors or the assistance of prestigious consulting firms hired to lead the implementation
Development of interenterprise ERP systems that provide Web-enabled links between key business systems of a company and its customers, suppliers, distributors, and others.
An ERP system was installed, but did not extend to the shop floor.
Significant research was done before deciding to add the shop floor reporting module.
KNOWLEDGE CHECK
Please cite at least two causes of Enterprise Resource Planning failure.
Learning Objectives
Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource manage-ment, and supply chain management systems: Business processes supported Customer and business value provided Potential challenges and trends Understand the importance of managing at the enterprise level to achieve maximum efficiencies and benefits.
Help desk software provides service data and suggestions for solving problems
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
CRM Failures
Reasons for Failure
Lack of senior management sponsorship Improper change management Elongated projects that take on too much, too fast Lack of or poor integration between CRM and core business systems Lack of end-user incentives leading to poor user adoption rates Lack of understanding and preparation -- # 1 Not solving business process problems first No participation on part of business stakeholders involved
What is ERP?
Cross-functional enterprise system
Integrated suite of software modules Supports basic internal business processes
Manufacturing Logistics Distribution Accounting Finance Human resources
Failure to involve affected employees Too much too fast Insufficient training
Insufficient data conversion and testing
Benefits of SCM
Key Benefits
Faster, more accurate order processing Reductions in inventory levels Quicker times to market
Challenges of SCM
Key Challenges
Lack of knowledge, tools, and guidelines Inaccurate data Lack of collaboration SCM tools are immature, incomplete, and hard to implement
Trends in SCM
CVS, McKesson
CVS leading drug retail chain
The CRM implementations in this case highlight the critical importance of information about customers, their preferences and activities, and how to use it to understand and develop better marketing solutions. The benefits are well-understood but the risks and concerns for customers are not well addressed especially with regards to customer privacy.
NetSuite Inc. is a leading provider of on-demand enterprise applications, including CRM. Other important players in this market include Salesforce.com and Siebel On Demand.
Churchill Downs Incorporated is the parent company of Churchill Downs. The company owns several other thoroughbred and standard bred racetracks. Churchill Downs Incorporated is listed on the NASDAQ as CHDN. The company is the most profitable track owner in the horse racing industry.
Before installing CRM, it was previously thought that there were 4 customer types but after using CRM it was discovered that there were 9 customer types indicating that previous marketing efforts were not targeted or useful as should have been.
Berlin Packaging: The Secret to Berlin CRM is in the Data Packaging is a major North
American supplier of packaging, closures and related services to manufacturers in a wide array of industries, including beverage, food, personal care, pharmaceutical, household care, and industrial and coatings sectors. of more than $600 million. At the end of 2011, the firm had 32 U.S. sales offices in 21 U.S. states and Puerto Rico as well as over 50 dedicated or third-party warehouse locations across the United States.
Easterns business slogan is Connecting you Faster, Better and with Sales Cloud from Salesforce.com we are living up to our promise.
Why did Eastern need CRM? Easterns customer relationship management platform and other systems were expensive to maintain and develop; difficult to customise; and hard to get to talk to one-another Eastern needed a pre-sales order system that could work with a new business support system and sales tool was needed to allow the organisation to monitor and track all opportunities being worked on by the sales team
With a history of over 100 years, Eastern Communications has evolved into a full service provider of world-class telecommunication services of Internet, Data, fullservice Telephony and businessenabling solutions.
Creating a real-time SCM infrastructure is a daunting and ongoing issue and often a point of failure for several reasons
The chief reason is: planning, selection, and implementation of SCM solutions are becoming more complex as the pace of technological change accelerates and the number of companys partners increases
Aim: increase agility and responsiveness in meeting the demands of its customers and the needs of its business partners
Objectives of SCM:
BUSINESS VALUE GOALS Rapid demand fulfillment Collaborative supply Chain planning and execution
CUSTOMER VALUE GOALS Give customers what they want, when and how they want it, at the lower cost
A business unit initiates transaction, such as purchase order, through its ERP system
Challenges of SCM
Lack of adequate collaboration
among marketing, production, and inventory management departments within a company, and with suppliers, distributors, and others
Companies consider even the SCM software tools themselves to be immature, incomplete, and hard to implement
Nike Inc.
In the athletic footwear business, Nike has
32% worldwide market share (almost double Adidas, its nearest rival) Market cap thats more than the rest of the manufacturers and retailers in the industry combined
Nike Inc.
2000, installed i2 Tech. SCM software Upset Nike's inventory
Inventory shortages reduced Nike's fiscal thirdquarter sales by as much as $100 million Ultimately forced the footwear maker to slash earnings estimates.
Roland Wolfram Nike vice-president of global operations and technology i2problem glitch is a speed bump
i2 supply-and-demand-planning application didn't perform as expected, resulting in shortages of some footwear models and excess stock of others
Nike chose to customize the software and did not use the implemented methodology
Nike Inc.
i2 software glitch that cost Nike:
>$100million in lost sales Depressed its stock price by 20% triggered a flurry of class-action law suits
famously lamented This is what you get for $400 million, huh?
Nike Inc.
Nikes demand-planning strategy was and continues to be a mixture of art and technology Nike sells too many products (120,000) in too many cycles (four per year) to do things by intuition alone. Six years later, better collaboration with Far East factories has reduced the amount of prebuilding of shoes from 30% to 3%
http://www.philippines.scmtimes.com/p/2064463971/f ord-plant-closure-highlights-gaps-in-ph-autoindustry?tag=Supply+Chain
Trends in SCM
The supplier-facing applications arena:
Continued growth of public as well as private networks that transform linear and inflexible supply chains into nonlinear and dynamic fulfillment networks From automation and integration of supply chains to collaborative sourcing, planning, and design across their supplier networks
Stages in SCM
Information Sharing Product/Sales Data Sourcing Help Logistics Order Fulfillment Order Management Inventory Management Resource Allocation Systems Use and Integration Collaborative Marketing Sales and Service SCM Optimization Collaborative Design and Delivery
SCM Stage 1 Current supply chain improvement Supply chain, ecommerce loosely coupled
SCM Stage 3 Collaborative planning and fulfillment Extranet and exchangebased collaboration
SCM Stage 1 Current supply chain improvement Supply chain, ecommerce loosely coupled
Its e-commerce Web site and those of some its trading partners provide access to online catalogs and useful supply chain information as they support limited online transactions.
A company accomplishes:
Internally: substantial supply chain management applications by using selected SCM software programs internally, Externally: via intranet and extranet links among suppliers, distributors, customers, and other trading partners.
Expanding the business network of Web-enabled SCMcapable trading partners in their supply chain
To increase its operational efficiency and effectiveness in meeting their strategic objectives
SCM Stage 3 Collaborative planning and fulfillment Extranet and exchangebased collaboration
SCM Stage 3 Collaborative planning and fulfillment Extranet and exchangebased collaboration
Stages in SCM
Information Sharing Product/Sales Data Sourcing Help Logistics Order Fulfillment Order Management Inventory Management Resource Allocation Systems Use and Integration Collaborative Marketing Sales and Service SCM Optimization Colaborative Design and Delivery
SCM Stage 1 Current supply chain improvement Supply chain, ecommerce loosely coupled
SCM Stage 3 Collaborative planning and fulfillment Extranet and exchangebased collaboration
Supply chain integration allows marketing managers to plan promotions more effectively, using historical point-of-sale data on a store-by-store basis Substantially reduces the amount of time needed to plan to stock inventory for individual promotions
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