CIS 310 Management Information Systems Enterprise Wide Information Systems Guthrie, Winter 2013.

CIS 310 Management Information Systems

Enterprise Wide Information SystemsGuthrie, Winter 2013

The Big Three• Enterprise Resources Planning• Supply Chain Management• Customer Relationship Management

ERP

• Integrates all the departments throughout an organization to support decision making.

• Keeps an integrated, consistent view of what is going on. – Improves planning– Reduces waste and – Reduces cycle time– Accounts for changes

Enterprise Resources Planning (ERP)

• Prior to 1990 – Manufacturing Resources Planning

• 1990s grew into ERP and began focusing on manufacturing and other enterprise wide systems.

• Grew to include HR, Accounting and business functions beyond manufacturing by the mid 90s.

• Gained popularity because of Y2K.

What was Y2K?

• Year 2000 computer bug.• Many programs had 19xx in their code. They

needed to be upgraded to accept 20xx.• Predictions of massive software failure and

world collapse were at a hysterical pace.• Ultimately, nothing happened.

What Does ERP Do?

• Financials– Accounts payable – Accounts Receivable– Accounting and financial reporting– Risk management– Regulatory compliance– Cash flow monitoring– Travel management

• Human Resources– End user maintenance– Process Management– Reporting– Labor Force Analysis– Placement– Recruitment & Training– Talent Management

• Operations– Procurement– Logistics– Sales and service– Operations analytics

Before & After ERP

Materials & Manufacturing

Engineering

Procurement

Accounting

Marketing & Sales

Human Resources

Materials & Manufacturing

Engineering

Procurement

Accounting

Marketing & Sales

Human Resources

ERP

Vertical Integration

• Forward Integration – How the company implements it’s product distribution.

• Backward Integration – How the company regulates it’s goods or supplies.

• Vertical Integration is both.

Integration and IT

• Throughout the lectures for this week, you will see that integration is the key feature.

• Having integrated systems – Reduces errors– Increases speed– Makes information visible to everyone involved in

the product life cycle

Big ERP Companies

• SAP (25% - Gartner Group, 2011)– Systemanalyse und Programmentwicklung (1972)

(Systems Analysis and program Development)– Systeme, Anwendungen, Produkte in der

Datenverarbeitung (Systems, Applications and Products in Data Processing)

• Oracle• Microsoft Dynamics• PeopleSoft

Example: Network Polymers

• Developer of thermoplastic resins and alloys• Old systems (spreadsheets and other systems)• Problems– Old, inaccurate data– No integration of bill of materials with manufacturing

• 2010 ERP solved these problems• Employees were 50% more productive• 50% less paper use• Better inventory stocking & barcoding• Quicker cycle times IQMS Case Study: Network Polymers

Example: USAF

• Air Force's Expeditionary Combat Support System (ECSS)

• Project to “modernize logistics”• “enormously complex task” • Started in 2005• $1 Billion in, several billion to complete• Project was closed and is under investigation

ComputerWorld: USAF ERP Failure

Benefits of ERP

• Integration – reduced data entry and reduced errors.

• Improve efficiency and effectiveness of business processes.

• Cost reduction – manual processes are reduced. Fewer people are needed.

• Better, more informed, decision making.

Challenges of ERP

• Expensive• Can be difficult to implement• Can be difficult and expensive to customize• Typically requires a lot of consultants• Typically requires a lot of training• User satisfaction is often low, especially if

people perceive the implementation as responsible for lost jobs

Future ERP

• Two Tier ERP for Global Corporations• Mobile• Social Media Integration• Cloud Computing (subscription vs. in-house

service)

End

• Why is ERP so expensive?

• Does ERP include CRM?

• What’s so great about integration?

It is a large, complex system and requires a lot of experts to implement it and to provide training for organizations.

Yes. Often this is true.

Speeds things up. Reduces errors. Creates one true source of data for people to interpret. Gives access across organizations.

Supply Chain Management

Guthrie, Winter 2013

Wieland, Andreas; Wallenburg, Carl Marcus (2011): Supply-Chain-Management in stürmischen Zeiten. Berlin, p. 8.

The Chain

SCM

• Supply Chain Management seeks to optimize information flows between all activities in the supply chain in order to improve effectiveness and increase profit.

The Dollhouse Supply Chain

SuppliersChop Shop

Wood

Raw materials

Printed Items

Paper

Raw materials

Packages

Raw materials

Customers

Hobby WebsitesExternal Distributors

Doll House PartsLabelsInstructionsPackaging

DH DesignsInternal

The Dollhouse Supply Chain

SuppliersChop Shop

Wood

Raw materials

Printed Items

Paper

Raw materials

Packages

Raw materials

Customers

Hobby WebsitesExternal Distributors

Doll House PartsLabelsInstructionsPackaging

DH Designs

Internal

Up-stream

Down-stream

Supply Chain Activities

• Plan – Plan the product to market. How will you meet the demands of the customers?

• Source – Supplier Selection• Make – Manufacturing or assembling the

product. Measuring your quality, production and productivity.

• Deliver – Logistics. Getting your product to your customer.

• Return – Managing the return of defective and excess products from customers.

Benefits of SCM

• Reduced Cost• Minimized Delays• Increased Profitability• Increased insight and collaboration• Create a switching cost for those who do

business with you• Possibly reduce the bargaining power of

suppliers or buyers

Challenge of SCM

• Cost• Complexity• Talent• Risk Management

End

• If my company provides tax return preparation, are my clients upstream or downstream?

• What are the 5 activities in SCM?

Downstream.

Plan, Source, Make, Deliver, Return.

Customer Relationship Management (CRM)

Winter, 2013

CRM• Customer Relationship Management (CRM) is exactly like it

sounds. It is the information systems used to support the customer relationship just after manufacturing in the supply chain.– Marketing develops sales leads.

– Contacts – interactions with customers and people who give customer support in your firm.

– Meetings and appointments.

– Records – historic data about the relationship with the client.

• CRM automates/organizes all these activities and lets marketing, sales and service people see it.

• Enhances communication and collaboration.

CRM Integration

Marketing

Sales RepsCustomer

Service

Accounting

Fulfillment

Accounting

Marketing

Sales

CRM

Customer Service

RFM Analysis

• Recency, Frequency, Monetary (RFM)• An analysis technique to identify the best

customers.• “80% of your business comes from 20% of your

customers” • Focus on the best customers to generate more

business.• Careful not to:– Oversell to great customers– Ignore smaller customers

Operational and Analytical CRM

• Operational Tracking– CRM first developed to support operational

aspects of customer relationship management. – Correspondence, sales, tracking…etc.

• Predictive forecasting– Analyze customer buying behaviors to sell more

products– Apply models of customer behavior to increase

profits

How CRM Supports Marketing

• Customer intelligence helps to design more effective marketing campaigns.

• Track effectiveness of marketing campaigns.• CRM data helps to identify target markets with

the most potential as new clients.• CRM coordinates the relationship between

marketing and other business functions.• Lead generation to pass on to Sales.• Find opportunities for cross-selling and up-selling.

How CRM Supports Sales

• Sales force automation• Track all the steps of the sales process – Contact customer and work on solving their

problem– Generate a quote– Place an order– Fulfill the order & bill the customer

• Contact and appointment management• Sharing best practices• Projections/Forecasting

How CRM Supports Customer Service

• Case Management – Log & track customer problems.• Knowledge management – find and share solutions

to customer problems.• Ensure that the customer needs are known and

shared among departments.• Follow up management. Alerts to contact clients to

see if they are satisfied.• Track and share historical data.• Reporting on customer service effectiveness.

Call Centers

• Operators standing by to give customers assistance.

• Zappos – Online shoe company known for customer service

and high employee satisfaction.– 2009 – 4 hours– 2011 call - 8 hours, 3 minutes. Helped caller

eventually find shoes on another web site.– 2012 call 10 hour 29 minutes long service call.

Customer bought Ugg boots.

Benefits & Future of CRM

• The main benefit of CRM is better communication for everyone involved in the sales process.

• Future CRM technologies promises to improve on the operational features and the predictive potential of CRM.

• Disadvantages of CRM include complexity and cost.

End

• What departments are most involved with CRM?

• What is the main benefit of CRM?

• What are two types of processing does CRM support?

Marketing, Sales and Customer Support

Communication and collaborationthroughout the entire sales process.

Operational and Analytical CRM