lecture 9_ebs_aggarwal.ppt
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TRANSCRIPT
Mid Term Exam
Chapters 1,3,4,5,6,10 & (additional readings)
Two parts:
Multiple choice (get scantron form 889 E available in book store)
Short cases
CASE: Implementing Success or Failure: It’s in the eye of the beholder Q: Two sides?
Should not have been a surprise• They knew when the semester was starting
• Project manager should know better than to underestimate the complexity of the problem
• Should know “end-users” importance from past experiences
• “Interface” issue should have been studied
• Should know never implement a system without properly testing it
• Should know never to implement a “critical” system all at once
Is it possible that some implementation problems cannot be easily foreseen or prevented? Give some examples.
• Rapid change in outside environment
• Unexpected shifts in market conditions
• Mergers & Acquisitions That were not in place during system development
What could Indiana University have done differently to prevent this unfortunate event from occurring?
Paid more attention to the following:• Lack of a “sponsor”• Lack of system “analysis”• Lack of Project Management experience, hence planning• Violated most principles of project management• Ignoring the Complexity of problem (break it into small
modules)• Implement on one campus at a time• Apparent rush to implement the system • Ignore analysts warnings• Lack of testing & Training
Is there evidence to suggest that they learned from this
experience?
It appears they learned from their mistakes.
• They were able to identify causes of failures – first step in correcting errors
What is a Business Process?
• A collection of related, structured activities--a chain of events--that produce a specific service or product for a particular customer or customers.www.gao.gov/policy/itguide/glossary.htm
• The complete response that a business makes to an event. A business process entails the execution of a sequence of one or more process steps. It has a clearly defined deliverable or outcome. www.georgetown.edu/uis/ia/dw/GLOSSARY0816.html
• A collection of activities that takes one or more kinds of input and creates an output that is of value to the customer.www.crfonline.org/orc/glossary/b.html
Ch 7
Electronic Business Systems
Learning Objectives
Identify the following cross-functional enterprise systems, and give examples of how they can provide significant business value to a company:
a. Enterprise resource planning (ERP)
b. Customer relationship management (CRM)
c. Supply chain management (SCM)
d. Enterprise application integration (EAI)
e. Transaction processing systems (TPS)
f. Enterprise collaboration systems (ECS)
Learning Objectives
2. Give examples of how Internet and other information technologies support business processes within the business functions of accounting, finance, human resource management, marketing, and production and operations management.
3. Understand the need for enterprise application integration to improve support of business interactions across multiple e-business applications.
Case 1/p235
What are the benefits and drawbacks of the OnQ system at Hilton ?
Benefits could include:– Prompt resolution of problems– Matching customers with their profiles, and thus provide personalized services
and accommodations– Supports brand and loyalty building– Differentiates customers in terms of their value to the franchise (measured in
frequency of stay, duration, revenue per customer, past complaints, etc.)Drawbacks could include:• Company could become exposed to legal issues concerning privacy rights
regarding the information it is storing and its usage• While very useful to the franchise, the OnQ system does not have a direct
impact on the bottom line and thus may be subject to questions about whether its benefits outweigh its costs
• Being custom-developed, the system requires the maintenance of a large IT staff to support and modify it, without relying on outside vendors
What does Hilton have to do to create a competitive advantage through OnQ? Provide some specific
examples.
• A competitive advantage exists when a firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). OnQ is most likely intended to produce a competitive advantage of the second kind.
Examples:• Automatic accommodation assignment (room type,
special needs, etc.) based on past experiences• Self-service check-in with prior reservation (similar to
what Hertz does with car rentals in certain programs)
Is it possible to have too much information about a customer? Explain.
For the marketing department, it is never possible to have too much information about a customer. And that is probably true at the aggregate level, i.e. for grouping or segmenting, planning and forecasting, etc.
However, at the point of contact with the customer, in this case most likely the front desk or the call center, providing too much of that information to service representatives can impede efficient and effective communication.
There are two reasons why this might happen: representatives would need to process a significant amount of data in a
very short period of time, and then, also in a very short time, decide which pieces to use to form a decision
and how. In this sense, it would be better to provide representatives with a distilled set of facts that would directly enhance their decision making rather than flood them with all the available data.
Cross Functional Enterprise Systems
Focus on supporting integrated clusters of business processes involved in operations of an organization
Re-engineering business processes across functions, customers and suppliers
Suppliers
Customers
Em
plo
yees
Par
tner
s
Supply Chain ManagementSourcing - Procurement
Enterprise Resource PlanningInternal Business Processes
Customer Relationship ManagementMarketing – Sales - Service
Kn
owle
dge
Man
agem
ent
Col
labo
rati
on –
Dec
isio
n S
uppo
rt
Par
tner
Rel
atio
nshi
p M
anag
emen
tSe
llin
g –
Dis
trib
utio
n
Enterprise Application ArchitectureEnterprise Application Architecture
Enterprise Business Systems
CRM – Business Focus
CRM is an organization-wide strategy to manage customer experience and perception.
CRM requires a customer-centric business philosophy and culture to support effective marketing, sales and service processes.
CRM
‘Customer’ represents the intended group organization serves.
‘Relationship,’ the most important term, represents the level of trust organization forms with its intended customers.
‘Management,’ represents the effort organizations put forth to support the ‘Customer Relationship.
Supports an Integrated and Supports an Integrated and Collaborative Relationship Between Collaborative Relationship Between a Business and it’s Customersa Business and it’s Customers
CRM: The Business Focus
CustomerLife Cycle
CRMFunctionalSolutions
CRMIntegratedSolution
The Internet
Acquire Enhance Retain
Direct Marketing Cross-sell and Up-sell Proactive Service
Sales Force Automation Customer Support
CollaborativeService
SharedCustomer Data
Partner Company Customer
CRM Uses IT to Create a Cross-CRM Uses IT to Create a Cross-Functional Enterprise SystemFunctional Enterprise System
CRM: The Business Focus
Marketing andFulfillment Customer
Service andSupport
Retentionand LoyaltyProgramsContact and
AccountManagement
Sales•Cross-Sell•Up-Sell
Prospect orEmployee
Fax e-Mail
Telephone Web
CRM: The Business FocusBenefits and Challenges of CRMBenefits and Challenges of CRM• Identify and Target the Best Customers• Customization and Personalization of
Products and Services• Track Customer Contacts
CRM FailuresCRM Failures• 50% of Applications Fail to Meet
Expectations• 20% of the Time CRM Damaged
Customer Relationships• Lack of Understanding and Preparation
is Blamed
INTUIT
How can CRM support Intuit during this tax season?
CRM Integrated Solution? (Page 241)
PartnerIRS
Bank
Company
Intuit
Customer:
Tax payers
ERP – Business Backbone
E EnterpriseR ResourcesP Planning
ERP is ENTERPRISE
ERP software attempts to integrate all departments and functions across a company onto a single computer system that can serve all those departments’ particular needs.
ProductionPlanning Integrated
Logistics
Accounting and FinanceHuman
Resources
Sales,Distribution,
OrderManagement
Customer/Employee
Enterprise Resource Planning
The Technological Backbone of The Technological Backbone of e-Businesse-Business
Su
pp
liers
Human ResourcesFinance and Accounting
DemandPlanning
Manufacturing Planning
LogisticsPlanning
DistributionPlanning
OrderEntry
Enterprise Resource Planning
Cu
stom
ers
Purchasing& Accounts
Payable
MRPInbound
InventoryPlant Mgmt.
Manufacturing& Production
Scheduling
InventoryControl &
Warehousing
Distribution& AccountsReceivable
Enterprise Resource Planning
The Business Value of ERPThe Business Value of ERP
Benefits of ERPBenefits of ERP• Quality and Efficiency
• Decreased Costs
• Decision Support
• Enterprise Agility
Failures in ERP Do ExistFailures in ERP Do Exist
Enterprise Resource Planning
Causes of ERP Failures Causes of ERP Failures
• Underestimating the Complexity of Planning, Development, and Training Needed
• Failure to Involve Affected Employees
• Trying to do Too Much Too Fast• Over Reliance by Company on
Claims of Software Companies
Enterprise Resource Planning
SCM –Business Backbone
It is the art & science that goes into improving the way your company finds raw components it needs to make a product or service and deliver it to customers
Five Components of SCM:
1. PLAN (Strategic Part)2. SOURCE (Choose Supplier)3. MAKE (Manufacturing Step)4. DELIVER (Logistics) 5. RETURN ( Return/Support Customers)
SCM Software Helps Firms Reengineer and SCM Software Helps Firms Reengineer and Integrate The Functional SCM ProcessesIntegrate The Functional SCM Processes
Supply ChainLife Cycle
SCMFunctionalProcesses
SCMIntegratedSolution
Supplier Manufacturer CustomerRetailer
The Internet
CollaborativeFulfillment
SharedMarket Data
Commit Schedule Make Deliver
Strategic Sourcingand Procurement
Forecast and Demand Planning
Customer Order Fulfillment Service
Distribution Network and Warehouse Operations
Transportation and ShipmentManagement
ProductionLogistics
SCM: The Business Network
SCM: The Business Network
Supply Chain Management : aSupply Chain Management : a top strategic objective for many top strategic objective for many firms firms
• The Right Products• The Right Place• The Right Time• In the Proper Quantity• At an Acceptable Cost
Business Value GoalsRapid Demand Fulfillment
Collaborative SupplyChain Planning and
Execution
Customer Value GoalsGive customers what theywant, when and how theywant it, at the lowest cost
InterenterpriseCoordination of
Manufacturing andBusiness Process
EffectiveDistribution and
Channel Partnerships
Responsiveness andAccountabilityto Customers
Objectives of Supply Chain Objectives of Supply Chain ManagementManagement
SCM: The Business Network
Value Chain Example
Define SCM for producing pork products
Pork Industry
A value chain in the pork industry might include: • an input supplier (of food, housing, veterinary care, etc.) • the farmer or producer (to raise and market the animals) • the packing plant (for primal cuts) • the fabrication plant (for portion cuts) • the food service distributor who gets the product to
wholesalers and other markets • the consumer who buys the pork chop or pork roast
VALUE CHAIN
SCM: The Business Network
Objective of SCM Efficiently Objective of SCM Efficiently Manages this Process by: Manages this Process by:
• Forecasting Demand• Controlling Inventory• Enhancing Business
Relationships• Receiving Feedback and Status
of Every Link of the Chain
Benefits and Challenges of Benefits and Challenges of SCMSCM
SCM: The Business Network
• Lack of Proper Planning
Knowledge, Tools, and Guidelines
• Inaccurate Demand Forecasts• Lack of Adequate
Collaboration• Software Itself Immature
Question: SCMWhen supply chain relationships are reviewed for
streamlining, longtime supply chain partners may no longer be viable. Then the organization must decide between:– preserving a longstanding relationship with a supply
chain partner and sacrificing the benefits of a more rational process,
– or terminating a longtime relationship in favor of a more beneficial supply chain.
Discuss the pros and cons of this decision.– What criteria should an organization use in
determining the appropriate action with regard to longstanding supply chain partners?
QuestionCriteria for partnerships:
- Accuracy (251, 317)- Seamless integration (253)- Efficiency (245)- Ease of use/Fexibility (245)- Quality (245)- Predictability/Dependability- Compatibility/Risk
PROPros of Preserving - Already established relationship (mutual understanding and agreements)- Ease of ordering - Supply chain's knowledge of your business and its processes
CONS of Preserving - Stuck in a rut (not as obvious to see changes needed/more efficient processes)
Question?
What’s the relationship between ERP & SCM?
Enterprise Application Integration
EAI Software Connects Major e-Business Applications Like CRM and ERPEAI Software Connects Major e-Business Applications Like CRM and ERP
Front-OfficeCRM ApplicationsCustomer Service
Field ServiceProduct Configuration
Sales Order Entry
Back-OfficeERP Applications
DistributionManufacturing
SchedulingFinance
EnterpriseApplicationIntegration
EAI
Functional Systems
CIM
SFA (sales force automation)
FMS (Financial Management Systems)
AIS (Accounting Information Systems)
HRM - BQ list
TPS (transaction Processing Systems)
MIS and Transaction Processing MIS and Transaction Processing SystemsSystems
Management activity Management activity subsystemssubsystems
Transaction processing, operations
strategic
tactical
operational
STRATEGIC PLANNING
MANAGEMENT
CONTROL
OPERATIONAL
CONTROL
Transaction Processing SystemsTransaction Processing Systems
transactions
data capture
processing
reporting
updating
Data Capture (or Entry)Data Capture (or Entry)
• data transcription– source documents– turnaround documents
• data inscription– optically scanned– MICR
• on-line data entry– no source document
• EDI - Electronic Data Interchange
System flowcharting symbolsSystem flowcharting symbols
document or report
terminal keyboard
terminal display
DASD, disk
magnetic tapes
process, program
manual process
on-page connector
off-page connector
Transaction processing stepsTransaction processing steps1. Data Capture
2. Edit Transaction
3. Updating
4. Reporting
Batch TPSBatch TPStransaction
data entry
edit
errors
update
reports
detail
detail masterapplica-tion
On-line TPSOn-line TPS
reports
applica-tion
errors
master
log file
entry &process
Hilton Case/ P 236
What are the benefits and drawbacks of the OnQ system at Hilton?
Benefits could include:– Prompt resolution of problems– Matching customers with their profiles, and thus provide personalized services and
accommodations– Supports brand and loyalty building– Differentiates customers in terms of their value to the franchise (measured in frequency of
stay, duration, revenue per customer, past complaints, etc.)
Drawbacks could include:• Company could become exposed to legal issues concerning privacy rights regarding the
information it is storing and its usage• While very useful to the franchise, the OnQ system does not have a direct impact on the
bottom line and thus may be subject to questions about whether its benefits outweigh its costs
• Being custom-developed, the system requires the maintenance of a large IT staff to support and modify it, without relying on outside vendors
What does Hilton have to do to create a competitive advantage through OnQ? Provide some specific examples.
A competitive advantage exists when a firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). OnQ is most likely intended to produce a competitive advantage of the second kind.
Examples• Automatic accommodation assignment (room type, special
needs, etc.) based on past experiences• Self-service check-in with prior reservation (similar to
what Hertz does with car rentals in certain programs)
Is it possible to have too much information about
a customer? Explain.
For the marketing department, it is never possible to have too much information about a customer. And that is probably true at the aggregate level, i.e. for grouping or segmenting, planning and forecasting,
Front line worker ex: front desk or the call center, providing too much of that information to service representatives can impede efficient and effective communication.
Representatives would need to process a significant amount of data in a very short period of time
Decide which pieces to use to form a decision and how.
Why has EAI recently “become a critical part of the IT strategy at many organizations,” and a high-ranking project of top IT executives?
• The need to meld disparate systems together such as the integration of front- and back-office applications.
• The need to quickly deliver data to employees, customers and partners. Corporate Express needed to dramatically improve customer service.
• The need for complex corporations such as Baxter International and General Electric Co. to connect the independent operations of various business units.
• To reduce costs internally as well as for its customers.
Additional Readings
• ERP
• SCM
• CRM
• EAI