Lect_3_acheiving operational excellence.ppt

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1. 1
LECTURE THREE

Achieving Operational
Excellence and Customer
Intimacy: Enterprise Business
Applications
Dr. Sherif M. Tawfik

2. 2
Enterprise Application Architecture

3. 3
Enterprise Resource
Planning Systems (ERP)
•During the 1990s firms began to see the value in integrating all of
these systems so that they could function as a coordinated unit.
ERP systems are computer-based systems aimed at meeting this
need that enable the management of all of a firm’s resources on
an organization-wide basis.
• ERP system is a Cross-functional enterprise system with an
integrated suite of software modules that support the basic
internal business processes of a company.
•For example, ERP software for a manufacturing company will
typically process the data from, and track the status of, sales,
inventory, shipping, and invoicing, as well as forecast raw
material and human resource requirements.

4. How Enterprise Systems Work
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5. 5
Costs of implementing a new ERP
• The next figure illustrates the relative
size and types of costs of implementing an
ERP system in a company.
• Notice that hardware and software costs
are a small part of total costs, and that 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

6. 6
BUSINESS PROCESS REDESIGN
•The process of reworking the systems has been called
reengineering or business process redesign (BPR)
•BPR affects the firm’s IT operation in two ways:
1.IT can apply BPR to the redesign of legacy systems that
can no longer be kept alive by ordinary maintenance
2.When a firm applies BPR to its major operations, the
effort invariably has a ripple effect that results in the
redesign of information systems
•IT has devised reverse engineering, restructuring, and
reengineering that can be applied separately or in
combination for applying BPR

7. 7
REVERSE ENGINEERING
•It is the process of analyzing an existing system to identify its
elements and their interrelationships, as well as to create
documentation in a higher level of abstraction than currently
exists.
•The starting point is the computer code, which is transformed
into documentation. This documentation can, in turn, be
transformed into more abstract descriptions such as data flow
diagrams.
•The result is a documented system. However, the system still
does exactly what it was originally designed to do.
•Reverse engineering does not change the functionality of a
system. Rather, the objective is to better understand a system
in order to make changes by other means, restructuring or
reengineering.

8. 8
RESTRUCTURING & REENGINEERING
1.Restructuring is the transformation of a
system into another form without changing its
functionality.
2.Reengineering is the complete redesign of a
system with the objective of changing its
functionality

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Causes of ERP failure
•Underestimating the complexity of planning, development
and training.
•Failure to involve affected employees in planning and
development.
•Trying to do too much too fast.
•Insufficient training in new work tasks.
•Failure to do enough data conversion and testing.
•Over reliance on ERP vendor or consulting companies.

10. 10
Supply Chain Management (SCM)
•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.
•Supply Chain Management Systems (SCM)
–Automate flow of information between firm and suppliers to
help support and manage the links between a company’s key
business processes so that, optimize production and delivery.

11. 11
A supply chain

12. Push- Versus Pull-Based Supply Chain Models

13. •Match supply to demand.
•Reduce inventory levels.
•Improve delivery service.
•Speed product time to market.
•Use assets more effectively.
•Reduced supply chain costs lead to increased profitability.
•Total supply chain costs can be 75% of operating budget.
•Increase sales.
Business Value of Supply Chain
Management Systems
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14. 14
•Managing the full range of the customer
relationship involves two related objectives:
–One, to provide the organization and all of its
customer-facing employees with a single,
complete view of every customer at every
touch point and across all channels;
–Two, to provide the customer with a single,
complete view of the company and its extended
channels
Customer Relationship Management
(CRM)

15. 15
CRM Applications Clusters
The next figure illustrates some of the major
application components of a CRM system.

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CRM applications
•Contact and Account Management
–Helps sales, marketing and service professionals to capture and track
data about past and planned contacts with customers and prospects.
–Information is captured from all customer touchpoints, such as
telephone, fax, e-mail, the company's website, retail stores, and
personal contact.
–CRM systems store the data in a common customer database that
integrates all customer account information and makes it available
throughout the company via Internet, intranet, or other network links
for sales, marketing, service, and other CRM applications.

17. 17
CRM applications
•Sales
–Provides sales reps with software tools and data they need to support and
manage sales activities and optimize cross-selling and up-selling.
–Cross-selling is trying to sell a customer of one product with a related
product. Example, a customer of one product, say, auto insurance might also
be interested in purchasing a related product such as homeowner’s insurance.
–Up-selling is trying to sell customer a better product than they are currently
seeking. Example, a CRM system may alert bank sales reps to call customers
how make a large deposits to sell them premier credit or investment services.

18. 18
CRM applications
•Marketing and Fulfillment
–CRM systems help marketing professionals accomplish direct
marketing campaigns by automating such tasks as qualifying
leads for targeted marketing and scheduling and tracking
direct marketing mailings.
–Then the CRM software helps marketing professionals capture
and manage prospect and customer response data in the CRM
database, and analyze the customer and business value of a
company's direct marketing campaigns.
–CRM also assists in the fulfillment of prospect and customer
responses and requests by quickly scheduling sales contacts and
providing appropriate information on products and services to
them, while capturing relevant information for the CRM
database.

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

20. 20
CRM benefits
•Identify and target best customers
•Real-time customization and personalization of
products and services based on customer wants,
needs, buying and life cycles.
•Track when a customer contacts a company
regardless of the contact point.
•Provide consistent customer experience and
superior service and support.
All of these benefits would provide strategic business
to a company and major customer value to its
customers

21. 21
Reasons for CRM failures
•Lack of understanding and preparation
•Rely on application to solve a problem without
first changing the business processes
The business benefits of customer relationship management are
not guaranteed, and instead, have proven elusive at many
companies. Surveys by industry research groups include a report
that over 50 percent of CRM projects did not produce the results
that were promised. Research shows that the major reasons are as
follows:

22. The Internet
and the
Evolution
of Corporate
Computing
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23. EC Order Processing Must Be Linked to Traditional
Back-End Systems
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24. Why Study E-commerce?
•E-commerce technology is different, more powerful than previous
technologies
•E-commerce brings fundamental changes to traditional commerce
•Traditional commerce:
–Consumer as passive targets (The customer has been the receiver of one-way
communication and a representative of the target group defined by the company)
–Mass-marketing (An attempt to appeal to an entire market
 with one basic
marketing strategy utilizing mass distribution
 and mass media.)
–Sales-force driven
–Fixed prices, and product quality
–Information asymmetry (A situation in which one party in a transaction has
more or superior information compared to another. This often happens in
transactions where the seller knows more than the buyer, although the reverse can
happen as well. Potentially, this could be a harmful situation because one party can
take advantage of the other party's lack of knowledge.
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25. The Digital World
•Digital economy
An economy that is based on digital technologies, including digital
communication networks, computers, software, and other related
information technologies; also called the Internet economy, the new
economy, or the Web economy
•Digital enterprise
A new business model that uses IT in a fundamental way to
accomplish one or more of three basic objectives:
1- reach and engage customers more effectively
2- Increase employee productivity
3- Improve operating efficiency
uses converged communication and computing technology in a way
that improves business processes
corporate portal
A major gateway through which employees, business partners, and the public
can enter a corporate website.
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