Information Technology for

Management

• Chapter 10: Strategic Enterprise Systems

Prepared by Dr. Derek Sedlack, South University

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Learning Objectives
Enterprise
Enterprise
Social
Systems
Platforms

Customer Enterprise
Relationship Resource
Management Planning
Systems Systems

Supply Chain
Management
Systems

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Systems
Enterprise Systems
– A category of cross-functional and inter-
organizational systems that support business
strategy.
– Primary enterprise systems:
• Enterprise Resource Planning (ERP)
• Supply Chain Management (SCM)
• Customer Relationship Management (CRM)

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Systems
• Core business processes
– Include accounting, finance, sales, marketing,
human resources, inventory, productions, and
manufacturing.
• Customer lifetime value
– CLV is a formula for estimating the dollar value, or
worth, of a long-term relationship with a customer.
• Value-added reseller (VAR)
– Customizes or adds features to a vendor’s software
or equipment and resells the enhanced product.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Systems
• Implementation Challenges
– Complexity from incorporating different
organizational facets.
– Time-consuming coordinating an enterprise
integration.
– Typically requires consulting, vendor, or value-added
reseller (VAR) assistance.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Systems
• Legacy Challenges
– Legacy systems are older information systems
maintained over decades because they fulfill critical
needs.
– They are difficult and expensive to maintain, update,
and interface securely with leading-edge business
applications

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Systems
• Legacy Challenges
– High maintenance costs
– Inflexibility (integration issues)
– Integration obstacles (hardwired)
– Lack of staff (qualified/trained professionals)

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Systems
• Benefits
– Reduced maintenance through integrated or cloud
systems.
– Flexible architectures provide scalability.
– CRM and web-based applications ease future
integration.
– Large enterprise systems mean more skilled staff
availability.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Systems
• Implementation Best Practices
1. Redesign of business processes through
simplification and redesign so that they can be
automated, either totally or partially, or removed.
2. Changes in how people perform their jobs or
accommodate the new processes.
3. Integration of many types of information systems
so that data can flow seamlessly among
departments and business partners.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Systems
• Insights
– Provide and support applications that enable
workers to access, use, and understand data.
– Using data about buying behaviors helps a company
identify its loyal customers and which ones are
profitable.
– Improving communication and integration among
firms in a global supply chain justifies billions
invested in ERP systems.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Systems
1. Explain the purpose of an enterprise system.
2. Describe three types of enterprise systems.
3. What is customer lifetime value (CLV)?
4. What is a value added reseller (VAR)?
5. What are two challenges of legacy systems?
6. Why do companies migrate to enterprise systems?
7. Explain the challenges of enterprise system
implementation.
8. Explain the three types of changes needed when an
enterprise system is implemented.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Learning Objectives
Enterprise
Enterprise
Social
Systems
Platforms

Customer Enterprise
Relationship Resource
Management Planning
Systems Systems

Supply Chain
Management
Systems

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Social Platforms

Smart companies connect their employees’ desire to

contribute and interact with peers, with their own need to
get timely feedback from the trenches.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Social Platforms

• Enterprise Social
– Refers to private (company owned) social media,
software, platforms, or apps specially designed for
use by business leaders and employees to fulfill the
strategic mission.
– Three main reasons for interest:
• Knowledge management
• Collaboration
• Employee pressure

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Social Platforms

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Social Platforms

• SharePoint
– A collaborative and social platform from Microsoft
with Yammer the social collaboration tool of choice
over the Microsoft Cloud.
• Yammer
– A social network geared toward enterprises.
Employees collaborate across departments,
locations, and business applications.
• Office Graph with Oslo
– Provides a natural way for users to navigate,
discover, and search people, information, and
knowledge across the enterprise.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Social Platforms

• SharePoint
– Provides tools for setting up employee social
network platforms and company wikis.
– Shared space to store documents from any desktop
or mobile device, so they are not siloed on any one
person’s hard drive or device.
– Enables coworkers to stay up-to-date and work
simultaneously on a single document, save previous
versions, and track updates.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Social Platforms

• Yammer
– Features similar to Facebook likes, newsfeeds,
threaded conversation, and direct messaging.
– This private social channel helps employees,
partners, and customers communicate; exchange
information; and collaborate across departments,
locations, and business apps.
– Includes Enterprise Graph shows how users are
related to one another that solves social network
sprawl.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Social Platforms

• Jive
– Provides tools for communication, sharing, and
content creation to make social media monitoring
and engagement easier.
• Chatter
– [Link] add-on offers companies their own
private network while pushing updates and news in
real time to user feeds, offering smart search, which
places items an employee frequently uses higher in
the search list.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Social Platforms

1. What are the basic functions of an enterprise social
platform?
2. What are the capabilities of SharePoint?
3. In what ways can enterprises realize value from
Yammer or other enterprise social?
4. How do Office Graph and Enterprise Graph support
collaboration?
5. How does Chatter enable workers to solve problems?

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Learning Objectives
Enterprise
Enterprise
Social
Systems
Platforms

Customer Enterprise
Relationship Resource
Management Planning
Systems Systems

Supply Chain
Management
Systems

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Resource Planning

Systems
• ERP Past to Present
– Integrating accounting, finance, HR, marketing, and
other critical business functions.
– Originally run on client-server architecture and
customer-designed apps.
– Now web-based with a focus on social collaboration,
deployment flexibility, faster response, and
accessibility from mobile devices.
– An enterprise application integration (EAI) layer
enables the ERP to interface with legacy apps.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Resource Planning

Systems
• ERP Add-ons
– Sales associates to process orders, take payments,
and collect signatures with an iPad app.
– Field technicians to provide customer service from
anywhere.
– Marketing to manage every aspect of ongoing
customer relationships using a smartphone app.
– Production to access to the real-time information
needed to reduce stock-outs and excess inventory.
– Customers to access, pay, and view invoices online.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Resource Planning

Systems
• Manufacturing ERP
– Success depends on lower costs, shorter cycle
times, and maximum production throughput.
– Minimizing inventory errors and maintaining the
optimal inventory level.
• Lean Manufacturing
– Optimize inventory to keep production running while
minimizing inventory-on-hand to control holding
costs.
– Help manufacturers avoid material shortages,
manage production, and coordinate distribution
channels, which improves on-time delivery.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Resource Planning

Systems
• ERP Selection Factors
1. Select an ERP solution that targets the company’s
requirements.
2. Evaluate potential ERP vendors’ strengths and
weaknesses.
3. Meet with each vendor and get a hands-on demo
of its ERP solutions.
4. Calculate the ERP’s total cost of ownership (TCO).

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Resource Planning

Systems
• ERP Success Factors
1. Focus on business processes and requirements.
2. Focus on achieving a measurable ROI.
3. Use a strong project management approach and
secure commitment of resources.
4. Obtain strong and continuing commitment from
senior executives.
5. Take sufficient time to plan and prepare up-front.
6. Provide thorough training and change
management.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Resource Planning

Systems
• ERP Failure Factors
1. Cost misrepresentation.
2. Unrealistic implementation timeframes.
3. Software-license issues.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Enterprise Resource Planning

Systems
1. What are three ways ERP can be deployed?
2. Briefly describe the latest ERP features and add-ons.
3. Describe ERP from a technology perspective.
4. Explain manufacturing ERP systems and lean
principles.
5. 5List and briefly describe three ERP implementation
success factors.
6. Describe causes or factors that contribute to ERP
failure.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Learning Objectives
Enterprise
Enterprise
Social
Systems
Platforms

Customer Enterprise
Relationship Resource
Management Planning
Systems Systems

Supply Chain
Management
Systems

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Supply Chain Management Systems

• Supply Chain
– Starts with the acquisition of raw materials or the
procurement (purchase) of products and proceeds
through manufacture, transport, and delivery—and
the disposal or recycling of products.

Figure 10.10 Model of the supply chain.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Supply Chain Management Systems

• Supply Chain Functions
– Starts with the acquisition of raw materials or the
procurement (purchase) of products and proceeds
through manufacture, transport, and delivery—and
the disposal or recycling of products.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Supply Chain Management Systems

• Supply Chain Flows
– Material or product flow: the movement of materials
and goods from a supplier to its consumer.
– Information flow: the movement of detailed data
among members of the supply chain, for example,
order information, customer information, order
fulfillment, delivery status, and proof-of-delivery
confirmation.
– Financial flow: the transfer of payments and
financial arrangements.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Supply Chain Management Systems

• Supply Chain Management (SCM)
– The efficient management of the flows of material,
data, and payments along the companies in the
supply chain, from suppliers to consumers.
– SCM systems are configured to achieve the
following business goals:
• To reduce uncertainty and variability in order to
improve the accuracy of forecasting.
• To increase control over processes in order to
achieve optimal inventory levels, cycle time, and
customer service.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Supply Chain Management Systems

• Order Fulfillment
– Part of back-office operations, such as accounting,
inventory management, and shipping; and closely
related to front-office operations or customer-facing
activities with the key aspect as delivery of
materials or products at the right time, to the right
place, and at the right cost. Part of logistics.
• Logistics
– Logistics entails all the processes and information
needed to move products from origin to destination
efficiently.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Supply Chain Management Systems

• Order Fulfillment Steps
– Step 1: Make sure the customer will pay.
– Step 2: Check in-stock availability and reorder as
necessary.
– Step 3: Arrange shipments.
– Step 4: Insurance.
– Step 5: Replenishment.
– Step 6: In-house production.
– Step 7: Use suppliers.
– Step 8: Contacts with customers.
– Step 9: Returns.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Supply Chain Management Systems

• Order Fulfillment
– Part of back-office operations, such as accounting,
inventory management, and shipping; and closely
related to front-office operations or customer-facing
activities with the key aspect as delivery of
materials or products at the right time, to the right
place, and at the right cost.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Supply Chain Management Systems

• Supply Chain Research
– The top two strategic priorities of executives are
supply chain analytics and multichannel fulfillment.
– The two major barriers preventing innovation in the
supply chain are a talent shortage and a continuing
focus on cost reduction reducing sustainability.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Supply Chain Management Systems

• Supply Chain Analytics
– Algorithms and SCM models based on past
demand, supply, and business cycles are
inadequate to effectively manage the supply chain
used to help predict the future.
• Multichannel Fulfillment
– Efficient handling of back-end order fulfillment
processes.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Supply Chain Management Systems

• Supply Chain Technology
– Mobility and mobile-to-mobile (M2M) technologies
improving responsiveness and customer service.
– 3D printing could have far-reaching implications, but
immediate potential remains unrealized.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Supply Chain Management Systems

1. What is a supply chain?
2. List four functions carried out by companies in a supply
chain.
3. List and describe the three main flows being managed in a
supply chain.
4. Describe SCM.
5. What are steps in the order fulfillment?
6. Explain logistics.
7. What are the top two strategic priorities of SCM executives?
8. What are the two major barriers preventing innovation in the
supply chain?
9. What are the top innovative digital technologies impacting
SCM?

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Learning Objectives
Enterprise
Enterprise
Social
Systems
Platforms

Customer Enterprise
Relationship Resource
Management Planning
Systems Systems

Supply Chain
Management
Systems

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Customer Relationship Management

Systems

Figure 10.12 Four CRM critical success factors and

their importance.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Customer Relationship Management

Systems
• Making CRM Matter
– Data analytics, sophisticated predictive analytics,
and BI are needed to determine customer lifetime
value (CLV); then business rules need to specify how
to treat or manage customers based on their value
score.
– Intelligently managing relationships with customers can
increase revenues and net profits significantly.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Customer Relationship Management

Systems
• CRM and Customer Acquisition/Retention
– CRM technologies help marketing managers run
effective campaigns, promotions, commercials, and
advertisements to attract new customers, or to
increase sales to existing customers, or to do both.
– Newly acquired customers are unprofitable until
they have purchased enough products or services to
exceed the cost to acquire and service them.
– Retaining customers that generate revenues in
excess of the costs is critical.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Customer Relationship Management

Systems
• Drucker on Marketing Effectiveness
– Know your customers
– Understand customer needs
– Communicate intelligently with customers

Loyalty Effect

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Customer Relationship Management

Systems
• CRM Failures
– IT department in charge instead of business users.
– Incorrect CRM requirements by not involving key
business stakeholders from the outset.
– Mobility CRM strategy is an afterthought.
– Taking the wrong approach to CRM training.
– Underestimating users’ resistance to change.

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Customer Relationship Management

Systems
• Measuring CRM Success
– Tangible net benefits, intangible benefits, risk
assessments lead to:
• Increased staff productivity (more closed deals)
• Cost avoidance
• Revenues
• Margin increases
• Inventory cost reductions
• Increased customer satisfaction, loyalty, and
retention

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.
Chapter 10

Customer Relationship Management

Systems
1. Explain the four critical success factors for CRM.
2. Why does CRM matter?
3. Discuss how CRM impacts customer acquisition and
retention.
4. According to Peter Drucker, what does marketing
effectiveness depend on?
5. Give three reasons why CRM fails.
6. How can CRM be justified?

Copyright © 2015 John Wiley & Sons, Inc. All rights reserved.