Enterprise Systems Flashcards
What is the meaning of ERP
ERP = Enterprise Resource Planning
- Defined: A modular, integrated software application that spans all organizational functions and relies on ONE core database.
- Goal: ERP’s goal is to integrate all departments and functions in a company to a SINGLE computer system that meets all the needs of each of those respective departments
o Each department sees or can access every piece of information/data other departments can see or access because the system ensures that each department is fully integrated.
o Integrates financial information and customer order information, standardizes and speeds manufacturing, reduces inventory and standardizes HR information. “
What are the Advantages & Disadvantages of an ERP
- ADVANTAGES:
o ERP improve processes and therefore improves the timeliness and efficiency of the company
o Knowledge infusion within an organization
o Adaptability—the system offers a high degree of customization rarely provided
- DISADVANTAGES:
o Standardization—when implementing, must stay close to the standard set for the software.
o Best practices being embedded in the software is a selling point, however it is hard to define what the best practice is and how they are identified.
o Strategic clash—best practices for the organization may not be supported by the software
o ERP is EXPENSIVE (upfront costs are high and there are hidden costs associated with it as well) and shouldn’t be expected to revolutionize one’s business.
o There is a HIGH failure rate with ERP systems. “
What is the meaning of CRM
CRM = Customer Relationship Management
- Defined: CRM aims to put the customer at the center of the information flow within the company “Customer Centric”
- Goal: CRM systems store all customer related information—CRM relies on personal and transactional data to learn about the customer to increase
PROFITABILITY
o CRM is a strategic initiative, NOT technology…however technology is important to the function of CRM initiatives. “
What are the Advantages & Disadvantages of a CRM
- ADVANTAGES:
o Customers in this type of organization feel valued and they have higher customer retention rates that competitors
o Customer requests are dealt with more rapidly and accurately b/c all the information required to service the request is in ONE place.
- DISADVANTAGES:
o CRM is firm centric o Limited predictive ability
Harrah’s Solid Gold CRM for the Service Sector: Background
Harrah’s Entertainment provides a great example of how to leverage data assets in the service sector. They have used this to become the largest gaming company by revenue.
Harrah’s Solid Gold CRM for the Service Sector: What drives the firm?
o Data drives the firm. Data is collected on what customers eat, drink, when they gamble, attend a show, stay in a room - all for tracking customer preferences and to determine whether the customer is worth pursing
o They use this data to drive targeted marketing campaigns to keep customers coming back
Harrah’s Solid Gold CRM for the Service Sector: What did they implement?
Implemented a Total Rewards loyalty card.
- It is an opt-in program, meaning the customers have to provide their consent to participate, in contrast to opt-out programs where customers are enrolled by default.
- Used by 80 percent of customers which is the equivalent of 44 million customers
- Card is presented for various transactions – all opportunities to collect data
- Various levels determine customer loyalty: Gold, Diamond, Platinum
- The higher the loyalty, the greater the treatment – status symbol
Harrah’s Solid Gold CRM for the Service Sector: What is CLV?
Harrah’s determines which customers are worth having a relationship with – they use data to determine Customer lifetime value (CLV).
- CLV determines the present value of the likely future income stream generated by an individual purchaser.
- Helps Harrah’s determine how to spend to keep that customer coming back
- If a customer is suffering from unusual losses, Harrah’s dispatches personnel to comfort customer with a token – “here’s a free buffet coupon”
- Customers keep coming back due to their laser-like focus on service quality
Harrah’s Solid Gold CRM for the Service Sector: What was their innovation?
RFID poker chips and RFID bracelets to track customers who don’t carry their wallets
Harrah’s Solid Gold CRM for the Service Sector: What was their Strategy?
- Data advantage creates intelligence for high-quality and highly personal customer experience
- Differentiation edge
Barclay’s use of CRM: Background & What happened?
Barclay is a major UK-based global provider of financial services; the UK’s fourth largest mortgage company. What happened: Barclay’s sales people were in dire need of tools to help them achieve their mortgage sales targets. One issue was related to the ability to provide a firm offer to clients quickly. The solution was PAML-IVR (Pre-Approved Mortgage Limits-Interactive Voice Response). This system provides dial in access to information housed in the SAS Credit Data Warehouse via phone or fax.
Barclay’s use of CRM: Business Issue…How it works:
Business Issue: Giving salespeople rapid access to loan limit information at the point of customer contact. This would allow salespeople not to worry about a mortgage being declined after an offer has been made. Customer limits are known up front.
How it works: Salesperson dials a dedicated phone line | Enters PIN | Enters code (bank branch) | enters the number of applicants for the mortgage | enters the customer identification numbers | IVR server feeds request through SAS data sets (refreshed monthly with newest data) | SAS Credit data warehouse feeds back Pre-Approved Mortgage Limit data which is converted to voice output | Sales person has the loan amount they can safely offer to the customer.
Benefits:
o ROI achieved in eight weeks
o Increased employee satisfaction (salespeople were delighted!)
o Transactions reduced by 15-30 minutes
o Sales increased
o Customers were very satisfied with fast response
Barclay’s use of CRM: Solution:
Solution: Deliver information from SAS data warehouse via telephone using Interactive Voice Response technology
The software concrete feature of enterprise systems (Piccoli, page 81)
One of the limitations of an enterprise system is that they are referred to as software concrete.
The role of RFID (radiofrequency identification) chips in supply chain management (Piccoli, pages 86-87. RFIDs are also mentioned in the Supply Chain Management article)
o There has been increasing attention to IT enabled supply chain management.
o Value proposition is providing tools to enable integrated supply chain management
o They provide mountains of information about when and where merchandise is manufactured, picked, packed, and shipped. Information is stored real time. “
