week 5: enterprise systems part 1 Flashcards
What are the fundamental ways of achieving competitive advantage?
Changing the product
Business processes
how to change the product to obtain competitive advantaged?
By introducing new products or services or enhancing current products or services
how do business processes obtain competitive advantage?
the use technology
this helps lock in customers, reduce costs, and create entry barriers for competitors in the market
how can information systems
can affect competitive advantage?
By making the primary and support activities in an organization more productive than those of competitors
making business processes more effective and more efficient to increase productivity
primary and support activities in an organization
referring to the value chain
thinking that the value chain activities serve several functions in the organization
are building blocks in an organization
primary activities
Relate directly to organization’s customers and
products
mostly create value
what is part of primary activities?
Marketing and sales
Inbound logistics
Operations and manufacturing
Outbound logistics
Service and support
support activities
facilitate primary activities
what is part of support activities?
Human resource
Accounting and infrastructure
Procurement
Technology activities
which are the systems used in primary activities?
operation systems
manufacturing systems
sales systems
Functional silos
Systems designed to work independently of one another
such as operation systems, manufacturing systems, sales systems
in reality, are functional systems independent or inter-related? why?
inter related
organization as a whole is inter related
ex: Purchasing influences inventory, which influences production, which influences customer satisfaction, which influences future sales
when you make a decision, must you consider all the other functional silos or functional systems in the organization?
ye bruv
what must managers do with functional silos? how is this inefficient?
they must query separate functional systems and integrate the data manually
creates a lot of errors which creates error in decision making process
which are the major functions in functional systems?
marketing and sales
operations
manufacturing
human ressources
accounting and finance
which are the main information systems in the marketing and sales function?
product management
lead tracking
sales forecasting
customer management
which are the main information systems in the operations function?
order entry
order management
inventory management
customer service
which are the main information systems in the manufacturing function?
inventory
planning
scheduling
manufacturing operations
which are the main information systems in the human resources function?
payroll and compensation+
recruiting
assessment
development and training
human ressources planning
which are the main information systems in the accounting and finance function?
general ledger
financial reporting
accounts receivable
accounts payable
costs accounting
budgeting
cash management
treasury management
Why Are Functional Systems Changing?
they are limited because they operate in isolation
what happens when functional systems are limited because they operate in isolation?
Data duplication results from each application having own database
Business processes disjointed across functions
Limited information available at any one source
Limited information available at any one source
Inefficient decisions based on limited knowledge
Increased costs to organization
how are disjointed business processes a problem?
produces lack of integrated enterprise information
managers have it difficult to see the big picture?
how is data duplication an issue?
potential lack of data integrity
Integrated, Cross-Functional Systems
Cross-departmental systems operate across departmental boundaries
what we need to achieve
why is transition from functional systems to integrated cross-functional systems is difficult?
need a lot of coordination
Integrated processing needs many departments to coordinate activities
Inter-organizational systems are cross- functional systems used by two or more related companies
Most organizations today have a mixture of functional and integrated systems
How can business processes be improved?
Adding resources, such as adding more workers
Adding increased specialization
Changing/eliminating nonproductive activities
what already supports business processes?
information systems
IT enables firms to innovate and make significant change
what does using IT to improve business process require?
understanding of where improvements are possible
what do more efficient business processes integrate?
the activities of all departments involved in a value chain
Enterprise Application Integration (EAI)
a way go combine different functional systems by adding some lawyers of software to connect them together
older thing
An approach to combining functional systems
it uses layers of software as a bridge to connect different functional systems together
Enterprise Resource Planning (ERP)
much better and modern approach
creating a new system with one central data base
it combines all the data components, elements, and other shit from processes
A second approach to combining functional systems
one central database is combined with a set of standard processes built on top of the database to ensure integration between functional area
what is the main design principle of ERPs?
one central database
it is combined with a set of standard processes built on top of the database
this ensures integration between functional area
what is the body of the Enterprise Resource Planning (EAI)
the manager at the top
the EAI server right after from which the manager accesses the data
underneath it, there is the different EAI interfaces that sends data to the EAI server
underneath, there are the corresponding independent functional systems for each EAI interface
what is the body of the Enterprise Application Integration (ERP)
The manager at the top
underneath is the ERP database which is the single central database from which the manager accesses data
underneath are the functional areas where people send and receive data to the ERP database
no functional systems exist. They were replaced by ERP modules
What are the challenges of implementing business process changes? why will process design projects be expensive and difficult?
There is a lot of detailed work to be done to determine what to change and make an effective decision
Hard to estimate the business value that will emerge from business process changes
Many people like change but do not want to change
May take a long time
Very expensive and outcomes are uncertain
why did many early business process design projects fail?
because they were tailor-made
Software vendors designed integrated applications, with built-in industry standard processes
what was the goal of designing integrated applications, with built-in industry standard processes (which was a mistake)
Integrate activities across departments
Save costs of new process design
Examples: Oracle, Salesforce.com, Microsoft, or SAP
what were the problems with designing integrated applications, with built-in industry standard processes?
Industry standard processes may be very different from existing processes in the organization
May require the organization to change substantially
What are ERP systems?
Support all the primary business processes as well as the human resource and accounting support processes
Enterprise-wide systems that integrate sales, order, inventory, manufacturing, and customer service activities
ERP systems provide software, pre- designed databases, procedures, and job descriptions for organization-wide process integration
who are the primary ERP users?
manufacturing companies
what are the characteristics of the ERP?
cross functional, process view of the organization
formal approach based on formal business models
maintains data in centralized database
offers large benefits
difficult, fraught with challenges, and can be slow to implement
often very expensive
benefits of ERP
Efficient business processes
Inventory reduction
Lead-time reduction
Improved customer service
Greater, real-time insight into organization
Higher profitability
what are cross-functional systems developed for?
cross-functional systems developed to overcome problems in functional silos
what do Customer Relationship Management (CRM) systems do?
Support the business processes of attracting, selling, managing, delivering, and supporting customers
support the direct value chain activities that involve the customer
Integrate four phases of the customer life cycle: marketing, customer acquisition, relationship management, and loss/churn
in Customer Relationship Management (CRM) systems, how is the customer data stored?
All customer data stored in single database
Purpose of Relationship Management
To maximize the value of the existing customer
Two types of applications for Relationship Management applications
Sales Management applications
Integrated CRM applications
Sales Management applications
support sales to existing customers
Ensures that sales management has sufficient information to prioritize and allocate sales time and efforts
Integrated CRM applications
store data in a single database
can CRM processes be linked to one another?
ye bruv
what are the CRM components?
solicitation
Lead tracking (pre-sale)
relationship management (post sale)
what does CRM solicitation do?
generate prospects via messages to target market
what does CRM solicitation use to generate prospects via messages?
use email, websites, and other IS messaging media
support direct mail, catalogue, and other tradition promotion
what is the goal of CRM lead tracking (pre sale)?
track sales leads
track customer responses and contacts
prioritize responses to maximize new customer revenue
what does CRM relationship Management (post sale) do?
maximize the value of existing customer base
what does CRM relationship Management (post sale) use to maximize the value of existing customer base?
sales management applications
customer support applications
what do CRM sales management applications do?
prioritize customer using purchasing history
increase sales to existing customers
focus reselling on high-value customers
win back lost high value customers
what do CRM customer support applications do?
manage orders
track customer’ problems and problem resolutions
prioritize responses according to customer value
gather data for product improvement
what are supply chain management (SCM) systems?
inter-organizational systems that enable companies to efficiently handle the flow of good from suppliers to customers
integrating all different aspects of supply chain to present it as a coherent ensemble to stakeholders and everyone in the orgnaization
what is a supply chain?
a network of organizations and facilities that transforms raw materials into products delivered to customers
who does a supply chain involve?
customers
retailers
distributors
manufacturers
suppliers
transportation companies
warehouses
inventories
some means for transmitting messages and information among the organizations involved
Customer Relationship Management (CRM) systems
Support the business processes of attracting, selling, managing, delivering, and supporting customers
Direct value chain activities that involve the customer
Integrates four phases of the customer life cycle
All customer data stored in single database
four phases of the customer life cycle
marketing
customer acquisition
relationship management
loss/churn
