Session#8; organizational is

Management Information Systems
Organizational Information Systems
Graduate School of
Management & Economics
Organizational
Information Systems
1 N.Karami, MIS-Spring 2012

Graduate School of
Learning Objectives
• Describe enterprise resource planning
systems.
• Describe supply chain management systems.
• Describe customer relationship management
systems.
• Discuss electronic data interchange and
extranets.

Graduate School of
Chapter Opening Case
Toyota
Production
System

Toyota Production System
Graduate School of
(continued)
Electronic dashboard showing
status of assembly line

Graduate School of
Toyota Production System
(continued)
Toyota’s
proprietary
Assembly
Line Control
System (ALCS)
software

Graduate School of
Enterprise Application Systems
 Enterprise Resourcing Planning Systems
(ERP)
 Supply Chain Management Systems
(SCM)
 Customer Relationship Management
Systems (CRM)

Graduate School of
16
14
12
10
8
6
4
2
0
Global EAS Sales
1997
1998
1999
2000
2001
2002E
2003E
2004E
2005E
USD Billions
ERP
CRM
SCM
Total

Graduate School of
Enterprise Resource Planning
Systems (ERP)
• ERP is a cross-functional enterprise backbone that
integrates and automates processes within:
 Manufacturing & Production
 Sales & Marketing
 Distribution
 Finance & Accounting
 Human resources
• Suite of integrated software modules and a common
central database
• Collects data from many divisions of firm for use in nearly
all of firm’s internal business activities
• Information entered in one process is immediately
available for other processes
• Enterprise software’s vendors: SAP, Oracle, SSA Global

Graduate School of
How Enterprise Systems Work
Enterprise
systems feature a
set of integrated
software modules
and a central
database that
enables data to be
shared by many
different business
processes and
functional areas
throughout the
enterprise

Graduate School of
SAP Modules

Graduate School of
Costs of Implementing a New ERP

Graduate School of
Causes of ERP Failures
• Most common causes of ERP failure
– Under-estimating the complexity of planning,
development, training
– Failure to involve affected employees in
planning and development
– Trying to do too much too fast
– Insufficient training
– Insufficient data conversion and testing
– Over-reliance on ERP vendor or consultants

Graduate School of
Supply Chain Management
Systems (SCM)
refers to the flow of materials,
information, money, and services from raw
material suppliers, through factories and
warehouses, to the end customers.
is the
function of planning, organizing and optimizing
the supply chain’s activities

Graduate School of
Supply Chain

Graduate School of
Generic Supply Chain

Graduate School of
Problems Along the Supply
Chain
• Poor customer service
• Poor quality product
• High inventory costs
• Loss of revenues
• New technologies

Problems Along the Supply Chain
Graduate School of
(continued)
• Problems stem mainly from two sources:
– Uncertainties due to demand forecast, delivery
times, quality problems in materials and parts that
can create production delays;
– The need to coordinate several activities, internal
units and business partners.
• Bullwhip effect refers to erratic shifts in
orders up and down the supply chain.

Graduate School of
Push- Versus Pull-Based Supply
Chain Models
The difference between push- and pull-based models is summarized by the
slogan “Make what we sell, not sell what we make.”

Graduate School of
Goals of SCM
• The goal of SCM is to efficiently
– Forecast demand
– Control inventory
– Enhance relationships with customers, suppliers,
distributors, and others
– Receive feedback on the status of every link in the
supply chain

Graduate School of
SCM Applications
• Supply chain planning systems
• Model existing supply chain
• Demand planning
• Optimize sourcing, manufacturing plans
• Establish inventory levels
• Identifying transportation modes
• Supply chain execution systems
• Manage flow of products through distribution centers and
warehouses
• Software’s vendors: Manugistics, i2 Technologies

Graduate School of
Global Supply Chains &
the Internet
• Before Internet, supply chain coordination hampered
by difficulties of using disparate internal supply chain
systems
• Enterprise systems supply some integration of internal
supply chain processes but not designed to deal with
external supply chain processes
• Intranets and Extranets
• Intranets: To improve coordination among internal supply
chain processes
• Extranets

Graduate School of
Customer Relationship
Management
• Knowing the customer
• In large businesses, too many customers and too many
ways customers interact with firm
• Customer relationship management (CRM) systems
• Capture and integrate customer data from all over the
organization
• Consolidate and analyze customer data
• Distribute customer information to various systems and
customer touch points across enterprise
• Provide single enterprise view of customers
• Help keep profitable customers and maximizes lifetime
revenue from them.

Graduate School of
CRM Definition
 CRM = Customer Relationship Management
 Attracting, developing and maintaining
successful customer relationships over time
 A strategy for identifying, satisfying, retaining
and maximizing the value of a company’s
best customers
 All processes and technologies that
organizations use to identify, select, acquire,
develop, retain, and better serve customers

Graduate School of
Four Levels of CRM
• Strategic CRM
– A top-down perspective on CRM which views CRM as a core
customer-centric business strategy that aims at winning and keeping
profitable customers
• Operational CRM
– Customer-facing applications that integrate the front, back and mobile
offices, including sales-force automation, enterprise marketing
automation, and customer service and support
• Analytical CRM
– Applications that analyze customer data generated by operational
tools for the purpose of business performance management
• Collaborative/ Communicational/Interactive CRM
– Collaborative services that facilitate interactions between customers
and businesses
– Help to establish the lifetime value of customers beyond the
transaction by creating a partnering relationship

Graduate School of

Graduate School of
Three Areas in Operational CRM

Graduate School of
Customer Touch Points
Telephone
Conventional mail
Help desk
Web site
E-mail
Store

Graduate School of
Software as a Service for CRM
• Software’s Vendors: Siebel Systems, PeopleSoft, SAP,
Salesforce.com

Graduate School of
Analytical CRM
• Analyze customer data output from operational CRM
applications
• Based on data warehouses populated by operational
CRM systems and customer touch points
• Customer lifetime value (CLTV)
• Analytical CRM is inextricably tied to a Data
Warehouse architecture, and use analytical
applications to leverage optimized functionality for
analysis and reporting

Graduate School of
Analytical CRM Data
Warehouse
Analytical CRM uses a customer data warehouse and tools to analyze customer data collected from the
firm’s customer touch points and from other sources.

Graduate School of
CRM Failures
• Business benefits of CRM are not guaranteed
– 50 percent of CRM projects did not produce promised
results
– 20 percent damaged customer relationships
• Reasons for failure
– Lack of understanding and preparation
– Not solving business process problems first
– No participation on part of business stakeholders
involved

Graduate School of
Putting it all together
The relationships among SCM, ERP, and CRM

Electronic Data Interchange (EDI)
Graduate School of
& Extranets
is a
communication standard that enables
business partners to exchange routine
documents, such as purchase orders,
electronically.
link business partners to one
another over the Internet by providing
access to certain areas of each other’s
corporate intranets.

Graduate School of
EDI Benefits
• Minimize data entry errors
• Length of messages are shorter
• Messages are secured
• Reduces cycle time
• Increases productivity
• Enhances customer service
• Minimizes paper usage and storage

Graduate School of
The Structure of an Extranet

Graduate School of
Types of Extranets
A company and its dealers, customers or
suppliers
An industry’s extranet
Joint ventures and other business partnerships

Session#8; organizational is

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