October 23, 2021

Business Value of Enterprise Systems Increases operational efficiency by providing organizational-wide information to help managers make better decisions. Facilitates Standardizations and Coordination of important business processes Helps firms respond rapidly to customers requests for information or products Producing, procuring, shipping right amounts Enforcing standard practices and data throughout company Providing firm-wide information to help managers make better decisions Allowing senior management to easily find out at any moment how a particular organizational unit is performing or to determine which products are most or least profitable Examples of Enterprise systems Supply Chain Management Systems (SCM) Supply chain: Network of organizations and business processes for: Procuring raw materials Transforming them into intermediate and finished products Distributing finished products to customers Includes secondary and tertiary suppliers Upstream portion: Suppliers Downstream portion: Distributors Two main categories Supply chain planning systems Demand planning Order planning Advanced scheduling and manufacturing planning Distribution planning Transportation planning Supply chain execution systems: Manage flow of products through distribution centers and warehouses to ensure products delivered to right locations in most efficient manner Order commitments Final production Replenishment Distribution management Reverse distribution Business value of supply chain management systems Matching supply to demand and reducing inventory levels Improving delivery service and speeding product time to market Using assets more effectively Increasing sales by assuring availability of products Increased profitability Supply chain costs can approach 75% of total operating budgets Customer Relationship Management Systems (CRM) Capture, consolidate, analyze customer data and distribute results to various systems and customer touch points (contact points) across enterprise Provide single enterprise view of customers Provide customers single view of enterprise at touch points Provide analytical tools for determining value, loyalty, profitability of customers Assist in acquiring new customers, providing better service and support to customers, customize offerings to customer preferences, provide ongoing value to retain profitable customers Two main categories of CRM Operational CRM Customer-facing applications, e.g. tools for sales force automation, call center and customer service support, marketing automation Analytical CRM Applications that analyze (OLAP, data mining, etc.) customer data Based on data warehouses consolidating data from operational CRM systems and customer touch points One important output: Customer lifetime value (CLTV) Value based on revenue produced by a customer, expenses incurred in acquiring and servicing customer, and expected life of relationship between customer and company Business value of CRM systems Increased customer satisfaction Reduced direct marketing costs More effective marketing Lower costs for customer acquisition and retention Increased sales revenue By identifying profitable customers and segments for focused marketing and cross-selling Reduced churn rate (number of customers who stop using or purchasing products or services) Management Opportunities, Challenges, and Solutions None of these enterprise systems are without their opportunities and challenges. Briefly, the opportunities are: Higher levels of productivity, earnings, and share prices Enhanced decision-making at all levels of the organization Information when and where necessary The challenges are: Expensive to purchase and implement Total implementation cost may be four to five times of cost of software Deep-seated technological change Fundamental changes to organization, business processes New functions and responsibilities for employees SCM systems require business process change for multiple organizations Introduce ―switching costs‖, dependency on enterprise software vendor Require understanding firm’s data and cleansing data Integrating the system throughout the organization and yet serving specific needs Training managers and employees Managing the costs of information Managing user demands on the system The solutions are: Determine specific information requirements and which of the requirements are being met by current systems Pay attention to the training needs of managers and employees — allocate the necessary funds to ensure training needs are adequately met Ensure each division is charged for all the information services they use and make the division managers responsible for managing the resource the same as they must manage all their other resources

Enterprise Information Systems Definition Firm-wide information systems that integrate key business processes within the firm or business processes shared by multiple firms. Enterprise systems features 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 Enterprise systems (ES) are large-scale, integrated application-software packages that use the computational, data storage, and data transmission power of modern information technology to support business processes, information flows, reporting, and data analytics within and between complex organizations. Enterprise Information Systems provide a technology platform that enables organizations to integrate and coordinate their business processes. They provide a single system that is central to the organization and ensure that information can be shared across all functional levels and management hierarchies. Enterprise systems are invaluable in eliminating the problem of information fragmentation caused by multiple information systems in an organization, by creating a standard data structure. A typical Enterprise Information System would be housed in one or more data centers, run enterprise software, and could include applications that typically cross organizational borders such as content management systems. Enterprise Software Enterprise software is built around thousands of predefined business processes that reflects best practices. Companies implementing this software must first select the functions of the system they wish to use and then map their business processes to the pre-defined business processes in the software. Business Support Business processes supported by Enterprise systems includes; Financial and Accounting processes; including general ledger, accounts payable, accounts receivable, fixed assets, cash management, and forecasting, product-costing accounting, cost-center accounting, asset accounting, tax accounting, credit management and financial reporting. Human Resource Processes; including personnel administration, time accounting, payroll, personnel planning and development, benefits accounting, applicant tracking, time management, compensation, workforce planning, performance and travel expense reporting. Manufacturing and production processes, including procurement, inventory management, purchasing, shipping, production planning, production scheduling, material requirements planning, quality control, distribution, transportation execution, and plant and equipment maintenance. Sales and Marketing processes including order processing, quotations, contracts, product configuration, pricing, billing, credit checking, incentive and commission management and sales planning.