Lecture Business driven information systems (4/e): Chapter 8 - Paige Baltzan
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CHAPTER EIGHT
ENTERPRISE
APPLICATIONS
BUSINESS
COMMUNICATIONS
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor
use. Not authorized for sale or distribution in any manner. This document may not be copied,
scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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CHAPTER OVERVIEW
SECTION 8.1 – Enterprise Systems and Supply
Chain Management
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Building a Connected Corporation Through Integrations
Supply Chain Management
The Benefits of SCM
The Challenges of SCM
The Future of SCM
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CHAPTER OVERVIEW
SECTION 8.2 – Customer Relationship
Management and Enterprise Resource Planning
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Customer Relationship Management
The Benefits of CRM
The challenges of CRM
The Future of CRM
Enterprise Resource Planning
The Benefits of ERP
The challenges of ERP
The Future of Enterprise Systems, Integrating SCM,
CRM, and ERP
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SECTION 8.1
Enterprise
Systems and
Supply Chain
Management
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor
use. Not authorized for sale or distribution in any manner. This document may not be copied,
scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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LEARNING OUTCOMES
1. Explain integrations and the role they play in
connecting a corporation
2. Describe supply chain management along
with its associated benefits and challenges
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BUILDING A CONNECTED CORPORATION
THROUGH INTEGRATIONS
Integration – Allows separate
systems to communicate directly
with each other, eliminating the
need for manual entry into multiple
systems
• Forward integration
• Backward integration
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BUILDING A CONNECTED CORPORATION
THROUGH INTEGRATIONS
Integration Example
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BUILDING A CONNECTED CORPORATION
THROUGH INTEGRATIONS
A Central Information Repository Example
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Integration Tools
Enterprise system – Provide
enterprisewide support and
data access for a firm’s
operations and business
processes
Enterprise application
integration (EAI) – Connects
the plans, methods, and tools
aimed at integrating separate
enterprise systems
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Integration Tools
Middleware – Several different types
of software that sit between and
provide connectivity for two or more
software applications
Enterprise application integration
middleware – Takes a new approach
to middleware by packaging commonly
used applications together, reducing
the time needed to integrate
applications from multiple vendors
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Integration Tools
Three Primary Enterprise Systems
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SUPPLY CHAIN MANAGEMENT
Five basic supply
chain activities
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SUPPLY CHAIN MANAGEMENT
Supply Chain Management (SCM) – The management
of information flows between and among activities in a
supply chain to maximize total supply chain effectiveness
and profitability
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SUPPLY CHAIN MANAGEMENT
The supply chain has three main links
1. Materials flow from suppliers and their
“upstream” suppliers at all levels
2. Transformation of materials into
semifinished and finished products
through the organization’s own production
process
3. Distribution of products to customers and
their “downstream” customers at all levels
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SUPPLY CHAIN MANAGEMENT
Supply Chain Example
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SUPPLY CHAIN MANAGEMENT
Walmart and Procter & Gamble SCM Example
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SUPPLY CHAIN MANAGEMENT
Effective and efficient SCM systems can enable
an organization to
• Decrease the power of its buyers
• Increase its own supplier power
• Increase switching costs to reduce the threat of
substitute products or services
• Create entry barriers thereby reducing the threat of
new entrants
• Increase efficiencies while seeking a competitive
advantage through cost leadership
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SUPPLY CHAIN MANAGEMENT
Effective and Efficient SCM Systems
Effect on Porter’s Five Forces
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THE BENEFITS OF SCM:
Improved Visibility
Supply chain visibility – The ability to view all areas
up and down the supply chain in real time
Supply chain planning system – Uses advanced
mathematical algorithms to improve the flow and
efficiency of the supply chain while reducing inventory
Supply chain execution system – Automates the
different activities of the supply chain
Bullwhip effect – Occurs when distorted product
demand information ripples from one partner to the
next throughout the supply chain
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THE BENEFITS OF SCM:
Improved Visibility
Supply Chain Planning and Execution
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THE BENEFITS OF SCM:
Improved Profitability
Companies can respond faster and more
effectively to consumer demands through
supply chain enhances
Demand planning system – Generates
demand forecasts using statistical tools and
forecasting techniques, so companies can
respond faster and more effectively to
consumer demands through supply chain
enhancements
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THE BENEFITS OF SCM:
Improved Profitability
Common supply chain metrics include:
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Back order
Inventory cycle time
Customer order cycle time
Inventory turnover
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THE CHALLENGES OF SCM
Primary challenges include
• Cost – An SCM system can cost millions of dollars
for the software and millions more for help
implementing the system
• Complexity - The move towards globalization is
increasing complexity in the supply chain
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THE FUTURE OF SCM
Fastest growing SCM components
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Collaborative demand planning
Collaborative engineering
Selling chain management
Supply chain event management (SCEM)
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SECTION 8.2
Customer
Relationship
Management
and
Enterprise
Resource
Planning
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor
use. Not authorized for sale or distribution in any manner. This document may not be copied,
scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
