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ISPP Chapter 8

Enterprise Information Systems: ERP, CRM and SCM

QuestionAnswer
Enterprise Systems IS that allow companies to integrate information across operations on a company wide basies.
Legacy System Approach vs Enterprise Systems Approach (Figure 8.3) Separate information storage access vs a centralised, consolidated and streamlined strogce access
Internally Focused System Supports functional areas, business processes and decision making within an organisation.
Externally Focused System Coordinate business processes with customers, suppliers, business partner and others who operate outside an organisation's boundraries
Interorganisational System (IOS) A system that communicates across an organisation's boundaries
Value Chain Flow of information through business activities
5 Core Activities of the Value Chain • Inbound Logistics • Operations and Manufacturing • Outbound Logistics • Marketing and Sales • Customer Service
5 Support Activities of the Value Chaing • Administration • Infrastructure (Technological) • Human Resources • Technology Development • Procurement
Packaged Applications Software programs written by 3rd-party vendors that are used for the needs of many different users for standardised, repetitive tasks. Usually cost effective
Custom Applications Developed exclusively for a specific organisation to meet their particular needs. Much higher development costs
Stand-alone Applications Systems that focus on the specific needs if individual departments and are not designed to communicate with other systems in the organisation
Upstream Information Flow Information that is received externally
Downstream Information Flow Information produced that is sent externally
Conversion The process that transfer information stored on legacy systems to a new, integrated computing platform.
Vanilla vs Customized Software Feautres and modules that come right out of the box vs direct changes to the vanilla version or additional software, features and modules to support it for the organisation's needs
Best Practices-Based Software Software developed based on the practices of business organisation over time
Business Process Management (BPM) A systematic, structured improvement approach in organisations where people critically examine, rethink and redesign business processes in order to achieve dramatic improvements in one or more performance measures like cost, cycle time and quality
5 Steps for Business Process Management • Develop organisation vision/objectives • Identify critical processes in need of redesign • Understand/measure existing processes as a baseline • Identify how IS can improve it • Design/Implement a prototype of the new process
7 Conditions for Business Process Management • Senior management support • Shared vision by all organisation members • Realistic expectations • Power to make changes • The right people participating • Good management practices • Appropriate funding
Enterprise Resource Planning (ERP) IS that integrate business activites across departmental boundaries including planning, manufacturing, sales, marketing etc
ERP Control Refers to where the focus of control should be situated within the systems, whether it be centralised or individually governed
3 ERP Core Components That Supports Primary Internal Activities • Financial Management • Operations Management • Human Resource Management
3 ERP Extended Components That Supports Primary External Activities • Customer Relationship Management (downstream) • Supply Chain Management (Upstream)
2 ERP Limitations • Falls short communicating across boundaries • Not well suited for managing value system activities (other systems can do this)
Customer Relationship Management (CRM) Strategy to create and maintain through reliable systems, processes and procedures lasting relationships with customers by concentrating on the downstream information flows.
8 Benefits of Customer Relationship Management Systems • 24/7/365 operation • Individualised service • Improved information • Speeds problem resolution • Speeds processes • Improved integration • Improved product development • Improved planning
3 Primary Components to CRM Architecture (Figure 8.17) • Operational (Front-office service) • Analytical (Back-office storage) • Collaboration (communication)
Front-office System System that allows for direct interaction with customers
Back-office System Provides analysis necessary to more effectively manage sales, service and marketing activities etc
Supply Chain Management (SCM) Management of the producers of supplies that the company uses and the supply networks used to receive those supplies
Supply Chain Planning (Figure 8.21) • Demand Planning and Forecasting • Distribution Planning • Production Scheduling • Procurement Planning
Supply Chain Execution (Figure 8.22) • Product flow • Information flow • Financial flow
5 Step Formula for Enterprise System Success • Secure executive sponsorship • Get help from outside experts • Through training • Multidisciplinary approach to implementations • Look beyond ERP
Created by: coeezy