Chapter 3b: Business Functions and Supply Chains(p101-115)

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Chapter 3b Business Functions and Supply
Chains(p101-115)

• Business Functions
• CRM,
• HR,
• Supply Chain ? ERP

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Revision

• Page 15
• Each business function is like a puzzle piece.
  Each piece is important and should fit well with
  adjacent pieces, but the entire picture should
  always be kept in view.
• OR One of an ISs most important contributions
  to the sound workings of an organization is the
  automation of information exchange among
  subsystems ? ERP

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Revision (continued)

• Example Customers orders taken via the web site
  by the Sales Department, should be AUTOMATICALLY
  routed to the
• Manufacturing and
• Shipping units
• And processed by their OWN IS for their specific
  purpose.

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Introduction to CRM

• No company can survive without selling its
  products or services
• Providing products that customers want
• Marketing efforts to pinpoint demographic groups,
  features that consumers desire
• Providing efficient/effective ways to execute a
  sale to a customer
• IS support the sale effort ? IS support customer
  services

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CRM

• Customer Relationship Management supporting
  relationships with customers
• Supports three areas
• Marketing
• Sales
• Customer service

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Market Research

• To promote products successfully, organizations
  must perform market research
• Market research discover populations and regions
  that are most likely to purchase product
• Conduct interviews with consumers and retailers
• Statistical models predict sales volumes of
  different products

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Targeted Marketing

• Targeted Marketing promote to people most likely
  to purchase products
• Principle to define the prospective customer as
  accurately as possible
• Can direct promotional spending to customers most
  likely to buy your products
• Internet Mass communication of unsolicited
  promotional email ? SPAM

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Marketing (continued)

• To define target markets companies collect data
• Sales transactions
• Loyalty cards
• Buy databases with info about organizations/indivi
  dual
• Database technology manipulate data pools
• Sort and categorize consumers by
• Age, gender, income, previous purchases of
  related products, or other combinations

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Marketing (continued)

• With this vast information, corporations can
  prepare electronic dossiers on the
• Interest
• Tastes
• Buying habits of customers
• Market of one

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Marketing (continued)p104

• Telemarketing marketing over the telephone
• PC connected to large database
• Computer telephony integration allows computer
  to use telephone line as input
• Data mining using large data warehouses to find
  trends on consumer habits
• Set-top box.personalize marketing

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Customer Service

• Web-based customer service provides automated
  customer service 24/7
• Saves labor costs
• Saves paper costs
• Let customers pay their bills electronically
  invoice to payment cycle is 41days, now it is 6
  days

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Customer Service (continued)

• Artificial intelligence used to emulate a
  real-life customer service representative for FAQ
• Sales force automation
• Equips traveling salespeople with information
  technology (example PDA)
• Makes sales presentations more efficient
• Let salespeople present different options for
  products and services on net

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Human Resource Management

• Employee record management
• Promotion and recruitment
• Training
• Evaluation
• Compensation and benefits management

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Employee Record Management

• Keep personnel records to satisfy laws
• Payroll and tax calculation
• Human Resource information systems are now
  digitized
• Saves space, time and costs

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Promotion and Recruitment

• Select best-qualified person for position
• Selection process automated with IS
• Intranet inter-organizational network that
  supports Web applications
• Helps HR manager post position vacancy
  announcements
• Automated recruiting and selection software saves
  costs of publishing ads

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Training

• Improving employee skills
• Multimedia software training replacing classrooms
  and teachers
• Training software emulates situations where
  employee must act
• Information technology reduces training costs
  dramatically

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Evaluation

• Employee ability must be periodically evaluated
  by supervisors
• Often is a subjective process, which is a problem
• Evaluation software tries to solve this problem
  by standardizing evaluation process
• Provide tools to aid in fairly evaluating every
  employee

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Compensation and Benefits Management

• Compensation includes salary, hourly pay, and
  bonus
• Programs calculate pay and taxes
• Automatically generates pay slips and performs
  direct deposits
• Programs help manage benefits
• Benefits database accessible through intranet

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Inter-organizational Supply Chain Management
Systemsp111-115

• Inventory is decreasing while gross domestic
  product is increasing
• Money saved from inventory can be spent elsewhere
• Reduction in inventory attributed to supply chain
  management systems
• Streamline operations throughout chain
• Newer SCM systems connect multiple organizations

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The Importance of Trust

• Supply chain systems work best when all
  businesses are sharing information
• Trust between allied companies facilitates
  collaboration
• Nissan UK parts come from UK and Europe, and the
  systems are linked to Nissans Production Control
  System
• 97 of parts are delivered on time
• 98 of cars are completed well within time

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Distrust

• Risk of disclosing important figures is present,
  like taking advantage of demand figures
• If Comp A buys from Comp B and has access to Comp
  Bs demand figures, it might disclose the
  information to competitors, stirring competition
  forcing prices down!
• GM and Goodyear
• Goodyear can have lower inventory if it knows the
  demand schedule for tyres.

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Goodyear

• It could then calibrate its own order for raw
  materials
• Manufacturing capacity to suit GM
• Save money and pass some of the savings to its
  client in the form of cheaper products
• It could replenish the clients inventory of
  tyres before GM run out of them OR
• It could deliver it straight to the assembly
  line, just as needed and save warehouse costs!

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The Musical Chairs of Inventory

• Small enterprises do not use SCM systems
• Affects more powerful organization that small
  enterprise is linked to
• Inventory turns the number of times the business
  sells its inventory per year
• Sales revenue/average value of inventory
• Example
• GM has an increase of 55
• Goodyear decreased in the same period by 21

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Why?

• GM avoided buying tyres from Goodyear until they
  needed them on the assembly line
• Goodyear did not have that information when the
  tyres will be needed and kept overstock!
• When SCM of companies are not linked, supplier
  requirements unknown so companies must overstock
  inventory
• One company sits with lean inventory while other
  stands, hence musical chairs

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Collaborative Logistics

• Web allows organizations from different
  industries to collaborate
• Businesses combine freight, sharing trucks
• Optimize logistics by connecting SCM systems
• SCM systems help collaborative warehousing
• Share warehouse space

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Enterprise Resource PlanningStudy p115

• Replace old, disparate information systems with
  enterprise applications, supporting all or most
  of the business activities.
• Enterprise resource planning manages daily
  operations
• Complex
• Require special tailoring for specific
  organizations
• Relatively expensive

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Summary

• Effectiveness is the degree to which a task is
  accomplished
• Efficiency is the ratio of output to input
• Productivity is the measure of peoples
  efficiency
• Information systems have been integrated into
  accounting services
• Financial information systems help managers track
  cash

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Summary (continued)

• Computer-aided design systems help engineers
  design new projects
• Computer-aided manufacturing systems direct
  machines that assemble parts
• Supply chain management systems optimize
  workload, speed, and cost in supply chains
• Customer relationship management includes the
  entire cycle of relationships with customers

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Summary (continued)

• Human resource management systems facilitate
  staff selection and record keeping
• Multiple companies SCM systems can be linked,
  facilitating cooperation, which requires trust
• Installing an enterprise resource planning system
  can encompass all business processes