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CISB113

Fundamentals of Information
Systems

Cross Functional
Enterprise Systems
Learning Outcomes
At the end of this lesson, you should be able to:
• Discuss Business Process Re-engineering
• Describe Cross Functional Enterprise Systems
• Called BPR or Reengineering
• Rethinking, transform and radical redesign of
business process
• Purpose: Achieve improvement in cost, quality,
service and speed
• The roles are to:
– Increase process efficiency
– Improve communication
– Facilitate collaboration
BPR Example:
BPR Benefits
1. An organization can achieve radical changes in
performance
2. It boosts competitiveness in the operations network
through simpler, leaner and more productive
processes.
3. Encourages organizations to abandon conventional
approaches to problem solving and to “think big”
4. Helps organizations make radical changes in the
pace and quality of their response to customer
BPR Benefits
5. Develop new organizational designs that can help
companies respond better to competitive pressures,
increase market share, profitability and quality.
6. The change that occurs in the corporate culture and
the basic principles by which departments operate.
7. Help to create more challenging and more rewarding
jobs with broader responsibilities for employees (job
redesign).
Cross Functional Business Process
• Processes that span across several different
departments of one business.
• Advancement in IT results in conversion from
functional processes to cross functional processes
• Many companies today are using IT to develop
integrated cross functional enterprise systems
• Purpose :
– Reengineer and improve important business
process across the enterprise
Cross Functional Enterprise
Systems
Scenario : A new product development process
in a manufacturing company

• The above diagram is an example of a business


process that must be supported by cross-functional
enterprise Information Systems.
Cross Functional Enterprise
Systems
• Enterprise systems control all major business processes with a
single software architecture in real time.
• It is comprised of a set of applications that automate routine
back-end operations, such as :
– financial management
– inventory management
– Scheduling
– order fulfillment
– accounts payable and receivable
• It includes front-end operations (deals with customers) such as:
– Point of Sales
– Service
Cross Functional Enterprise
Systems
• Focused on accomplishing fundamental business
process with involvement of many parties
– the company’s customers,
– suppliers,
– partners,
– employees from different departments
• The key word here is “enterprise-wide”
Cross Functional Enterprise Systems
(CRM)
Customer Relationship Management (CRM)
• Customer relationship management (CRM) manages a company’s
interactions with current and future customers. It involves using technology
to organize, automate, and synchronize sales, marketing, customer service,
and technical support
(Wikipedia.com)
• CRM application integrates all of the primary business activities in
the Porter’s Value Chain.
• Tracks all interactions with the customer from prospect through
follow up service and support
• Focuses on acquiring and retaining profitable customers via
marketing, sales, and services
• Customer centric
Cross Functional Enterprise Systems
Source: Kroenke,

(CRM) D,M. (2010)


Experiencing MIS,
2nd Edition
Looking from the 4 phases of customer life cycle Pearson

• Marketing :
– Marketing sends messages to prospect customers, attracting them to buy
– Tracks and measure campaign, user behavior on website
• Customer Acquisition :
– Selling and buying takes place
– Recording of sales, customer details, customer buying pattern
• Relationship management :
– When prospect customers made order, they become customers who need
to be supported
– Supporting and reselling : using data obtained during selling and buying,
send targeted messages, share knowledge about customer’s needs
• Loss/Churn/Attrition :
– Analyze and Categorize customer, win back high value customer
Cross Functional Enterprise
Systems (CRM)
Benefits of CRM
• Identify and target the best customers
• Real-time customization and personalization of
products and services
• Track when and how a customer contacts the
company
• Provide a consistent customer experience
Cross Functional Enterprise
Systems (CRM)
Business benefits of CRM are not guaranteed
• 50 percent of CRM projects did not produce
promised results
• 20 percent damaged customer relationships

Reasons for CRM failure


• Lack of understanding and preparation
• Not solving business process problems first
• No participation or involvement from part of
business stakeholders/management
Value Chain

Support
processes

Primary
processes

The goal of these activities is to offer the customer a level of value that
exceeds the cost of the activity, resulting in a profit
Supply Chain
What is Supply Chain?
• Supply chain refers to the flow of materials, information, payments, and
services from raw material suppliers, through factories and warehouses, to the
final consumer.
• It includes tasks such as purchasing, payment flow, materials handling,
production planning & control, logistics & warehousing, inventory control, and
distribution
• A supply chain is a system of organizations, people, activities, information, and
resources involved in moving a product or service from supplier to customer.
• Supply chain activities transform natural resources, raw materials, and
components into a finished product that is delivered to the end customer.
(Wikipedia.com)
• Comprises of all the businesses and individual contributors involved in creating
a product from raw materials to finished merchandise
(About.com)
Supply Chain

• The supply chain involves three segments:


1. Upstream, where sourcing or procurement from external
suppliers occur
2. Internal, where packaging, assembly, or manufacturing
take place
3. Downstream, where distribution or dispersal take place,
to the customers, sometimes via external distributors
• It also includes the movement of information and money
and the procedures that support the movement of a
product or a service.
Supply Chain

• The purpose/goal :
– to efficiently forecast demand, control inventory,
enhance relationships with customers, suppliers,
distributors, and receive feedback on the status of
every link in the supply chain
Supply Chain
Key Challenges
• Lack of demand planning knowledge, tools,
and guidelines
• Inaccurate data provided by other information
systems
• Lack of collaboration among marketing,
production, and inventory management
• The tools are immature, incomplete, and
hard to implement
Enterprise Resource Planning(ERP)
• Enterprise Resource Planning (ERP)
– A cross functional enterprise system
that integrates the primary value
chain activities with human
resources and
accounting/infrastructure
– Allows an organization to use a
system of integrated applications to
manage the business
– Truly enterprise wide
– Track customers, process orders,
manage inventory, pay employees,
and other accounting functions
– SAP and ORACLE are the major
vendors
Enterprise Resource Planning(ERP)

• ERP Characteristics
– Provides cross-functional, process
view of organization
– Maintains data in centralized
database
– Offers large benefit but very
challenging to implement
– VERY expensive

Scriptcase.net
Cross Functional Enterprise
Systems (ERP)

Typical Cost of Implementing a New ERP


Enterprise Resource Planning(ERP)

• The biggest challenge of ERP is costs and risks


• 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