Chapter 10 Enterprise Systems: Supply Chain, ERP, CRM and KM

(Prepared by research scholar Amrita Patwa)

Enterprise Systems or processes that involve the entire enterprise or two or more departments of
it. Example: ERP, Extended ERP, CRM, Knowledge Management, Partner Relationship
Management, Business Process Management, Business Intelligence, etc.
Supply Chain: It s is set of Relationship among suppliers, manufacturer, distributors and retailers
that facilitate the transformation of raw material into final products. The flow of material,
information, money and services from raw materials suppliers through factories and ware houses
to the end consumers. Supply Chain Management is the efficient management of the supply
chain end to end process that starts with design of the product or service and end when it is
sold, consumed or used by the end consumer. Eg: Inventory Management Materials acquition
and transformation, shipping and transportation etc. In todays competitive business
environment, efficient, affective supply chains are critical to the survival of most organization
and they are greatly dependent on the supporting information systems. IT support supply chain to
function and implement the following issues:

Procurement and Supply Decision

Production Decision
Distribution Decision
Information support Decision
Material Flow Decision
Cash Flow Decision

When a supply chain is managed electronically, usually with web based software, it is refer to as
a digital supply chain or an e-supply chain. Supply chains are composed of three major
components:

Upstream
Internal
Downstream

Integrating Enterprise System: - Oracle is probably is the best example of a software vendor that
buys software vendors with specialize enterprise system and integrates the systems together
(such as ERP and CRM).
Managing Collaboration:- Necessary since companies depend on each other, but do not always
work together.

Collaborative Planning (Collectively creates initial demand forecast, provide changes

and share information)

Vendor Manage Inventory (Manage Inventories for the manufacturer or buyers, reduces
warehousing cost for suppliers)

Advantages of Internet Utilization in SPM:

Better Cost Performance

Enhance Customer Service
Improved Process Capabilities
Higher Productivity and Dependability
Shortened Cycle Time
Greater Flexibility
Shortened Supply Chain

E-Business Activities:

Collaborative Fulfillment Network

Electronic Market Place (B2B Internet based Technologies)
EDI(Electronic Data Interchange)
Electronic Ordering and Fund Transfer
RFID (Managing Inventory)
E-Procurement

Mobility and Wireless Solution:(i)

(ii)

It eliminate wasted time in business processes

Through mobility, computing power is moved from stationary desktop computer to a
mobile computer.

Business Value of SCM:

Reduce uncertainty and risk

Improved collaboration
Decreasing Inventory levels and cycle time
Improving business processes and customer service

ERP Systems: - To control all major business processes in real time with single software
architecture, ERP systems are used. This software integrates the planning management and use
of all of the resources in the entire enterprises. It comprises of sets of application that automate
routine backend operations.
Purpose and Advantages:

To integrate all departments and functional information flows across a company onto a
single computer system.

Improving inventory management

Availability of information to optimize production schedule
Increases productivity and customer satisfaction

ERP can be integrated with SPM systems, E- commerce and CRM.

Customer Relationship Management:- CRM is an enterprise wide effort to acquire and retain
profitable customers, CRM focuses on building long term and sustainable customer relationships
that add value for both the customer and the company.
Classification of CRM Application:(i)
(ii)
(iii)
(iv)

Customer facing application(Customer interacts with the company)

Customer touching application(Customer interact directly with the application)
Customer centric intelligence application(intended analyze the results of operational
processing)
Online networking application(Provide the opportunity to build personal relationships
with a wide range of people in business)

E-CRM: - When businesses started using web browsers, the internet and other electronic touch
points to manage customer relationships.
Levels and types of E-CRM:(i)
(ii)
(iii)

Foundational service- Minimum necessary services such web site responsiveness, site
effectiveness and order fulfillment.
Customer centered service- service include order tracking configuration and
customization, and security/trust.
Value added service- Extra services such as online auctions and online training and
development, loyalty programs.

Types of CRM Activities:(i)

(ii)
(iii)

Operational CRM(customer services order management sales/marketing automation

and management, etc)
Analytical CRM(capture, store, extract, process, interpret and report customer data)
for analysis
Collaborative CRM (communication, coordination and collaboration between vendors
and customers)

Customers services on the WEB:(i)

(ii)

Search and comparison capabilities

Free products and services

(iii)
(iv)
(v)

Technical and other information and services

Customized products and services
Account or order status tracking

Tools or customers services:

Personalized Web Pages

FAQs
Email and automated response
Chat and Live rooms
Call Centers
Trouble Shooting Tools

Wireless CRM:- Enables employees to provide better service while they are at the customers
sites.
CRM Failures:1.
2.
3.
4.

Difficulty majoring and valuing in tangibles benefits

Lack of active senior managements sponsorship
Poor user acceptance
Trying to automate properly define business process in CRM

Business Value of CRM:Many organizations are adopting CRM systems, with software to help acquire, managed and
retain loyal customers. One of the biggest problems in CRM implementation is the difficulty of
defining and measuring success. A formal business plan must be in place before the e-CRM
project begins. The plan should include tangible net benefits (cost benefit analysis), intangible
benefits and risk assessments (potential pitfalls).
Risk of E-CRM:

Taking on more than can be delivered

Getting over budget and behind solutions
Poor user adoption
Expensive maintenance and support
Next isolation
Garbage and in garbage out
Failure to measure success

Knowledge Management:- A process that helps organizations identify, select, organize,

disseminate and transfer important information and expertise that are part of the organizations

memory and that typically reside within the organization in an unstructured manner. Also known
as intellectual capital, that implies financial value to knowledge.

Extraordinary leverage and increasing returns

Fragmentation, leakage and the need to refresh
Uncertain value
Uncertain value of sharing
Rooted in time

Types of knowledge
1. Explicit knowledge: It deals with more objective, rational and technical knowledge (data,
policies, procedures, software, documents, etc)
2. Tacit knowledge: It is in the domain of subjective, cognitive and experiential learning; it
is highly personal and difficult to formalize.
The need to integrate explicit and tacit knowledge gives rise to Knowledge Management
Systems (KMS) that make use of modern information technology. The two basic components of
KMS are communication and collaboration technologies and storage and retrieval technologies.

To systematize, enhance and expedite intra and inter firm knowledge management
To help an organization cope with turnover, rapid change and downsizing
To maintain a well informed productive workforce
To help large organizations provide a consistent level of customer service
Retain knowledge about departing employees
To capitalize on the knowledge and experience of employees worldwide

Knowledge Management System Cycle

1.
2.
3.
4.
5.
6.

Create Knowledge
Capture Knowledge
Refine Knowledge
Store Knowledge
Manage Knowledge
Disseminate Knowledge

KMS Implementation
1. An employee submits a question into the ELS (Expert Location System)
2. The software searches its database for an answer to that question already exists or not. If
not, then searches for an expert
3. The system asks for him to respond to that question and submit his response
4. Response is reviewed for accuracy and sent back to the user