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Management Information Systems: Learning Objectives
Managing the Digital Firm 9.1 How do enterprise systems help businesses achieve
Seventeenth Edition operational excellence?
9.2 How do supply chain management systems coordinate
Chapter 9 planning, production, and logistics with suppliers?
Achieving Operational Excellence
9.3 How do customer relationship management systems
and Customer Intimacy: Enterprise help firms achieve customer intimacy?
Applications 9.4 What are the challenges that enterprise applications
pose, and how are enterprise applications taking
advantage of new technologies?
9.5 How will MI S help my career?
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Video Cases Lenzing Sustainably Balances Supply
and Demand (1 of 2)
• Case 1: Maersk Develops a Global Shipping Management • Problem
System – High environmental standards
– Global operations
– Inefficient supply chain
– Manual processes
• Solutions
– Establish sustainability goals
– Promote innovation
– Select new technology
– Revise supply chain processes
– Deploy JDA Sales & Operations Planning
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Lenzing Sustainably Balances Supply What Are Enterprise Systems
and Demand (2 of 2)
• Also known as enterprise resource planning (ERP)
• Lenzing implemented JDA’s Sales & Operations Planning systems
software to gain better visibility into its supply chain, leading to
greater forecast accuracy, better decisions, and higher • Based on a suite of integrated software modules and a
operational efficiency across the global enterprise common central database
• Helped Lenzing minimize waste and made its entire supply • Collects data from many divisions of firm for use in nearly
chain “leaner” all of firm’s internal business activities
• Illustrates the critical nature of supply chain management • Information entered in one process is immediately
systems in business available for other processes
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Figure 9.1 How Enterprise Systems Enterprise Software
Work • Built around thousands of predefined business processes that
reflect best practices
– Finance and accounting
– Human resources
– Manufacturing and production
– Sales and marketing
• To implement, firms:
– Select functions of system they wish to use
– Map business processes to software processes
Use software’s configuration tables for customizing
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Business Value of Enterprise The Supply Chain
Systems • Network of organizations and processes for:
• Increase operational efficiency – Procuring materials
– Transforming materials into products
• Provide firm-wide information to support decision making
– Distributing the products
• Enable rapid responses to customer requests for
information or products • Upstream supply chain
• Include analytical tools to evaluate overall organizational • Downstream supply chain
performance and improve decision-making • Internal supply chain
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Figure 9.2 Nike’s Supply Chain Supply Chain Management
• Inefficiencies cut into a company’s operating costs
– Can waste up to 25 percent of operating expenses
• Just-in-time strategy
– Components arrive as they are needed
– Finished goods shipped after leaving assembly line
• Safety stock: buffer for lack of flexibility in supply chain
• Bullwhip effect
– Information about product demand gets distorted as it
passes from one entity to next across supply chain
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Figure 9.3 The Bullwhip Effect Supply Chain Management Software
• Supply chain planning systems
– Model existing supply chain
– Enable demand planning
– Optimize sourcing, manufacturing plans
– Establish inventory levels
– Identify transportation modes
• Supply chain execution systems
– Manage flow of products through distribution centers
and warehouses
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Global Supply Chains and the Internet Demand-Driven Supply Chains: From Push to
• Global supply chain issues Pull Manufacturing and Efficient Customer
– Greater geographical distances, time differences Response
– Participants from different countries • Push-based model (build-to-stock)
Different performance standards – Earlier SCM systems
Different legal requirements – Schedules based on best guesses of demand
• Pull-based model (demand-driven)
• Internet helps manage global complexities
– Web-based
– Warehouse management
– Customer orders trigger events in supply chain
– Transportation management
• Internet enables move from sequential supply chains to concurrent
– Logistics supply chains
– Outsourcing – Complex networks of suppliers can adjust immediately
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Figure 9.4 Push- Versus Pull-Based Figure 9.5 The Emerging Internet-
Supply Chain Models Driven Supply Chain
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Business Value of Supply Chain Customer Relationship Management
Management Systems • Knowing the customer
• In large businesses, too many customers and too many ways
• Match supply to demand
customers interact with firm
• Reduce inventory levels • CRM systems
• Improve delivery service – Capture and integrate customer data from all over the
• Speed product time to market organization
• Use assets more effectively – Consolidate and analyze customer data
– Total supply chain costs can be 75 percent of operating – Distribute customer information to various systems and
budget customer touch points across enterprise
• Increase sales – Provide single enterprise view of customers
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Figure 9.6 Customer Relationship Customer Relationship Management
Management (CRM) Software (1 of 2)
• Packages range from niche tools to large-scale enterprise applications
• More comprehensive packages have modules for:
– Partner relationship management (PRM)
Integrating lead generation, pricing, promotions, order
configurations, and availability
Tools to assess partners’ performances
– Employee relationship management (ERM)
Setting objectives, employee performance management,
performance-based compensation, employee training
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Customer Relationship Management Figure 9.7 How CRM Systems
Software (2 of 2) Support Marketing
• CRM packages typically include tools for:
– Sales force automation (SFA)
Sales prospect and contact information
Sales quote generation capabilities
– Customer service
Assigning and managing customer service requests
Web-based self-service capabilities
– Marketing
Capturing prospect and customer data, scheduling and tracking
direct-marketing mailings or e-mail
Cross-selling
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Figure 9.8 CRM Software Capabilities Figure 9.9 Customer Loyalty
Management Process Map
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Operational and Analytical CRM Figure 9.10 Analytical CRM Data
• Operational CRM Warehouse
– Customer-facing applications
– Sales force automation call center and customer service
support
– Marketing automation
• Analytical CRM
– Based on data warehouses populated by operational CRM
systems and customer touch points
– Analyzes customer data (OLAP, data mining, etc.)
Customer lifetime value (CLTV)
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Business Value of Customer Interactive Session: Organizations: CRM
Relationship Management Systems Helps Adidas Know Its Customers One
• Business value of CRM systems Shoe Buyer at a Time (1 of 2)
– Increased customer satisfaction
– Reduced direct-marketing costs • Class discussion
– More effective marketing – Analyze Adidas using the competitive forces and value
– Lower costs for customer acquisition/retention chain model.
– Increased sales revenue – What is Adidas’s business strategy? What is the rule of
• Churn rate customer relationship management in that strategy?
– Number of customers who stop using or purchasing products or – How do information systems support Adidas’s strategy?
services from a company
– Indicator of growth or decline of firm’s customer base
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Interactive Session: Organizations: CRM Enterprise Application Challenges
Helps Adidas Know Its Customers One • Expensive to purchase and implement
Shoe Buyer at a Time (2 of 2) – Many projects experience cost overruns
– Long development times
• Class discussion
– How did using Salesforce.com make Adidas more • Technology changes
competitive? How did it change the way the company ran its
• Business process changes
business?
– Give an example of two business decisions that were • Organizational learning changes
improved by using Salesforce.com • Switching costs, dependence on software vendors
• Data standardization, management, cleansing
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Next-Generation Enterprise Next-Generation Enterprise
Applications (1 of 2) Applications (2 of 2)
• Enterprise solutions/suites • Social CRM
– Make applications more flexible, web-enabled, – Incorporating social networking technologies
integrated with other systems – Company social networks
• Cloud-based versions – Monitor social media activity; social media analytics
– Manage social and web-based campaigns
• Functionality for mobile platform
• Business intelligence
• Versions also available for small and medium-sized
– Inclusion of BI with enterprise applications
businesses
– Flexible reporting, ad hoc analysis, “what-if” scenarios, digital
dashboards, data visualization, AI machine learning
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Interactive Session: Technology: Versum’s
ERP Transformation
• Class discussion
– Define the problem in this case study. What management,
organization, and technology factors contributed to this problem?
– Was the SAP S/4 HANA SaaS solution a good one for Versum?
Explain your answer.
– What challenges did Versum encounter implementing the new
system?
– How did the new system change the way Versum ran its
business?
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