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Enterprise Resource Planning and Customer Relationship Management (ERP and CRM). Minder Chen, Ph.D. Professor of MIS Martin V. Smith School of Business and Economics CSU Channel Islands Minder.Chen@CSUCI.EDU. ERP Market. ERP: Enterprise Resource Planning.

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Enterprise resource planning and customer relationship management erp and crm

Enterprise Resource Planning

and

Customer Relationship Management

(ERP and CRM)

Minder Chen, Ph.D.

Professor of MIS

Martin V. Smith School of Business and Economics

CSU Channel Islands

Minder.Chen@CSUCI.EDU


Erp market
ERP Market

ERP: Enterprise Resource Planning

http://www.forbes.com/sites/louiscolumbus/2013/05/12/2013-erp-market-share-update-sap-solidifies-market-leadership/


Major global software firms
Major Global Software Firms

Source: http://www.forbes.com/global2000/list/ under software and programming


Erp systems
ERP Systems

  • Major investment

    • Cost between $50,000 and $100,000,000+

  • Variety of business justifications

    • Replace legacy systems

    • Reduce cycle times

    • Lower operating costs

    • Enables better management decisions

      • Real-time

      • On-line


What is erp
What is ERP?

  • Enterprise-wide application packages

  • Manage business processes/functions via various modules

    • Supply chain, receiving, inventory, customer orders, production planning, shipping, accounting, HR

  • Allow automation and integration of business processes

  • Enable data and information sharing

  • Incorporate and implement “best practices”


Evolution of erp
Evolution of ERP

  • 1960s: software packages with inventory control

  • 1970s: MRP systems

    • Production schedule with materials management

  • 1980s: MRPII systems

    • Adds financial accounting system

  • 1990s: MRPII

    • Integrated systems for manufacturing execution

  • Late 1990s: ERP

    • Integrated manufacturing with supply chain

  • Late 1990s and 200X: SCM & CRM


Major vendors
Major Vendors

  • SAP

    • SAP Business One http://en.wikipedia.org/wiki/SAP_Business_One

    • http://www.sap.com/solutions/business-suite/erp/demos/index.epx

  • Oracle e-Business Suite

    • PeopleSoft

  • Microsoft

    • Microsoft Dynamics http://www.microsoft.com/dynamics/default.mspx

    • http://www.microsoft.com/dynamics/product/experience.mspx#EWC

    • http://www.microsoft.com/dynamics/ax/product/demos.mspx

http://en.wikipedia.org/wiki/List_of_ERP_vendors


Other vendors ii
Other Vendors (II)

  • QAD: Providing innovative enterprise software and services for global manufacturers

    • http://www.qad.com/erp/

  • Salesforce.com for CRM

    • Software as a service (SaaS)  Cloud computing

    • http://www.salesforce.com

  • NetSuite

    • http://www.netsuite.com/portal/home.shtml

    • http://www.netsuite.com/portal/resource/edemo_main.shtml

  • QuickBooks

    • http://quickbooks.intuit.com/index.jsp

  • Microsoft Accounting Express

    • http://office.microsoft.com/en-us/accountingexpress/default.aspx


Anatomy of an enterprise system
Anatomy of an Enterprise System

Harvard Business Review article: "Putting the enterprise into the Enterprise System" by Thomas H. Davenport


Integrated systems approach
Integrated Systems Approach

  • Common set of applications/modules

  • Overcomes inefficiencies of independent systems

  • Integrated data supports multiple business functions

  • Limit your customization

    • Easier upgrades

  • Consider reengineering business processes according to ERP package’s underlying business model (reference model / blueprint)

    • Better alignment, best practices, less customization



Enterprise resource planning and customer relationship management erp and crm

R

Procurement Tasks

Materials

Planning

External Procurement

Internal

Procurement

Production

Purchasing

Master Data

Invoice Verification

Inventory

Management

Material

Goods

Batches

Issue

Vendors

G/L

accounts

Invoice

Receipt

Storage bins

Transfer

Goods Receipt

Posting

Internal

and

External

Internal

and

External

Sales

and

Accounting

Accounting

Distribution


Erp business processes overview
ERP: Business Processes Overview

Financial Controlling

Financial Controlling

Cost Controlling

Cost Controlling

Sales

Sales

Customer

Inventory

Initial

Customer

Inventory

Initial

Customer

Customer

Sales order

Delivery

Invoicing

Delivery

Invoicing

order

Sourcing

Contact

order

Sourcing

Contact

payment

payment

Production

Production

Prod.

Prod.

Planned

Prod.

Planned

Prod.

MPS

SOP

MPS

SOP

MRP

MRP

control

control

order

order

order

order

Purchasing

Purchasing

Purchase

Purchase

Vendor

Goods

Invoice

Purch

.

Vendor

Vendor

Goods

Invoice

Purch

.

Vendor

requisite.

requisite.

order

payment

order

payment

selection

issue

verificat.

selection

issue

verificat.

Logistics Controlling

Logistics Controlling

Sales, Production, Purch., Warehouse Mgmt

SOP: Sales & Operations Planning; MPS: Master Production Schedule

http://134.198.33.115/sap/1000.htm


Mrp information flow
MRP Information Flow

Outstanding Purchase Orders

Purchase Requisition

Demand Management

(MPS)

MRP

Stock

(Inventory)

Sales Planning & Forecasting

Bill of Materials

(BOM)

LT: Lead Time


R 3 logistics process flow

SAP R/3 Typical Business Blueprint

R/3 Logistics Process Flow


Commercial application package s implementation strategy
Commercial Application Package’s Implementation Strategy

  • Commercial application package – a software application that can be purchased and customized to meet the business requirements of a large number of organizations or a specific industry. A synonym is commercial off-the-shelf (COTS) system.

    • Request for proposal (RFP) – a formal document that communicates business, technical, and support requirements for an application software package to vendors that may wish to compete for the sale of that application package and services.

    • Request for quotation (RFQ) – a formal document that communicates business, technical, and support requirements for an application software package to a single vendor that has been determined as being able to supply that application package and services.

    • Gap analysis – a comparison of business and technical requirements for a commercial application package against the capabilities and features of a specific commercial application package for the purpose of defining the requirements that cannot be met.

Source: Preparing and Evaluating A Request for Proposals: How to Select a Vendor (link)


Gap analysis and strategies to reduce gaps
Gap Analysis and Strategies to Reduce Gaps

Assess and explore ERP Packages’ functionality & its underlying Reference Model

Develop a custom-built solution

Big gap

Gap Analysis

Consider costs of customization and future upgrades

Select the best fit ERP package

Small gap

Customize the package

Define business requirements and the firm’s processes / procedures / business rules

Conduct detailed gap analysis & Determine ways to reduce the gap

Redesign the firm’s business processes

AS-IS vs.TO-BE

Assume the selected ERP package has the best practices


The flow of your implementation process
The Flow of Your Implementation Process

This process assumes that a software package has been selected.

Define project scope & organization

Define & build technical infrastructures

Install software

Tune system performance

Perform fit/gap analysis

Build and test prototypes

Convert data

Develop interfaces

Train project team

Support system after conversion

Perform testing

Go live

Evolve system

Create end-user procedures documentation & training


Why do erp projects often fail
Why Do ERP Projects Often Fail?

  • Under-estimate the complexity of planning, development, and training for ERP implementation.

  • Fail to involve affected employees in planning and implementation

  • Try to do too much too fast

  • Provide insufficient training for ERP users

  • Do not conduct sufficient data conversation and testing

  • Rely too much on ERP vendors or consultants (you cannot outsource your problems away)

http://ramialsindi.wordpress.com/2011/10/24/week-10-enterprise-resource-planning/


Implementation success factors
Implementation Success Factors

  • Understand your business objectives

  • Assemble a dedicated project team with the appropriate skills

  • Recognize and capitalize on re-engineering opportunities

  • Leverage the experience of others and follow a proven formula

  • Understand the system’s capabilities

  • Explore new technology solutions

  • Execute your implementation in phases

  • Customize by prototyping

  • Maintain a close relationship with your vendors


Erp benefits framework
ERP Benefits Framework

Source: Shari Shang & Peter Seddon, Assessing and managing the benefits of enterprise systems: the business manager’s Perspective, Info Systems Journal, (2002) 12, pp. 271–299 at http://cba.uah.edu/guptaj/m680/erpbenefits.pdf


Benefits achieved by organizations
Benefits Achieved by Organizations

Improved financial management

Faster, more accurate transactions

Better managerial decision making

Improved inventory & asset mgt

Ease of expansion & increased flexibility

Improved logistics

Cycle time reduction

Improved customer service

Headcount reduction

Increased revenue


Enterprise resource planning and customer relationship management erp and crm

Maximizing Benefits from Enterprise Systems

Operational

Benefits

Managerial

Benefits

Strategic

Benefits

IT infrastructure

Benefits

Organizational

Benefits

Evolutionary Spiral of PEAS & Process Change and Management Initiatives

Distinctive Characteristics of Packaged Enterprise

Application Software (PEAS)

Another cycle of ES Exploration,

Redesign and Use

Net Benefits

from ES Use

Packaged Software

Features

Achieving Fit between PEAS and Business needs

Assess and Explore PEAS

Changes to PEAS

Agree on

Redesigned

Processes

Evolving Functionality

Changes to Process

Assess and

Explore Processes

Sophisticated Knowledge

Initiatives to Manage the Distinctive Characteristics of the PEA Software

Monitor Changing Conditions & Reevaluate Benefits

Application Infrastructure

Use ES to Generate Benefits

Source: Shari Shang and Peter Seddon


When in the years after go live are net benefits realized
When, in the years after "go live", are net benefits realized?

One of the most consistent findings reported in the literature is that there is a dip in organizational performance in the six to twelve months after "go live".

Under Promise and over Deliver

Transformation

Continuous

Improvement

Implement

Design

Stabilization

Low employee morale due to extra work, mismatched processes, data errors and change

pressures

Source: Ross & Vitale (1998)

  • A possible explanation for the above pattern is organizational learning, the time taken for people in the organization to really understand their role in the new processes.


Why do problems occur after go live
Why Do Problems Occur after "Go Live"? realized?

Factors that might explain why problems occur after go live (packages or websites):

  • Poor project management including poor decisions regarding requirements and design specifications during the implementation project

  • Inappropriate software choice and configuration, resulting in poor fit

  • Lack of business and technical knowledge on part of implementation team and users

  • Lack of testing before “go live”

  • Poor change management

The star witness  HealthCare.Gov went live Oct. 1, 2013


Customer relationship management crm
Customer Relationship Management (CRM) realized?

“The purpose of a business is to get and keep customers. ”*

- Peter Drucker

Watch https://www.salesforce.com/form/conf/crm-sales-indexpage-demo.jsp

*Source:

http://www.forbes.com/sites/petercohan/2012/10/01/four-ways-start-ups-can-get-and-keep-customers/print/


Customer relationship management crm1
Customer Relationship Management (CRM) realized?

The measures an organization takes to

  • Identify,

  • Select,

  • Acquire,

  • Work with,

  • Retain

  • Grow

    its customers

Companies spend two to 20 times as much finding new customers as they do keeping old ones.


Customer relationship in business model canvas
Customer Relationship in Business Model Canvas realized?

Source: Steve Blank,

The Startup Owners Manual.

http://www.businessmodelgeneration.com/canvas


Objectives of crm
Objectives of CRM realized?

  • The right offer (products or services)

  • To the right person (target marketing)

  • At the right time (spacing outbound calls)

  • Through the right channel (direct vs. channel)

  • Via appropriate media (phone, email, Web)


Customer management activities
Customer Management Activities realized?

Touch Points

Moments of Truth (MOT)


Highest level business flow
Highest Level Business Flow realized?

Source: Oracle.

http://barnraisersllc.com/2012/06/21-experts-define-crm-words-pictures/


Get keep and grow customers
Get, Keep, and Grow Customers realized?

Source: Steve Blank,

The Startup Owners Manual.


Complexity of crm
Complexity of CRM realized?

/service

Source: http://barnraisersllc.com/2012/06/21-experts-define-crm-words-pictures/


Crm architecture
CRM Architecture realized?

Collaborative CRM

Operational CRM

Analytical CRM

ODS: Operational Data Stores


Enterprise resource planning and customer relationship management erp and crm

An Open Source CRM Solution realized?

Source: http://www.sugarforge.org/screenshots/screenshot.php/6/1861/fullsize/Accounts.jpg


Enterprise resource planning and customer relationship management erp and crm

http://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpghttp://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpg


Salesforce com example
Salesforce.Com Examplehttp://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpg

Convert leads into customers

Update deal information, track opportunity milestones, and record all opportunity-related interactions.

Manage customer relationships

Acquire deep knowledge of every account, facilitate collaboration, and build and maintain strong, lasting customer relationships.

Manage the follow-up process

Log calls, send emails, and update the status of your leads so that you never miss an opportunity.

Capture leads

from your Web site

Prospects fill out a Web form, which creates a lead in Salesforce that is routed to your sales team.

People click on your ad

When people search on Google, your ad is displayed and traffic is driven to your site.

Advertise your business on Google

Take five minutes

to write your ad

and select a couple keywords—even target your ad locally.


Enterprise resource planning and customer relationship management erp and crm

Close More Dealshttp://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpg

Close deals faster by providing a single place for updating deal information, tracking opportunity milestones, and recording interactions.

Easily analyze your sales pipeline so you can quickly identify and eliminate any bottlenecks in the sales cycle.

Top 10 Deals

Month-to-Date Trending

Closed Business by Month

Top Sales Reps

Sales

Marketing

Open Opportunities

Presentation

Proposal

Negotiation

Won

Yes

No

You can monitor your opportunities reports and dashboards to keep track of your top deals and prioritize your time.

New Customers

Support

Customize Salesforce to fit your internal sales methodologies and processes, making it easier to monitor your sales pipeline.

Salesforce gives your entire company a 360-degree view of your customers and facilitates collaboration across your organization, helping you build strong, lasting customer relationships.

Keep an archive of your dead opportunities.

Use email marketing and call downs to re-market to your archived opportunities.


E business integration imperatives
E-Business Integration Imperativeshttp://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpg

Internet /

Virtual Private Network

SouthWest.com

B2C

Trading Partners

Suppliers

Distributors

Business Partners

Consumers

B2B

Integration

Dollars.com

REQUIREMENTS

Standards based integration

Configurable across applications

Business process oriented

Loosely coupled

Supports an incremental approach

Scaleable, available, secure, manageable

EAI

Heterogeneous Platforms

ERP Application Packages

Proprietary Applications

Legacy Applications


Erp crm scm implementation
ERP-CRM-SCM Implementation http://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpg

Software

  • Package (proprietary or open source)

  • Hosting Solution (SaaS)

  • Custom-built

    Development Teams/Staffing

  • In-house staff

  • Outsourcing firms:

    • Systems integrator/IT consulting firm (onsite vs. offsite)

    • Offshoring: SI firms outside US (e.g., Tata Consultancy Services, Wipro, Infosys)

    • BPO (Business Process Outsourcing) vs. ITO


Backup slides
Backup Slideshttp://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpg


A taxonomy for system development methodologies strategies
A Taxonomy for System Development Methodologies & Strategieshttp://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpg


Sucessive platforms for enterprise applications
Sucessive Platforms for Enterprise Applications http://www.sugarforge.org/screenshots/screenshot.php/6/1862/fullsize/Home-Dashboard.jpg

Source: IDC, at http://resources.idgenterprise.com/original/AST-0104779_IDC_SAP_and_the_transition_to_the_3rd_platform_for_enterprise_applicatio_.pdf


Enterprise resource planning and customer relationship management erp and crm

http://www.flickr.com/photos/softwareinsider/10670994216/sizes/o/in/photostream/http://www.flickr.com/photos/softwareinsider/10670994216/sizes/o/in/photostream/


Commercial application package implementation strategy
Commercial Application Package Implementation Strategyhttp://www.flickr.com/photos/softwareinsider/10670994216/sizes/o/in/photostream/


Social media crm
Social Media CRMhttp://www.flickr.com/photos/softwareinsider/10670994216/sizes/o/in/photostream/

  • "Companies have departments dedicated to surfing the Internet and making sure their brands are protected," says Sherry.

  • Many firms have separate Twitter handles for help, such as @ComcastCares, @DeltaAssist, and @Zappos_Service. AT&T invites consumers to use Facebook and Twitter to reach the company, calling the service "social media customer care."


Customer management activities1
Customer Management Activitieshttp://www.flickr.com/photos/softwareinsider/10670994216/sizes/o/in/photostream/