Project #12559 - Conference work

Enterprise Applications

Chapter 8 discusses many types of enterprise systems, but, first – what do we mean by an enterprise system? (Not the computer system for the StarTrek ship!) This refers to systems that integrate data across an enterprise (organization) to support the business processes related to a variety of business functions – such as the supply chain and customers. This can be done by one large-scale system that integrates the major functions such as Finance, Human Resources, Production, Marketing, etc. or through linking (or integrating) individual systems through a type of middleware – usually referred to as enterprise application integration (EAI) (See p. 290 in your textbook.)

Supply Chain Management (SCM)

Page 292 shows a high level typical supply chain. If you think of the basic model of businesses – it’s input/process/output. Stuff comes in (this could be raw goods to manufacture materials or human capital and knowledge) – then the work of the company is to transform it in some way to something that the customers want (process), and then send it out to the customers (output)—the output could be to wholesalers, retailers, or individual customers. Each step in the supply chain provides an opportunity to improve profitability, impact quality, etc. And through the use of supply chain management software, management and employees can view what’s happening along the supply chain to make better decisions.

The Fitness Center uses a simple supply chain but it still exists. So every step in the value chain can be analyzed for ways to improve profitability and service. For example, as many of you mentioned – negotiating with current suppliers or identifying new suppliers can help reduce costs at the Fitness Center. An automated system that monitors inventory can provide several efficiencies: Just-in-time ordering directly to suppliers (for clean towels or for water and snacks), monitoring usage especially to track goods with expiration dates, and tracking sales through a point of sales system are a few examples of how SCM could improve efficiencies at the Fitness Center.

In today’s world, it is impossible to have an effective supply chain without the use of technology, including the right technology solution to implement the business strategy. Once again, getting the right information to the right people at the right time is critical to successful SCM – and that is exactly what good SCM systems do. Businesses use SCM to plan, source, make, deliver and return their products. SCM helps them develop a plan for managing all the resources needed; choose reliable suppliers; manufacture their products or services; implement their logistics processes (receive and fulfill orders and receive payment); and provide for returns, excess product and customer support. This is an iterative process that goes on continuously as companies monitor, evaluate and modify their supply chains. SCM is a clear example of the relationship between people, information, business processes and information technology.

Customer Relationship Management (CRM)

CRM is a business philosophy (not a technology, as many people use the term) based on the premise that those organizations that understand the needs of individual customers are best positioned to achieve sustainable competitive advantages in the future. Companies who recognize that their customers are not just generators of revenue but are valued assets are moving quickly from a focus on their product to a focus on the customers. As companies deal with customers around the world and expanding competition, they find that adopting a CRM strategy is essential. It costs much less to make a repeat sale to an existing customer than it costs to make a sale to a new customer.

As you’ve worked on the Fitness Center case study, many of you recognized that having more information about your customers and meeting and exceeding their expectations is a method to increase customer loyalty, attract new customers and make your fitness center more competitive. Now, keeping track of information in a small fitness center is relatively easy, but think if you are Amazon, Ford Motor Company, or Pfizer Pharmaceuticals – then the challenge becomes much more complex. Here’s where an information system can provide immense value—allowing the company to capture information, make it available to all functions that need to know something about the customers, and provide superior customer service. Plus, the availability of this data enables companies to analyze the information to determine patterns and trends in customer habits, analyze demographic profiles of customers to target marketing campaigns, and identify ways to build customer loyalty. The chart on the bottom of page 306 provides a variety of measures that can be used to evaluate sales, customer service and marketing efforts.

 

Enterprise Resource Planning (ERP)

 

Lastly, Chapter 8 talks about Enterprise Resource Planning (ERP) systems – this is where the SCM, CRM and other functions are integrated into either one system or a combination of integrated systems to give a enterprise-wide view of information. Figure 8.18 and 8.19 show two simple graphical views of this integration. ERP systems were originally developed to handle the “back office” types of resources – human resources, financial systems and operational/manufacturing systems. Now, linked with SCM and CRM systems, ERPs provide the end-to-end visibility of a company’s information; the ERP provides the “glue” to allow all the systems of an enterprise to work together to get the right information to the right people at the right time.

 

As you read through this chapter, two things should become clear: 1) effective ERP can provide great strategic advantage to an organization and help break down the stove pipes of information aligned to specific groups (like human resources, finance, etc.), and 2) ERPs are a lot of work and effort, and can be very expensive, to correctly design and implement.

 

This is a high-level overview of enterprise systems, but hopefully it helps put the pieces together. IFSM 311 Enterprise Architecture and Systems – gets into a lot more depth on this topic.

 

I found the power point presentation attached below on the internet, and since it does a great job of tying all the pieces together, I wanted to share it with you. It works best if you run it as a slide show and click multiple times on each screen to see the parts emerge.

 

Obviously, not every business needs all the different types of systems, but you should know conceptually how they fit together, and what the benefits of each are.

 

For this week’s discussion you need to post your initial responses by Thursday. In your efforts to revitalize the Healthy Fitness Center, you realize that:

  • exercise programs and logs are maintained on paper
  • the inventory of fitness supplies is kept on a clipboard
  • orders for supplies are placed using pen and paper
  • your point-of-sale cash register system collects who the customer is, what they bought and when they made their purchase or signed up for a program, but that information goes into its own data base
  • no one is recording what group is using the facility at what time, and in what way
  • the staff work assignment sheet is just a calendar with names and times posted on the wall
  • there is no reliable record of employee training and certification, nor a way to remind staff that they need to update their training
  • the financial records and payroll are kept on paper
  • there is no real marketing program.

 

You know that if you could combine this information into an enterprise system, you would be able to improve the operations of the Fitness Center. You begin your analysis by answering the following questions:

  1. What opportunities are being missed when each little area (facilities, the front desk, trainers) has its own “stove piped” data? (Provide some examples.)
  2. What benefits will the Center realize if you implement an enterprise-wide system? Identify at least three different functions at the Center that would benefit and how you as the manager will benefit from having additional information available.
  3. What types of decisions that you make as the manager would be improved if you had all this information in one place?
  4. Would it make the most sense to start with a CRM, an SCM or an ERP system for the fitness center and why, with the idea that more systems can come later.

 

 

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Due By (Pacific Time) 09/18/2013 12:00 am
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