CSE-E4560 Enterprise Systems Architecture (Fall 2015) Thu Kari Hiekkanen CRM, SCM & ERP

Transcription

1 C-4560 nterprise ystems Architecture (Fall 2015) Thu Kari Hiekkanen CRM, CM & RP

2 The tructure of an nterprise M U T I P B U I N UPPY CHAIN ORDRß à DIVRY TRATGIC MANAGMNT PRODUCT & RVIC DVOPMNT CUTOMR RVIC Running Business PRODUCTION PANNING PRODUCTION WARHOU, OGITIC MARKTING A DIVRYà ß ORDR M U T I P B U I N M O D INVOICà ß PAYMNT ADMIN, COMMUNICATION, HR, ICT, FINANC, ACCOUNTING INVOICà ß PAYMNT M O D The tructure of an nterprise M U T I P B U I N M O D CM UPPY CHAIN ORDRß à DIVRY INVOICà ß PAYMNT TRATGIC MANAGMNT PRODUCT & RVIC DVOPMNT CUTOMR RVIC PRODUCTION PANNING PRODUCTION RP WARHOU, OGITIC ADMIN, COMMUNICATION, HR, ICT, FINANC, ACCOUNTING CRM MARKTING A DIVRYà ß ORDR INVOICà ß PAYMNT M U T I P B U I N M O D

3 Cross-functional nterprise ystems Defined as systems that involve the entire enterprise (or at least several departments of it) Where as functional systems are more or less confined to one department (or business function) Why should I care? Regardless of the management role, you will need to understand core enterprise systems and how to utilize them fficient implementation and application is key to the survival of any larger organizations Failures in implementing these systems can break enterprises (and have done so in too many occasions) Cross-functional nterprise ystems Focused to accomplish core business processes of an enterprise, connecting and integrating suppliers, customers, partners and employees as stakeholders into single manageable system Typical examples are RP: nterprise Resource Planning (incl. xtented RP) CRM: Customer Relationship Management CM: upply Chain Management Knowledge and Content Management (KM / CM) Business Intelligence and Decision upport ystems

4 Major nterprise ystems uppliers mployees Knowledge Management Collaboration, Communication upply Chain Management ourcing, Procurement nterprise Resource Planning Internal Business Processes Customer Relationship Management Marketing, ales, ervice Partner Relationship Management elling, Distribution (Channels) Customers Customers (Adapted from O Brien & Marakas 2008) Customer Relationship Management Customer Releationship Management aims to Provide the organization and all it s customer facing employees a single viewpoint of every customer, in all encounters across every channel (personal and digital) Provide the customer single view to the organization Why? To acquire new customers To retain profitable customers and expand customer encounters Building long-term and sustainable relationships Integrate and optimize marketing, sales, customer support efforts

5 Customer Relationship Management Managing customer s identity and history Capture and maintain customer identity ; who s who Organizational structures, roles, decision makers, Track every customer transactions Previous contacts, product / service history, planned activities Across the whole life-cycle Prospects, current customers, after-sales, customers lost Utilize accumulated data to Identify most valuable, most profitable, bad, buying trends, Treat each customer uniquely CRM / egments Contact and Account Management Customer identity, basic information and previous history ales Management / ales Pipeline Management Managing sales activities; promote cross-selling and up-selling Integrates (or includes) functionality from Product Data Management product / service configuration and quote / proposal preparations Tracking of sales pipeline ; pending activities, unresolved things, Marketing and Fullfillment Direct marketing efforts to the right targets, follow impact, Capture and manage responses and put prospects to sales pipeline

6 CRM / egments Customer service and support Provides service employees (field service, call-centers, help-desks, ) access to common customer data and previous history Helps to create, manage and resolve customer issues and problems Provides feedback system to marketing and sales Includes also on-line customer self-service, FAQ s, returns, Retention and oyalty nhancing customer loyalty and retention should be #1 priority It costs 6x more to acquire a new customer than to sell to an old one Dissatisfied customer will share bad experiences to others xamples: frequent-flyer programs, K-plussa, Volvo-card, CRM / egments e-crm More and more CRM systems, information and functionality are connected to on-line systems offered by the enterprises -Commerce systems typically include or directly integrate with the core CRM systems of an enterprise nterprises are providing more and more self-service opportunities on-line (and in doing so also outsourcing work to customers) On-line brand management and ocial Media Providing better and more holistic customer experiences Build customer communities Get feedback, involve customers into R&D, viral marketing Web, inked-in, Facebook, Twitter, activist communities,

7 CRM & Analytics Basic analytics capabilities are typically build into applications Complemented with integration to separate BI / DW ales & marketing analytics Monitor and understand client actions and preferences ales forecasting, sales targets, analysis by regions / territories Predictive analytics to improve segmentation and targeting Measurement of different marketing activities and channels Track and analyse weak signals oyalty programs provide invaluable insights to individual behaviour! Compensation for sales & marketing employees CRM in different forms In addition to commercial company sales & marketing system, CRM applications / functionality comes in many forms tudent Management ystem for a chool / University Patient Management ystem for a Healthcare Customer Management for a Police / Prison Membership systems for non-profit organisations, Alumni, Public sector customers ; Tax payers, ocial benefits Pensions Day-care

8 CRM Application andscape Total worldwide CRM market ~ $10 billion (Trefis Inc.) Dominant vendors for enterprise-level CRM Peoplesoft, iebel, Oracle (now all part of Oracle) Microsoft CRM (Axapta or Dynamics) AP CRM (part of AP RP) A number of point solutions to separate functional CRM areas aa (oftware-as-a-ervice) model has become dominant in the recent years with alesforce.com as a leading vendor aa will dominate the future of CRM Analysts predicts that 50% of the market will be aa in 2020 CRM Market ome Research Notes Worldwide CRM market grew 13.7% from $18B to $20.4B 41% of all systems sold in 2013 were aa-based. alesforce is the worldwide leader in CRM software, with 16.1% market share, outdistancing AP (13%) and Oracle (10%), followed by Microsoft (7%) and IBM (4%). Primary growth drivers were enterprise investments in digital marketing and customer experience initiatives. Communications, media and IT ervices industries spent the most on CRM systems in 2013, with analytics being a high priority for improving and bringing consistency to customer experiences. (Gartner, 2014)

9 Know the Company? upply Chain Management A supply chain is defined as a set of relationships among suppliers, manufacturers, distributors, shipping and retailers that facilitate the transformation of raw materials into final products. Includes all interactions, processes and information flows between different parties involved in different stages of production / manufacturing / service provision including also external entities (e.g. finance, insurance, official bodies) fficient and effective supply chain is critical to the survival of most organisations in today s competitive business environment egacy supply chains are clogged with redundant and unnecessary stockpiles. A typical box of breakfast cereal spends 104 days in its way from a factory to a store shelf through a maze of wholesalers, distributors, brokers, and consolidators

10 A imple upply Chain upply upply upply Transport Manufacturing hipping Warehouse Distribution A Not-so-imple upply Chain Market / eller upply upply Customs Tax Office upply Transport Customs Tax Office Manufacturing Finance hipping Warehouse Broker Distribution Insurance

11 CM Activities The management of a supply chain is an end-to-end process; starts from the design of the product / service and ends when it s sold / consumed / used by the end customer CM is a core cross-functional, interenterprise system Main goals includes reduction of uncertainty, variability and risks and increased control of supply, cycle times and inventories (e.g bullwhip effect) and increasing customer satisfaction Different products / services require different features of CM; CM should aim to ensure that supply chain and it s features match the requirements of organisation and the maturity of business If you want to experience how hard CM is, try The Beer Game CM Functional Areas upply Chain ifecycle; Commit, chedule, Make, Deliver trategic ourcing and Procurement Forecast and Demand Planning Customer Order Fulfillment / ervice (à CRM) Distribution Network and Warehouse Operations (ogistics) Production ogistics (Internal stockpiles) Transportation and hipment Management

12 CM / egments upply Chain xecution ogistics, fulfillment, transportation and warehousing Functional areas such as WM, TM, GTM Warehouse Managemement ystems From simple bin tracking to complex, fully-automated warehouses Includes also abor, Dock & Yard management, lotting, Funcionality from receiving, storing, picking, packing, shipping, CM / egments Transporation Management As transport costs are rising, optimizing trasport operations is important Route planning, scheduling, consolidation, execution, communication Fleet planning (à FM, Fleet Management ystem) Parcel shipping, load building, track & trace Freight rating, billing, payment, audit Geographic Information ystems; mapping, visualisation, route plans

13 CM / egments Global Trade Management Trade, Comply, Move, Finance Import & xport Orders, icenses, Documents, Permits, Duty / Tax Global ogistics Planning (à TM) etters of Credit, Payments, Insurance, Financing, upply Chain Planning and Analytics Demand, Inventory & Replenishment Planning treamline supply, minimize waste and integrate with production (à RP) CM Concepts Inventory Optimization Track & plan on total inventory level in all locations Vendor-managed inventory (VMI) Vendor (distributor) manages inventory for a client reducing warehousing costs and needs (just-in-time deliveries) ervice Parts Planning xtension of CM, targeted to special needs of service / repair parts Inventory locations, stocking, regional needs,

14 CM Concepts Internal Procurement Internal (not-production related) procurement and purchasing Handling of PO s, approvals and billing mart Goods and Warehouses Identification technologies (such as RFID) and mobile communication provides possibilities to utilize even more real-time information on the flow of materials and goods through different parties and locations. Technological development allows even more innovative CM uses upply chain innovation enabled by extensive information systems, has become a major competitive factor for many companies e.g. Amazon, Nokia ( ), Toyota (lean), Wal-mart, Kesko, CM & Integration CM is a core cross-functional, interenterprise system CM has been one major drivers for interenterprise integration B2B -integration standardization has been fueled by CM DI (lectronic Data Interchange) RosettaNet ebxm UB Also in other areas like healthcare integration and standardization CM related processes and messages form a major part

15 CM Application andscape The worldwide supply chain management (CM) and procurement software market grew 7.3 percent to $8.9B in Market is divided between overall CRM / RP / CM vendors AP (23.9%) and Oracle (16.3%) A large number of CM specialist solutions to different segments The impact of cloud on traditional on-premises license sales outside of the procurement market, which is heavily influenced by software as a service (aa), is still minimal. (Gartner, 2014)

16 nterprise Resource Planning RP as a Concept Conceptually RP can be defined as a set of information assets (application, information, processes) that supports the primary business model of given enterprise Main objective is to get an integrated view over all departments and functions related to core business processes The forms of RP vary from business to business Retail: Procurement, Warehousing, ales Manufacturing: upply, Production, Delivery Building: Planning, Procurement, Workforce, Project Mgmt. Consulting: Project management, Workforce, Reporting Hospital: taffing, Asset management & usage, Patient Management Airline: cheduling, Plane operation, Crew rotation nterprise Resource Planning RP as a Concept RP takes a process view of an organisation to meet the organisational goals tightly integrating all functions Manages 4 M s : Man, Money, Machines, Materials Aims to: Create value through integrating activities across organization Implementation of best practices / standardization of processes One-source data & on-demand access to information Core RP: Accunting + Finance, Productions + Materials, HR xtended-rp: +CRM, +CM, +Analytics, +e-business

17 nterprise Resource Planning RP as a Product An integrated suite of cross-functional applications to control all major business processes with a single software architecture in real time a modular monolith Defines and operates all necessary processes for planning and managing all resources and their use in the entire organization. Products: AP, Oracle B, Microsoft Dynamics, age, Baan, Incredibly large, extensive and xpensive software packages volution of RP 1960 s: Inventory, Purchacing, Production cheduling à MRP (Material Requirement Planning) s: MRP + Finance, abor à MRP II (Manufacturing Resources Planning) 1990 s: MRP II + All Internal Resources à RP (nterprise Resource Planning) s: RP + Internal networks à Internal RP/CM 2000 s: Internal RP/CM + xternal networks à xtended CM

18 RP Products Brand names: AP (R/3), Oracle B, Microsoft Dynamics A number of smaller vendors Most RP products are not ready-to-use ; rather they should be considered as operating systems for business processes with a number of pre-configured interfaces and databases Modern systems are modular, providing modules as manufacturing, distribution, sales and even financials and human resources. Come with a number of both industry specifif and common process templates. Typical Requirements and Features Requirements Integrating all the functions Integrating the systems running in all the locations Transparency of information using a single data source Modular, flexible and provide a growth path Features On-line systems, Client-erver type of UI s (using Web tools) One single database for all data Clearly defined data formats and tables fficient supporting back-office processes Template processes / process libraries for industry best practise Propriatary technologies & languages

19 RP xample: Materials Management ales Forecasting Operations Planning Material Requirement Planning Production cheduling Purchasing Production Goods nterprise Resource Planning Production Planning Integrated ogistics ales, Distribution, Order Mgmt. nterprise Resource Planning Accounting Finance HR Asset Management

20 RP Application andscape The worldwide RP software market grew 3.8% to $25.4B in 2013 AP retained their market leadership position with 24% market share, followed by Oracle (12%), age (6%), Infor (6%) and Microsoft (5%). There is a significant shift to Cloud-based RP (aa). The sales of on-premise RP relies almost solely on maintenance revenue. egacy systems designed for business models long gone yet still on maintenance are extended with cloud-based systems capable to keeping pace with an entirely new level of performance companies need to survive and grow. (Gartner, 2014) xample: AP Implementation Configuration is the process of making standard software fit your business. AP, as an example, has: configuration decisions Data structuring; organization, partners, channels, products, Rewriting Code (modifications) Customization (writing code at AP-specified hooks ) Third-party software solutions (add-on modules) xperience has shown that it is easier to fit a company to AP than AP to a company Maintenance cost for systems ~10 20% / y (of original implemantation)

21 RP Cost tructure Hardware 10 % icence 10 % Implementation 50 % Training 15 % Integration 15 % (ource: O Brien & Marakas 2008) Questions?