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Mis Assignment.

The document discusses enterprise resource planning (ERP) and customer relationship management (CRM). It describes the key components and applications of ERP and CRM systems. It also outlines the benefits of implementing ERP and CRM, including improved customer service and efficiency, as well as the challenges of CRM failures if not properly implemented.

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0% found this document useful (0 votes)
88 views13 pages

Mis Assignment.

The document discusses enterprise resource planning (ERP) and customer relationship management (CRM). It describes the key components and applications of ERP and CRM systems. It also outlines the benefits of implementing ERP and CRM, including improved customer service and efficiency, as well as the challenges of CRM failures if not properly implemented.

Uploaded by

Sena Tefera
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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HARAMBRE UNIVERSITY COLLEGE

DEPARTMENT OF MANAGEMENT
MASTERS OF BUSINECE ADIMINSTIRATION
PROGRAM (MBA Program)
MANAGEMENT INFORMATION SYSTEMS
Course code (MBA 621)
Assignment one
Enterprise Business Systems
By: -
1. Sena Tefera HMBA/214957/13
2. Asegedech Tefera HMBA/214958/13
3. Redwan Abduljaber HMBA/214928/13

Submitted to Teklu U. (Ph.D.)


Submitted date August, 7, 2021
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1. Customer Relationship Management: The Business Focus
Introduction
Customer-focused business is one of the top business strategies that can be supported by
information technology. Many companies are implementing customer relationship management
(CRM) business initiatives and information systems as part of a customer-focused or customer
centric strategy to improve their chances for success in today’s competitive business
environment.
CRM is described as a cross-functional e-business application that integrates and automates
many customer-serving processes in sales, direct marketing, accounting and order management,
and customer service and support. CRM systems create an IT framework that integrates all the
functional processes with the rest of a company’s business operations. CRM systems consist of a
family of software modules that perform the business activities involved in such front office
processes. CRM software provides the tools that enable a business and its employees to provide
fast, convenient, dependable, and consistent service to its customers.

Application Clusters in CRM

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Fig.1. Application Clusters in CRM.
Contract and Account Management
CRM software helps sales, marketing, and service professionals capture and track relevant data
about every past and planned contact with prospects and customers, as well as other business and
life cycle events of customers.
Sales
CRM software tracks customer contacts and other business and life cycle events of customers for
cross-selling and up-selling.
Marketing and Fulfilment
CRM software can automate tasks such as qualifying leads, managing responses, scheduling
sales contacts, and providing information to prospects and customers.
Customer Service and Support
CRM helps customer service managers quickly create, assign, and manage service requests. Help
desk software assists customer service reps in helping customers whom are having problems with
a product or service, by providing relevant service data and suggestions for resolving problems.
Retention and Loyalty Programs
• It costs six times more to sell to a new customer than to sell to an existing one.
• A typical dissatisfied customer will tell eight to ten people about his or her experience.
• A company can boost its profits 85 percent by increasing its annual customer retention by only
5 percent.
• The odds of selling a product to a new customer are 15 percent, whereas the odds of selling a
product to an existing customer are 50 percent.
• Seventy percent of complaining customers will do business with the company again if it
quickly takes care of a service snafu.
• More than 90 percent of existing companies don’t have the necessary sales and service
integration to support e-commerce.
Examples of business benefits of customer relationship management include:
• CRM allows a business to identify and target their best customers; those who are the most
profitable to the business, so they can be retained as lifelong customers for greater and more
profitable services.

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• CRM enables real-time customization and personalization of products and services based on
customer wants, needs, buying habits, and life cycles.
• CRM can keep track of when a customer contacts the company, regardless of the contact point.
• CRM enables a company to provide a consistent customer experience and superior service and
support across all the contact points a customer chooses.

The Three Phases of CRM:


CRM can be viewed as an integrated system of Web-enabled software tools and databases
accomplishing a variety of customer-focused business processes that support the three phases of
the relationship between a business and its customers.
• Acquire – a business relies on CRM software tools and databases to help it acquire new
customers by doing a superior job of contract management, sales prospecting, selling, direct
marketing, and fulfilment.
o the goal of these CRM functions is to help customers perceive the value of a
superior product offered by an outstanding company.
• Enhance – Web-enabled CRM account management and customer service and support tools
help keep customers happy by supporting superior service from a responsive networked team
of sales and service specialists and business partners. CRM sales force automation and direct
marketing and fulfilment tools help company’s cross-sell and up-sell to their customers, thus
increasing their profitability to the business.
o the value perceived by customers is the convenience of one-stop shopping at
attractive prices.
• Retain – CRM analytical software and databases help a company proactively identify and
reward its most loyal and profitable customers to retain and expend their business via
targeted marketing and relationship marketing programs.
o the value perceived by customers is of a rewarding personalized business
relationship with “their company”.

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Fig.2.The Three Phases of CRM.
Benefits and Challenges of CRM
• CRM allows a business to identify and target their best customers; those who are the most
profitable to the business, so they can be retained as lifelong customers for greater and more
profitable services.
• CRM enables real-time customization and personalization of products and services based on
customer wants, needs, buying habits, and life cycles.
• CRM can keep track of when a customer contacts the company, regardless of the contact point.
• CRM enables a company to provide a consistent customer experience and superior service and
support across all the contact points a customer chooses.

CRM Failures:
• Major reason for the failure of CRM systems is the lack of understanding and preparation.
Trends in CRM:
Four types or categories of CRM that are being implemented by many companies today include:
• Operational CRM – most businesses start out with operational CRM systems such as sales
force automation and customer service centers.

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• Analytical CRM – analytical CRM applications are implemented using several analytical
marketing tools, such as data mining, to extract vital data about customers and prospects for
targeted marketing campaigns.
• Collaborative CRM – CRM systems to involve business partners as well as customers in
collaborative customer service.
• Portal-based CRM – Internet, intranet, and extranet Web-based CRM portals as a common
gateway for various levels of access to all customer information, as well as operational,
analytical, and collaborative CRM tools for customers, employees, and business partners.

Increasingly, businesses are moving to collaborative CRM systems, to involve business partners
as well as customers in collaborative customer services. This includes systems for customer self-
service and feedback, as well as partner relationship management (PRM) systems.

2. Enterprise Resource Planning: The Business Backbone


Introduction
Enterprise resource planning (ERP) systems serve as a cross-functional enterprise backbone that
integrates and automates many internal business processes and information systems within the
manufacturing, logistics, distribution, accounting, finance, and human resource functions of a
company.

Enterprise resource planning (ERP) is a cross-functional enterprise system that serves as a


framework to integrate and automate many of the business processes that must be accomplished
within the manufacturing, logistics, distribution, accounting, finance, and human resources
functions of a business. Characteristics of ERP software include:
• ERP software is a family of software modules that supports the business activities involved in
vital back-office processes.
• ERP gives a company an integrated real-time view of its core business processes.
• ERP systems track business resources, and the status of commitments made by the business no
matter what department has entered the data into the system.
• ERP software suites typically consist of integrated modules of manufacturing, distribution,
sales, accounting, and human resource applications.

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ERP Application Components

Fig.3. ERP Application Components.

Fig.4 ERP Process and Information Flows.

Benefits and Challenges of ERP


• Quality and efficiency – ERP create a framework for integrating and improving a company’s
internal business processes that results in significant improvements in the quality and
efficiency of customer service, production, and distribution.
• Decreased costs – many companies report significant reductions in transaction processing
costs and hardware, software, and IT support staff compared to the non-integrated legacy
systems that were replaced by their new ERP systems.

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• Decision support – ERP provides vital cross-functional information on business performance
quickly to managers to significantly improve their ability to make better decisions in a timely
manner across the entire business enterprise.
• Enterprise agility – ERP can be used in breaking down many former departmental and
functional walls, which results in more flexible organizational structures, managerial
responsibility, and work roles. The result is a more agile and adaptive organization and
workforce that can more easily capitalize on new business opportunities.
The Cost of ERP:
• Costs and risks involved in implementing ERP are considerable.
• Hardware and software costs are a small part of the total costs. The costs of developing new
business processes (reengineering) and preparing employees for the new system (training and
change management) make up the bulk of implementing a new ERP system.
• Converting data from previous legacy systems to the new cross-functional ERP system is
another major category of ERP implementation costs.

Fig. 5. Costs of Implementing a New ERP.


Causes of ERP Failures:
• Business managers and IT professionals underestimate the complexity of the planning,
development, and training that are needed to prepare for a new ERP system that would
radically change their business processes and information systems.

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• Failure to involve affected employees in the planning and development phases and change
management programs
• Trying to do too much too fast in the conversion process.
• Insufficient training in the new work tasks required by the ERP system.
• Failure to do enough data conversion and testing.
• Overreliance by company or IT management on claims of ERP software vendors or the
assistance of prestigious consulting firms hired to lead the implementation.
Trends in ERP:
Four major developments and trends that are evolving in ERP applications include:
• ERP software packages are gradually being modified into more flexible products.
• In relation to the growth of the Internet and corporate intranets and extranets prompted software
companies to use Internet technologies to build Web interfaces and network capabilities into
ERP systems.
• Development of interenterprise ERP systems that provide Web-enabled links between key
business systems of a company and its customers, suppliers, distributors, and others.
• ERP software companies have developed modular, Web-enabled software suites that integrate
ERO, customer relationship management, supply chain management, procurement, decision
support, enterprise portals, and other business applications and functions.

Fig. 6. Trends in ERP.

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3. Supply Chain Management: The Business Network
Introduction
Fundamentally, supply chain management helps a company get the right products to the right
place at the right time, in the proper quantity and at an acceptable cost. The goal of SCM is to
efficiently manage this process by forecasting demand; controlling inventory; enhancing the
network of business relationships a company has with customers, suppliers, distributors, and
others; and receiving feedback on the status of every link in the supply chain. To achieve this
goal, many companies today are turning to Internet technologies to Web-enable their supply
chain processes, decision-making, and information flows.

Supply chain management is a cross-functional interenterprise system that uses information


technology to help support and manage the links between some of a company’s key business
processes and those of its suppliers, customers, and business partners. The goal of SCM is to
create a fast, efficient, and low-cost network of business relationships, or supply chain, to get a
company’s products from concept to market.

Fig. 7. Supply Chain Life Cycle.


According to the Advanced Management Council, supply chain management has three business
objectives:
• Get the right product to the right place at the least cost.

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• Keep inventory as low as possible and still offers superior customer service.
• Reduce cycle times. Supply chain management seeks to simplify and accelerate operations that
deal with how customer orders are processed through the system and ultimately filled, as
well as how raw materials are acquired and delivered for manufacturing processes.

Electronic Data Interchange


Electronic data interchange (EDI) involves the electronic exchange of business transaction
documents over the Internet and other networks between supply chain trading partners
(organizations and their customers and suppliers). Data representing a variety of business
transaction documents are electronically exchanged between computers using standard document
message formats. Characteristics of EDI software include:
• EDI software is used to convert a company’s own document formats into standardized EDI
formats as specified by various industry and international protocols.
• Formatted transaction data are transmitted over network links directly between computers,
without paper documents or human intervention.
• Besides direct network links between the computers of trading partners, third-party services are
widely used.
• EDI eliminates the printing, mailing, checking, and handling by employees of numerous
multiple-copy forms of business documents.

Benefits of the business use of EDI include:


• Reduction in paper, postage, and labor costs
• Faster flow of transactions as formatted transaction data are transmitted over network links
directly between computers, without paper documents or human intervention.
• Reductions in errors
• Increases in productivity
• Support of just-in-time (JIT) inventory policies
• Reductions in inventory levels
• Value-added network companies offer a variety of EDI services. They can offer secure, lower
cost EDI services over the Internet.
• Smaller businesses can now afford the costs of EDI services.

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The Role of SCM:
SCM supports the objectives of the top three management levels of an organization (strategic,
tactical, and operational). The role of information technology in SCM is to support these
objectives with interenterprise information systems that produce many of the outcomes a
business needs to effectively manage its supply chain.
Benefits and Challenges of SCM
Major business benefits that are possible with effective supply chain management systems
include:
• Faster, more accurate order processing, reductions in inventory levels, quicker time to market,
lower transaction and materials costs, and strategic relationships with suppliers.
• Companies can achieve agility and responsiveness in meeting the demands of their customers
and the needs of their business partners.

Fig. 8. Goals and Objectives of SCM.

Major business challenges include:


• Lack of proper demand planning knowledge, tools, and guidelines is a major source of SCM
failure.
• Inaccurate or overoptimistic demand forecasts will cause major production, inventory, and
other business problems, no matter how efficient the rest of the supply chain management
process is constructed.

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• Inaccurate production, inventory, and other business data provided by a company’s other
information systems are frequent causes of SCM problems.
• Lack of adequate collaboration among marketing, production, and inventory management
departments within a company, and with suppliers, distributors, and others.
• SCM software tools are considered to be immature, incomplete, and hard to implement by
many companies who are installing SCM systems.
Trends in SCM:
Three possible stages in a company’s implementation of SCM systems.
• First stage – a company concentrates on making improvements to its internal supply chain
process and its external processes and relationships with suppliers and customers.
• Second stage – a company accomplishes substantial supply chain management applications by
using selected SCM software programs internally, as well as externally via intranet and
extranet links among suppliers, distributors, customers, and other trading partners.
• Third stage – company begins to develop and implement cutting-edge collaborative supply
chain management applications using advance SCM software, full-service extranets links,
and private and public e-commerce exchanges.

Fig.9, Three possible stages in a company’s implementation of SCM systems.

Reference:

James A. O'Brien, and George Marakas. Management Information Systems with MISource 2007,
8th ed. Boston, MA: McGraw-Hill, Inc., 2007. ISBN: 13 9780073323091

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