Enterprise systems are based on a suite of
integrated software modules and a common central database that collects data
from many different divisions and departments in a firm, making it available
for applications that support nearly all of an organization’s internal business
activities. Enterprise software is a set
of integrated modules for applications that allow data to be used by multiple
functions and business processes. Enterprise
systems provide value in several ways to a firm. It increases operational efficiency and it
provides firm-wide information to help managers make better decisions. It also helps firms respond rapidly to
customer requests for information or products.
In addition, it provides much valuable information for improving
management decision-making.
Supply chain management systems automate the
flow of information between a firm and its suppliers in order to optimize the
planning, sourcing, manufacturing, and delivery of products and services. A firm’s supply chain links suppliers,
manufacturing plants, distribution centers, retail outlets, and customers to
supply goods and services from source through consumption. Materials, information, and payments flow
through the supply chain in both directions.
Inefficiencies in the supply chain are caused
by inaccurate or untimely information. Uncertainties
arise because many events cannot be foreseen.
One recurring problem in supply chain management is the bullwhip
effect. This is where information about
the demand for a product goes distorted as it passes from one entity to the
next across the supply chain. The
bullwhip effect is controlled by reducing uncertainties about demand and supply
when all members of the supply chain have accurate and up-to-date
information. Supply chain management
systems provide the kind of information that helps members of the supply chain
make better purchasing and scheduling decisions.
Supply chain management software includes
software to help businesses plan their supply chains (supply chain planning) or
software to help them execute the supply chain steps (supply chain
execution). Supply chain planning
systems allows firms to model their existing supply chain, generate demand
forecasts for products, and develop optimal sourcing and manufacturing
plans. Demand planning is one of the
most important and complex supply chain planning functions. It determines how much product a business
needs to make to satisfy all of its customers’ demands. Supply chain execution systems manage the
flow of products through distribution centers and warehouses to ensure that
products are delivered to the right locations in the most efficient
manner.
Supply chains now can extend across multiple
countries and regions. In doing so,
there are complexities and challenges to managing a global supply chain. For example, there may be additional costs
for transportation, inventory, and local taxes are fees. Supply chain managements will need to reflect
foreign government regulations and cultural differences. The Internet will enable companies to manage
many aspects of their global supply chains.
Globalization has also encouraged outsourcing warehouse management,
transportation management, and related operations to third-party logistics
providers.
Supply chain management systems facilitate
efficient customer response, enabling the workings of the business to be driven
more by customer demand. It follows a
pull-based model where actual customer orders or purchases trigger events in
the supply chain. This is also known as
a demand-driven model or build-to-order because transactions to produce and
deliver only what customers have ordered move up the supply chain from
retailers to distributors to manufacturers, and eventually to suppliers.
Supply chain management systems help in
reducing costs and increasing sales. By
implementing a networked and integrated supply chain management system,
companies match supply to demand, reduce inventory levels, improve delivery
service, speed product time to market, and use assets more effectively.
Customer relationship management (CRM) systems
capture and integrate customer data from all over the organization, consolidate
the data, analyze the data, and then distribute the results to various systems
and customer touch points across the enterprise. A touch point is a method of interaction with
the customer, such as telephone, email, Website, or retail store. A well-designed CRM system provides a single
enterprise view of customers that is useful for improving both sales and customer
service. It also provides data and
analytical tools for answering questions that allow firms to use the answers to
acquire new customers, provide better service and support to existing
customers, customize their offerings more precisely to customer preferences,
and provide ongoing value to retain profitable customers.
CRM software packages range from niche tools
that perform limited functions to large-scale enterprise applications. The core comprehensive packages contain
modules for partner relationship management (PRM) and employee relationship
management (ERM). PRM is the automation
of the firm’s relationships with its selling partners using customer data and
analytical tools to improve coordination and customer sales. ERM is software that deals with employee
issues that are closely related to CRM, such as setting objectives, employee
performance management, performance-based compensation, and employee
training. CRM systems typically provide
software and online tools for sales, customer service, and marketing. Sales force automation modules help sales
staff increase their productivity by focusing sales efforts on the most
profitable customers. Customer service
modules provide information and tools to increase the efficiency of call
centers, help desks, and customer support staff. Marketing modules provide capabilities for
capturing prospect and customer data, for providing product and service
information, for qualifying leads for targeted marketing, and for scheduling
and tracking direct-marketing mailings or email. It also identifies opportunities for
cross-selling which is the marketing of complementary products to customers.
The CRM software packages provide capabilities
for both operational CRM and analytical CRM.
Operational CRM are the customer-facing applications, such as tools for
sales force automation, call center and customer service support, and marketing
automation. Analytical CRM are the
applications that analyze customer data generated by operational CRM
applications to provide information for improving business performance. Customer lifetime value (CLTV) is another
important output of analytical CRM which is based on the relationship between
the revenue produced by a specific customer, the expenses incurred in acquiring
and servicing that customer, and the expected life of the relationship between
the customer and the company.
Customer relationship management provides many
benefits, including increased customer satisfaction, reduced direct-marketing
costs, more effective marketing, and lower costs for customer acquisition and
retention. Information from CRM systems
increases sales revenue by identifying the most profitable customers and
segments for focused marketing and cross-selling. The churn rate is an important indicator of
the growth or decline of a firm’s customer base. It measures the number of customers who stop
using or purchasing products or services from a company.
Firms are implementing enterprise systems, SCM
systems, and CRM systems in order to achieve operational excellence and
enhancing decision-making. However, they
are challenging to implement because they are so powerful in changing the way
the organization works. These
applications are very expensive to purchase and implement. They also require fundamental changes in the
way the business operates and new organizational learning. Once an enterprise application is adopted
from a vendor, it is very costly to switch.
“Switching costs” are introduced because the firm becomes dependent on
that vendor to upgrade its product and maintain its installation. The way the data is organized in these
systems needs to be understood because the applications are based on
organization-wide definitions of data.
This typically requires some data cleansing work.
Enterprise software vendors are addressing
these challenges by offering paired-down versions of their software and
“fast-start” programs for small and medium-sized businesses and best-practice
guidelines for larger firms. Companies
adopting these applications can also save time and money by keeping
customizations to a minimum.
Enterprise systems, CRM systems, and SCM
systems are fazing out because enterprise application vendors are delivering
more value by becoming more flexible, Web-enabled, and capable of integration
with other systems. Next generation
enterprise software vendors have now created enterprise solutions, enterprise
suites, or e-business suites to make their CRM, SCM, and enterprise systems
work closely with each other, and link to systems of customers and
suppliers. These applications also
include open source and on-demand solutions.
In addition the vendors also offer portions of their products that work
on mobile handhelds and complementary analytics products. Service platforms are created to integrate
information from multiple functional areas.
They provide a greater degree of cross-functional integration than the
traditional enterprise applications.
Employee performance management systems change with the times. And as the landscape surrounding employee management software continues to evolve, following technological and financial forces, you have to keep up with talent management software to remain competitive and make sure you're getting the most up to date products. If you work in the industry, the employee performance measurement software industry should be followed closely so that you can make the best presentations and know what your competitors are doing.
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Thank you for sharing. Operational excellence defines how production and maintenance are performed, drives change and improvement, and directs how goals for processes are set, deployed, and managed day-to-day.
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