Chapter 9

Achieving Operational
Excellence and Customer
Intimacy: Enterprise
Applications
Video Cases
Video Case 1a: What Is Workday: Enterprise Software as a Service (Saas)
Video Case 1b: Workday: Mobile Solutions for iPad
Video Case 2: Evolution Homecare Manages Patients with Microsoft CRM (2011)
Video Case 3: Sinosteel Strengthens Business Management with ERP Applications (2008)
Instructional Video 1: Zara’s: Wearing Today’s Fashions with Supply Chain Management

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems

• Customer relationship management (CRM)

– Knowing the customer
– In large businesses, too many customers and too many
ways customers interact with firm
• CRM systems:
– Capture and integrate customer data from all over the
organization
– Consolidate and analyze customer data
– Distribute customer information to various systems and
customer touch points across enterprise
– Provide single enterprise view of customers

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management (CRM)

CRM systems examine

customers from a multifaceted
perspective. These systems use
a set of integrated applications
to address all aspects of the
customer relationship,
including customer service,
sales, and marketing.

Figure 9-6

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems

• CRM Software
– Packages range from niche tools to large-scale
enterprise applications.
– More comprehensive have modules for:
• Partner relationship management (PRM)
– Integrating lead generation, pricing, promotions, order
configurations, and availability
– Tools to assess partners’ performances
• Employee relationship management (ERM)
– Setting objectives, employee performance management,
performance-based compensation, employee training

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems

• CRM software (cont.)

– CRM packages typically include tools for:
• Sales force automation (SFA)
– Sales prospect and contact information, sales quote
generation capabilities
• Customer service
– Assigning and managing customer service requests, Web-
based self-service capabilities
• Marketing
– Capturing prospect and customer data, scheduling and
tracking direct-marketing mailings or e-mail, cross-selling

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
How CRM Systems Support Marketing

Customer relationship
management software provides
a single point for users to
manage and evaluate marketing
campaigns across multiple
channels, including e-mail,
direct mail, telephone, the Web,
and wireless messages.

Figure 9-7

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
CRM Software Capabilities

The major CRM software

products support business
processes in sales, service, and
marketing, integrating customer
information from many
different sources. Included are
support for both the operational
and analytical aspects of CRM.

Figure 9-8

9.7 Copyright © 2014 Pearson Education

Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Loyalty Management Process Map

Figure 8-9 This process map shows how a best practice for promoting customer loyalty through customer service would be
modeled by customer relationship management software. The CRM software helps firms identify high-value
customers for preferential treatment.

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems

• Operational CRM:
– Customer-facing applications such as sales force
automation, call center and customer service
support, and marketing automation
• Analytical CRM:
– Based on data warehouses populated by operational
CRM systems and customer touch points
– Analyzes customer data (OLAP, data mining, etc.)
• Customer lifetime value (CLTV)

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Analytical CRM Data Warehouse

Analytical CRM uses a customer

data warehouse and tools to
analyze customer data collected
from the firm’s customer touch
points and from other sources.

Figure 9-10

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Customer Relationship Management Systems

• Business value of CRM systems

– Increased customer satisfaction
– Reduced direct-marketing costs
– More effective marketing
– Lower costs for customer acquisition/retention
– Increased sales revenue
• Churn rate:
– Number of customers who stop using or purchasing
products or services from a company
– Indicator of growth or decline of firm’s customer base

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Supply Chain Management Systems

• Supply Chain
– Network of organizations and processes for:
• Procuring materials, transforming them into products,
and distributing the products
– Upstream supply chain:
• Firm’s suppliers, suppliers’ suppliers, processes for
managing relationships with them
– Downstream supply chain:
• Organizations and processes responsible for delivering
products to customers
– Internal supply chain

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Nike’s Supply Chain

Figure 9-2 This figure illustrates the major entities in Nike’s supply chain and the flow of information upstream and downstream
to coordinate the activities involved in buying, making, and moving a product. Shown here is a simplified supply
chain, with the upstream portion focusing only on the suppliers for sneakers and sneaker soles.

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Supply Chain Management Systems

• Supply Chain Management

– Inefficiencies cut into a company’s operating costs
• Can waste up to 25% of operating expenses
– Just-in-time strategy:
• Components arrive as they are needed
• Finished goods shipped after leaving assembly line
– Safety stock: Buffer for lack of flexibility in supply chain

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Supply Chain Management Systems

• Supply Chain Management Software

– Supply chain planning systems
• Model existing supply chain
• Enable demand planning
• Optimize sourcing, manufacturing plans
• Establish inventory levels
• Identify transportation modes
– Supply chain execution systems
• Manage flow of products through distribution centers
and warehouses

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Supply Chain Management Systems

• Global supply chain issues

– Greater geographical distances
– Greater time differences
– Participants from different countries
• Different performance standards
• Different legal requirements
• Internet helps manage global complexities
– Warehouse management
– Transportation management
– Logistics
– Outsourcing

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Supply Chain Management Systems

• Supply chain management

– Push-based model (build-to-stock)
• Earlier SCM systems
• Schedules based on best guesses of demand
– Pull-based model (demand-driven)
• Web-based
• Customer orders trigger events in supply chain

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Push- Versus Pull-Based Supply Chain Models

Figure 9-4 The difference between push- and pull-based models is summarized by the slogan “Make what we sell, not sell
what we make.”

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Management Information Systems, Global Edition
Chapter 9: Achieving Operational Excellence and Customer
Intimacy: Enterprise Applications
Supply Chain Management Systems

• Business value of SCM systems

– Match supply to demand; reduce inventory levels
– Improve delivery service
– Speed product time to market
– Use assets more effectively
– Reduced supply chain costs lead to increased
profitability
• Total supply chain costs can be 75% of operating budget
– Increase sales

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