Trying to inject a little humor into this blog…
Summary:
In chapter 2 of our textbook, the authors define Enterprise
Systems as a set of software and business processes that integrate previously
fragmented data from different systems. This is accomplished by storing all
information in a centralized repository where it can be used by all parts of
the business or organization. These are also commonly known as enterprise resource planning (ERP)
systems and are essential for enabling a business to attain maximum efficiency
and evaluate organizational performance.
Falling under the umbrella of ERP systems are supply chain management (SCM) systems.
This software allows firms with large scale and complex manufacturing and
distribution chains to effectively manage the business processes from producing
and procuring raw materials to the final distribution of the finished product
to the customer. Most supply chains can be broken down into 2 basic levels. The
upstream portion includes the firms’
suppliers and the downstream portion
deals with the processes for delivering and distributing the finished product
to customers. Below is figure 9-2 from our textbook that illustrates Nike’s
supply chain, but keep in mind that it is not to scale, in reality Nike has
thousands of suppliers and distributors.
A common issue with the utilization of SCM systems is the bullwhip effect. This occurs when
information about the demand for a product is distorted as it moves through the
supply chain processes. To combat this
problem, it behooves a company to consistently audit the accuracy of
information passing through the system and being used for decision making. The
software that runs SCM systems can be classified as either supply chain planning (SCP) systems or supply chain execution (SCE) systems. SCP’s tell the organization how to model their supply chain, and SCE’s
actually direct the flow of products
through the supply chain.
Unit 3 of this chapter explains the uses of customer
relationship management (CRM) systems in an attempt to “get to know” the
customer. CRM software crosses the full spectrum of customer relations, from
personal tools that perform specific functions to organizational applications
that capture all of the data from interactions
with a customer and incorporate it into the other major enterprise systems that
an organization uses. This software allows a firm to provide better customer
service and better market their products to future customers. CRM software
supports either the Operational or Analytical aspects of customer relations. The
major CRM software producers include Oracle-owned Siebel Systems,
Salesforce.com, and Microsoft Dynamics CRM.
One of the challenges to implementation of Enterprise
Applications is a high cost of purchase. Including training, software,
hardware, and consulting fees, the price can range into the double digit
millions of dollars. Also, a firm must be ready for the fundamental changes to
organization and processes that will occur with the introduction of ERP
software. In the end, a company must look at whether or not they think the
proverbial “juice” is worth the squeeze.
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