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392 Part Three Key System Applications for the Digital Age

Review Summary

1. How do enterprise systems help businesses achieve operational excellence?
Enterprise software is based on a suite of integrated software modules and a common central
database. The database collects data from and feeds the data into numerous applications that can
support nearly all of an organization’s internal business activities. When new information is entered
by one process, the information is made available immediately to other business processes.
Enterprise systems support organizational centralization by enforcing uniform data standards
and business processes throughout the company and a single unified technology platform. The
firmwide data generated by enterprise systems helps managers evaluate organizational perfor-
mance.

2. How do supply chain management systems coordinate planning, production, and logistics with
suppliers?

Supply chain management (SCM) systems automate the flow of information among members of the
supply chain so they can use it to make better decisions about when and how much to purchase,
produce, or ship. More accurate information from supply chain management systems reduces
uncertainty and the impact of the bullwhip effect.
Supply chain management software includes software for supply chain planning and for supply
chain execution. Internet technology facilitates the management of global supply chains by providing
the connectivity for organizations in different countries to share supply chain information. Improved
communication among supply chain members also facilitates efficient customer response and
movement toward a demand-driven model.

3. How do customer relationship management systems help firms achieve customer intimacy?
Customer relationship management (CRM) systems integrate and automate customer-facing
processes in sales, marketing, and customer service, providing an enterprise-wide view of customers.
Companies can use this customer knowledge when they interact with customers to provide them with
better service or to sell new products and services. These systems also identify profitable or
nonprofitable customers or opportunities to reduce the churn rate.
The major customer relationship management software packages provide capabilities for both
operational CRM and analytical CRM. They often include modules for managing relationships with
selling partners (partner relationship management) and for employee relationship management.

4. What are the challenges posed by enterprise applications?
Enterprise applications are difficult to implement. They require extensive organizational change,
large new software investments, and careful assessment of how these systems will enhance
organizational performance. Enterprise applications cannot provide value if they are implemented
atop flawed processes or if firms do not know how to use these systems to measure performance
improvements. Employees require training to prepare for new procedures and roles. Attention to data
management is essential.

5. How are enterprise applications taking advantage of new technologies?
Enterprise applications are now more flexible, Web-enabled, and capable of integration with
other systems, using Web services and service-oriented architecture (SOA). They also have open
source and on-demand versions and are able to run in cloud infrastructures or on mobile platforms.
CRM software has added social networking capabilities to enhance internal collaboration, deepen
interactions with customers, and utilize data from social networking sites. Open source, mobile,
and cloud versions of some of these products are becoming available.

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