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86 Part One Organizations, Management, and the Networked Enterprise

FIGURE 2.6 ENTERPRISE APPLICATION ARCHITECTURE

Enterprise applications automate processes that span multiple business functions and organizational
levels and may extend outside the organization.

lowering the costs of moving and making products and by enabling managers to
make better decisions about how to organize and schedule sourcing, produc-
tion, and distribution.
Supply chain management systems are one type of interorganizational
system because they automate the flow of information across organizational
boundaries. You will find examples of other types of interorganizational
information systems throughout this text because such systems make it possible
for firms to link electronically to customers and to outsource their work to other
companies.

Customer Relationship Management Systems Firms use customer
relationship management (CRM) systems to help manage their relation-
ships with their customers. CRM systems provide information to coordinate all
of the business processes that deal with customers in sales, marketing, and
service to optimize revenue, customer satisfaction, and customer retention.
This information helps firms identify, attract, and retain the most profitable
customers; provide better service to existing customers; and increase sales.
Knowledge Management Systems Some firms perform better than others
because they have better knowledge about how to create, produce, and deliver
products and services. This firm knowledge is unique, difficult to imitate, and
can be leveraged into long-term strategic benefits. Knowledge management
systems (KMS) enable organizations to better manage processes for capturing
and applying knowledge and expertise. These systems collect all relevant
knowledge and experience in the firm, and make it available wherever and

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