What is ERP?• Enterprise resource planning is a cross-functional enterprise system – An integrated suite of software modules – Supports basic internal business processes – Facilitates business, supplier, and customer information flows• For e.g. software for a manufacturing company will typically process the data and track the status of sales, inventory, shipping, and invoicing, as well as forecast raw material and human resource requirements. 8-2
ERP Process and Information Flows 8-3
ERP Application Components 8-4
ERP• ERP is the technological backbone of e-business, and enterprise wide transaction framework with links into sales order processing, inventory management and control, production and distribution planning, and finance.• ERP gives a company an integrated real time view of its core business processes, such as production, order processing, and inventory management tied together by the ERP application software and a common database maintained by a database management system.• ERP software suites typically consist of integrated modules of manufacturing, distribution, sales, accounting, and human resource applications.
• Example of manufacturing processes supported are material requirements planning, production planning and capacity planning.• Sales and marketing processes supported by ERP are sales analysis, sales planning, and pricing analysis.• ERP support many vital human resource processes, from personnel requirements planning to salary and benefits administration, and accomplish most required financial record keeping and managerial accounting applications
Benefits of ERP• ERP Business Benefits – Quality and efficiency: ERP creates a framework for integrating and improving a company’s internal business processes that results in significant improvements in the quality and efficiency of customer service, production, and distribution. – Decreased costs: companies significant reductions in transaction processing costs and hardware, software, and IT support staff compared to the nonintegrated legacy systems that were replaced by their new ERP systems 8-7
Benefits of ERP– Decision support: ERP provides vital cross functional information on business performance to managers quickly to significantly improve their ability to make better decisions in a timely manner across the entire business enterprise.– Enterprise agility: implementing ERP systems breaks down many former departmental and functional walls of business processes, information systems, and information resources. This results in more flexible org structures, managerial responsibilities, and work roles and therefore a more adaptive organization and workforce that can work more easily capitalize on new business requirements.
Challenges of ERP• ERP Costs – Risks and costs are considerable – Hardware and software are a small part of total costs, and that the costs of developing new business processes and preparing emp for the new system make up the bulk of implementing a new ERP system. – Converting data from previous legacy systems to the new cross functional ERP system is another major category of ERP implementation costs. – Failure in implementing a new ERP system can cripple or kill a business
Costs of Implementing a New ERP
Causes of ERP Failures• Most common causes of ERP failure – Under-estimating the complexity of planning, development, training – Failure to involve affected employees in planning and development – Trying to do too much too fast – Insufficient training – Insufficient data conversion and testing – Over-reliance on ERP vendor or consultants
ERP Implementation• Erp implementation, generally follows the waterfall mode approach.• Once a firm order is received, the implementation begins with meeting between the vendor and the org.• ERP implementation process model, it is a nine step approach for successful implementation of ERP
Nine steps approach to ERP implementation1. RDD ( requirement definition and description)2. Product mapping to RDD3. Gap analysis for review4. ERP product configuration5. Functional implementation6. Technical implementation7. User feedback and review8. Deploy fully and go live as planned9. Project and process review
ERP implementation Product mapping to RDD (2) RDD (1) GAP Analysis for review (3) User training ERP product Functional * Deployconfiguration implementation (5) Hand holding fully and Project (4) * go live and Critical process process as review testing planned Technical * (9) (8) implementation (6) User feedback and review (7)
ERP implementation• The model is built on three reviews. – First review product vs. RDD results into ‘gap analysis’ showing what ERP package offers and RDD states. This confirms the utility of ERP product and makes a clear prescription of changes, which are must in the ERP solution. – Second review is ERP ‘ configuration review’ to confirm that configured ERP for customer specific requirement is useful to the users. – Third and final review is after six months usage, to confirm that RDD is fully implemented and the solution meets all requirements, namely functions, features, facilities, technology interface, information requirements and reports and queries.• Nine steps implementation model is dynamic where each step is checked, reviewed and confirmed.
What is a Supply Chain?• The interrelationships – With suppliers, customers, distributors, and other businesses – Needed to design, build, and sell a product• Each supply chain process should add value to the products or services a company produces – Frequently called a value chain
Supply Chain Management (SCM)• Fundamentally, supply chain management helps a company – Get the right products – To the right place – At the right time – In the proper quantity – At an acceptable cost
SCM• Major functions of supply chain are marketing, manufacturing, procurement, operations, inventory, warehousing, distribution and customer service.• The process begins with customer order and ends with delivery of goods and services.• These functions are managed through supply chain participants who could be many at each stage in the chain.
SCM• Supply chain consist of all stages involved in servicing the customer to fulfill the expectations.• A supply chain is an extended enterprise where participants in the chain have specific contributing roles to the goal of reaching the customer.• Table shows supply chain models and participants Manufacturing Trading Service business • Customer • Customer • Customer • Retailer • Retailer • consultant • Distributor • Transporter • Service provider • Transporter • warehouse • warehouse • supplier • supplier
Supply Chain Life Cycle
Goals of SCM• The goal of SCM is to efficiently – Forecast demand – Control inventory – Enhance relationships with customers, suppliers, distributors, and others – Receive feedback on the status of every link in the supply chain
Objectives of SCM
Roles and Activities of SCM in Business
Planning Function of SCM• Planning – Supply chain design • optimize network of suppliers, plants and distribution centers – Collaborative demand and supply planning • Develop an accurate forecast of customer demand by sharing demand and supply forecasts instantaneously across multiple tiers • Internet enabled collaborative scenarios, such as collaborative planning, forecasting and replenishment (CPFR), and vendor managed inventory
Execution function of SCM• Execution – Materials management • Share accurate inventory and procurement order information • Ensure materials required for production are available in the right place at the right time • Reduce raw material spending, procurement costs, safety stocks, and raw material and finished goods inventory – Collaborative manufacturing • Optimize plans and schedules while considering resources, material, and dependency constraints
Execution function of SCM– Collaborative fulfillment • Commit to delivery dates in real time • Fulfill orders from all channels on time with order management, transportation planning, and vehicle scheduling • Support the entire logistics process, including picking, packing, shipping, and delivery in foreign countries.– Supply chain event management • Monitor every stage of the supply chain process, form price quotation to the moment the customer receives the product, and receive alerts when problem arises– Supply chain performance management • Report key measurements in the supply chain, such as filling rates, order cycle times, and capacity utilization.
Benefits of SCM• Key Benefits – Faster, more accurate order processing – Reductions in inventory levels – Quicker times to market – Lower transaction and materials costs – Strategic relationships with supplier
Challenges of SCM• Key Challenges – Lack of demand planning knowledge, tools, and guidelines – Inaccurate data provided by other information systems – Lack of collaboration among marketing, production, and inventory management – SCM tools are immature, incomplete, and hard to implement
Integrated Supply Chain Phase 1: Independent Suppliers Purchasing Production Distribution Customers supply-chain entities Phase 2: Internal Suppliers Purchasing Production Distribution Customers integration Internal supply chain Materials management department Phase 3: Internal Supply-chain Suppliers supply Customers integration chain Integrated supply chain
• Today supply chain management has become a matter of survival for corporate sector• Companies are discovering this much to their dismay.• Real time decision making• Rapid changes in supply & demand
SCM – SUCCESS THE STEPS TO SUCCESS IN SUPPLY CHAIN MANAGEMENT1.Integrating Information2.Analyzing This Information To Trigger A Corresponding Product Transition3. Creating A Nimble And Responsive Planning And Execution Process4. Enabling Global Process Visibility And Co-ordination Between All Supply Chain Partners5. Improving Overall Throughput And Asset Utilization6. Empowering People To Identify And Solve Problems Proactively
SCM - TOOLS• Online real-time available to promise (ATP)• Online real-time commit to promise (CTP)• Accurate forecasting (AF)• Closed loop corporate to enterprise to department to work cell planning, optimization and execution• Reactive dynamic scheduling• Concurrent and collaborative planning• Web-enabled communication of planning and inventory information between suppliers and customers.
Future of Competition Supplier Inbound Manufacturing Distribution Outbound Ultimate Transport Transport Customer My Supply Chain vs. Your Supply ChainSupplier Inbound Manufacturing Distribution Outbound Ultimate Transport Transport Customer
Customer Relationship Management• A customer-centric focus – Customer relationships have become a company’s most valued asset – Every company’s strategy should be to find and retain the most profitable customers possible
What is CRM?• Managing the full range of the customer relationship involves – Providing customer-facing employees with a single, complete view of every customer at every touch point and across all channels – Providing the customer with a single, complete view of the company and its extended channels• CRM uses IT to create a cross-functional enterprise system that integrates and automates many of the customer-serving processes
What is Customer Relationship Management (CRM)?CRM is “the development and maintenance of mutually beneficiallong-term relationships with strategically significant customers” (Buttle, 2000)CRM is “an IT enhanced value process, which identifies, develops,integrates and focuses the various competencies of the firm to the‘voice’ of the customer in order to deliver long-term superiorcustomer value, at a profit to well identified existing and potentialcustomers”. (Plakoyiannaki and Tzokas, 2001)
Customer Relationship Management “Process of creating and maintaining relationships with business customers or consumers” “A holistic process of identifying, attracting, differentiating, and retaining customers” “Integrating the firm’s value chain to create enhanced customer value at every step” “An integrated cross-functional focus on improving customer retention and profitability for the company.”
Areas of CRM Activity Sales Force Automation (SFA) Customer Service and Support (CSS) Help Desk Field Service Marketing Automation
Application Clusters in CRM
Contact and Account Management• CRM helps sales, marketing, and service professionals capture and track relevant data about – Every past and planned contact with prospects and customers – Other business and life cycle events of customers• Data are captured through customer touch points – Telephone, fax, e-mail – Websites, retail stores, kiosks – Personal contact
Sales• A CRM system provides sales reps with the tools and data resources they need to – Support and manage their sales activities – Optimize cross- and up-selling• CRM also provides the means to check on a customer’s account status and history before scheduling a sales call
Marketing and Fulfillment• CRM systems help with direct marketing campaigns by automatic such tasks as – Qualifying leads for targeted marketing – Scheduling and tracking mailings – Capturing and managing responses – Analyzing the business value of the campaign – Fulfilling responses and requests
Customer Service and Support• A CRM system gives service reps real-time access to the same database used by sales and marketing – Requests for service are created, assigned, and managed – Call center software routes calls to agents – Help desk software provides service data and suggestions for solving problems• Web-based self-service enables customers to access personalized support information
Retention and Loyalty Programs• It costs 6 times more to sell to a new customer• An unhappy customer will tell 8-10 others• Boosting customer retention by 5 percent can boost profits by 85 percent• The odds of selling to an existing customer are 50 percent; a new one 15 percent• About 70 percent of customers will do business with the company again if a problem is quickly taken care of
Retention and Loyalty Programs• Enhancing and optimizing customer retention and loyalty is a primary objective of CRM – Identify, reward, and market to the most loyal and profitable customers – Evaluate targeted marketing and relationship programs
The three phases of CRM• We can view CRM as an integrated system of web enabled software tools and databases accomplishing a variety of customer focused business processes that support the 3 phases of the relationship between a business and its customers. – Acquire – Enhance – Retain
The Three Phases of CRM
Acquire• A business relies on CRM software tools and databases to help it acquire new customers by doing a superior job of contact management, sales prospecting, selling, direct marketing, and fulfillment.• The goal of these CRM functions is to help customers perceive the value of a superior product offered by an outstanding company.
Enhance• Web-Enabled CRM account management and customer service and support tools help keep customers happy by supporting superior service from a responsive networked team of sales and service specialists and business partners.• CRM sales force automation and direct marketing and fulfillment tools help companies to increase their profitability to the business.• The value of the customers perceive is the convenience of one stop shopping at attractive prices
Retain• CRM analytical software and databases help a company proactively identify and reward its most loyal and profitable customers to retain and expand their business via targeted marketing and relationship marketing programs.• The value the customers perceive is of a rewarding personalized business relationships with their company.
Benefits of CRM• Benefits of CRM – Identify and target the best customers – Real-time customization and personalization of products and services – Track when and how a customer contacts the company – Provide a consistent customer experience – Provide superior service and support across all customer contact points
CRM Failures• Business benefits of CRM are not guaranteed – 50 percent of CRM projects did not produce promised results – 20 percent damaged customer relationships• Reasons for failure – Lack of understanding and preparation – Not solving business process problems first – No participation on part of business stakeholders involved
Trends in CRM• Operational CRM – Supports customer interaction with greater convenience through a variety of channels – Synchronizes customer interactions consistently across all channels – Makes the company easier to do business with
Trends in CRM• Analytical CRM – Extracts in-depth customer history, preferences, and profitability from databases – Allows prediction of customer value and behavior – Allows forecast of demand – Helps tailor information and offers to customer needs
Trends in CRM• Collaborative CRM – Easy collaboration with customers, suppliers, and partners – Improves efficiency and integration throughout supply chain – Greater responsiveness to customer needs through outside sourcing of products and services
Trends in CRM• Portal-based CRM – Provides users with tools and information that fit their needs – Empowers employees to respond to customer demands more quickly – Helps reps become truly customer-faced – Provides instant access to all internal and external customer information
What is Knowledge• Knowledge is justified true belief. Ayer, A.J. (1956).• Knowledge is a fluid mix of framed experience, values, contextual information and expert insight that provides a framework for evaluating and incorporating new experience and information.
• KM is the process of capturing and making use of a firm’s collective enterprise anywhere in the business- on paper, in document, in databases (called explicit knowledge) or in people’s heads (called tacit knowledge).
What is Knowledge Management?• Defined in a variety of ways.• KM in education: a strategy to enable people to develop a set of practices to create, capture, share & use knowledge to advance.• KM focuses on: – people who create and use knowledge. – processes and technologies by which knowledge is created, maintained and accessed. – artifacts in which knowledge is stored (manuals, databases, intranets, books, heads).
What is Knowledge Management?• “Knowledge management is a discipline that promotes an integrated approach to identifying, managing and sharing all of an enterprise’s information needs.
Where does KM come from?• Technology – Infrastructure, Database, Web, Interface• Globalization – World wide markets, North American integration• Demographics – Aging population, workforce mobility, diversity• Economics – Knowledge economy• Customer relations – Quality• Increase in information – Specialization, Volume, Order
Data, Information & Knowledge DATA INFORMATION KNOWLEDGEDefinition Raw facts, figures Data placed into Information in and records a form that is context to make contained in a accessible, timely it insightful and system. and accurate. relevant for human action.Reason Processing Storing / Insight, Accessing. innovation, improvement.
Two types of knowledge Know-how & learning Documented information embedded within the minds that can facilitate action. people.Explicit knowledge Implicit (Tacit) knowledge – Formal or codified – Informal and uncodified – Documents: reports, policy – Values, perspectives & culture manuals, white – Knowledge in heads papers, standard procedures – Databases – Memories of staff, suppliers and – Books, magazines, journals vendors (library) Knowledge informs decisions and actions.
Knowledge type Nature Owners of knowledge SourceSkills Tacit Individual IndividualCapability Tacit Individual or groups Individual or groupsKnowhow Tacit Individual or groups Individual or groupsInformation Explicit Individual IndividualOrganised Explicit Databases SysteminformationFacts Explicit Databases/individual SystemProcess Explicit Organisation SystemProprietary (Patent) Explicit Organisation System
Need for KM• Increase profits of revenues• Retain key talent and expertise• Improve customer retention and satisfaction• Defend market share against new entrants• Accelerate time to market with product• Penetrate new market segments• Reduce costs• Develop new products and services
Forces driving KM initiatives External Internal Pressure to Cut throat increase competition effectiveness Understanding Insistence on of cognitive customization behavior Need of Continuous tech- breakthroughs knowledge intensive work Changing Need to move capabilities of to shared business partners intelligence
Knowledge Management• KM has following processes – Define, capture, manipulate, store and develop. – Develop IS for knowledge creation – Design applications for improving org effectiveness – Create knowledge set, i.e.., intellectual capital to increase economic value of the org – Keep on upgrading to use it as a central resource – Distribute and share to concerned.
The Knowledge Process Cycle Apply existing knowledge to generate Harvest, or extract, tacit or more knowledge, make informed explicit knowledge by decisions and (explicitly or implicitly) prompting the source, or lead to innovation. Can happen in real- “knower‟‟ to communicate time (e.g. in conversation), or with time and share. (Explicit elapse (e.g. applying lessons learned knowledge is codified in over time). paper or electronic form. Use & Tacit knowledge is more e complex that has been Innovat developed over time and internalised by the „‟knower‟‟) C Ca p ptur ur Access Use the organisation e e structure and the storage medium to retrieve the knowledge. This can be automatic with “push” technology (e.g. Portal), e where the user profile or is an event triggers knowledge Sto rg retrieval and display. r e Categorise and sort O knowledge (e.g., by assigning metadata, synthesising, codifying) with consideration for future Access and Use Place knowledge in a format requirements. that enables it to be accessed (e.g., computer file/database, policy, training, or subject matter expert‟s head)
Information management represents the foundation for effective governance. But service innovationrequires integrated processes creating value from isolated data and information by the application ofknowledgeReceive/Gather Data Implement Services & Policies Information Value Chain Capture Store Update Query Distribute Analyze Act Learn Manage Information Analyze Information Use Knowledge Use Knowledge to Improve Process
Knowledge management system architecture KMSIdentification of Knowledge creation Knowledge delivery knowledge Definition and Processing for Access control categorization acquisition Surveying and Manipulation and locating Application methods modelingBuild knowledge structure Creation of KDB Storage and security
E-governance• Before going into the question of strategies, you must be aware of WHY some country wants to put effort into e- government. Which are their motives? What driving forces make a country work with e- government?• No matter what motive you have, you should be aware of it, because the answer to the question WHY do have a great impact on your strategy
Why e-government? “Everyone else is doing it, so its probably “Its hype” important and useful” “We don‟t want to“We think it will provide faster, more fall behind all others” convenient government services”“We think it will reduce costs for ”We think it will reduce costs forindividuals and businesses to deal government (reduced data entrywith government” costs, lower error rates)” “We think it will ”To reduce corruption improve democratic and fight poverty” process” ”We need to reach out to a broader ”We think it‟s a tool for transformation of part of population” public administration from bureaucracy to service provider”
E-governance• E-governance is the public sectors use of information and communication technologies with the aim of improving information and service delivery, encouraging citizen participation in the decision-making process and making government more accountable, transparent & effective.
Goals• To extend the reach of government services• To promote equal access to government services• To increase constituency satisfaction with government services – in particular: to reduce transaction costs for citizens• To reduce government costs 75
Conceptual Framework for E-Government StrategyDimensions Outputs Goals E-Governance: Leadership •Legal Framework, TRANSPARENCY •ICT Policies - StandardsHuman Connectivity & DataResource Dev. Processing infrastructure SERVICE Policy & Institutional Institutional Infrastructure for Service Delivery Reform EFFICIENCY Client-Oriented Service Technology Applications ECONOMY Back-End Government Financing Applications
Incentives• Individuals: skills upgrading, professional development, increased autonomy, international exposure• Departments: Increased budgetary control, organizational visibility, economic rewards, e.g. share of profits/savings, etc. 78
Measurement of results Output Indicators• Infrastructure – Improvement in connectivity and data processing capacity• Governance – E-government management framework in place – Policy and regulatory framework in place• Institutional Capacity – Geographical reach of government services – Training imparted – Business processes reengineered – Number of Government systems operating at service standards 79
Measurement of results Impact Indicators• Constituency satisfaction with government services (opinion surveys, citizen report cards)• Access by the poor and rural population• Client orientation in public service – Data sharing across information systems – transparency of government organization to service recipients 80
Example of e-government strategy E-Bharat under preparation
India’s e-Government strategy• Provision of improved, more convenient government services countrywide through on-line delivery at local service centers.• It is fully recognized as key part of national development plans.• Involves central and all state governments. Will be led centrally and implemented locally.• Will be implemented over an 8-year period (FY2006-2013) at a cost of roughly USD 4 billion.• To be supported by proposed USD 1 billion, Bank project in two phases 82
Scope of Outputs Central State IntegratedServices to Income Tax Land records Common Services Centres:Citizens (G2C) Passport, visa and Property registration Single-window public service immigration Road transport delivery points eventually E-Posts Agriculture reaching all the 600,000 villages Municipalities in India Panchayats State Wide Area Network SWAN: fiber optic connectivity up Police to block level Employment Exchange Countrywide State Data Centers Education All India Portal Health National E-Governance Gateway Food Distribution & other welfare programsServices to Excise Commercial Taxes EDI (customs & foreigh trade)Business (G2B) Company affairs E-BIZ E-ProcurementOther National ID Treasuries E-Courts National GIS for planning