11.6. Enterprise Systems

Customer Relationship Management

A Customer Relationship Management (CRM) system manages an organization’s customers. In today’s environment, it is important to develop relationships with your customers, and the use of a well-designed CRM can allow a business to personalize its relationship with each of its customers. CRM systems are often used to empower employees to track and record data at nearly every point of customer contact. Someone calls for a quote? Brings a return back to a store? Writes a complaint via e-mail? A well-designed CRM system can capture all these events for subsequent analysis or for triggering follow-up events.  Some ERP software systems include CRM modules. An example of a well-known CRM package is Salesforce.

Supply Chain Management

Supply Chain Management system involves the supplier providing materials for production and then the company produces and distributes the final product to the customer
Supply Chain Management System (click to enlarge)

Many organizations must deal with the complex task of managing their supply chains. At its simplest, a supply chain is the linkage between an organization’s suppliers, its manufacturing facilities, and the distributors of its products. Each link in the chain has a multiplying effect on the complexity of the process. For example, if there are two suppliers, one manufacturing facility, and two distributors, then the number of links to manage = 4 ( 2 x 1 x 2 ). However, if two more suppliers are added, plus another manufacturing facility, and two more distributors, then the number of links to manage = 32 ( 4 x 2 x 4 ). Also, notice in the image above that all arrows have two heads, indicating that information flows in both directions. Suppliers are part of a business’s supply chain. They provide information such as price, size, quantity, etc. to the business. In turn, the business provides information such as quantity on hand at every store to the supplier. The key to successful supply chain management is the information system.

A Supply Chain Management (SCM) system handles the interconnection between these links as well as the inventory of the products in their various stages of development. Much of Walmart’s success has come from its ability to identify and control the supply chain for its products. They realized in the 1980s that the key to their success was information systems to manage their complex supply chain with thousands of suppliers, retail outlets, and millions of customers.  They invested heavily in systems so they could communicate with their suppliers and manage the products they sell.  Their success came from being able to integrate information systems to every entity (suppliers, warehouses, retail stores) through the sharing of sales and inventory data.

Knowledge Management

All companies accumulate knowledge over the course of their existence. Some of this knowledge is written down or saved, but not in an organized fashion. Much of this knowledge is stored inside the heads of its employees. Knowledge management is the process of creating, formalizing the capture, indexing, storing, and sharing of the company’s knowledge in order to benefit from the experiences and insights that the company has captured during its existence. Knowledge management systems store and streamline this process. One example of a knowledge management system is learning management systems which are  used in educational institutions. Professors use the system to share educational materials with students. Desire to Learn (D2L) is one vendor in the learning management system market.

Electronic Data Interchange

Electronic Data Interchange (EDI) provides a competitive advantage through integrating the supply chain electronically. EDI can be thought of as the computer-to-computer exchange of business documents in a standard electronic format between business partners. By integrating suppliers and distributors via EDI, a company can vastly reduce the resources required to manage the relevant information. Instead of manually ordering supplies, the company can simply place an order via the computer and the products are ordered.

Order Processes
Comparison of process with and without EDI  adapted from D. Bourgeois CC-BY-NC

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Information Systems for Business and Beyond by Shauna Roch; James Fowler; Barbara Smith; and David Bourgeois is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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