Chapter 02 – Major Business Initiatives: Gaining Competitive Advantage with IT
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CHAPTER 2
MAJOR BUSINESS INITIATIVES:
GAINING COMPETITIVE ADVANTAGE WITH IT
JUMP TO THE SUPPORT YOU WANT
STUDENT LEARNING OUTCOMES
2. Define customer relationship management (CRM) systems and describe their strategic and
competitive opportunities.
CHAPTER SUMMARY
This chapter focuses on some of the key “systems” within an organization that can help gain
and sustain a competitive advantage. They include supply chain management systems,
customer relationship management systems, enterprise resource planning, and social media.
The primary sections of this chapter include:
1. Supply Chain Management
3. Enterprise Resource Planning – Bringing IT All Together
Chapter 02 – Major Business Initiatives: Gaining Competitive Advantage with IT
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LECTURE OUTLINE
INTRODUCTION (p. 36)
SUPPLY CHAIN MANAGEMENT (p. 36)
1. Strategic and Competitive Opportunities with SCM
CUSTOMER RELATIONSHIP MANAGEMENT (p. 40)
1. Strategic and Competitive Opportunities with CRM
ENTERPRISE RESOURCE PLANNING – BRINGING IT ALL TOGETHER (p. 45)
1. The Evolution of ERP Systems
3. ERP Software for Market Size
SOCIAL MEDIA (p. 51)
2. Social Shopping
4. Social “Saving the World”
END OF CHAPTER (p. 58)
1. Summary: Student Learning Outcomes Revisited
3. Closing Case Study Two
5. Short-Answer Questions
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Chapter 02 – Major Business Initiatives: Gaining Competitive Advantage with IT
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MODULES, PROJECTS, AND DATA FILES
Supporting Modules
XLM/B The World Wide Web and the Internet – fast-paced tour of the Web and Internet. The
Group Projects
• Executive Information System Reporting
• Developing an Enterprise Resource Planning System
Electronic Commerce Projects
• Consumer information
• Demographics
Data Files
• There are no data files associated with this chapter. However, there may be data files
associated with the Group Projects you choose.
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Chapter 02 – Major Business Initiatives: Gaining Competitive Advantage with IT
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• These are the Student Learning Outcomes for the chapter.
• Use them as a road map to inform your students of what you will be
• These are the Student Learning Outcomes for the chapter.
• Use them as a road map to inform your students of what you will be
• This slide provides the graphic for the opening outrageous industry
transformation
• This slide provides some discussion for the previous slide
• These are good discussion questions as most of your students will
Chapter 02 – Major Business Initiatives: Gaining Competitive Advantage with IT
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• This slide presents the organization for the chapter by major section
and associated learning outcome
• This slide begins the discussion of supply chain management systems
(Student Learning Outcome #1)
• This slide presents Figure 2.1 on page 37
• It illustrates how Dell’s SCM system helps keep inventory low over
• This slide talks about inter-modal transportation, the use of multiple
modes of transportation in SCM
• This adds complexity
• This slide presents the focuses of SCM
• The main focus is on
Chapter 02 – Major Business Initiatives: Gaining Competitive Advantage with IT
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• This slide broadly talks about the IT support for SCM
• It also provides additional resources you may want to explore with
your class
• This slide begins the discussion of customer relationship management
(Student Learning Outcome #2)
• It also highlights the three focuses of CRM
• This slide presents Figure 2.3 on page 40
• It shows the four focuses of CRM
• Analytics is now a large part of any business initiative – we’ll talk more
• This slide talks about sales force automation and its key ingredients
• Sales force automation is fundamental to the success of any CRM
effort
• This slide presents Figure 2.4 on page 41
• This is GM’s purchase funnel
Chapter 02 – Major Business Initiatives: Gaining Competitive Advantage with IT
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• This slide presents the focuses of CRM
• The main focus is on
o Differentiation and focus
• This slide presents the two areas in which IT can support CRM
• They are through front-office systems and back-office systems
• This slide presents Figure 2.5 on page 43
• It illustrates how front-office systems, back-office systems, a CRM
database, and analysis and reporting systems work together
• This slide broadly talks about the IT support for CRM
• This slide begins the discussion of ERP systems (Student Learning
Outcome #3)
• With this edition of the book, we have moved all ERP material to this
Chapter 02 – Major Business Initiatives: Gaining Competitive Advantage with IT
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• This slide presents the importance of ERP systems.
• Most organizations, of all sizes, now use some form of ERP.
• This slide presents Figure 2.7 on page 46
• It includes the big players in the ERP market
• Slides 24 and 25 present a historical perspective of the evolution of
ERP systems.
• They also present Figure 2.8 on page 47
• Slides 24 and 25 present a historical perspective of the evolution of
ERP systems.
• They also present Figure 2.8 on page 47
• This slide presents Figure 2.9 on page 48
• It illustrates that ERP encompasses everything – financials, sales and
Chapter 02 – Major Business Initiatives: Gaining Competitive Advantage with IT
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• This slide reinforces the notion that ERP should encompass everything
in an organization
• If everything is tied together, the organization can operate more
• This slide presents Figure 2.10 on page 50
• It reinforces the notion that ERP encompasses everything in an
• This slide represents that there are differing sub-markets of the ERP
market
• These sub-markets are based on size
• This slide begins the discussion of social media (Student Learning
• Social media applications are based on Web 2.0 technologies
• This slide provides a formal definition for Web 2.0 technologies
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• This slide presents Figure 2.11 on page 52
• It provides a historical development of the Web, from its beginning to
Web 2.0 and social media
• There are many aspects of social media
• In this chapter, we cover the five listed on this slide
• Social networking is the most well-known aspect of social media
• Most of your students use Facebook, the most popular social
networking site
• This slide presents Figure 2.12 on page 53
• It provides usage statistics by social networking site
• This slide begins the discussion of social shopping
• It seems a lot of people want to be social while shopping
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• This slide starts the discussion of social playing
• Again, most of your students will be involved in social playing on the
• This slide presents Figure 2.13 on page 55
• This slide introduces World of Warcraft and Second Life
• They are two of the most popular social playing sites
• INDUSTRY PERSPECTIVE –I’m on Facebook – Sell Your Products There
• This slide introduces Zynga.
• It has many, many games.
• Most people play these games while on Facebook.
• This slide introduces socially “saving the world”
• Saving the world has become popular
• Many sites support contests for saving the world initiatives
Chapter 02 – Major Business Initiatives: Gaining Competitive Advantage with IT
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• This slide includes a few of the many sites that support socially saving
the world
• Visit some of these with your students
• This slide introduces social locationing
• This is also known as location-based services using GPS
• This slide presents some of the more popular social locationing
services
Chapter 02 – Major Business Initiatives: Gaining Competitive Advantage with IT
CLOSING CASES
CLOSING CASE STUDY ONE (p. 59)
COCA-COLA IS EVERYTHING: SCM, CRM, ERP, SOCIAL MEDIA, YOU NAME IT
In this case study, your students will explore how Coca-Cola uses technology to supports its
QUESTIONS
1. Why is standardization so important in supply chain management? Coke is developing its
own set of software services for bottlers to use. Do you think Coke charges the bottlers for
these software services? Why or why not?
DISCUSSION
• SCM crosses many organizations in a typical supply chain.
2. How is My Coke Rewards an example of a switching cost? How can a switching cost not
have a monetary penalty associated with it?
DISCUSSION
3. What sort of business intelligence could Coke gather from its My Coke Rewards Web site.
How could it use this information for customer relationship management activities?
DISCUSSION
• A lot of business intelligence, some of examples are: