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Chapter 9
Achieving Operational Excellence and Customer Intimacy:
Enterprise Applications
Learning Objectives
1. How do enterprise systems help businesses achieve operational excellence?
2. How do supply chain management systems coordinate planning, production, and
Chapter Outline
9.1 Enterprise Systems
What Are Enterprise Systems?
Enterprise Software
Business Value of Enterprise Systems
9.2 Supply Chain Management Systems
The Supply Chain
9.3 Customer Relationship Management Systems
What Is Customer Relationship Management?
9.4 Enterprise Applications: New Opportunities and Challenges
Key Terms
The following alphabetical list identifies the key terms discussed in this chapter. The
page number for each key term is provided.
Analytical CRM, 386
Pull-based model, 379
Push-based model, 379
Social CRM, 389
Supply chain, 372
Supply chain execution systems, 376
Supply chain planning systems, 376
Touch point, 381
Teaching Suggestions
The opening case, “Technology Helps Nvidia Anticipate the Future” illustrates how
accurately forecasting customer demand and adjusting inventory levels is of key
importance. Production planners must estimate how much material the company will
need and how much production time they need to schedule.
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Section 9.1, “Enterprise Systems.” This section introduces enterprise systems and
explains the benefits and disadvantages of installing them. There have been success
Section 9.2, “Supply Chain Management Systems.” Section 9.2 goes into great depth
about supply chain processes and how information can help managers control the supply
chain better. Have your students give you examples of following the supply chain with
Interactive Session: Organizations: DP World Takes Port Management to the Next
Level with RFID
Case Study Questions:
1. How did the Identec Solutions RFID-based technology help DP World
increase the efficiency and effectiveness of its customers’ supply chains?
RFID technology enabled DP World’s customers to have their goods cleared and
2. Describe two improvements that resulted from implementing the Identec RFID-
based solution.
Improvements include:
– Higher customer satisfaction (faster truck turnaround times)
3. How does the concept of supply chain execution relate to this interactive session?
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4. What managerial, organizational, and technological challenges might DP World
have faced in the early stages of the RFID project’s deployment?
Management: Managers might not be familiar with RFID technology. They might need
to resolve many technical and operational issues related to initial deployment.
In Section 9.3, “Customer Relationship Management Systems” As the book states,
“…the Internet, and electronic commerce have put more power in the hands of
customers.” A good example you can use to explain this statement is the increased
future.
Section 9.4, “Enterprise Applications: New Opportunities and Challenges” This section
explains the difficulties of implementing CRM, SCM, and enterprise systems and
integrating them with other systems. New business processes must be built on enterprise-
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Interactive Session: Technology: Customer Relationship Management Heads to the
Cloud
Case Study Questions
1. What types of companies are most likely to adopt cloud-based CRM software
services? Why? What companies might not be well-suited for this type of
software?
Small to mid-size companies that lack the know-how or financial resources to
successfully build and maintain CRM applications in-house are most likely to use
2. What are the advantages and disadvantages of using cloud-based enterprise
applications?
Advantages: Reduced costs; access to software that may be too sophisticated or
cumbersome for in-house development; access to best practices industry-wide; ability
3. What management, organization, and technology issues should be addressed in
deciding whether to use a conventional CRM system versus a cloud-based
version?
Management: Employee training; number of employees needed for each system
type; switching costs associated with each system type.
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Visit the Web sites of Salesforce.com, RightNow, or another competing company
offering a cloud-based version of CRM. Then answer the following questions:
(Information provided in these answers was copied from www.rightnow.com Nov
2010)
1. What CRM capabilities does the company offer? Describe some of the features.
The RightNow CX Cloud Platform is the first platform to be purpose-built for
customer experience. The critical elements for building, leveraging, and delivering
great customer experiences are surfaced with the Platform pillars of “RightNow App
Key Highlights of the RightNow CX Cloud Platform Features:
Mission Critical Operations
• Reliable: Disaster recovery, data redundancy, guaranteed SLA
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App Builder
• Extensible: Customizable business objects
Knowledge Foundation
• Collaborative: Socially Infused, collaborative knowledge
2. Toward what types of companies is the company marketing its services?
RightNow lists government agencies (Air Force Personnel Center and Army
3. What other services does the company offer?
Web Experience: RightNow Web Experience gives your customers always available
access to your organization with a feature rich, branded online customer experience
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Engage: As part of RightNow CX, RightNow Engage helps to integrate your service,
sales, marketing, and feedback functions, with the external experience channels
Review Questions
1. How do enterprise systems help businesses achieve operational excellence?
Define an enterprise system and explain how enterprise software works.
Enterprise software consists of a set of interdependent software modules that support
basic internal business processes. The software allows data to be used by multiple
Describe how enterprise systems provide value for a business.
Enterprise systems provide value both by increasing operational efficiency and by
providing firmwide information to help managers make better decisions. Large
companies with many operating units in different locations have used enterprise
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not previously possible or to create a more disciplined organizational culture. They
2. How do supply chain management systems coordinate planning, production, and
logistics with suppliers?
Define a supply chain and identify each of its components.
A supply chain is defined as a network of organizations and business processes for
procuring materials, transforming raw materials into intermediate and finished
Explain how supply chain management systems help reduce the bullwhip effect
and how they provide value for a business.
The bullwhip effect occurs when information about the demand for a product gets
distorted as it passes from one entity to the next across the supply chain. It can also
Define and compare supply chain planning systems and supply chain execution
systems.
Supply chain planning systems enable the firm to generate demand forecasts for a
product and to develop sourcing and manufacturing plans for that product. They help
companies make better operating decisions such as determining how much of a
Supply chain execution systems manage the flow of products through distribution
centers and warehouses to ensure that products are delivered to the right locations in
the most efficient manner. They track the physical status of goods, the management
of materials, warehouse and transportation operations, and financial information
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Describe the challenges of global supply chains and how Internet technology can
help companies manage them better.
Firms use intranets to improve coordination among their internal supply chain
processes, and they can use extranets to coordinate supply chain processes shared
with their business partners. Using intranets and extranets (both based on Internet
Distinguish between a push-based and pull-based model of supply chain
management and explain how contemporary supply chain management systems
facilitate a pull-based model.
In a push-based model, production master schedules are based on forecasts or best
guesses of demand for products, and products are “pushed” to customers. In a pull-
3. How do customer relationship management systems help firms achieve customer
intimacy?
Define customer relationship management and explain why customer
relationships are so important today.
Customer relationship management: A business and technology discipline that
Importance of customer relationships: Globalization of business, the Internet, and
electronic commerce have put more power in the hands of customers. Companies
relationships represent the firm’s most valuable asset.
Describe how partner relationship management (PRM) and employee
relationship management (ERM) are related to customer relationship
management (CRM)?
CRM systems capture and integrate customer data from all over the organization,
consolidate the data, analyze the data, and then distribute the results to various
systems and customer touch points across the enterprise. Companies can use this
PRM uses many of the same data, tools, and systems as CRM to enhance
collaboration between a company and its selling partners. If a company does not sell
directly to customers but rather works through distributors or retailers, PRM helps
these channels sell to customers directly.
Describe the tools and capabilities of customer relationship management
software for sales, marketing, and customer service.
Customer relationship management systems typically provide software and online
tools for sales, customer service, and marketing. Refer to Figure 9-8 for a diagram of