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Unit Three – Enhancing Business
Decisions
• Decision-enabling, problem-solving, and
opportunity-seizing systems
Ch. 9: Model-based Decision Making
• Model – a simplified representation or abstraction
of reality
• The following systems use models to support
decision making, problem solving, and opportunity
capturing:
– Decision support systems (DSS)
– Executive information systems (EIS)
– Artificial intelligence (AI)
– Data mining
DECISION SUPPORT SYSTEMS
•
Decision support system (DSS) – models information
to support managers and business professionals during
the decision-making process
•
Three quantitative models typically used by DSSs:
1. Sensitivity analysis – the study of the impact that changes in
one (or more) parts of the model have on other parts of the
model
2. What-if analysis – checks the impact of a change in an
assumption on the proposed solution
3. Goal-seeking analysis – finds the inputs necessary to achieve
a goal such as a desired level of output
EXECUTIVE INFORMATION SYSTEMS
•
Executive information system (EIS) – a specialized
DSS that supports senior level executives within the
organization
•
Most EISs offering the following capabilities:
– Consolidation – involves the aggregation of information and
features simple roll-ups to complex groupings of interrelated
information
– Drill-down – enables users to get details, and details of
details, of information
– Slice-and-dice – looks at information from different
perspectives
EXECUTIVE INFORMATION SYSTEMS
•
Digital dashboard – integrates information from
multiple components and present it in a unified
display
ARTIFICAL INTELLIGENCE (AI)
•
Intelligent systems – various commercial
applications of artificial intelligence
•
Artificial intelligence (AI) – simulates human
intelligence such as the ability to reason and learn
and typically can:
– Learn or understand from experience
– Make sense of ambiguous or contradictory information
– Use reasoning to solve problems and make decisions
ARTIFICAL INTELLIGENCE (AI)
•
The three most common categories of AI include:
1. Expert systems – computerized advisory programs
that imitate the reasoning processes of experts in
solving difficult problems
2. Neural Networks – attempts to emulate the way the
human brain works
3. Intelligent agents – special-purposed knowledgebased information system that accomplishes specific
tasks on behalf of its users
Ch. 10: SCM Decision Making
• The average company spends nearly half of every dollar
that it earns on production
• In the past, companies focused primarily on manufacturing
and quality improvements to influence their supply chains
• Today, companies are focusing on all of the following to
influence their supply chains:
– Suppliers, assemblers, shipping/logistic firms, sales/marketing
channels, third-party customers support firms, other business
partners
SCM
•
The supply chain has three main links:
1. Materials flow from suppliers and their “upstream”
suppliers at all levels
2. Transformation of materials into semifinished and
finished products through the organization’s own
production process
3. Distribution of products to customers and their
“downstream” customers at all levels
SCM
• Organizations must embrace technologies that can
effectively manage and oversee their supply chains
SUPPLY CHAIN MANAGEMENT’S
EXPLOSIVE GROWTH
• Top reasons why more and more executives are
turning to SCM to manage their extended enterprises
SUPPLY CHAIN MANAGEMENT’S
EXPLOSIVE GROWTH
• Five Factors Driving SCM’s Explosive Growth
USING SUPPLY CHAIN MANAGEMENT
TO ENHANCE DECISION MAKING
• Numerous decision support systems (DSSs) are
being built to assist decision makers in the design
and operation of integrated supply chains
• DSSs allow managers to examine performance and
relationships over the supply chain and among:
– Suppliers
– Manufacturers
– Distributors
– Other factors that optimize supply chain performance
SUPPLY CHAIN MANAGEMENT
SUCCESS FACTORS
10-14
SUPPLY CHAIN MANAGEMENT
SUCCESS FACTORS
•
The following are the SCM industry best
practices:
1. Make the sale to suppliers
2. Wean employees off traditional business practices
3. Ensure the SCM system supports the organizational
goals
4. Deploy in incremental phases and measure and
communicate success
5. Be future oriented
Ch. 11: CRM Decision Making
• CRM is a business philosophy based on the
premise that those organizations that understand
the needs of individual customers are best
positioned to achieve sustainable competitive
advantages in the future
• This chapter discusses
– The reasons for CRM’s explosive growth
– Using CRM to enhance decision making
– CRM success factors
CRM
• CRM enables an organization to:
– Provide better customer service
– Make call centers more efficient
– Cross sell products more effectively
– Help sales staff close deals faster
– Simplify marketing and sales processes
– Discover new customers
– Increase customer revenues
CUSTOMER RELATIONSHIP
MANAGEMENT’S EXPLOSIVE GROWTH
• CRM Business Drivers
CUSTOMER RELATIONSHIP
MANAGEMENT’S EXPLOSIVE GROWTH
• Forecasts for CRM Spending (in billions)
USING ANALYTICAL CRM TO ENHANCE
DECISIONS
• Operational CRM – supports traditional
transactional processing for day-to-day front-office
operations or systems that deal directly with the
customers
• Analytical CRM – supports back-office operations
and strategic analysis and includes all systems that
do not deal directly with the customers
USING ANALYTICAL CRM TO ENHANCE
DECISIONS
• Operational CRM and analytical CRM
CUSTOMER RELATIONSHIP
MANAGEMENT SUCCESS FACTORS
•
CRM Success factors include:
1.
2.
3.
4.
5.
Clearly communicate the CRM strategy
Define information needs and flows
Build an integrated view of the customer
Implement in iterations
Scalability for organizational growth
Ch. 12: ERP Decision Making
• Enterprise resource planning systems serve as the
organization's backbone in providing fundamental
decision-making support
• This chapter discusses
– ERP’s explosive growth
– Using ERP to connect corporations
– Integrating SCM, CRM, and ERP
ERP
• At the heart of all ERP systems is a database,
when a user enters or updates information in one
module, it is immediately and automatically
updated throughout the entire system
ERP
• ERP systems can automate business processes
ERP
• ERP systems must integrate various organization
processes and be:
– Flexible
– Modular and open
– Comprehensive
– Beyond the company
ENTERPRISE RESOURCE PLANNING’S
EXPLOSIVE GROWTH
• SAP boasts 20,000 installations and 10 million
users worldwide
• ERP solutions are growing because:
– ERP is a logical solution to the mess of incompatible
applications that had sprung up in most businesses
– ERP addresses the need for global information sharing
and reporting
– ERP is used to avoid the pain and expense of fixing
legacy systems
THE CONNECTED CORPORATION
• Top three ERP vendors and their major components
THE CONNECTED CORPORATION
• SCM, CRM, and ERP are the backbone of ebusiness
• Integration of these applications is the key to
success for many companies
• Integration allows the unlocking of information to
make it available to any user, anywhere, anytime
THE CONNECTED CORPORATION
• SCM and CRM market overviews
INTEGRATING SCM, CRM, AND ERP
• Many companies purchase modules from an ERP vendor,
an SCM vendor, and a CRM vendor and must integrate the
different modules together
– Middleware – several different types of software which sit in the
middle of and provide connectivity between two or more software
applications
– Enterprise application integration (EAI) middleware –
represents a new approach to middleware by packaging together
commonly used functionality, such as providing prebuilt links to
popular enterprise applications, which reduced the time
necessary to develop solutions that integrate applications from
multiple vendors
INTEGRATING SCM, CRM, AND ERP
• General audience and purpose of SCM, CRM and
ERP
INTEGRATING SCM, CRM, AND ERP
• Data points where SCM, CRM, and ERP integrate