ERP, SCM and CRM

POST GRADUATE PROGRAM IN MANAGEMENT

(PGPM)
 Question

What is the most obscure item you have searched for in

Amazon?
 Amazon

Retail Books Prime AWS

Artificial Amazon
Streaming FBA
Intelligence Studio

Listen to your Invent for the Personalize for

customers customers the customers
 Some metrics
• 9 out of 10 consumers price check a product on Amazon.
• Amazon sells more than 12 million products
• 95 million people have Amazon Prime memberships in the US
• Amazon shipped over 5 billion items worldwide in 2017
 Context

So, how does Amazon manage to do all that?

 Core Business Process
• Typically the Business processes revolve around the functional units such as Marketing and
Sales, Manufacturing and Operations, Supply Chain Management, Accounting and Finance
and Human Resources
• Some of the Core Business Processes include

Make to Stock
Order to Cash Procure to Pay
Make to Order
• Customer • Vendors • Manufacturing
 Order to Cash

Create Pick,
Allocate Prepare and Collect
Customer Check Credit Create Order Package and
Stock Send Invoice Payment
Record Shipment

Now recollect your last purchase in Amazon and all the steps you went through
 Procure to Pay

Negotiate Issue
Receive Settle
Price and Purchase
Goods Payment
Terms Order

Now recollect the last time, your company sold something to your customer and the
steps you went through
 Make to Stock and Make to Order

Procure Schedule Quality Stock

Production
Inputs Production Control Product

Examples – TV, Mobiles, Appliances

Design
Procure Procure Quality Ship
Engineer Production
Sales Order Inputs Control Product
the Product

Examples – Aircrafts, DELL, Buildings, BMW, IT Projects

 Value Chain Framework
Core
Operations
Inbound Outbound Marketing and Customer
and
Logistics Logistics Sales Service
Manufacturing

Support

Human Technology
Administration Infrastructure Procurement
Resources Development
 Build the Information System

For a retail shop, what are the systems will you build?
a. Where do you store customer preferences?
b. Where do you store customer payments?
c. Where do you store product lists?
d. Vendor Lists?
e. Inventory of items
f. Shipping agencies
g. Returns Items?
h. Who speaks the local language here?
i. Who is monitoring the blogs?
j. Did someone mention GST?
 Information Systems
• Do you want to buy COTS or Build it from Scratch?
• Vanilla or Customized?
• Individual Systems or Enterprise Level?
• Dealing with Legacy Applications
• Mergers and Acquisitions of companies resulting in duplicate and
redundant systems
 Enterprise Systems Approach

Inbound Logistics Operations Outbound Logistics

Inventory Data Order Details Invoices

Database
What is common to all Enterprise Systems

• They have a work flow

• They have a database
• They have a user or application interface
 Enterprise Systems

Customer
Enterprise Supply Chain
Relationship
Resource Planning Management
Management
(ERP) Systems (SCM) Systems
(CRM) Systems
ERP Systems
Example of a ERP and its features
 Challenges with ERP

• Bulky
• More than 50% of projects exceeds budget
• Actual ROI is much less than Expected ROI
• Users need to be upskilled
• Expensive Consultants
 SaaS Model

• ERP on Cloud - Discussion

 Supply Chain Management

What is Supply Chain?

• Case Study: Thailand Floods and the Volcano in

Iceland
 Supply Chain Management

• Supplier Portals
• Just in Time
• B2B marketplace • Vendor Managed Inventory

• Customer Portals
• Web-API / EDI
 Optimizing the Supply Chain
Functions to optimize SCM
Demand Planning and Forecasting
Safety Stock Planning
Distribution Planning
Supply Network Collaboration
Materials Management
Manufacturing execution
Order Promising
Transportation
Warehouse Management
Supply Chain Analytics
 SCM Technologies

• XML / XBRL
• RFID vs Barcode
• Internet of Things
Customer Relationship Management

Managing
Business
Customer
Transaction
Relationship
 CRM

• The many avatars of customer

Customer Commuter Subscriber Diner User

Consumer Traveller Member Tourist Patron

Passenger Professional Employee Owner

Patient Audience Sportsman Insured

Shopper Purchaser Student Citizen

 Benefits of a CRM

Enables 24/7 Engagement

Individualized Service
Improved Insights
Faster Problem Resolution
Faster Processes
Improved Product Development and New Solutions
Better Planning
Improved integration
 CRM – Successful Strategy

• Policies and Business Process

• Customer Service
• Employee Training
• Data Collection and Analytics
 CRM – Architecture

Operational CRM Analytical CRM Collaborative CRM

• Sales Force • Customer • Effective

Automation Behaviour and communication
• Enterprise Perception with entire
Marketing • Personalization organization
Management and Localization • Customer
• Customer Service • Data Mining Communication
and Support • Social Media and collaboration
Integration
SalesForce.com
DEVELOPING AND ACQUIRING INFORMATION
SYSTEMS
 Ecosystem

The world of AppStores and ecosystems

 Business Case
Making a business case is the process of
• identifying the opportunity,
• quantifying the benefits GO / NOGO
• Quantifying the cost of making and
• Cost Benefit Analysis (ROI)
• Presenting the case
 Making a successful Business Case

Opportunity Costs Benefits ROI Presentation

• Faith - Instincts
• Fear – of not doing
• Fact – Backed with Data
• (Fiction) - Imagination
 Costs

Opportunity Costs Benefits ROI Presentation

• TCO – Total Cost of Ownership

– Acquisition, use and maintenance
– Tangible and Intangible costs
 Benefits

Opportunity Costs Benefits ROI Presentation

• Quantifying the benefits could be problematics due to

– Measurement Errors
– Time Lag
– Mismanagement
– Redistribution
• Tangible and Intangible benefits
 Cost-Benefit Analysis

Opportunity Costs Benefits ROI Presentation

• Net Present Value

analysis with Discount
Rate
• Competing Options /
Alternatives
• Decision Analysis
Strategy – Best Case,
Worst Case, Regret
Strategy
 Presenting your case

Opportunity Costs Benefits ROI Presentation

• Know your Audience – Steering, Management, User, IT

• Convert Benefits to Monetary Terms
• Measure what is important to management (Hot-button)
Other factors that impacts project selection

Perceived and Real Needs

List of Ongoing and

Potential Projects
Decision Outcomes
• Accept
Resource • Reject
Availability Selection • Delay
Decision • Refocus
• POC
Current Organization • MVP
Environment

Evaluation Criteria
 IS Development

• Customized vs COTS
• Open Source vs Licensed
• Outsource or in-house
• Waterfall, iterative, agile, rad
 Development Life Cycle

Systems Requirements
Design Development
Planning Analysis

Maintenance
Test Implementation
and Support
 Development Life Cycle

Requirements Maintenance
Systems Planning Design Development Test Implementation
Analysis and Support

• Project Plan, Timeline and Milestones

• Governance
• Stakeholders / Team
 Development Life Cycle

Requirements Maintenance
Systems Planning Design Development Test Implementation
Analysis and Support

• Requirements collection – interviews, questionnaire, surveys, observations, document

analysis
 Development Life Cycle

Requirements Maintenance
Systems Planning Design Development Test Implementation
Analysis and Support

• Joint application design

• Data Models
• Software Frameworks
• Business Rules / Logic
• User Interfaces
• Data and Logic Flow
 Development Life Cycle

Requirements Maintenance
Systems Planning Design Development Test Implementation
Analysis and Support

• Software Development
• Version Control and Collaboration
• Unit Testing
• Documentation
 Development Life Cycle

Requirements Maintenance
Systems Planning Design Development Test Implementation
Analysis and Support

• System and User Acceptance Testing

• Regression Tests
• Non-functional Testing like Stress and Performance Test, Penetration Testing
• Usability Tests
 Development Life Cycle

Requirements Maintenance
Systems Planning Design Development Test Implementation
Analysis and Support

• Soft and Hard application launch

• Running parallel and switchover/transition from old systems
• Post deployment support
 Development Life Cycle

Requirements Maintenance
Systems Planning Design Development Test Implementation
Analysis and Support

• Documentation and Handover to maintenance

• User Training
• Minor Enhancements