IT PRESENTATION

Q7-4. How do CRM, ERP, and EAI Support Enterprise Processes?

The Need for Business Process Engineering
(- The organizations realized that their existing business processes
needed to change, they needed to change to use the shared databases and
to use new computer-based forms and reports, important reason for
changing business processes was that integrated data and enterprise
systems offered the potential of substantial improvements in
process quality)
- What is business process reegineering?Business process reegineering
is the activity of altering existing and designing new business processes
to take advantage of new information systems.
(Unfortunately,) Business process reengineering is difficult, slow, and
exceedingly expensive. Because of the complexity involved, such
projects require highlevel, expensive skills and considerable time.
Personnel didn’t know if they were using the new system, the old system,
or some hacked-up version of both.(that why it difficult and expensive)
*Emergence of Enterprise Application Solutions:
- (Applications became more and more complex, in-house development
costs became infeasible).
- Systems built in-house are expensive not only because of their high
initial development costs, but also because of the continuing need to
adapt those systems to changing requirements.

- (Major reason why developing enterprise information system in-house

is expensive) In the early 1990s, the costs of business process
reengineering were coupled to the costs of in-house development, and
rganizations began to look more favorably on the idea of licensing
preexisting applications.
- PeopleSoft, Siebel, SAP- these are companies that offered standardized
business processes. These inherent processes, which are predesigned
procedures for using the software products, saved organizations from the
expense, delays, and risks of business process reengineering.
(( câu dẫn vô chủ đề )The stage was set for the emergence of enterprise
application solutions, which we discuss next.)

1/ CRM (customer relationship management)

This system is a suite of applications, a database, and a set of inherent
processes for managing all the interactions with the customer, from lead
generation to customer service .
- (Shows four phases of the customer life cycle: Chèn hình 296...
marketing, customer acquisition, relationship management, and
loss/churn:)
 +Marketing sends messages to the target market to attract
customer prospects.
+When prospects order, they become customers who need to be
supported. Additionally, relationship management processes increase the
value of existing customers by selling them more product. Inevitably,
over time the organization loses customers.
+When this occurs, win-back processes categorize customers
according to value and attempt to win back high-value customers.

(this is) - The major components of a CRM application: (chèn hình trang
297 -> liệt kê cái ô vàng đó ra:)
->>>(câu này đặt dưới hình) This design eliminates duplicated customer
data and removes the possibility of inconsistent data. It also means that
each department knows what has been happening with the customer at
other departments.
(chèn hình H7-10) --->( However, it will know to bend over backward for
customers that have generated hundreds of thousands of dollars of
business. CRM systems vary in the degree of functionality they provide.
You might be involved in just such a project during your career.)

2/ERP (Enterprise resource planning)

ERP is a suite of applications called modules, a database, and a set of
inherent processes . An ERP system is an information system based on
ERP technology
- The primary purpose of an ERP system is integration
- (To understand the utility of this integration, consider the pre-ERP
systems shown in Figure 7-11. (chèn hình 299).
(+ In this situation with such separated systems , even if parts can be
obtained, until the order is entered into the finished goods database,
purchasing is unaware of the need to buy new parts. The same comment
applies to manufacturing.
+Until the new order is entered into the manufacturing plan, the
Production department doesn’t know that it needs to increase
manufacturing. Some questions are raised) : (ghi dưới hình 7-11) Does
the company have sufficient machine and floor capacity to fill the order
on a timely basis? Does it have sufficient personnel with the correct skill
sets? Should it be hiring? Can production meet the order schedule? No
one knows before the order is approved.
- (Contrast this situation with the ERP system in Figure 7-12.(chen hinh
7-12)
(Here,) all activity is processed by ERP application programs (called
modules), and consolidated data are stored in a centralized ERP
database.)
+The information it needs to confirm that the order, schedule, and terms
are possible can be obtained from the ERP system immediately.
+ Once the order is accepted, all departments, including purchasing,
manufacturing, human resources, and accounting are notified.
+Further, transactions are posted to the ERP database as they occur; the
result is that financial statements are available quickly.
+ In most cases, correct financial statements can be produced in real time.
With such integration, ERP systems can display the current status of
critical business factors to managers and executives, as
shown in the sales dashboard in Figure 7-13. (rút ý trên pp)
“ERP Applications,” and assume that data integration takes all the
problems away. But it is far more difficult to write those application
programs and to design the database to store that integrated
data. Even more problematic, what procedures should employees and
others use to process those application programs? Here are some of the
questions that need to be answered or resolve..tuy nhiên trước khi tìm
hiểu kĩ hơn thì chúng ta hãy đến với EAL(enterprise application
integration) ( maybe bỏ đoạn này)
3/EAI (Enterprise Application Integration)
-ERP systems are not for every organization, companies for which ERP is
inappropriate still have the problems associated with information silos.
But EAI to solve those problems.
-WHAT IS EAI? -> EAI is a suite of software applications that
integrates existing systems by providing layers of software that connect
applications together.
- EAI does the following:
• It connects system “islands” via a new layer of software/system.
• It enables existing applications to communicate and share data.
• It provides integrated information.
• It leverages existing systems—leaving functional applications as is but
providing an integration layer over the top.
• It enables a gradual move to ERP
Chèn hình 304....the layers of EAI software shown in Figure 7-14 enable
existing applications to communicate with each other and to share data.
(diễn tả hình 7-14)--->The CRM system sends its data to an EAI software
program. That EAI program makes the conversion and then sends the
converted data to the ERP system. The reverse action is taken to send
data back from the ERP to the CRM.
+The major benefit of EAI is that it enables organizations to use existing
applications while
remove many of the serious problems of isolated systems.
+Some organizations develop EAI applications as a stepping stone to
complete ERP systems.
 DIFFERENCE OF CRM, ERP AND EAL:
- ERP software has a wider scope than CRM software(Some ERP
systems include a CRM component, while others do not, but CRM
software systems do not include ERP components)

-CRM is designed to help businesses manage their customer data and

interactions. ERPt is a bit more all-encompassing. Its designed to help
businesses manage their core business processes, from accounting and
HR to inventory and manufacturing.

-ERM and CRM software have similar operational systems, CRM and
ERP programs also can have the same deployment methods.

-ERP is a system that connects different functions of the organization.

Whereas, an EAI connects the applications which are run by the system
and enables a communication path for them to share information.

THE SIMILAR BETWEEN CRM AND ERP:

- (explain why the natural CRM ERP similar than EAI) An EAI is
essentially an integration that is responsible to take care of the data
produced. It uses this data in different ways which include marketing,
content integration, and web service integration. Transfer of data and
information across multiple channels is possible through EAI.
-ERM and CRM software have similar operational systems, CRM and
ERP programs also can have the same deployment methods
+ERP and CRM are both business applications that store and analyze
data in a relational database. Both are delivered either through a
traditional on-premises model or through software as a service, where the
vendor manages the software in its own data center and customers access
it through the cloud.
-->(So we can conclude that CRM and ERP is more similar to each
other than that of EAI)

Q7-5. WHAT ARE THE ELEMENTS OF AN ERP SYSTEMS?

The elements of an ERP system are:
 Supply chain (procurement, sales order processing, inventory
management, supplier management, and related activities)
 Manufacturing (scheduling, capacity planning, quality control, bill of
materials, and related activities)
 CRM- customer realtionship management (sales prospecting,
customer management, marketing, customer support, call center
support)
 Human resources (payroll, time and attendance, HR management,
commission calculations, benefits administration, and related
activities)
 Accounting (general ledger, accounts receivable, accounts payable,
cash management, fixed asset accounting)
(An ERP solution is an information system and, as such, has all five
components. We consider each in turn.)

Five components are:

1/ HARDWARE: Traditionally, organizations hosted ERP
solutions on their own in-house, networked server computers. Such
hosting is still the case for many large ERP applications, as well as for
those ERP applications that were installed years ago and for which the
hardware infrastructure is stable and well managed.
-Increasingly, organizations are turning to cloud-based hosting in
one of two modes:
• PaaS: Replace an organization’s existing hardware
infrastructure with hardware in the cloud. Install ERP software and
databases on that cloud hardware. The using organization
then manages the ERP software on the cloud hardware.
• SaaS: Acquire a cloud-based ERP solution. SAP, Oracle,
Microsoft, and the other major ERP vendors offer their ERP software as a
service. The vendor manages the ERP software and offers it to customers
as a service.
2/ ERP application programs: ERP vendors design application
programs to be configurable so that development teams can alter them to
meet an organization’s requirements without changing program code.
If a new ERP customer has requirements that cannot be met via
program configuration, then it needs to either adapt its business to what
the software can do or write application code to meet its requirements.
(In addition, as stated in Chapter 4 such) Custom programming is
expensive, both initially and in long-term maintenance costs.
(SO , choosing an ERP solution with applications that function close to
the organization’s requirements is critical to its successful
implementation.)

3/ ERP Databases : An ERP solution includes a database design as

well as initial configuration data. It does not, of course, contain the
company’s operational data.
-(If your only experience with databases is creating a few tables in
Microsoft Access, then you probably underestimate the value and
importance of ERP database designs).
 - SAP, the leading vendor of ERP solutions, provides ERP
databases that contain more than 15,000 tables.
Large organizational databases contain two types of program code:
 The first, called a trigger: is a computer program stored within the
database that runs to keep the database consistent when certain
conditions arise.
 The second, called a stored procedure: is a computer program stored
in the database that is used to enforce business rules.
(Another component of an ERP solution is a set of inherent
procedures that implement standard business processes)
4/ Business Process Procedure:- (Figure 7-15 shows a part of the
SAP ordering business process): chèn hình ( let’s see this picture)

(giai thich hinh) Every function (rounded rectangles in Figure 7-15)

consists of a set of procedures for accomplishing that function. Typically,
these procedures require an ERP user to use application menus, screens,
and reports to accomplish the activity.
5/ TRAINING AND CONSUILTING
TRAINING:
(- Because of the complexity and difficulty of implementing and using
ERP solutions, ERP vendors have developed training curricula and
numerous classes)
ERP training falls into two broad categories:
 The first category is training about how to implement the ERP
solution: This training includes topics such as obtaining top-level
management support, preparing the organization for change, and
dealing with the inevitable resistance that develops when people are
asked to perform work in new ways.
 The second category is training on how to use the ERP application
software; this training includes specific steps for using the ERP
applications to accomplish the activities in processes such as those in
Figure 7-15.
CONSULTING:
+ ERP vendors also provide on-site consulting for implementing and
using the ERP system. Additionally, an industry of third-party ERP
consultants has developed to support new ERP customers and
implementations.
+These consultants provide knowledge gained through numerous
ERP implementations. (having done so, they now know how to do it.
Consequently, some employees, seasoned by an ERP conversion with
their employer, leave that company to become ERP consultants.)
6/ Industry-Specific Solutions:
- To reduce considerable work , ERP vendors provide starter kits for
specific industries called industry-specific solutions.
- These solutions contain program and database configuration files as
well as process blueprints that apply to ERP implementations in specific
industries
7/Which Companies Are the Major ERP Vendors?
 (Although more than 100 different companies advertise ERP
products, but not all of those products meet the minimal ERP criteria)
(the bulk of the market is held by the five vendors shown in Figure 7-
16)]
 LIST THE TOP 5 ERP VENDORS IN DECREASING ORDER OF
MARKET SHARE: (liet ke company, chen hinh 7-16)
(giai thich hinh):
 Infor is owned by private equity investors and does not publish
financial data. Its ranking is based on what little sales data is publicly
available.
 Microsoft’s ERP revenue is combined with its CRM revenue, and its
true ERP revenue is unknown.
 (Similarly) Oracle and SAP combine ERP revenue with revenue
from other products.
 Sage revenue is an amalgam of ERP, CRM, and financial-oriented
functional solutions.
 LIST THE TOP 5 ERP VENDORS IN DECREASING ORDER OF
MARKET SHARE:
- Info
- Microsoft
- SAP
-Oracle
-Sage
-Microsoft Dynamics
..(chèn hình 7-16)

Q7-6. What Are the Challenges of Implementing and

Upgrading Enterprise Information Systems?
(Implementing new enterprise systems, whether CRM, ERP, or EAI, is
challenging, difficult, expensive, and risky. Whether from a new
implementation or an upgrade, expense and risks arise from five primary
factors (see Figure 7-17).) : chèn hình 7-17
Five primary factors:
 Collaborative Management:
-Unlike departmental systems in which a single department manager is in
charge, enterprise systems have no clear boss
-There is no manager of discharge, all of these departments ultimately
report to the CEO, so there is a single boss over all of them, but
employees can’t go to the CEO with a problem. Instead, the organization
needs to develop some sort of collaborative management for resolving
process issues.
- In fact may be the only solution, the work of such groups is both slow
and expensive.
 Transition problem:
Transitioning to a new enterprise system is also difficult. The
organization must somehow change from using isolated departmental
systems to using the new enterprise system. Such transitions require
careful planning and substantial training.
 Employee Resistance:
- REASON:
+ Change requires effort and engenders fear.
+Employees fear change because it threatens self-efficacy, which is a
person’s belief that he or she can be successful at his or her job.
+Many of the employees who are asked to change their activities to
implement ERP will not receive any direct benefit from it.
(SO.. How organizations can deal with it?)
- SOME WAYS OF RESPONDING TO THAT RESISTANCE
+ Senior-level management needs to communicate the need for the
change to the organization and reiterate this as necessary, throughout the
transition process.
+ To enhance confidence, employees need to be trained and coached on
the successful use of the new system.
+ Employees may need to be given extra inducement to change to the
new syste.
+ Straightout pay for change is bribery but contests with cash prizes
among employees or groups can be very effective at inducing change.
 New Technology:
-New technology affects all information systems, but it affects enterprise
systems particularly because of their importance and their value.
(example :Employees want to use mobile devices to access and even
modify enterprise system data. But mobile devices are just that-mobile.
The enterprise system may be exposed to considerable risk while outside
the control of the organization. And ERP data is a juicy target for crime )

-These factors don’t mean organizations cannot use new technology with
enterprise systems, but they do add challenges.