Chapter 7

Question 1

Competitive edge through systems

Answer 1

1. changing the product - introducing new products/services or enhancing them
2. Business process - companies use tec to lower cost, create barriers for other companies and lock in customers

Question 2

Functional Systems

Answer 2

• transfers work of single departments
• work independently from each other
• effective as independent functions
• not efficient working with other processes
  Ex. finance - HR - marketing/sales - production

Question 3

Problems with Functional systems

Answer 3

• data duplication
• inefficient, make decisions with limited knowledge
• Business process disjointed, lack of data integration
• Increased overall costs and lost opportunities*

Question 4

Enterprise Application Integration (EAI)

Answer 4

• functional systems can be addressed by EAI
• Software layer, allows sharing of data across multiple functional systems
• Band-Aid solution for multiple functional systems (cheap)

Question 5

Challenges of Business Process Design (redesign)

Answer 5

• Expensive and difficult
• takes a long time
• Employees resist change
• outcome uncertain

Question 6

Benefits of Industry-standard process

Answer 6

• integrate activities across departments
• reduce costs
• efficient and effective
• ex. Oracle and SAP

Question 7

Problems of Industry-standard process

Answer 7

• could be very different from existing processes in the company; * don’t change source code*
• major change to the company

Question 8

Cross-function systems

Answer 8

1. Enterprise resource planning (ERP)

2. Customer Relationship Management (CRM)

Question 9

ERP characteristics

Answer 9

• designed around the best practice for a particular function
• helps companies automate steps instead of doing everything manually
• help employees remember the steps in a process and show data to all who needs it
• very complex
• one change of the processes may disturb other modules

Question 10

Benefits of ERP

Answer 10

• inventory reduction
• better customer service
• higher profitability
• efficient business processes

Question 11

Benefits of CRM

Answer 11

• turn raw data into useful information is what CRM is best at
• collects all customer info from every department and provides the company customer contact points
• companies can now cater to the customers that offer the most profitability

Question 12

CRM components

Answer 12

• Solicitation; generates prospects via messages to target market,
• Lead Tracking; track sales, customer response and contacts
• Relationship management;
  1. Max the value of the existing customer base.
  2. Customer support application - manage orders, track customer problems.
  3. Sales management application - increase sales to customers, prioritize customers using purchase history.

Question 13

Business Value of CRMs

Answer 13

• lower cost of customer acquisition
• increase sales
• better response to customer needs (customer satisfaction)
• reduce marketing costs

Question 14

Inter-organizational systems

Answer 14

• are crossed-functional systems used by two or more related companies (companies and their suppliers)
  ex. supply chain management (SCM)