Questions Related to Enterprise e-Business Systems

ANSWERS TO DISCUSSION QUESTIONS

1.            Should a company become a customer-focused business?  Why or why not?

It is a well-known fact that to survive in today’s competitive environment, companies have no choice but to be become customer-focused.  No longer can companies expect to rely on traditional methods of buying and selling of their products to suppliers, intermediaries or channel members.  The channels have changed, and companies are closer to the consumer who is the actual user of the product.  Technology is increasingly being used in the marketplace (marketspace) to reach these consumers and businesses have come to realize that the relationships that they build with these consumers are their most valuable assets.  Today’s consumers can quickly change from one company’s product offering to other companies with a click of a mouse.  As such, a customer-focused business is one that will more likely have a competitive advantage.  A customer-focused business strategy is not a matter of choice  - rather it is a matter of necessity, and technology makes this possible.  CRM allows a business to identify and target their best customers, those who are the most profitable to the business, so they can be retained as lifelong customers for greater and more profitable services.  It makes possible real-time customisation and personalization of products and services based on customer wants, needs, buying habits, and life cycles.  CRM can also keep track of when a customer contacts the company, regardless of the contact point.  And CRM systems can enable a company to provide a consistent customer experience and superior service and support across all the contact points a customer chooses.  These benefits provide strategic business value to a company and major customer value to its customers.

2.      Why would systems that enhance a company’s relationships with customers have such a high rate of failure?

Customer relationships management systems are very complex systems to develop.  Many failures happen when firms try to create a cross-functional enterprise system that will integrate and data from a wide array of departments into one system.  For example, integrating data from sales, marketing, manufacturing, customer service etc. is a daunting task.  e enterprise.  Organizations view cross-functional enterprise systems as a strategic way to use IT to share information resources and improve the efficiency and effectiveness of business processes, thus helping an e-business attain its strategic objectives.  Building such seamless CRM systems to enable employees to see a “total picture” of a customer is difficult.   Research shows that the major reason for high failure rates is lack of understanding and preparation.  For example, many CRM projects are implemented without the proper participation of the business stakeholders involved – both employees and customers are not prepared for the new processes or challenges that are part of a new CRM implementation.

3.      How could some of the spectacular failures of ERP systems have been avoided?

In answering this question, students could first start out by stating the most common causes of failed systems, then make suggestions as to how to avoid them such as knowing what you want the system to do, involve people, understand change management, hire consultants with proven track records, conduct extensive conversion and data testing etc.

Failures of ERP systems as stated in the text include: Business managers and IT professionals have been the major cause of ERP failures.  The reason given is that these individuals underestimate the complexity of the planning, development, and training that are needed to prepare for a new ERP system that would radically change their business processes and information systems.  Failure to involve affected employees in the planning and development phases and change management programs, or trying to do too much too fast in the conversion process, are also typical causes of failed ERP projects.  Insufficient training in the new work tasks required by the ERP system, and failure to do enough data conversion and testing, are other causes of failure.  In other cases, ERP failures are also due to overreliance by company or IT management on the claims of ERP software vendors or the assistance of prestigious consulting firms hired to lead the implementation.

4.      How can problem of overenthusiastic demand forecasts in supply chain planning be avoided?

Implementing collaborative SCM systems is a very complex undertaking.  A lack of proper demand planning knowledge, tools, and guidelines are stated as major sources of SCM failure.  Inaccurate and overenthusiastic demand forecasts will cause major production, inventory, and other business problems, no matter how efficient the rest of the supply chain management process is constructed.  Inaccurate production, inventory, and other business data provided by a company’s other information systems are a frequent cause of SCM problems.  Any lack of adequate collaboration among marketing, production, and inventory management departments within a company, and with suppliers, distributors, and others, will sabotage any SCM system. Even the SCM software tools themselves are considered to be immature, incomplete, and hard to implement by many companies who are installing SCM systems.

Given this information, students will provide suggestions to correct the problem of overenthusiastic demand forecasts by make suggestions such as ensuring that systems currently in place are capturing real-time and correct data.  Also, getting everyone on board of the project early so that problems can be identified before implementation.  Conversion, testing, training, etc should be carefully conducted to correct problems.

5.            What challenges do you see for a company that wants to implement collaborative SCM? How          would you meet such challenges?

Creating a real-time SCM infrastructure is a daunting and ongoing issue and quite often, a point of failure.  As stated in the text, one of the chief reasons of the failure of SCM systems is that the planning, selection, and implementation of SCM solutions is becoming even more complex as the pace of technological change accelerates and the number of company’s partners increases.

6.      Should companies install e-business software suites or “best of breed” e-business software components?  Why?

e-business suites are defined as an integrated system of software modules for customer relationship management, enterprise resource planning, supply chain management, and other business applications.    The major ERP software companies have developed modular, Web-enabled software suites that integrate ERP, CRM, SCM, procurement, decision support, enterprise portals, and other business applications and functions.  The goal of these software suites is to enable companies to run most of their business using one Web-enabled system of integrated software and databases, instead of a variety of separate e-business applications.  The answer to this question could go either way.  For companies that know what they are doing, and how to use these suites they integration of is probably a good move as they should operate seamlessly without any major problems.  However, for companies who really don’t know how to operate any of these components, this is no magic cure or recipe to their problems.  In fact, for these companies it may cause even major problems as they will be ill prepared for such a challenge.