Chapter 3
Strategic Initiatives for Implementing
Competitive Advantage
Using IT to gain a competitive advantage
• Businesses use IT to give themselves a
– Customers
product or service.
• Major initiatives
– Supply chain management (
)
– Customer relationship management (
– Business process reengineering (
)
– Enterprise resource planning ( )
)
Supply Chain Management
• Supply Chain Management (SCM) – involves the
between and
among stages in a supply chain to maximize total
supply chain effectiveness and profitability.
• Players in the supply chain include:
–S
– Manufacturers and distributors
–C
–A
, from the order
being made until its delivery to the customer
Supply Chain Management
•
Four basic components of supply chain management
include:
1. Supply chain strategy – strategy for managing all resources
to meet customer demand
2. Supply chain partner – partners throughout the supply
chain that deliver finished products, raw materials, and
services.
3. Supply chain operation – s
4. Supply chain logistics – p
Supply Chain Management
• Wal-Mart and Procter & Gamble (P&G) SCM
Supply Chain Management
• Effective and efficient SCM systems can enable an
organization to:
– Decrease the
–I
its own
– Increase
to reduce the threat of substitute
products or services
–C
thereby reducing the threat of new
entrants
–I
while seeking a competitive
advantage
Customer Relationship Management
• Customer relationship management (CRM) – involves
managing
to increase customer loyalty and
retention and an organization's profitability
• CRM is not just technology, but a
and business goal that an organization must embrace on
an enterprise wide level
• CRM can enable an organization to:
–
–
–
–
Identify types of customers
Design
Treat
Understand
Customer Relationship Management
• Customers contact organizations multiple times
through numerous channels and CRM systems
allow each
of these
contacts
to be
and
Enterprise Resource Planning
• Enterprise resource planning (ERP) – integrates
throughout an
organization into a
so
that employees can make decisions by viewing
enterprise wide information on all business
operations (
)
• Keyword in ERP is “
– SCM systems focus specifically on
– CRM systems focus specifically on
– ERP systems focus on
departments and operations
”
processes,
Attention Students:
Add your own details to the info found on the next
slide since it contains a picture without any blanks.
Add details about what is being illustrated and by the
spreadsheets and the problems that might present, as
well as how using an ERP system might resolve those
issues.
We don’t need this ERP stuff. We
already have enterprise wide
software that we are all using. It is
called a SPREADSHEET.
S
a
l
e
s
A
c
c
t
g
Enterprise Resource Planning
• ERP systems
from across an
organization and correlates the data generating an
that is consistent and
• Common
• C
required
• Real time
• Consistent
• O
Business Process Improvement
and Reengineering
• B
– a standardized set of activities
that
, such as
processing a customer’s order
• Business process
(BPIR and/or BPR) – the analysis and
within and between enterprises
– The purpose of BPR is to make all business processes best-in-class
– How can we do things better and more efficiently? Is there a
• Try to avoid the
• Maybe we need to start with a
Finding Opportunity Using BPR
• A company can improve the
way it travels the road by
moving from foot to horse
and then horse to car
– Follow the same path as
before, but just do it faster
• BPR looks at
, such as an
airplane which ignore the
road completely
Attention Students:
Add your own details to the info found on the
next slide since it contains a picture without any
blanks.
I would add details about what is seen in the
picture
Finding Opportunity Using BPR
• Types of change
an organization
can achieve, along
with the
magnitudes of
change and the
potential business
benefit
In Summary
• Information Technology can be an important
of business success and innovation.
• Information Technology is
it
the talents of
when
• In order for this to happen, you must have an
of the entire business
operation.