Chapter 11: Enterprise Applications and Business Process ...
Chapter 11
Enterprise Applications and Business Process Integration
True-False Questions
| |Enterprise software allows data to be used by multiple functions and business processes for precise organizational |
| |coordination and control. |
| | |
| |Answer: True Difficulty: Easy Reference: p. 380 |
| |Companies can use state transition diagrams provided by the enterprise software to tailor a particular aspect of the system |
| |to the way it does business. |
| | |
| |Answer: False Difficulty: Hard Reference: p. 381 |
| |Major enterprise software vendors include SAP, Oracle, PeopleSoft, and Baan. |
| | |
| |Answer: True Difficulty: Medium Reference: p. 383 |
| |Enterprise systems use a client/server architecture and have not yet been redesigned to take advantage of the Web. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 383 |
| |When doing business worldwide, enterprise-enabled organizations use enterprise systems to emphasize functional boundaries and|
| |deemphasize cross-functional coordination. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 383 |
| |Enterprise systems can improve management reporting and decision making. |
| | |
| |Answer: True Difficulty: Easy Reference: p. 384 |
| |The upstream portion of the supply chain consists of the organizations and processes for distributing and delivering products|
| |to the final customers. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 386 |
| |Supply chains in large manufacturing companies are multitiered. |
| | |
| |Answer: True Difficulty: Medium Reference: p. 387 |
| |The Supply Chain Council developed a Supply Chain Operations Reference Model as a -process reference model for supply chain |
| |management for the transportation industry. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 386 |
| |SCOR identifies five major supply chain processes: organize, research, plan, deliver, and return. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 386 |
| |Logistics accounts for 12 to 14 percent of a typical manufacturer’s cost of goods sold. |
| | |
| |Answer: True Difficulty: Medium Reference: p. 387 |
| |Supply chain inefficiencies can waste as much as 25 percent of a company’s operating costs. |
| | |
| |Answer: True Difficulty: Medium Reference: p. 387 |
| |Low inventory acts a buffer for the lack of flexibility in the supply chain. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 387 |
| |Ripple effect is the distortion of information about the demand for a product as it passes from one entity to the next across|
| |the supply chain. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 387 |
| |Supply chain execution systems enable the firm to generate demand forecasts for a product and to develop sourcing and |
| |manufacturing plans for that product. |
| | |
| |Answer: False Difficulty: Hard Reference: p. 388 |
| |A metric is a standard measurement of performance. |
| | |
| |Answer: True Difficulty: Easy Reference: p. 389 |
| |Throughput is the total elapsed time to complete a business process. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 389 |
| |In the pre-Internet environment, supply chain coordination was hampered by the difficulties of making information flow |
| |smoothly among different internal supply chain processes. |
| | |
| |Answer: True Difficulty: Easy Reference: p. 389 |
| |Intranets can be used to integrate information from isolated business processes within the firm to help them manage their |
| |internal supply chains. |
| | |
| |Answer: True Difficulty: Easy Reference: p. 390 |
| |The Internet provides a standard set of tools that can be used by companies all over the world to coordinate overseas |
| |sourcing, transportation, communications, financing, and compliance with customs regulations. |
| | |
| |Answer: True Difficulty: Medium Reference: p. 391 |
| |In a push-based model, actual customer orders or purchases trigger events in the supply chain. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 391 |
| |In a pull-based model, production master schedules are based on forecasts of demand for products. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 391 |
| |Dell Computers is an example of a push-based model. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 392 |
| |Total supply chain costs represent the majority of operating expenses for many businesses and in some industries approach 75 |
| |percent of the total operating budget. |
| | |
| |Answer: True Difficulty: Hard Reference: p. 393 |
| |Customer relationship management can help organizations identify customers who cost a lot to attract and to keep. |
| | |
| |Answer: True Difficulty: Hard Reference: p. 393 |
| |Cross-selling markets complementary products to customers. |
| | |
| |Answer: True Difficulty: Easy Reference: p. 395 |
| |Major CRM application software vendors include Siebel Systems, Clarify, and . |
| | |
| |Answer: True Difficulty: Easy Reference: p. 394 |
| |Bundling is one kind of cross-selling in which a combination of products is sold as a bundle at a price higher than the total|
| |cost of the individual products.. |
| | |
| |Answer: False Difficulty: Easy Reference: p. 395 |
| |Siebel Systems is the market-leading vendor of customer relationship management software. |
| | |
| |Answer: True Difficulty: Easy Reference: p. 395 |
| |Single-channel customers are known to have a higher lifetime value than multichannel customers. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 397 |
| |Analytical CRM uses a customer data warehouse and tools to analyze customer data collected from the firm’s customer touch |
| |points and from other sources. |
| | |
| |Answer: True Difficulty: Medium Reference: p. 398 |
| |When building an enterprise system, the benefits are easily quantified at the beginning of the project. |
| | |
| |Answer: False Difficulty: Easy Reference: p. 399 |
| |SAPs mySAP and Oracle’s e-Business Suite are both examples of software vendors that have developed Web-enabled software for |
| |enterprise solutions. |
| | |
| |Answer: True Difficulty: Easy Reference: p. 399 |
|` |A service such as order-to-cash requires data from enterprise applications and financial systems to be further integrated |
| |into an enterprise-wide composite process. |
| | |
| |Answer: True Difficulty: Medium Reference: p. 401 |
| |SAP’s version of cross-application services is called XRP. |
| | |
| |Answer: False Difficulty: Hard Reference: p. 401 |
| |The costs of enterprise systems are moderate compared to the benefits they achieve, are not noticeable, and often incur |
| |political support. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 403 |
| |One of the challenges associated with enterprise systems is realizing strategic value. |
| | |
| |Answer: True Difficulty: Medium Reference: p. 405 |
| |Primary advantages of enterprise systems include their ease of implementation and flexibility. |
| | |
| |Answer: False Difficulty: Medium Reference: p. 405 |
| |Enterprise systems require changes in business processes, organizational structure, and organizational culture. |
| | |
| |Answer: True Difficulty: Medium Reference: p. 406 |
| |Many firms embracing CRM underestimate the extent to which every facet of the enterprise must be involved and integrated into|
| |the customer relationship. |
| | |
| |Answer: True Difficulty: Medium Reference: p. 403 |
Multiple-Choice Questions
| |A set of integrated software modules for finance and accounting, human resources, manufacturing and production, and sales and|
| |marketing that allows data to be used by multiple functions and business processes best describes: |
| | |
| |a. process management software . |
| |b. enterprise software. |
| |c. collaboration software. |
| |d. application software. |
| | |
| |Answer: b Difficulty: Medium Reference: p. 380 |
| |This type of software enables data to be used by multiple functions and business processes for precise organization |
| |coordination and control: |
| | |
| |a. groupware. |
| |b. application software. |
| |c. collaboration software. |
| |d. enterprise software. |
| | |
| |Answer: d Difficulty: Medium Reference: p. 380 |
| |This software is built around thousands of predefined business processes: |
| | |
| |a. process management software |
| |b. collaboration software. |
| |c. enterprise software. |
| |d. groupware software. |
| | |
| |Answer: c Difficulty: Medium Reference: p. 381 |
| |Process maps or reference models provided by enterprise software vendors are based on business process knowledge and: |
| | |
| |a. cross-selling. |
| |b. best practices. |
| |c. metrics. |
| |d. push-models. |
| | |
| |Answer: b Difficulty: Medium Reference: p. 381 |
| |The most successful solutions or problem-solving methods for consistently and effectively achieving a business objective best|
| |describes: |
| | |
| |a. business module. |
| |b. formal system. |
| |c. business process. |
| |d. best practices. |
| | |
| |Answer: d Difficulty: Medium Reference: p. 381 |
| |When tailoring a particular aspect of a system to the way a company does business, enterprise software can provide the |
| |company with: |
| | |
| |a. configuration tables. |
| |b. project workbooks. |
| |c. data dictionaries. |
| |d. state transition diagrams. |
| | |
| |Answer: a Difficulty: Medium Reference: p. 381 |
| |Nestlé SA, installed a ______________________ enterprise system as a way of standardizing and coordinating its business |
| |processes in 500 facilities in 80 countries. |
| | |
| |a. SAP R/3 |
| |b. Oracle |
| |c. Baan |
| |d. PeopleSoft |
| | |
| |Answer: a Difficulty: Hard Reference: p. 384 |
| |A network of organizations and business processes for procuring raw materials, transforming these materials into intermediate|
| |and finished products, and distributing the finished products to customers is called a: |
| | |
| |a. distribution channel. |
| |b. supply chain. |
| |c. value chain. |
| |d. marketing chain. |
| | |
| |Answer: b Difficulty: Medium Reference: p. 385 |
| |The Supply Chain Council developed a cross-industry process reference model for supply chain management called: |
| | |
| |a. SCOR. |
| |b. SCCM. |
| |c. TCP/IP. |
| |d. MRP. |
| | |
| |Answer: a Difficulty: Hard Reference: p. 386 |
| |According to SCOR, the source process: |
| | |
| |a. consists of processes associated with returning products or receiving returned products, including postdelivery customer |
| |support. |
| |b. consists of processes that provide finished goods and services to meet actual or planned demand, including order |
| |management, transportation management, and distribution management. |
| |c. consists of processes that transform a product into a finished state to meet planned or actual demand. |
| |d. consists of processes that procure goods and services needed to create a specific product or service. |
| | |
| |Answer: d Difficulty: Medium Reference: p. 386 |
| |Planning and control of all factors that will have an impact on transporting a product or service best defines: |
| | |
| |a. acquisition. |
| |b. research and development. |
| |c. logistics. |
| |d. procurement. |
| | |
| |Answer: c Difficulty: Medium Reference: p. 387 |
| |A scheduling system for minimizing inventory by having components arrive exactly at the moment they are needed and finished |
| |goods shipped as soon as they leave the assembly line best describes: |
| | |
| |a. just-in-time. |
| |b. stockless inventory. |
| |c. ASAP inventory. |
| |d. replenishment-only inventory. |
| | |
| |Answer: a Difficulty: Medium Reference: p. 387 |
| |A distortion of information about the demand for a product as it passes from one entity to the next across the supply chain |
| |is called: |
| | |
| |a. bullwhip effect. |
| |b. ripple effect. |
| |c. replenishment effect. |
| |d. exponential effect. |
| | |
| |Answer: a Difficulty: Medium Reference: p. 387 |
| |Supply chain software can be classified as: |
| | |
| |a. supply chain source systems and supply chain recovery systems. |
| |b. supply chain make systems and supply chain delivery systems. |
| |c. supply chain return systems and supply chain make systems. |
| |d. supply chain planning systems and supply chain execution systems. |
| | |
| |Answer: d Difficulty: Medium Reference: p. 388 |
| |Supply chain planning systems: |
| | |
| |a. track the physical status of goods. |
| |b. identify the transportation mode to use for product delivery. |
| |c. track the financial information involving all parties. |
| |d. track the status of orders |
| | |
| |Answer: b Difficulty: Hard Reference: p. 389 |
| |Supply chain execution systems: |
| | |
| |a. schedule product subassemblies |
| |b. help the company determine how much of a specific product to manufacture in a given time period. |
| |c. enable the firm to generate demand forecasts for a product. |
| |d. develop sourcing and manufacturing plans to determine how much of a specific product to manufacture in a given time |
| |period. |
| | |
| |Answer: a Difficulty: Hard Reference: p. 389 |
| |Systems that enable a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for |
| |that product best describes: |
| | |
| |a. supply chain demand systems. |
| |b. supply chain delivery systems. |
| |c. supply chain planning systems. |
| |d. supply chain execution systems. |
| | |
| |Answer: c Difficulty: Medium Reference: p. 388 |
| |Systems to manage the flow of products through distribution centers and warehouses to ensure that products are delivered to |
| |the right locations in the most efficient manner best describes: |
| | |
| |a. supply chain demand systems. |
| |b. supply chain delivery systems. |
| |c. supply chain planning systems. |
| |d. supply chain execution systems. |
| | |
| |Answer: d Difficulty: Medium Reference: p. 389 |
| |Capabilities of supply chain planning systems would not include: |
| | |
| |a. replenishment. |
| |b. advanced scheduling and manufacturing planning. |
| |c. demand planning. |
| |d. order planning. |
| | |
| |Answer: a Difficulty: Medium Reference: p. 390 |
| |A standard measurement of performance best describes: |
| | |
| |a. metric. |
| |b. component cycle. |
| |c. MIPS. |
| |d. cycle. |
| | |
| |Answer: a Difficulty: Medium Reference: p. 389 |
| |Which of the following is NOT for measuring supply chain performance: |
| | |
| |a. Delta-normal. |
| |b. fill rate. |
| |c. cycle time for sourcing. |
| |d. forecast accuracy. |
| | |
| |Answer: a Difficulty: Medium Reference: p. 389 |
| |A standard set of tools that can be used by companies all over the world to coordinate overseas sourcing, transportation, |
| |communications, financing, and compliance with customs regulations would be: |
| | |
| |a. the Internet. |
| |b. an intranet. |
| |c. an extranet. |
| |d. WAN. |
| | |
| |Answer: a Difficulty: Easy Reference: p. 391 |
| |A supply chain driven by actual customer orders or purchases so that members of the supply chain produce and deliver only |
| |what customers have ordered best describes: |
| | |
| |a. pull-based model. |
| |b. innovation-based model. |
| |c. push-based model. |
| |d. replenishment-based model. |
| | |
| |Answer: a Difficulty: Medium Reference: p. 391 |
| |Companies with effective supply chain management systems can expect: |
| | |
| |a. improved customer service and responsiveness. |
| |b. cost reduction. |
| |c. cash utilization. |
| |d. All of the above |
| | |
| |Answer: d Difficulty: Easy Reference: p. 393 |
| |“Good” customers represent about ___________________ percent of the company’s profits but they represent only 10 to 20 |
| |percent of the company’s customer base. |
| | |
| |a. 45 to 55 |
| |b. 55 to 65 |
| |c. 50 to 80 |
| |d. 80 to 90 |
| | |
| |Answer: d Difficulty: Easy Reference: p. 393 |
| |It is estimated that it can cost up to ____________________ times as much to acquire a new customer as to keep an old |
| |customer. |
| | |
| |a. five |
| |b. six |
| |c. eight |
| |d. ten |
| | |
| |Answer: b Difficulty: Easy Reference: p. 394 |
| |A method of firm interaction with a customer, such as telephone, e-mail, customer service desk, conventional mail, or point |
| |of purchase best describes: |
| | |
| |a. point of presence. |
| |b. touch point. |
| |c. market entry. |
| |d. channel point. |
| | |
| |Answer: b Difficulty: Medium Reference: p. 394 |
| |Which of the following deals with employee issues that are closely related to CRM, such as setting objectives, employee |
| |performance management, performance-based compensation, and employee training? |
| | |
| |a. Enterprise systems software |
| |b. Employee relationship management software |
| |c. Supply chain management software |
| |d. Customer relationship management software |
| | |
| |Answer: b Difficulty: Easy Reference: p. 394 |
| |Cross-selling in which a combination of products is sold as a bundle at a price lower than the total cost of the individual |
| |products best describes: |
| | |
| |a. collaborative marketing. |
| |b. up-selling. |
| |c. discount selling. |
| |d. bundling. |
| | |
| |Answer: d Difficulty: Easy Reference: p. 395 |
| |The marketing of elevated-value products or services to new or existing customers is referred to as: |
| | |
| |a. cross over selling. |
| |b. up-selling. |
| |c. discount selling. |
| |d. bundling. |
| | |
| |Answer: b Difficulty: Easy Reference: p. 395 |
| |This company is the market-leading vendor of customer relationship management software: |
| | |
| |a. IBM. |
| |b. Microsoft. |
| |c. Siebel Systems. |
| |d. J. D. Edwards. |
| | |
| |Answer: c Difficulty: Easy Reference: p. 395 |
| |Verizon sells telephone services that include local and long-distance service, voice mail service, caller identification, and|
| |digital subscriber line access to the Internet. This is a form of: |
| | |
| |a. up-selling. |
| |b. bundling. |
| |c. customer relationship management. |
| |d. cross-marketing |
| | |
| |Answer: b Difficulty: Easy Reference: p. 395 |
| |Customer relationship management applications dealing with the analysis of customer data to provide information for improving|
| |business performance best describes: |
| | |
| |a. operational customer relationship management applications. |
| |b. analytical customer relationship management applications. |
| |c. supply chain management applications. |
| |d. generic customer relationship management applications. |
| | |
| |Answer: b Difficulty: Medium Reference: p. 397 |
| |Measurement of the number of customers who stop using or purchasing products or services from a company; it is used as an |
| |indicator of the growth or decline of a firm’s customer base best describes: |
| | |
| |a. turnover rate. |
| |b. churn rate. |
| |c. decline rate. |
| |d. asset turns. |
| |e. fill rate. |
| | |
| |Answer: b Difficulty: Medium Reference: p. 398 |
| |Analyzing sales representative and customer service representative productivity is an example of: |
| | |
| |a. cross-selling. |
| |b. operational CRM. |
| |c. analytical CRM. |
| |d. bundling. |
| | |
| |Answer: c Difficulty: Medium Reference: p. 398 |
| |This metric is based on the relationship between the revenue produced by a specific customer, the expenses incurred in |
| |acquiring and servicing that customer, and the expected live of the relationship between the customer and the company. |
| | |
| |a. churn rate |
| |b. CLTV |
| |c. cost per lead |
| |d. cost per sale |
| | |
| |Answer: b Difficulty: Easy Reference: p. 399 |
| |This metric represents the difference between revenues and expenses minus the cost of promotional marketing used to retain an|
| |account: |
| | |
| |a. ROI. |
| |b. EOQ. |
| |c. CLTV. |
| |d. BEP |
| | |
| |Answer: c Difficulty: Medium Reference: p. 399 |
| |The integration of multiple applications from multiple business functions, business units, or business partners to deliver a |
| |seamless experience for the customer, employee, manager, or business partner is called a: |
| | |
| |a. production platform. |
| |b. service platform. |
| |c. forecasting platform. |
| |d. source platform. |
| | |
| |Answer: b Difficulty: Medium Reference: p. 401 |
| |A methodology for dealing with the organization’s need to change its business processes continually to remain competitive is |
| |called: |
| | |
| |a. business process management. |
| |b. business process investigation. |
| |c. business process sourcing. |
| |d. business process refinement. |
| | |
| |Answer: a Difficulty: Medium Reference: p. 401 |
| |A Meta Group study of the total cost of ownership of enterprise systems found that the average TCO was: |
| | |
| |a. $10 million. |
| |b. $15 million. |
| |c. $300 million. |
| |d. $400,000 thousand. |
| | |
| |Answer: b Difficulty: Hard Reference: p. 403 |
Fill in the Blanks
| |Enterprise resource planning (ERO) systems are based on a suite of integrated software modules and a common central |
| |database. |
| | |
| |Difficulty: Medium Reference: p. 380 |
| |Enterprise software consists of a set of interdependent software modules that support basic internal business processes for |
| |finance and accounting, human resources, manufacturing and production, and sales and marketing. |
| | |
| |Difficulty: Medium Reference: p. 380 |
| |Best practices are the most successful solutions or problem-solving methods for consistently and effectively achieving a |
| |business objective. |
| | |
| |Difficulty: Easy Reference: p. 381 |
| |SAP, Oracle, PeopleSoft and Baan are all vendors of enterprise software packages. |
| | |
| |Difficulty: Medium Reference: p. 383 |
| |An enterprise-enabled organization does business the same way worldwide. |
| | |
| |Difficulty: Medium Reference: p. 383 |
| |Supply chain management is the close linkage and coordination of activities involved in buying, making, and moving a product.|
| | |
| |Difficulty: Medium Reference: p. 385 |
| |The supply chain is a network of organizations and business processes for procuring raw materials, transforming these |
| |materials into intermediate and finished products, and distributing the finished products to customers. |
| | |
| |Difficulty: Medium Reference: p. 385 |
| |The upstream portion of the supply chain includes the organization’s suppliers and their suppliers and the process of |
| |managing relationships with them. |
| | |
| |Difficulty: Hard Reference: p. 386 |
| |The downstream portion of the supply chain consists of the organizations and processes for distributing and delivering |
| |products to the final customers. |
| | |
| |Difficulty: Medium Reference: p. 386 |
| |In the supply chain process, planning consists of processes that balance aggregate demand and supply to develop a course of |
| |action to meet sourcing, production, and delivery requirements. |
| | |
| |Difficulty: Easy Reference: p. 386 |
| |In the supply chain process, sourcing consists of processes that procure goods and services needed to create a specific |
| |product or service. |
| | |
| |Difficulty: Easy Reference: p. 386 |
| |In the supply chain process, making consists of processes that transform a product into a finished state to meet planned or |
| |actual demand. |
| | |
| |Difficulty: Easy Reference: p. 386 |
| |SCOR identifies five major supply chain processes: plan, source, make, deliver, and return. |
| | |
| |Difficulty: Medium Reference: p. 386 |
| |In the supply chain process, delivering consists of processes that provide finished goods and services to meet actual or |
| |planned demand, including order management, transportation management, and distribution management. |
| | |
| |Difficulty: Easy Reference: p. 387 |
| |Inefficiencies in the supply chain are caused by inaccurate or untimely information. |
| | |
| |Difficulty: Medium Reference: p. 387 |
| |In the supply chain process, returning consists of processes associated with returning products or receiving returned |
| |products, including postdelivery customer support. |
| | |
| |Difficulty: Easy Reference: p. 387 |
| |Logistics deals with the planning and control of all factors that will have an impact on transporting the correct product or |
| |service to where it is needed on time and at the least cost. |
| | |
| |Difficulty: Medium Reference: p. 387 |
| |If a manufacturer had perfect information about exactly how many units of product customers wanted, when they wanted them, |
| |and when they could be produced, it would be possible to implement a highly efficient just-in-time strategy. |
| | |
| |Difficulty: Hard Reference: p. 387 |
| |Information about the demand for a product gets distorted as it passes from one entity to the next across the supply chain is|
| |referred to as the bullwhip effect. |
| | |
| |Difficulty: Hard Reference: p. 387 |
| |Supply chain planning systems enable a firm to generate demand forecasts for a product and to develop sourcing and |
| |manufacturing plans for that product. |
| | |
| |Difficulty: Hard Reference: p. 388 |
| |Demand planning is used to determine how much product a business needs to make to satisfy all of its customers’ demands. |
| | |
| |Difficulty: Easy Reference: p. 389 |
| |Supply chain execution manage the flow of products through distribution centers and warehouses to ensure that products are |
| |delivered to the right locations in the most efficient manner. |
| | |
| |Difficulty: Medium Reference: p. 389 |
| |A(n) metric is a standard measurement of performance. |
| | |
| |Difficulty: Medium Reference: p. 389 |
| |Firms can use intranets to improve coordination among their internal supply chain processes, and they can use extranets to |
| |coordinate supply chain processes shared with their business partners. |
| | |
| |Difficulty: Medium Reference: p. 390 |
| |In a push-based model of supply chain management systems, production master schedules are based on forecasts or best guesses |
| |of demand for products, and products are shoved to customers. |
| | |
| |Difficulty: Hard Reference: p. 391 |
| |With new flows of information made possible by Web-based tools, supply chain management can more easily follow a pull-based |
| |model. |
| | |
| |Difficulty: Medium Reference: p. 391 |
| |Customer relationship management (CRM) is both a business and technology discipline for managing customer relationships to |
| |optimize revenue, profitability, customer satisfaction, and customer retention. |
| | |
| |Difficulty: Easy Reference: p. 393 |
| |Partnership relationship management (PRM) uses many of the same data, tools, and systems as customer relationship management |
| |to enhance collaboration between a company and its selling partners. |
| | |
| |Difficulty: Easy Reference: p. 394 |
| |A(n) touch point is a method of interaction with the customer, such as telephone, e-mail, customer service desk, conventional|
| |mail, Web site, or retail store. |
| | |
| |Difficulty: Medium Reference: p. 394 |
| |Employee relationship management software deals with employee issues that are closely related to CRM, such as setting |
| |objectives, employee performance management, performance-based compensation, and employee training. |
| | |
| |Difficulty: Easy Reference: p. 394 |
| |Sales force automation modules in CRM systems help sales staff increase their productivity by focusing sales efforts on the |
| |most profitable customers, those who are good candidates for sales and services. |
| | |
| |Difficulty: Medium Reference: p. 394 |
| |Cross-selling is the marketing of complementary products to customers. |
| | |
| |Difficulty: Easy Reference: p. 395 |
| |Up-selling is the marketing of higher-value products or services to new or existing customers. |
| | |
| |Difficulty: Easy Reference: p. 395 |
| |Bundling is one kind of cross-selling in which a combination of products is sold as a package at a price lower than the |
| |total cost of the individual products. |
| | |
| |Difficulty: Easy Reference: p. 395 |
| |Operational CRM includes customer-facing applications such as tools for sales force automation, call center and customer |
| |service support, and marketing automation. |
| | |
| |Difficulty: Easy Reference: p. 397 |
| |Analytical CRM includes applications that analyze customer data generated by operational CRM applications to provide |
| |information for improving business performance management. |
| | |
| |Difficulty: Easy Reference: p. 397 |
| |The churn rate measures the number of customers who stop using or purchasing products or services from a company. |
| | |
| |Difficulty: Easy Reference: p. 398 |
| |Customer lifetime value (CLTV) is based on the relationship between the revenue produced by a specific customer, the expenses|
| |incurred in acquiring and servicing that customer, and the expected life of the relationship between the customer and the |
| |company. |
| | |
| |Difficulty: Medium Reference: p. 399 |
| |A service platform integrates multiple applications form multiple business functions, business units, or business partners to|
| |deliver a seamless experience for the customer, employee, manager, or business partner. |
| | |
| |Difficulty: Easy Reference: p. 401 |
| |Business process management is a methodology for dealing with the organization’s need to change its business processes |
| |continually to remain competitive. |
| | |
| |Difficulty: Easy Reference: p. 401 |
Essay Questions
| |Identify and briefly describe three major enterprise applications. |
| | |
| |Enterprise systems, customer relationship management, and supply chain management are three enterprise applications. |
| |Enterprise systems are based on a suite of integrated software modules and a common central database. Enterprise systems |
| |utilize enterprise software to support financial and accounting, human resources, manufacturing and production, and sales and|
| |marketing processes. Enterprise systems provide many benefits including an enterprise-enabled organization, improved |
| |management reporting and decision making, a unified information systems technology platform, and more efficient operations |
| |and customer-driven business processes. |
| | |
| |Supply chain management systems help an organization better manage its supply chain, including planning, sourcing, making, |
| |delivering, and returning items. Supply chain management software can be categorized as a supply chain planning system or as|
| |a supply chain execution system. A supply chain planning system enables a firm to generate demand forecasts for a product |
| |and to develop sourcing and manufacturing plans for that product. |
| |A supply chain execution system manages the flow of products through distribution centers and warehouses to ensure that |
| |products are delivered to the right locations in the most efficient manner. Supply chain management benefits include |
| |improved customer service and responsiveness, cost reduction, and cash utilization. |
| | |
| |Customer relationship management systems help firms maximize the benefits of their customer assets. These systems capture |
| |and consolidate data from all over the organization and then distribute the results to various systems and customer touch |
| |points across the enterprise. Customer relationship management systems can be classified as operational or as analytical. |
| |Operational CRM refers to customer-facing applications, such as sales force automation, call center and customer service |
| |support, and marketing automation. Analytical CRM refers to customer relationship management applications dealing with the |
| |analysis of customer data to provide information for improving business performance. Benefits include increased customer |
| |satisfaction, reduced direct marketing costs, more effective marketing, and lower costs for customer acquisition and |
| |retention. |
| |What is an enterprise system? What is enterprise software? |
| | |
| |Enterprise systems focus on integrating the key internal business processes of the firm. Enterprise software is used by |
| |enterprise systems and is a set of integrated software modules for finance and accounting, human resources, manufacturing and|
| |production, and sales and marketing that allows data to be used by multiple functions and business processes. |
| |What are the benefits of enterprise systems? What are the challenges of enterprise systems? |
| | |
| |Benefits include creating an enterprise-enabled organization, providing firmwide knowledge-based management processes, |
| |providing a unified information system technology platform and environment, and enabling more efficient operations and |
| |customer-driven business processes. Challenges include a daunting implementation process, surviving a cost-benefit analysis,|
| |inflexibility, and realizing strategic value. |
| | |
| |What is SCOR? Identify its five major processes. |
| | |
| |The Supply Chain Operations Reference Model (SCOR) was developed by the Supply Chain Council. This cross-industry process |
| |reference model defines a common set of supply chain processes to help businesses better understand supply chain management |
| |issues and set goals for supply chain improvement. The five major processes include plan, source, make, deliver, and return.|
| |The planning process consists of processes that balance aggregate demand and supply to develop a course of action to meet |
| |sourcing, production, and delivery requirements. The sourcing process consists of processes that procure goods and services |
| |needed to create a specific product or service. The make process consists of processes that transform a product into a |
| |finished state to meet planned or actual demand. The delivery process consists of processes that provide finished goods and |
| |services to meet actual or planned demand, including order management, transportation management, and distribution |
| |management. The return process consists of processes associated with returning products or receiving returned products, |
| |including postdelivery customer support. |
| |Identify two classifications for supply chain software. For each classification, identify five capabilities. |
| | |
| |Supply chain planning systems and supply chain execution systems are two classifications for supply chain software. Supply |
| |chain planning systems enable a firm to generate demand forecasts for a product and develop sourcing and manufacturing plans |
| |for that product. Capabilities include order planning, advanced scheduling and manufacturing planning, demand planning, |
| |distribution planning, and transportation planning. Supply chain execution systems manage the flow of products through |
| |distribution centers and warehouses to ensure that products are delivered to the right locations. Capabilities include order|
| |commitments, final production, replenishment, distribution management, and reverse distribution. |
| |Describe service platforms and their relationship to enterprise applications. |
| | |
| |Service platforms integrate data and processes from the various enterprise applications (customer relationship management, |
| |supply chain management, and enterprise systems), as well as from disparate legacy applications to create new composite |
| |processes. Enterprise applications can serve as building blocks for new cross-functional service platforms. A new composite |
| |process is modeled using business process management tools, and application integration software ties various systems |
| |together. The new services are delivered through enterprise portals, which can integrate disparate applications so that |
| |information appears to be coming from a single source. |
| |What is a metric? Identify five metrics for measuring supply chain performance. |
| | |
| |A metric is a standard measurement of performance. Ten metrics were identified in the textbook, including fill rate, on-time|
| |deliveries, average time from order to delivery, total supply chain costs, number of days of supply in inventory, asset |
| |turns, supply chain response time, forecast accuracy, cycle time, and cash-to-cycle time. |
| |Identify two supply chain models. Which is better? |
| | |
| |Push-based and pull-based models were discussed in the textbook. Push-based refers to a supply chain driven by production |
| |master schedules based on forecasts or best guesses of demand for products. Pull-based refers to a supply chain driven by |
| |actual customer orders or purchases so that members of the supply chain produce and deliver only what customers have ordered.|
| |Pull-based models are better. |
| |Identify two aspects of customer relationships management. |
| | |
| |Operational CRM and analytical CRM are two aspects. Operational CRM refers to customer-facing applications, such as sales |
| |force automation, call center and customer service support, and marketing automation. Analytical CRM refers to customer |
| |relationship management applications dealing with the analysis of customer data to provide information for improving business|
| |performance. |
| |Identify five benefits of customer relationship management systems. |
| | |
| |Benefits include: better customer service, make call centers more efficient, cross-sell products more effectively, help |
| |sales staff close deals faster, simplify marketing and sales processes, acquire new profitable customers, sell additional |
| |products and services, provide customer information for developing new products, increase product utilization, reduce sales |
| |and marketing costs, identify and retain profitable customers, optimize service delivery costs, retain high-lifetime value |
| |customers, improve customer loyalty, improve response rates to direct mail, increase product profitability, respond quickly |
| |to market opportunities. |
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