ICT100 Foundations of

Information Systems

Lecture 8– Strengthening Business-to-Business Relationships via Supply Chain and

Customer Relationship Management

Slides adopted from:

Valacich, J. and Schneider, C., Information Systems Today: Managing in the Digital World, 9th ed, Global
Edition, Pearson: NJ USA

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Learning Objectives
8.1 Describe supply chain management systems
and how they help to improve business-to-business
processes
8.2 Describe customer relationship management
systems and how they help to improve the activities
involved in promoting and selling products to
customers as well as providing customer service
and nourishing long-term relationships.

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Supply Chain Management (1 of 2)

• Learning Objective: Describe supply chain management systems and

how they help to improve business-to-business processes.

• What is a Supply Chain

• Business-to-Business Electronic
Commerce: Exchanging Data in Supply
Networks
• Managing Complex Supply Networks
• Supply Chain visibility and Analytics
What is a Supply Chain?
A Typical Supply Network
Discussion Time
Students to identify Supply Networks we are all
involved with daily

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Business-to-Business Electronic Commerce:
Exchanging Data in Supply Networks
Business-to-Business (B2B) Electronic commerce

– 90% Of all EC in the United States

– Involve proprietary information
– Originally facilitated using Electronic Data Interchange (EDI) prior to the Internet
– Now suppliers use Web-based EDI protocols
– Companies also use extranets (Chapter 3), Portals and Marketplaces to facilitate B2B
EC
– EDI refers to computer-to-computer communication (without human intervention)
following certain standards as set by the UN Economic Commission (for Europe) or the
American National Standards Institute.
Source: Pexels.com
Portals

Access points (or front doors) through which a business partner accesses secured,
proprietary information that may be dispersed throughout an organization (typically
using extranets)

– Supplier Portals
Subset of an organization’s extranet designed to automate the business processes that occur
before, during, and after sales transactions between the organization (i.e., a single buyer) and its
multiple suppliers.
– Customer Portals
Automate the business processes that occur before, during, and after sales transactions between
a supplier and multiple customers. In other words, customer portals provide efficient tools for
business customers to manage all phases of the purchasing cycle, including reviewing product
information, order entry, and customer service
Supplier portals, B2B marketplaces, and customer portals

B2B marketplaces are typically run by separate entities and connect

multiple buyers and multiple suppliers
B2B Marketplaces
• Generate revenue by taking a small commission for each
transaction that occurs, by charging usage fees or
association fees, and/or by generating advertising revenues.
• Many focused on vertical markets composed of firms
operating within a certain industry sector
• http://www.b2bmetal.eu (metals), www.paperindex.com
(paper), and www.fibre2fashion.com (textile and fashion
supplies)
• Chinese marketplace Alibaba.com
Source: Pexels.com
Managing Complex Supply Networks
• A limited pool of suppliers for critical components can further exacerbate the
problem of domino effect on global supply networks, as companies have fewer
options to switch suppliers if necessary
• If firms do not collaborate effectively, information can easily become distorted as it
moves through the supply network
• Problems such as excessive inventories, inaccurate manufacturing capacity
plans, and missed production schedules can run rampant, causing huge ripple
effects that lead to degradations in profitability and poor customer service by
everyone within the supply network
Benefits of Effectively Managing Supply Chains (1 of 2)

• Just-in-Time Production
– Inventory delivered just as it is needed
– Minimizes stock and handling costs
– Reduces obsolescence charges
Discussion Time
Students to identify Organizations that operate on a
Just In Time Model

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Vendor-Managed Inventory
• Vendors monitor stock levels and track ongoing
sales data, replenish supplies
• optimize the manufacturer’s (or retailer’s) inventory
• saving costs and minimizing stockout situations
(thus enhancing customer satisfaction)
• more accurate forecasts, reduces ordering errors,
and helps prioritize the shipment of goods
Benefits of Effectively Managing Supply Chains (2 of 2)

• Reducing the Bullwhip Effect

– Ripple effects due to forecast errors
– Coordinated supply chain helps mitigate this

• Corporate Social Responsibility

– Product recalls
– Sustainable business practices
Optimizing the Supply Chain Through Supply Chain
Management (Table 8.1)
Module Key Uses
Demand planning and forecasting Forecast and plan anticipated demand for products
Safety stock planning Assign optimal safety and target stock levels
Distribution planning Optimize the allocation of available supply
Supply network collaboration Work with partners across the supply network
Materials management Ensure production materials are available
Manufacturing execution Support production processes
Order promising Provide answers to customers queries
Transportation execution Manage logistics
Warehouse management Support receiving, storing, and picking of goods
Supply chain analytics Monitor key performance indicators
In developing a supply chain strategy, companies have to evaluate the trade-offs
between effectiveness and efficiency in different areas, such as procurement,
production, and transportation
Supply chain planning includes (customer) demand planning and forecasting,
distribution planning, production planning, and (supplier) inventory and safety
stock planning
Supply chain execution focuses on the efficient and effective flow of products,
information, and finances along the supply chain
Supply Chain Visibility and
Analytics

• Supply chain visibility

– Product tracking
– Anticipating adverse impacts
 Weather impacts
 Labor negotiations

• Supply chain analytics

– Monitoring SC performance
– Identifying problem spots
Customer Relationship Management
• Learning Objective: Describe customer relationship management
systems and how they help to improve the activities involved in
promoting and selling products to customers as well as providing
customer service and nourishing long-term relationships.

• Developing a CRM Strategy

• Architecture of a CRM System
Interactions With Customers

• The megatrends mobile, social media, Big Data, cloud computing, and IoT
have tremendously changed the way organizations interact with their
customers
Companies search for ways to widen, lengthen, and deepen
customer relationships
Discussion Time
Students to identify interactions with CRM

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Benefits of a CRM System (Table 8.2)

Benefit Examples
24/7/365 operation Web-based interfaces
Individualized service Learn how each customer defines product and service quality
Improved information Integrate all information for all points of contact
Improved problem Improved record keeping and efficient methods of capturing customer
identification/resolution complaints help to identify and solve problems faster
Optimized processes Integrated information removes information handoffs
Improved integration Information from the CRM can be integrated with other systems to
streamline business processes
Improved product Tracking customer behavior over time helps to identify future product
development and service offerings
Improved planning Provides mechanism for managing and scheduling sales follow-ups
A successful CRM strategy requires enterprise-wide changes
Key Elements of a CRM Strategy

Policies and Business Processes Employee Training

Reflect a customer-focused culture For employees from all areas

Customer Service Data Collection, Analysis, and Sharing

Quality, satisfaction, enhanced customer Track all aspects of the customer experience
experience
Architecture of a CRM System
An operational CRM environment is used to enable customer interaction
and service
Operational CRM

• Sales Force Automation (SFA)

– Supports day-to-day sales force activities
• Customer Service and Support (CSS)
– Automates service requests, complaints,
product returns, and information requests
• Enterprise Marketing Management (EMM)
– Improves the management of promotional
campaigns
Sales Force Automation allows sales managers to track sales
performance
Customer Service and Support

• A customer engagement center allows

customers to use a variety of self-service and
assisted technologies to interact with the
organization
• Examples include:
– Phone (automatic call)
– Web (self-service technologies
– Facebook
– Industry blogs
– Face-to-face
CRM systems allow for managing various types of promotional
campaigns
Analytical CRM

• Analyzing customer behavior and perceptions

in order to provide the business intelligence
necessary to identify new opportunities and to
provide superior customer service
• Key Analytical Technologies (Chapter 6)
– Data mining
– Decision support
– Other business intelligence technologies
Digital dashboards help to visualize key CRM performance metrics
Many people interact with a company in different ways using various
online identities
Social Media Monitoring

• Customers use Facebook and Twitter to comment

on products and services
• Monitoring social media conversations helps to
understand public perceptions
• Analytical CRM applications
– Microsoft’s Social Networking Accelerator
– Google Alerts
– Dell’s Social Media Listening Command Center
Many CRM applications include various tools to help in monitoring and analyzing
ongoing conversations on social media sites
Collaborative CRM

• Systems for providing effective and efficient communication with

the customer from the entire organization
• Greater Customer Focus
– Understanding customer history and current needs

• Lower Communication Barriers

– Personnel have complete customer information
– Personnel use customer-preferred communication methods

• Increased Information Integration

– Personnel know prior and ongoing communication
Ethical Concerns with CRM

• CRM systems may facilitate coercive sales

practices
• Systems may categorize customers in a
way customers take offense to
• Personalized communication may become
too personal