What are the challenges that enterprise applications pose, and how are enterprise

applications taking advantage of new technologies?

Many firms have implemented enterprise systems and systems for supply chain and customer
relationship management because they are such powerful instruments for achieving operational
excellence and enhancing decision making. But precisely because they are so powerful in
changing the way the organization works, they are challenging to implement. Let’s briefly
examine some of these challenges as well as new ways of obtaining value from these systems.
Enterprise Application Challenges
Promises of dramatic reductions in inventory costs, order-to-delivery time, more efficient
customer response, and higher product and customer profitability make enterprise systems and
systems for SCM and CRM very alluring. But to obtain this value, you must clearly understand
how your business has to change to use these systems effectively.
Enterprise applications involve complex pieces of software that are very expensive to purchase
and implement. It might take a large Fortune 500 company several years to complete a large-
scale implementation of an enterprise system or a system for SCM or CRM. According to a 2018
survey of 237 ERP users conducted by Panorama Consulting Solutions, ERP projects took an
average of 17.4 months to complete, and 44 percent of the projects delivered 50 percent or less
of the expected benefits. Approximately 64 percent of these projects experienced cost overruns,
and 79 percent exceeded their initial timelines (Panorama Consulting Solutions, 2018). Changes
in project scope and additional customization work add to implementation delays and costs.
Enterprise applications require not only deep-seated technological changes but also fundamental
changes in the way the business operates. Companies must make sweeping changes to their
business processes to work with the software. Employees must accept new job functions and
responsibilities. They must learn how to perform a new set of work activities and understand
how the information they enter into the system can affect other parts of the company. This
requires new organizational learning and should also be factored into ERP implementation costs.
SCM systems require multiple organizations to share information and business processes. Each
participant in the system may have to change some of its processes and the way it uses
information to create a system that best serves the supply chain as a whole.
Some firms experienced enormous operating problems and losses when they first implemented
enterprise applications because they didn’t understand how much organizational change was
required. For example, Kmart had trouble getting products to store shelves when it first
implemented i2 Technologies (now JDA Software) SCM software. The i2 software did not work
well with Kmart’s promotion- driven business model, which created sharp spikes in demand for
products. Supermarket giant Woolworth’s Australia encountered data-related problems when it
transitioned from an antiquated home-grown ERP system to SAP. Weekly profit-and-loss reports
tailored for individual stores couldn’t be generated for nearly 18 months. The company had to
change its data collection procedures, but failed to understand its own processes or properly
document these business processes.
Enterprise applications also introduce switching costs. When you adopt an enterprise application
from a single vendor, such as SAP, Oracle, or others, it is very costly to switch vendors, and your
firm becomes dependent on the vendor to upgrade its product and maintain your installation.
Enterprise applications are based on organization-wide definitions of data. You’ll need to
understand exactly how your business uses its data and how the data would be organized in a
CRM, SCM, or ERP system. CRM systems typically require some data cleansing work.
Enterprise software vendors are addressing these problems by offering pareddown versions of
their software and fast-start programs for small and mediumsized businesses and best-practice
guidelines for larger companies. Companies are also achieving more flexibility by using cloud
applications for functions not addressed by the basic enterprise software so that they are not
constrained by a single do-it-all type of system.
Companies adopting enterprise applications can also save time and money by keeping
customizations to a minimum. For example, Kennametal, a $2 billion metal-cutting tools
company in Pennsylvania, had spent $10 million over 13 years maintaining an ERP system with
more than 6,400 customizations. The company replaced it with a plain-vanilla, uncustomized
version of SAP enterprise software and changed its business processes to conform to the
software. Office Depot avoided customization when it moved from in-house systems to the
Oracle ERP Cloud. The retailer is using best practices embedded in Oracle’s Supply Chain
Management Cloud and in its cloud-based Human Capital Management (HCM) and Enterprise
Performance Management (EPM) systems. By not customizing its Oracle ERP applications,
Office Depot simplified its information systems and reduced the cost of maintaining and
managing them (Thibodeau, 2018).
Next-Generation Enterprise Applications
Today, enterprise application vendors are delivering more value by becoming more flexible,
user-friendly, web-enabled, mobile, and capable of integration with other systems. Stand-alone
enterprise systems, customer relationship management systems, and SCM systems are becoming
a thing of the past. The major enterprise software vendors have created what they call enterprise
solutions, enterprise suites, or e-business suites to make their CRM, SCM, and ERP systems
work closely with each other and link to systems of customers and suppliers.
Next-generation enterprise applications also include cloud solutions as well as more functionality
available on mobile platforms. Large enterprise software vendors such as SAP, Oracle,
Microsoft, and Epicor now feature cloud versions of their flagship ERP systems and also cloud-
based products for small and medium-sized businesses (as described earlier in the Interactive
Session on Management). SAP, for example, offers SAP S/4HANA Cloud for large companies,
and SAP Business ByDesign and SAP Business One enterprise software for medium-sized and
small businesses. Microsoft offers the Dynamics 365 cloud version of its ERP and CRM
software. Cloud-based enterprise systems are also offered by smaller vendors such as NetSuite.
The undisputed global market leader in cloud-based CRM systems is Salesforce.com, which we
described in Chapter 5. Salesforce.com delivers its service through Internet-connected computers
or mobile devices, and it is widely used by small, medium-sized, and large enterprises. As cloud-
based products mature, more companies, including very large Fortune 500 firms, are choosing to
run all or part of their enterprise applications in the cloud.
Social CRM
CRM software vendors are enhancing their products to take advantage of social networking
technologies. These social enhancements help firms identify new ideas more rapidly, improve
team productivity, and deepen interactions with customers (see Chapter 10). Using social CRM
tools, businesses can better engage with their customers by, for example, analyzing their
sentiments about their products and services.
Social CRM tools enable a business to connect customer conversations and relationships from
social networking sites to CRM processes. The leading CRM vendors now offer such tools to
link data from social networks to their CRM software. SAP, Salesforce.com, and Oracle CRM
products now feature technology to monitor, track, and analyze social media activity on
Facebook, LinkedIn, Twitter, YouTube, and other sites. Business intelligence and analytics
software vendors such as SAS also have capabilities for social media analytics (with several
measures of customer engagement across a variety of social networks) along with campaign
management tools for testing and optimizing both social and traditional web-based campaigns.
Salesforce.com connected its system for tracking leads in the sales process with social-listening
and social-media marketing tools, enabling users to tailor their social-marketing dollars to core
customers and observe the resulting comments. If an ad agency wants to run a targeted Facebook
or Twitter ad, these capabilities make it possible to aim the ad specifically at people in the
client’s lead pipeline who are already being tracked in the CRM system. Users will be able to
view tweets as they take place in real time and perhaps uncover new leads. They can also
manage multiple campaigns and compare them all to figure out which ones generate the highest
click-through rates and cost per click.
Business Intelligence in Enterprise Applications
Enterprise application vendors have added business intelligence features to help managers obtain
more meaningful information from the massive amounts of data these systems generate,
including data from the Internet of Things (IoT). SAP now makes it possible for its enterprise
applications to use HANA in-memory computing technology so that they are capable of much
more rapid and complex data analysis. Included are tools for flexible reporting; ad hoc analysis;
interactive dashboards; what-if scenario analysis; data visualization; and machine learning to
analyze very large bodies of data, make connections, make predictions, and provide
recommendations for operations optimization. For example, SAP created a machine learning and
neural network application (see Chapter 11) that recognizes patterns associated with machine
performance in the oil and gas industry. The software automatically generates notifications of
potential machine failures and sends them to SAP Plant Maintenance, which planners use to
schedule machine repair and replacement (Franken, 2018).
The major enterprise application vendors offer portions of their products that work on mobile
handhelds. You can find out more about this topic in our Learning Track on Wireless
Applications for Customer Relationship Management, Supply Chain Management, and
Healthcare. 9-5
How will MIS help my career?
Here is how Chapter 9 and this book can help you find a job as a manufacturing management
trainee.
The Company
XYZ Global Industrial Components is a large Michigan-headquartered company with 40 global
manufacturing facilities and more than 4,000 employees worldwide, and it has an open position
for a new college graduate in its Manufacturing Management Program. The company produces
fastener, engineered, and linkage and suspension components for automotive, heavy-duty trucks,
aerospace, electric utility, telecommunications, and other industries worldwide.
Position Description
The Manufacturing Management Program is a rotational, two-year program designed to nurture
and train future managers by enabling recent college graduates to acquire critical skills and
industry experience in plant, technical, and corporate environments. Job responsibilities include:
• Working with business units and project teams on systems implementation, including
implementation of ERP and JDA manufacturing systems.
• Understanding business processes and data requirements for each business unit.
• Proficiency in supporting and conducting business requirement analysis sessions.
• Tracking and documenting changes to functional and business specifications.
• Writing user documentation, instructions, and procedures.
• Monitoring and documenting post-implementation problems and revision requests.
Job Requirements
• Bachelor’s degree in IT, MIS, engineering, or related field or equivalent, with a GPA
higher than 3.0
• Demonstrated skills in Microsoft Office Suite
• Strong written and verbal communication skills
• Proven track record of accomplishments both inside and outside the educational setting
• Experience in a leadership role in a team
Interview Questions
• Describe the projects you have worked on in a team. Did you play a leadership role? Exactly
what did you do to help your team achieve its goal? Were any of these projects IT projects?
• What do you know about ERP or JDA manufacturing systems? Have you ever worked with
them? What exactly did you do with these systems?
• Tell us what you can do with Microsoft Office software. Which tools have you used? Do you
have any Access and Excel skills? What kinds of problems have you used these tools to solve?
Did you take courses in Access or Excel?
Author Tips
1. Do some research on the company, its industry, and the kinds of challenges it faces. Look
through the company’s LinkedIn page and read their posts over the past twelve months.
Are there any key trends in the LinkedIn posts for this company?
2. Review this text’s Chapter 9 on enterprise applications, Chapter 13 on developing
systems, and Chapter 14 on IT project management and implementation.
3. View YouTube videos created by major IT consulting firms that discuss the latest trends
in manufacturing technology and enterprise systems.
4. Inquire how you would be using Microsoft Office tools for the job and what Excel and
Access skills you would be expected to demonstrate. Bring examples of the work you
have done with this software. Show that you would be eager to learn what you don’t
know about these tools to fulfill your job assignments.
5. Bring examples of your writing (including some from your Digital Portfolio described in
MyLab MIS) demonstrating your analytical skills and project experience.