No business can afford disjointed information systems that don't work together to produce a coherent picture of the entire organization. All the functions of a business must be integrated across traditional lines of demarcation. Islands of information can be devastating to a company if data cannot be shared throughout the company. Even worse, the islands of information can create problems if each faction of an enterprise has differing information that conflicts with other islands of information. These kinds of problems are what gave rise to enterprise applications that share the same data anywhere it's needed in an organization. As networks of all kinds take hold, from the Internet to intranets to extranets, Web-based enterprise applications are increasingly widespread.
Enterprise applications are the systems that can coordinate activities, decisions, and knowledge across many different functions, levels, and business units in a firm. Enterprise applications include: enterprise systems, supply chain management systems, customer relationship management systems, and knowledge management systems.
Enterprise systems
These systems are also known as enterprise resource planning (ERP) systems and are used to bridge the communication gap between all departments and all users of information within a company. If the production department enters information about its processes, the data are available to accounting, sales, and human resources. If sales and marketing is planning a new advertising campaign, anyone anywhere within the organization will have access to that information. Enterprise systems truly allow a company to use information as a vital resource and enhance the bottom line.
Supply Chain Management:
Supply chain management is the close linkage and coordination of activities in buying, making, and moving a product. It integrates supplier, manufacturer, distributor, and customer logistics processes to reduce time, redundant effort, and inventory cost. The supply chain is a network of organizations and business processes for procuring materials, transforming raw materials into intermediate and finished products, and distributing the finished products to
customers. It links suppliers, manufacturing plants, distribution centers, conveyances, retail outlets, people and information through processes such as procurement, inventory control, distribution, and delivery to supply goods and services from source through consumption. Supply chain also includes reverse logistics in which returned items flow in the reverse direction from buyer back to the seller.
Information systems make supply chain management more efficient by helping companies coordinate, schedule, and control procurement, production, inventory management, and delivery of products and services. Supply chain management systems can be built using intranets, extranets, or special supply chain management software. Information systems for supply chain management can help participants in the supply chain in the following activities:
à Decide when and what to produce, store, and move
à Rapidly communicate orders
à Track the status of orders
à Check inventory availability and monitor inventory levels
à Reduce inventory, transportation, and warehousing costs
à Track shipments
à Plan production based on actual customer demand
à Rapidly communicate changes in product design
Inaccurate or untimely information in the supply chain causes inefficiencies such as parts shortages, underutilized plant capacity, excessive finished goods inventory, or runaway transportation costs. One recurring problem in supply chain management is the bullwhip effect, in which information about the demand for a product gets distorted as it passes from one entity to next across the supply chain.
Supply chain management uses systems for supply chain planning (SCP) and supply chain execution (SCE). Supply chain planning systems enable the firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product. Supply chain execution systems 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.
Customer Relationship Management systems
Customer relationship management (CRM) is a term that refers to practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention and driving sales growth. An information system that maintains data about customers and all their interactions with the organization is called Customer Relation Management (CRM) System.
A major benefit of using CRM systems is to develop better relations with existing customers, which can lead to increased sales. By better anticipating the needs of the customers businesses can predict further purchases based on past historic trends. It also allows a cross-selling of other products by highlighting and suggesting alternatives and enhancements. By implementing a CRM system it can also lead to a better marketing of products by using a target market and a more personal approach. Ultimately this could lead to enhanced customer satisfaction and retention. Ensuring a good reputation in the market allows for the company to continuously grow.
Knowledge Management Systems
Knowledge management (KM) is the process of capturing, developing, sharing, and effectively using organizational knowledge. Knowledge management efforts typically focus on organizational objectives such as improved performance, competitive advantage, innovation, the sharing of lessons learned, integration and continuous improvement of the organization.
Knowledge Management System (KM System) refers to a (generally IT based) system for managing knowledge in organizations for supporting creation, capture, storage and dissemination of information. Knowledge management systems (KMS) collect all relevant knowledge and experience in the firm and make it available wherever and whenever it is needed to support business processes. The idea of a KM system is to enable employees to have ready access to the organization's documented base of facts, sources of information, and solutions. For example an engineer could know the metallurgical composition of an alloy that reduces sound in gear systems. Sharing this information organization wide can lead to more effective engine design and it could also lead to ideas for new or improved equipment.