The primary business value of customer relationships today is indisputable. That’s why we emphasized in Chapter 2 that becoming a customer-focused business was one of the top business strategies that can be supported by information technology. Thus, many companies are implementing customer relationship management (CRM) business initiatives and information systems as part of a customer-focused or customer centric strategy to improve their chances for success in today’s competitive business environment. In this section, we will explore basic CRM concepts and technologies, as well as examples of the benefits and challenges faced by companies that have implemented CRM systems as part of their customer-focused business strategy. Let’s start with a real world example.

Businesses of all kinds have now implemented enterprise resource planning (ERP) systems. ERP serves as a cross-functional enterprise backbone that integrates and automates many internal business processes and information systems within the manufacturing, logistics, distribution, accounting, finance, and human resource functions of a company. Large companies throughout the world began installing ERP systems in the 1990s as a conceptual framework and catalyst for reengineering their business processes. ERP also served as the vital software engine needed to integrate and accomplish the cross-functional processes that resulted. Now, ERP is recognized as a necessary ingredient that many companies need in order to gain the efficiency, agility, and responsiveness required to succeed in today’s dynamic business environment.

That’s why many companies today are making supply chain management (SCM) a top strategic objective and major e-business application development initiative. Fundamentally, supply chain management helps a company get the right products to the right place at the right time, in the proper quantity and at an acceptable cost. The goal of SCM is to efficiently manage this process by forecasting demand; controlling inventory; enhancing the network of business relationships a company has with customers, suppliers, distributors, and others, and receiving feedback on the status of every link in the supply chain. To achieve this goal, many companies today are turning to Internet technologies to Web-enable their supply chain processes, decision making, and information flows. Let’s take a look at a real world example.