Key IT Elements: Value Chain, Social Media, ERP, CRM, and AI

Key IT Elements for Business Success

8 Elements of IT

The core elements of IT include:

  1. Rapidly changing landscape
  2. Globalization and competitiveness
  3. Optimization of resources
  4. Proactive management of tech solutions
  5. Strategic leadership
  6. Evolution of competencies
  7. Business and relationship management
  8. Ensuring impact on business

The role of IT is evolving:

  • From systems and tech to processes and information
  • From tech language to commercial understanding
  • From IT cost to creating value for business
  • From reactive to proactive approaches
  • From on-time delivery to excellent executions

Value Chain Analysis

Value chain analysis is used to perform an internal analysis of a company. It includes:

  • A horizontal view of interdepartmental relationships (support activities)
  • Highlights the relationship between the company, suppliers, and customers
  • Supply chain of incoming and outgoing materials
  • Identifies interrelationships between activities
  • The development of an activity impacts the cost or result of another

We use value chain analysis to define the general process map and its principal relationships.

6 Reasons to Use Social Media

  1. Brand awareness
  2. Effective advertising
  3. Drive traffic and sales
  4. Better customer service
  5. Communicate to your audience
  6. Customer engagement

CRM Integration

Orders are executed in the ERP, which deals with shipment of goods and billing. The degree of process is then sent to CRM systems.

Adding Value to the Business with IT

IT can add value by:

  1. Improving results (invoicing, margins, market share)
  2. Reducing resources (doing more with less)
  3. Creating a competitive advantage (new opportunities and tech)

Examples:

  • A CRM can increase sales (improve results).
  • An ERP can provide better control (reduce resources).
  • IoT devices can remove manual activities and create something new (reducing costs and providing a competitive advantage).
  • A new social media campaign can drive traffic (improve results).

Value Chain Components

Value chain analysis is used to perform an internal analysis of a company. It:

  • Has a horizontal view of interdepartmental relationships
  • Highlights customer/supplier and company relationships
  • Is a supply chain of incoming and outgoing materials
  • Identifies interrelationships between activities as they each impact the result of another

Primary Activities: Focus on creating and delivering a product (inbound logistics, operations, outbound logistics, marketing + sales, service).

Secondary Activities: Support the flow (firm infrastructure, HR, tech development, procurement).

IoT (Internet of Things)

IoT can be categorized into:

  1. Things that collect information and send it (e.g., bins that collect weight data and send it to a central back office when full).
  2. Things that receive information and act on it (e.g., Philips Hue – press a button on your phone, and the lights turn on).
  3. Things that do both (e.g., Alexa, Tado heater which checks the temperature and allows you to request a new temperature).

ERP (Enterprise Resource Planning)

The purpose of ERP is to reduce costs and have more control. It arose from the necessity of having integrated systems (before, there were inefficiencies in information processing). It is an integrated computer system that manages internal/external resources like fixed assets and financial resources. Its goal is to facilitate the flow of information between business functions.

5 Key ERP Modules:

  1. SAP Financials (financial supply chain management, finance management, and controlling)
  2. SAP HR (recruiting, managing people, calculating payroll)
  3. Production (combines information from various processes like planning, controlling, warehouse management)
  4. Provisioning (determining needs, source determination, order tracking)
  5. Customer Orders Management (pre-sale, customer order availability, deliver goods, billing)

CRM (Customer Relationship Management)

The goal of CRM is to increase sales. It is a strategy aimed at customer loyalty and automates business processes: sales, marketing, and customer service.

3 Key CRM Modules:

  1. Marketing (plan and manage campaigns, digital marketing, analysis, client segmentation)
  2. Sales (sales planning and forecasting, opportunity management, supply and order requests, manage incentives)
  3. Services (service and client support, optimize resources, manage service operations)

SRM (Supplier Relationship Management)

SRM is a tool to manage suppliers. You can:

  • Integrate suppliers into purchase processes
  • Exchange documents
  • Give suppliers direct access through a web service
  • Collaborate with suppliers

SCM (Supply Chain Management)

SCM appeared because of the pressure on costs and the need for excellence in service, which meant that companies needed more sophisticated systems. They allow:

  • Real-time visibility
  • Synchronization of the logistics chain
  • Reduced execution time
  • Automating processes between suppliers and customers
  • Delivering goods on time

4 Key SCM Modules:

  1. Planning (design/demand supply chain, production and transportation planning)
  2. Execution (managing materials, control, commit orders, warehouse management)
  3. Coordination (supply chain event management, manage performance of the logistic chain)
  4. Collaboration (reduce costs and increase competence by collaboration between suppliers, clients, and manufacturers)

SCM Flow

The SCM flow involves suppliers, manufacturing, warehouse, logistics, consumers, shareholders, sales and production development, and procurement.

AI (Artificial Intelligence)

AI is the simulation of human intelligence processes by machines, especially computer systems. These processes include learning, reasoning, and self-correction.

Multiple classifications exist. One is:

  • Weak AI: Designed and trained for a particular task.
  • Strong AI: Possesses generalized human cognitive abilities, allowing it to find a solution when presented with an unfamiliar task.