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Chapter

5

Introduction to

e-Business Systems

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Learning Objectives

Give examples of how Internet and other information technologies support business processes within the business functions of ..Accounting,Finance,Human resource management,Marketing, andProduction and operations management.

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Learning Objectives (continued)

Identify the following cross-functional system concepts, and how they can provide significant business value to a company:Cross-functional enterprise systemsEnterprise application integrationTransaction processing systemsEnterprise collaboration systems

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Section I

Functional Business Systems

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IT in Business

“Business managers are moving from a tradition where they could avoid, delegate, or ignore decisions about IT to one where they cannot create a marketing, product, international, organization, or financial plan that does not involve such decisions.”

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Marketing Systems

Marketing Information Systems provide information technologies that support major components of the marketing function.Interactive Marketing

Customer focused marketing processBased on using Internet, intranets, &

extranets to establish two-way communications between customers or potential customers and the business

Customers become involved in product development, delivery, & service issues

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Marketing Systems (continued)

Targeted marketingFive targeting components

CommunityContentContextDemographic/psychographicOnline behavior

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Marketing Systems (continued)

Sales Force AutomationThe sales force is connected to marketing

websites on the Internet, extranets, & the company intranet

Increases productivity of sales forceSpeeds up the capture & analysis of sales

dataAllows management to provide improved

delivery information & better support of the sales force.

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Manufacturing Systems

Support the production/operations function

Assists firms in planning, monitoring, & controlling inventories, purchases, & the flow of goods and services

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Manufacturing Systems (continued)

Computer-Integrated Manufacturing (CIM)SimplifyAutomateIntegrate

Supports the concepts of flexible manufacturing systems, agile manufacturing, & total quality managementComputer-Aided Engineering (CAE)Computer-Aided Design (CAD)Material Requirements Planning (MRP)

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Manufacturing Systems (continued)

Computer-Aided Manufacturing (CAM)Automate the production process

Manufacturing Execution Systems (MES)Performance monitoring systems for factory

floor operations

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Manufacturing Systems (continued)

Process ControlThe use of computers to control an ongoing

physical process

Machine ControlThe use of a computer to control the actions

of a machine.Also called numerical control

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Human Resource Systems

Human Resource Information SystemsSupport

Planning to meet the personnel needs of the business

Development of employees to their full potential

Recruitment, selection, & hiringJob placement

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Human Resource Systems (continued)

Human Resource Information Systems (continued)

Performance appraisalsEmployee benefits analysisTraining and developmentHealth, safety, & security

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Human Resource Systems (continued)

HRM and the InternetAllows companies to process most common

HRM applications over their intranets.Allows companies to provide around-the-

clock services to their employees.Allows companies to disseminate valuable

information faster.Allows employees to perform HRM tasks

online.

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Human Resource Systems (continued)

StaffingSupported by information systems that

record and track human resources to maximize their use

Training and DevelopmentHelp human resource managers plan and

monitor employee recruitment, training, and development programs

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Accounting Systems

Record and report business transactions and other economic events

Online Accounting Systems

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Accounting Systems (continued)

Six widely used accounting systemsOrder processing

Captures & processes customer orders and produces data needed for sales analysis and inventory control

Inventory ControlProcesses data reflecting changes in items in

inventory.Helps provide high-quality service while

minimizing investment in inventory & inventory carrying costs

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Accounting Systems (continued)

Accounts ReceivableKeeps records of amounts owed by

customers from data generated by customer purchases and payments

Accounts PayableKeeps track of data concerning purchases

from, and payments to, suppliers

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Accounting Systems (continued)

PayrollReceives and maintains data from

employee time cards and other work records

General LedgerConsolidates data received from accounts

receivable, accounts payable, payroll, & other accounting information systems

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Financial Management Systems

Supports financial managers in decisions concerningThe financing of the businessThe allocation & control of financial

resources within the business.

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Financial Management Systems (continued)

Major financial management system categoriesCash Management

Collects information on all cash receipts and disbursements on a real-time or periodic basis

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Financial Management Systems (continued)

Investment ManagementHelps the financial manager make buy,

sell, or hold decisions for each type of security

Helps the financial manager develop the optimum mix of securities in order to minimize risk and maximize return

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Financial Management Systems (continued)

Capital BudgetingInvolves evaluating the profitability and

financial impact of proposed capital expenditures

Allows financial managers to analyze long-term expenditure proposals for plant and equipment

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Financial Management System (continued)

Financial Forecasting & PlanningEvaluate the present and projected

financial performance of the companyHelp determine financing needs and

analyze alternative methods of financingExplore what-if and goal-seeking

questions

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Section II

Cross-Functional Enterprise Systems

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Cross-Functional Enterprise Applications

Integrated combinations of information subsystems that share information resources and support business processes across the functional units

A strategic way to use IT to share information resources & improve efficiency & effectiveness

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Cross-Functional Enterprise Applications (continued)

Enterprise Application Architecture

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Cross-Functional Enterprise Applications (continued)

Focused on accomplishing fundamental business processes in concert with the company’s customer, supplier, partner, & employee stakeholders

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Enterprise Application Integration (EAI)

Software enables users to model the business processes involved in the interactions that should occur between business applications.

Also provides middleware thatPerforms data conversion & coordinationProvides application communication &

messaging servicesProvides access to the application interfaces

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Enterprise Application Integration (continued)

Business valueIntegrates front-office and back-office

applications to allow for quicker, more effective response to business events and customer demands

Improves customer and suppler experience with the business because of its responsiveness.

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Transaction Processing Systems

Cross-functional information systems that process data resulting from the occurrence of business transactionsTransactions – events that occur as part of doing

businessSalesPurchasesDepositsWithdrawalsRefundsPayments

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Transaction Processing Systems (continued)

Online transaction processing systemsReal-time systems that capture and

process transactions immediatelyAdds value to product or service

through superior customer service

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Transaction Processing Systems (continued)

Transaction Processing CycleData entry

The capture of business dataTransaction processing

Two basic waysBatch processing where transaction data are

accumulated & processed periodicallyReal-time processing where data are processed

immediately after a transaction occurs

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Transaction Processing Systems (continued)

Database maintenanceCorporate databases are updated to reflect

the day-to-day business transactions

Document and report generationA variety of documents and reports are

produced

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Transaction Processing Systems (continued)

Inquiry processingInquiries and responses concerning the

results of transaction processing activity

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Transaction Processing Systems (continued)

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Enterprise Collaboration Systems

Cross-functional e-business systems that enhance communication, coordination, & collaborationCommunicate – share information with each

otherCoordinate – coordinate individual work

efforts & use of resources with each other.Collaborate – work together cooperatively

on joint projects and assignments

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Enterprise Collaboration Systems (continued)

Tools for Enterprise CollaborationElectronic communication

E-mailVoice mailFaxWeb publishingBulletin boardsPagingInternet phone systems

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Enterprise Collaboration Systems (continued)

Electronic conferencingData & voice conferencingVideoconferencingChat systemsDiscussion forumsElectronic meeting systems

Synchronous. Team members can meet at the same time and place in a “decision room” setting

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Enterprise Collaboration Systems (continued)

Collaborative work managementCalendaring & schedulingTask & project managementWorkflow systemsKnowledge management

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Discussion Questions

Why is there a trend toward cross-functional integrated enterprise systems in business?

Referring to the example on Dell Computer, what other solutions could there be for the problem of information system incompatibility in business besides EAI systems?

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Discussion Questions (continued)

Referring to the Charles Schwab & Co. example, what are the most important HR applications a company could offer to its employees via a Web-based system?

How do you think sales force automation affects salesperson productivity, marketing management, and competitive advantage?

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Discussion Questions (continued)

How can Internet technologies be involved in improving a process in one of the functions of business?

What are several e-business applications that you might recommend to a small company to help it survive and succeed in challenging economic times?

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Discussion Questions (continued)

Which of the 14 tools for enterprise collaboration do you feel are essential for any business to have today? Which do you feel are optional?

Referring to the General Electric example, how do enterprise collaboration systems contribute to bottom-line profits for a business?

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Real World Case 1 – Cypress Semiconductor & FleetBoston

How does the use of Internet technologies to support the marketing function at Cypress Semiconductor improve business and customer value?

What are the benefits and potential challenges of FleetBoston’s use of IT to support their targeted marketing programs?

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Real World Case 1 (continued)

Why do IT-based targeted marketing programs sometimes produce negative business results?

How can negative business results be avoided?

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Real World Case 1 (continued)

How can customer segmentation and targeted marketing programs that focus on customer profitability avoid “ignoring customers with low current returns but high potential”?

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Real World Case 2 – Johnson Controls

Why is the exchange of “tribal knowledge” important in product design?

How do Web-based systems support such collaborations?

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Real World Case 2 (continued)

Why is it important to provide visibility throughout a supply chain?

How is JCI attempting to provide this visibility?

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Real World Case 2 (continued)

What is the business value of JCI’s B2B portal?

Can collaboration systems improve the quality of the products that are designed, as well as reducing the cost and time of the design process?

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Real World Case 3 – Union Pacific, Corporate Express, & Best Buy

How could an enterprise application integration system help a firm to better serve its customers?

How could enterprise application systems improve a company’s business interactions with its suppliers?

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Real World Case 3 (continued)

What major challenges are faced by businesses that implement EAI initiatives?

How can companies meet those challenges?

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Real World Case 4 – Baxter International

What key HR applications are provided by Baxter’s Web-based HR system?

What are some other Web-based HR applications they might implement?

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Real World Case 4 (continued)

What business value does Baxter derive from their Web-based HR approach?

What value do their employees receive from such HR systems?

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Real World Case 4 (continued)

How could viewing employees as customers or clients change how HR services are provided to employees by Web-based HR systems?

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Real World Case 5 – IBM Corporation

Why have many companies been reluctant to support instant messaging in the workplace?

What are the advantages of instant messaging over e-mail and voice mail for enterprise collaboration?

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Real World Case 5 (continued)

What do you see as the major disadvantages of using instant messenger instead of e-mail or voice mail?

Do you recommend that companies encourage and support the use of IM tools for enterprise collaboration?