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McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved.
Introductionto
e-Business Systems
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Learning Objectives
Give examples of how Internet and otherinformation technologies support businessprocesses 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 systemconcepts, and how they can provide significantbusiness 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 atradition where they could avoid, delegate, orignore decisions about IT to one where theycannot create a marketing, product,international, organization, or financial planthat does not involve such decisions.”
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Marketing Systems
Marketing Information Systems provideinformation technologies that support majorcomponents of the marketing function.Interactive MarketingCustomer focused marketing processBased on using Internet, intranets, &
extranets to establish two-waycommunications between customers orpotential customers and the businessCustomers become involved in product
development, delivery, & service issues
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Marketing Systems (continued)
Targeted marketingFive targeting componentsCommunityContentContextDemographic/psychographicOnline behavior
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Marketing Systems (continued)
Sales Force AutomationThe sales force is connected to marketing
websites on the Internet, extranets, & thecompany intranetIncreases productivity of sales forceSpeeds up the capture & analysis of sales
dataAllows management to provide improved
delivery information & better support ofthe sales force.
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Manufacturing Systems
Support the production/operations function
Assists firms in planning, monitoring, &controlling inventories, purchases, & the flowof goods and services
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Manufacturing Systems (continued)
Computer-Integrated Manufacturing (CIM)SimplifyAutomateIntegrate
Supports the concepts of flexible manufacturingsystems, agile manufacturing, & total qualitymanagementComputer-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 SystemsSupportPlanning to meet the personnel needs of
the businessDevelopment of employees to their full
potentialRecruitment, 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 tomaximize 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 andother economic events
Online Accounting Systems
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Accounting Systems (continued)
Six widely used accounting systemsOrder processingCaptures & processes customer orders and
produces data needed for sales analysis andinventory 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 bycustomer 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 workrecords
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 decisionsconcerningThe financing of the businessThe allocation & control of financial
resources within the business.
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Financial Management Systems (continued)
Major financial management systemcategoriesCash ManagementCollects information on all cash receipts
and disbursements on a real-time orperiodic basis
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Financial Management Systems (continued)
Investment ManagementHelps the financial manager make buy,
sell, or hold decisions for each type ofsecurityHelps the financial manager develop the
optimum mix of securities in order tominimize risk and maximize return
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Financial Management Systems (continued)
Capital BudgetingInvolves evaluating the profitability and
financial impact of proposed capitalexpendituresAllows financial managers to analyze long-
term expenditure proposals for plant andequipment
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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 informationsubsystems that share information resourcesand support business processes across thefunctional unitsA 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 fundamentalbusiness processes in concert with thecompany’s customer, supplier, partner, &employee stakeholders
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Enterprise Application Integration (EAI)
Software enables users to model the businessprocesses involved in the interactions thatshould 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, moreeffective response to business events andcustomer demandsImproves customer and suppler experience
with the business because of itsresponsiveness.
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Transaction Processing Systems
Cross-functional information systems that processdata resulting from the occurrence of businesstransactionsTransactions – 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 entryThe capture of business data
Transaction processingTwo 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 thatenhance 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 communicationE-mailVoice mailFaxWeb publishingBulletin boardsPagingInternet phone systems
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Enterprise Collaboration Systems (continued)
Electronic conferencingData & voice conferencingVideoconferencingChat systemsDiscussion forumsElectronic meeting systemsSynchronous. Team members can meet
at the same time and place in a “decisionroom” 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-functionalintegrated enterprise systems in business?
Referring to the example on Dell Computer,what other solutions could there be for theproblem of information system incompatibilityin business besides EAI systems?
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Discussion Questions (continued)
Referring to the Charles Schwab & Co.example, what are the most important HRapplications a company could offer to itsemployees via a Web-based system?
How do you think sales force automationaffects salesperson productivity, marketingmanagement, and competitive advantage?
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Discussion Questions (continued)
How can Internet technologies be involved inimproving a process in one of the functions ofbusiness?
What are several e-business applications thatyou might recommend to a small company tohelp it survive and succeed in challengingeconomic times?
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Discussion Questions (continued)
Which of the 14 tools for enterprisecollaboration do you feel are essential for anybusiness to have today? Which do you feel areoptional?
Referring to the General Electric example,how do enterprise collaboration systemscontribute to bottom-line profits for abusiness?
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Real World Case 1 – Cypress Semiconductor & FleetBoston
How does the use of Internet technologies tosupport the marketing function at CypressSemiconductor improve business andcustomer value?
What are the benefits and potential challengesof FleetBoston’s use of IT to support theirtargeted marketing programs?
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Real World Case 1 (continued)
Why do IT-based targeted marketingprograms sometimes produce negativebusiness results?
How can negative business results be avoided?
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Real World Case 1 (continued)
How can customer segmentation and targetedmarketing programs that focus on customerprofitability avoid “ignoring customers withlow 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 suchcollaborations?
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Real World Case 2 (continued)
Why is it important to provide visibilitythroughout a supply chain?
How is JCI attempting to provide thisvisibility?
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Real World Case 2 (continued)
What is the business value of JCI’s B2Bportal?
Can collaboration systems improve the qualityof the products that are designed, as well asreducing the cost and time of the designprocess?
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Real World Case 3 – Union Pacific, Corporate Express, & BestBuy
How could an enterprise applicationintegration system help a firm to better serveits customers?
How could enterprise application systemsimprove a company’s business interactionswith its suppliers?
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Real World Case 3 (continued)
What major challenges are faced by businessesthat 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 byBaxter’s Web-based HR system?
What are some other Web-based HRapplications they might implement?
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Real World Case 4 (continued)
What business value does Baxter derive fromtheir Web-based HR approach?
What value do their employees receive fromsuch HR systems?
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Real World Case 4 (continued)
How could viewing employees as customers orclients change how HR services are providedto employees by Web-based HR systems?
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Real World Case 5 – IBM Corporation
Why have many companies been reluctant tosupport instant messaging in the workplace?
What are the advantages of instant messagingover e-mail and voice mail for enterprisecollaboration?
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Real World Case 5 (continued)
What do you see as the major disadvantages ofusing instant messenger instead of e-mail orvoice mail?
Do you recommend that companies encourageand support the use of IM tools for enterprisecollaboration?