Chapter

5
Introduction to e-Business Systems

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

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, and Production and operations management.
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

Learning Objectives (continued)

Identify

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

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Section I

Functional Business Systems

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

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.

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Marketing Systems
Marketing

Information Systems provide information technologies that support major components of the marketing function. Interactive Marketing Customer focused marketing process Based 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
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

Marketing Systems (continued)

Targeted

marketing Five targeting components Community Content Context Demographic/psychographic Online behavior

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Marketing Systems (continued)

Sales

Force Automation The sales force is connected to marketing websites on the Internet, extranets, & the company intranet Increases productivity of sales force Speeds up the capture & analysis of sales data Allows management to provide improved delivery information & better support of the sales force.
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

Manufacturing Systems
Support

the production/operations function

Assists

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

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

10

Manufacturing Systems (continued)

Computer-Integrated Simplify Automate Integrate Supports

Manufacturing (CIM)

the concepts of flexible manufacturing systems, agile manufacturing, & total quality management Computer-Aided Engineering (CAE) Computer-Aided Design (CAD) Material Requirements Planning (MRP)
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

11

Manufacturing Systems (continued)

Computer-Aided

Manufacturing (CAM) Automate the production process Execution Systems (MES) Performance monitoring systems for factory floor operations

Manufacturing

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

12

Manufacturing Systems (continued)

Process

Control The use of computers to control an ongoing physical process

Machine

Control The use of a computer to control the actions of a machine. Also called numerical control
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

13

Human Resource Systems

Human

Resource Information Systems Support Planning to meet the personnel needs of the business Development of employees to their full potential Recruitment, selection, & hiring Job placement
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

14

Human Resource Systems (continued)

Human

Resource Information Systems (continued) Performance appraisals Employee benefits analysis Training and development Health, safety, & security

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

15

Human Resource Systems (continued)

HRM

and the Internet Allows companies to process most common HRM applications over their intranets. Allows companies to provide around-theclock services to their employees. Allows companies to disseminate valuable information faster. Allows employees to perform HRM tasks online.
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

16

Human Resource Systems (continued)

Staffing

by information systems that record and track human resources to maximize their use Training and Development Help human resource managers plan and monitor employee recruitment, training, and development programs
McGraw-Hill/Irwin
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Supported

17

Accounting Systems
Record

and report business transactions and other economic events Accounting Systems

Online

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

18

Accounting Systems (continued)

Six

widely used accounting systems Order processing Captures & processes customer orders and produces data needed for sales analysis and inventory control Inventory Control Processes data reflecting changes in items in inventory. Helps provide high-quality service while minimizing investment in inventory & inventory carrying costs
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

19

Accounting Systems (continued)

Accounts

Receivable Keeps records of amounts owed by customers from data generated by customer purchases and payments Payable Keeps track of data concerning purchases from, and payments to, suppliers
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Accounts

McGraw-Hill/Irwin

20

Accounting Systems (continued)

Payroll Receives

and maintains data from employee time cards and other work records

General

Ledger Consolidates data received from accounts receivable, accounts payable, payroll, & other accounting information systems
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

21

Financial Management Systems

Supports

financial managers in decisions concerning The financing of the business The allocation & control of financial resources within the business.

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

22

Financial Management Systems (continued)

Major

financial management system categories Cash Management Collects information on all cash receipts and disbursements on a real-time or periodic basis

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

23

Financial Management Systems (continued)

Investment

Management Helps 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

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

24

Financial Management Systems (continued)

Capital

Budgeting Involves evaluating the profitability and financial impact of proposed capital expenditures Allows financial managers to analyze longterm expenditure proposals for plant and equipment

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

25

Financial Management System (continued)

Financial

Forecasting & Planning Evaluate the present and projected financial performance of the company Help determine financing needs and analyze alternative methods of financing Explore what-if and goal-seeking questions

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

26

Section II

Cross-Functional Enterprise Systems

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

27

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

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

28

Cross-Functional Enterprise Applications (continued)

Enterprise

Application Architecture

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

29

Cross-Functional Enterprise Applications (continued)

Focused

on accomplishing fundamental business processes in concert with the companys customer, supplier, partner, & employee stakeholders

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

30

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 that Performs data conversion & coordination Provides application communication & messaging services Provides access to the application interfaces
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

31

Enterprise Application Integration (continued)

Business

value Integrates 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.
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

32

Transaction Processing Systems

Cross-functional

information systems that process data resulting from the occurrence of business transactions Transactions events that occur as part of doing business Sales Purchases Deposits Withdrawals Refunds Payments
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

33

Transaction Processing Systems (continued)

Online

transaction processing systems Real-time systems that capture and process transactions immediately Adds value to product or service through superior customer service

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

34

Transaction Processing Systems (continued)

Transaction
Data

Processing Cycle

entry The capture of business data Transaction processing Two basic ways Batch processing where transaction data are accumulated & processed periodically Real-time processing where data are processed immediately after a transaction occurs
McGraw-Hill/Irwin
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

35

Transaction Processing Systems (continued)

Database

maintenance Corporate databases are updated to reflect the day-to-day business transactions

Document

and report generation A variety of documents and reports are produced

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

36

Transaction Processing Systems (continued)

Inquiry

processing Inquiries and responses concerning the results of transaction processing activity

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

37

Transaction Processing Systems (continued)

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

38

Enterprise Collaboration Systems

Cross-functional

e-business systems that enhance communication, coordination, & collaboration Communicate share information with each other Coordinate coordinate individual work efforts & use of resources with each other. Collaborate work together cooperatively on joint projects and assignments
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

39

Enterprise Collaboration Systems (continued)

Tools

for Enterprise Collaboration Electronic communication E-mail Voice mail Fax Web publishing Bulletin boards Paging Internet phone systems
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

40

Enterprise Collaboration Systems (continued)

Electronic

conferencing Data & voice conferencing Videoconferencing Chat systems Discussion forums Electronic meeting systems Synchronous. Team members can meet at the same time and place in a decision room setting
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

41

Enterprise Collaboration Systems (continued)

Collaborative

work management Calendaring & scheduling Task & project management Workflow systems Knowledge management

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

42

Discussion Questions
Why

is there a trend toward cross-functional integrated enterprise systems in business? to the example on Dell Computer, what other solutions could there be for the problem of information system incompatibility in business besides EAI systems?

Referring

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

43

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? do you think sales force automation affects salesperson productivity, marketing management, and competitive advantage?
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

How

McGraw-Hill/Irwin

44

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?
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

45

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? to the General Electric example, how do enterprise collaboration systems contribute to bottom-line profits for a business?
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

Referring

McGraw-Hill/Irwin

46

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? are the benefits and potential challenges of FleetBostons use of IT to support their targeted marketing programs?
Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

What

McGraw-Hill/Irwin

47

Real World Case 1 (continued)

Why

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

How

can negative business results be avoided?

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

48

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?

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

49

Real World Case 2 Johnson Controls

Why

is the exchange of tribal knowledge important in product design? do Web-based systems support such collaborations?

How

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

50

Real World Case 2 (continued)

Why

is it important to provide visibility throughout a supply chain? is JCI attempting to provide this visibility?

How

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

51

Real World Case 2 (continued)

What

is the business value of JCIs B2B portal? collaboration systems improve the quality of the products that are designed, as well as reducing the cost and time of the design process?

Can

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

52

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 companys business interactions with its suppliers?

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

53

Real World Case 3 (continued)

What

major challenges are faced by businesses that implement EAI initiatives? can companies meet those challenges?

How

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

54

Real World Case 4 Baxter International

What

key HR applications are provided by Baxters Web-based HR system? are some other Web-based HR applications they might implement?

What

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

55

Real World Case 4 (continued)

What

business value does Baxter derive from their Web-based HR approach? value do their employees receive from such HR systems?

What

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

56

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?

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

57

Real World Case 5 IBM Corporation

Why

have many companies been reluctant to support instant messaging in the workplace? are the advantages of instant messaging over e-mail and voice mail for enterprise collaboration?

What

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.

58

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?

McGraw-Hill/Irwin

Copyright 2004, The McGraw-Hill Companies, Inc. All rights reserved.