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Chapter

7
Electronic Business Systems

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Learning Objectives 1. Identify the following cross-functional enterprise systems, and give examples of how they can provide significant business value to a company:
Enterprise application integration Transaction processing systems Enterprise collaboration systems

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Learning Objectives 2. 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.

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What is E-Business? The use of the Internet and other networks and information technologies to support electronic commerce, enterprise communications and collaboration, and Web-enabled business processes, both within a networked enterprise and with its customers and business partners.

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Case #1: Data-Driven Hospitality Customers are more satisfied when they have a problem and the hotel staff takes care of it than if the stay goes flawlessly.

The hospitality industry is a people business. It doesnt do any good to have great customer information thats only in the reservations system and available to the call center. It must be common across all systems.
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Case #1: Data-Driven Hospitality

OnQ Customers Really Matter: Custom-built customer relationship management information system Integrated to cover 22 million guests, all properties, eight brands Provide employees with a clearer idea of who customer are and what their past Hilton experiences have been so they can provide constant improvement
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Case #1: Data-Driven Hospitality OnQ Challenges: Presenting deep customer history data clearly enough for inexperienced front desk employees Supporting a diverse mix of brands

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Case #1: Data-Driven Hospitality 1. What are the benefits and drawbacks of the OnQ system at Hilton? 2. What does Hilton have to do to create a competitive advantage through OnQ? Provide some specific examples.

3. Is it possible to have too much information about a customer? Explain.

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Case #1: Data-Driven Hospitality 4. What are several reasons why CRM software applications are so expensive? Why do they seem to take so long to implement?

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Cross-Functional Enterprise Systems Definition: Information systems that cross the boundaries of traditional business functions in order to reengineer and improve vital business processes all across the enterprise

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Cross-Functional Information Systems

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Enterprise Application Architecture

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Enterprise Application Integration (EAI) Definition: Software that integrates a variety of enterprise application clusters by letting them exchange data according to rules derived from the business process models developed by users

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Enterprise Application Integration

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EAI Example

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Transaction Processing Systems (TPS)

Definition: Cross-functional information systems that process data resulting from the occurrence of business transactions

Transactions events that occur as part of doing business

Online Transaction Processing Systems (OLTP) real-time systems that capture and process transactions immediately
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Transaction Processing Cycle Data Entry capture of business data Transaction Processing
Batch transaction data are accumulated over a period of time and processed periodically Real-Time data are processed immediately after a transaction occurs

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Transaction Processing Cycle

Database Maintenance updating corporate databases of an organization to reflect changes resulting from day-to-day business transactions Document and Report Generation including transaction documents, transaction listings and error reports

Inquiry Processing making inquiries and receiving responses concerning the results of transaction processing activities
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Transaction Processing Cycle

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Enterprise Collaboration Systems (ECS) Definition: Cross-functional information systems that enhance communication, coordination, and collaboration among the members of business teams and workgroups

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ECS Goals Communicate share information Coordinate coordinate individual work efforts and share resources Collaborate work together cooperatively on joint projects and assignments

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ECS Tools

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Case #2: Business Case for EAI

EAI Benefits: Share data among legacy systems Improve data quality and accuracy

Align systems more closely with business processes Improve customer service
Cut costs
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Case #2: Business Case for EAI EAI Challenges: Specific IT skills required Extensive coordination among multiple departments

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Case #2: Business Case for EAI 1. Why has EAI recently become a critical part of the IT strategy at many organizations, and a high-ranking project of top IT executives? Use GE Power and Corporate Express as examples.

2. What is the major difference in the business value of the EAI projects at GE Power and Corporate Express?
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Case #2: Business Case for EAI 3. What are some of the challenges in developing and implementing EAI systems? How can companies meet these challenges? 4. Why is there a need for enterprise application integration systems in business? Will this continue to be the case in the future? Why or why not?
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Functional Business Systems Definition: Information systems that support the business functions of accounting, finance, marketing, operations management, and human resource management

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Functional Business IS

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Marketing Systems

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Interactive Marketing
Definition: Customer-focused marketing process that is based on using the Internet, intranets, and extranets to establish two-way transactions between a business and its customers or potential customers Goal: Use networks to attract and keep customers who will become partners with the business in creating, purchasing, and improving products and services
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Targeted Marketing Definition: Tool for developing advertising and promotion strategies to strengthen a companys e-commerce initiatives, as well as its traditional business venues

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Targeted Marketing Components

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Targeted Marketing Components Community customize advertising to appeal to people of specific virtual communities Content advertising placed on a variety of selected websites Context advertising placed on web pages that are relevant to the content of a product or service
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Targeted Marketing Components Demographic/Psychographic web marketing efforts aimed at specific types or classes or people

Online Behavior promotion efforts tailored to each visit to a site by an individual

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Sales Force Automation Definition: Information systems that improve the delivery of information and support to salespeople with the goal of improving sales productivity and marketing responsiveness

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Manufacturing Systems Definition: Information systems that support the production/operations function that includes all activities concerned with the planning and control of the processes producing goods and services

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Manufacturing Systems

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Computer-Integrated Manufacturing (CIM)

Objectives: Simplify production processes, product designs, and factory organization as a vital foundation to automation and integration Automate production processes and the business functions that support them with computers, machines, and robots Integrate all production and support processes using computer networks, cross-functional business software, and other information technologies
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CIM Systems
Computer-aided manufacturing (CAM) Information systems that automate the production process Manufacturing execution systems (MES) performance monitoring information systems for factory floor operations Process Control control ongoing physical processes Machine Control controls the actions of machines
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Human Resource Systems

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HRM and the Internet Recruiting employees through recruiting services and databases on the World Wide Web

Posting messages in selected Internet newsgroups Communicating with job applicants via email
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HRM and Corporate Intranets

Process common HRM applications

Allow HRM department to provide around-theclock services

Disseminate valuable information faster than through previous company channels Collect information from employees online Allow managers and other employees to perform HRM tasks with little intervention by the HRM department
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Accounting Information Systems

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Common Business Accounting Systems

Order Processing Captures and processes customer orders and produces data for inventory control and accounts receivable Inventory Control Processes data reflecting changes in inventory and provides shipping and reorder information Accounts Receivable Records amounts owed by customers and produces customer invoices, monthly customer statements, and credit management reports
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Common Business Accounting Systems

Accounts Payable Records purchases from, amounts owed to, and payments to suppliers, and produces cash management reports Payroll Records employee work and compensation data and produces paychecks and other payroll documents and reports

General Ledger Consolidates data from other accounting systems and produces the periodic financial statements and reports of the business
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Financial Management Systems

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Financial Management Systems Capital Budgeting evaluating the profitability and financial impact of proposed capital expenditures

Financial Planning evaluating the present and projected financial performance of a business

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Case #3: Improving Supply-Chain Results Supply chains are, by definition, a kludge of systems, comprising software for manufacturing, warehousing, inventory control, planning, shipping, and logistics. They also involve intimate relationships with suppliers and partners, and, on the front end, an increasing dependence on the input of customers.
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Case #3: Improving Supply-Chain Results Benefits of SCM Cut costs Increase sales with efficient and effective supply chains

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Case #3: Improving Supply-Chain Results Types of SCM: Supply-Chain Execution addresses particular segments along the supply chain such as warehouse management or transportation management Supply-Chain Planning helps companies decide which products to build and when, based on forecasts, orders, capacity, and resources
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Case #3: Improving Supply-Chain Results

1. What is the business value of SCM systems for Brunswick? 2. Does the business value of SCM depend upon what type of business a company is in? Explain. 3. How does Brunswicks approach to SCM differ from that of the other companies? Is one approach superior to all others? Why or why not?
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Case #4: Swarming Collaboration Swarming is a type of collaboration in which large numbers of geographically dispersed people quickly self-organize in a peer-to-peer network to deal with a problem or opportunity. Its a fluid, shifting network with no central control or hub.

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Case #4: Swarming Collaboration

Benefits of Swarming: Allows large organizations to match the agility of smaller competitors Tap resources previously overlooked Prospective customers become collaborators Cuts document duplication and delivery costs

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Case #4: Swarming Collaboration 1. What are the business benefits of swarming collaboration? Use Lowe Worldwide and HP as examples.

2. What are some possible limitations of swarming?

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Case #4: Swarming Collaboration 3. Visit the website of Groove Networks and experience their demo of working in a shared workspace. Would this support workgroup collaboration? Swarming collaboration? Why or why not?

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Summary
Major e-business applications are integrated cross-functional enterprise systems such as enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (SCM). Enterprise application integration (EAI) systems interconnect other information systems so that business professionals can more easily access the information resources they need to support the needs of customers, suppliers, and business partners.
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Summary
Transaction processing involves the basic activities of data entry, transaction processing, database maintenance, document and report generation, and inquiry processing.

Functional business information systems support the business functions of marketing, production/operations, accounting, finance, and human resource management through a variety of e-business operational and management information systems.
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Summary
Marketing information systems support traditional and e-commerce processes and management of the marketing function. Computer-based manufacturing information systems help a company achieve computerintegrated manufacturing, and thus simplify automate, and integrate many of the activities needed to quickly produce high-quality products to meet changing customer demands.

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Summary Human resource information systems support human resource management in organizations including staffing, training and development, and compensation administration. Accounting information systems record, report and analyze business transactions and events for the management of the business enterprise.
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Chapter

7
End of Chapter

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