Chapter-7

E-business:
It is the use of the Internet and other networks and information technologies to support e-commerce,
enterprise communications and collaboration, and Web-enabled business processes, both within a
networked enterprise and with its customers and business partners.
E-commerce:
It involves the buying and selling and marketing and servicing of products, services, and information over
the Internet and other networks.
Cross-Functional Enterprise Systems:
Many companies today are using information technology to develop integrated cross-functional enterprise
systems that cross the boundaries of traditional business functions in order to reengineer and improve
vital business processes all across the enterprise. These organizations view cross-functional enterprise
systems as a strategic way to use IT to share information resources and improve the efficiency and
effectiveness of business processes, and develop strategic relationships with customers, suppliers, and
business partners.
Enterprise Application Architecture:
Enterprise applications focus on accomplishing fundamental business processes in concert with a
company’s customer, supplier, partner, and employee stakeholders.
 Enterprise resource planning (ERP) concentrates on the efficiency of a firm’s internal production,
distribution, and financial processes.
 Customer relationship management (CRM) focuses on acquiring and retaining profitable
customers via marketing, sales, and service processes.
 Partner relationship management (PRM) aims to acquire and retain partners who can enhance the
sale and distribution of a firm’s products and services.
 Supply chain management (SCM) focuses on developing the most efficient and effective sourcing
and procurement processes with suppliers for the products and services that a business needs.
 Knowledge Management applications provide s firm’s employees with tools that support group
collaboration and decision support.
Enterprise Application Integration:
EAI software enables users to model the business processes involved in the interactions that should occur between
business applications. EAI also provides middleware that performs data conversion and coordination, application
communication and messaging services, and access to the application interfaces involved.

Front Office Back Office

Customer Service Distribution
Filed Service Manufacturing
Product Configuration Scheduling
Sales order Entry Finance

Transaction Processing Systems

TPSs are cross-functional information systems that record and process the data resulting from business transactions.
Data about the customer, product, salesperson, store, and so on, must be captured and processed. Thus, transaction
processing activities are needed to capture and process such data, or the operations of a business would grind to a
halt.
Activities of Transaction Processing Cycle:
i) Data Entry: The first step of the transaction processing cycle is the capture of business data. For example,
transaction data can be captured at an e-commerce Web site on the Internet.
ii) Transaction Processing. Transaction processing systems process data in two basic ways: (1) batch
processing , where transaction data are accumulated over a period of time and processed periodically, and
(2) real-time processing (also called online processing), where data are processed immediately after a
transaction occurs.
iii) Database Maintenance. An organization’s databases must be updated by its transaction processing systems
so that they are always correct and up-to-date. For example, credit sales made to customers will cause
customer account balances to be increased and the amount of inventory on hand to be decreased.
iv) Document and Report Generation. Transaction processing systems produce a variety of documents and
reports. Examples include purchase orders, sales receipts, invoices, and customer statements.
v) Inquiry Processing: Many transaction processing systems allow to use the Internet, intranets, extranets, and
Web browsers or database management query languages to make inquiries and receive responses concerning
the results of transaction processing activity. For example, checking on the status of a sales order, the amount
of stock in inventory.

Enterprise collaboration systems (ECS)

Enterprise collaboration systems (ECS) are cross-functional information systems that enhance communication,
coordination, and collaboration among the members of business teams and workgroups. The goal of ECS is to
enable us to work together more easily and effectively by helping us to:
 Communicate: Share information with each other.
 Coordinate: Organize our individual work efforts and use of resources.
 Collaborate: Work together cooperatively on joint projects and assignments

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Tools for Enterprise Collaboration:
The tools that the business users want for enterprise collaboration are:
i) Electronic communication tools:
E-mail, voice mail, faxing, Web publishing, bulletin board systems, paging, and Internet phone systems. These
tools enable you to send electronically messages, documents, and files in data, text, voice, or multimedia over
computer networks. This helps you share everything from voice and text messages to copies of project
documents and data files with your team members, wherever they may be.
ii) Electronic conferencing tools:
Data conferencing, Voice Conferencing, Video Conferencing, Discussion Forums, Chat Systems, Electronic
meeting systems. These tools help users communicate and collaborate as they work together.
iii) Collaborative work management tools:
Calendaring and scheduling tools, task and project management, workflow systems, and knowledge
management tools. These tools help users accomplish or manage group work activities.

Functional Business Systems

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.
Marketing System:
Marketing information systems support traditional and e-commerce processes and management of the
marketing function.
Types of Marketing Information System: TISPAMSC
i) Targeted marketing: An advertising and promotion management concept that includes five
components: community, content, context, demographic, online behavior.
ii) Interactive marketing at e-commerce Web sites- The customers become partners in creating,
marketing, purchasing, and improving products and services.
iii) Sales force automation: Computers and internet are providing the basis for it. It increases
the productivity of sales person and speeds up the capture and analysis of sales data.
iv) Product management v) Advertising and promotion vi) Market research vii)
Sales management viii) Customer relationship management

Thus, marketing information systems assist marketing managers in e-commerce product development
and customer relationship decisions, as well as in planning advertising and sales promotion strategies
and developing the e-commerce potential of new and present products and new channels of distribution.
Manufacturing Systems:
Manufacturing information systems support the production/operations function that includes all
activities concerned with the planning and control of the processes producing goods or services.

Computer-based manufacturing information systems help a company achieve computer-integrated

manufacturing (CIM), and thus simplify, automate, and integrate many of the activities needed to
quickly produce high-quality products to meet changing customer demands.
For example, computer-aided design using collaborative manufacturing networks helps engineers
collaborate on the design of new products and processes. Then manufacturing resource planning
systems help plan the types of resources needed in the production process. Finally, manufacturing
execution systems monitor and control the manufacture of products on the factory floor through shop
floor scheduling and control systems, controlling a physical process (process control), a machine tool
(numerical control), or machines with some humanlike work capabilities (robotics).

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  Process control is the use of computers to control an ongoing physical process.
 Machine control is the use of computers to control the actions of machines.
 Manufacturing execution systems (MES) are performance-monitoring information systems for
factory floor operations. They monitor, track, and control the five essential components involved
in a production process: materials, equipment, personnel, instructions and specifications, and
production facilities.
Human Resource Management:
Human resource information systems support human resource management in organizations that
include information systems for recruitment, selection, and hiring; job placement; performance
appraisals; employee benefits analysis; training and development; and health, safety, and security

Human resource information systems support the strategic, tactical, and operational use of the human
resources of an organization in the following ways:
Staffing Training and Development Compensation Administration
Strategic  Human resource Planning  Succession planning  Contract Costing
Systems  Labor force tracking  Performance appraisal planning  Salary forecasting
Tactical  Labor cost analysis and  Training  Compensation Effectiveness
Systems budgeting  Effectiveness Career matching and equity analysis
 Turnover analysis  Benefit preference analysis
Operational  Recruiting  Skill assessment  Payroll control
Systems  Workforce planning scheduling  Performance evaluations  Benefits administration

Accounting and Finance:

Accounting information systems record, report, and analyze business transactions and events for the
management of the business enterprise.
i. Order Processing: Captures and processes customer orders and produces data for inventory control
and accounts receivable.
ii. Inventory Control: Processes data reflecting changes in inventory and provides shipping and
reorder information.
iii. Accounts Receivable: Records amounts owed by customers and produces customer invoices,
monthly customer statements, and credit management reports.
iv. Accounts Payable: Records purchases from, amounts owed to, and payments to suppliers, and
produces cash management reports.
v. Payroll: Records employee work and compensation data and produces paychecks and other payroll
documents and reports.
vi. General Ledger: Consolidates data from other accounting systems and produces the periodic
financial statements and reports of the business
Financial Management Systems:
Information systems in finance support managers in decisions regarding the financing of a business and
the allocation of financial resources within a business. Financial information systems include:
i. Cash management: Forecast and manage cash position
ii. Investment management: Manage short-term and other securities
i. Capital budgeting: Evaluate risk/return of capital expenditures
ii. Financial forecasting and planning: Forecast financial performance and financing needs

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