1

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, and

Production 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 systems

Enterprise application integration

Transaction processing systems

Enterprise 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 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
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Marketing Systems (continued)

Targeted marketing
Five targeting components

Community

Content

Context

Demographic/psychographic

Online behavior

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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.
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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)

 Simplify

 Automate

 Integrate

 Supports the concepts of flexible manufacturing

systems, agile manufacturing, & total quality
management
 Computer-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 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

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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

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Human Resource Systems (continued)

Human Resource Information Systems

(continued)
Performance appraisals

Employee benefits analysis

Training and development

Health, safety, & security

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Human Resource Systems (continued)

HRM and the Internet

Allows 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)

Staffing

Supported
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

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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 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
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Accounting Systems (continued)

Accounts Receivable
Keeps records of amounts owed by

customers from data generated by

customer purchases and payments

Accounts Payable
Keeps track of data concerning purchases

from, and payments to, suppliers

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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
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Financial Management Systems

Supports financial managers in decisions
concerning
The financing of the business

The allocation & control of financial

resources within the business.

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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

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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

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Financial Management Systems (continued)

Capital Budgeting
Involves 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 & 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

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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 that

Performs data conversion & coordination

Provides application communication &

messaging services
Provides access to the application interfaces
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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.

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 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
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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

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Transaction Processing Systems (continued)

Transaction Processing Cycle

 Data 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

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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

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Transaction Processing Systems (continued)

Inquiry processing
Inquiries 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, &
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

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Enterprise Collaboration Systems (continued)

Tools for Enterprise Collaboration

Electronic communication

E-mail

Voice mail

Fax

Web publishing

Bulletin boards

Paging

Internet phone systems

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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
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Enterprise Collaboration Systems (continued)

Collaborative work management

Calendaring & scheduling

Task & project management

Workflow systems

Knowledge 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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 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?

Referring to the General Electric example,

how do enterprise collaboration systems
contribute to bottom-line profits for a
business?
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 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?

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?

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