Chapter

1

5
Introduction to e-Business Systems

McGraw-Hill/Irwin

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

2

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

3

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.

4

Section I

Functional Business Systems

McGraw-Hill/Irwin

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

5

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.

& extranets to establish two-way communications between customers or potential customers and the business Customers become involved in product development. Interactive Marketing Customer focused marketing process Based on using Internet. & service issues Copyright © 2004. McGraw-Hill/Irwin . The McGraw-Hill Companies.6 Marketing Systems Marketing Information Systems provide information technologies that support major components of the marketing function. delivery. intranets. Inc. All rights reserved.

7 Marketing Systems (continued) Targeted marketing Five targeting components Community Content Context Demographic/psychographic Online behavior McGraw-Hill/Irwin Copyright © 2004. Inc. . The McGraw-Hill Companies. All rights reserved.

extranets. All rights reserved. McGraw-Hill/Irwin . Inc. Copyright © 2004.8 Marketing Systems (continued) Sales Force Automation The sales force is connected to marketing websites on the Internet. The McGraw-Hill Companies. & 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.

& the flow of goods and services McGraw-Hill/Irwin Copyright © 2004. & controlling inventories. monitoring. All rights reserved. purchases. The McGraw-Hill Companies. Inc.9 Manufacturing Systems Support the production/operations function Assists firms in planning. .

All rights reserved. agile manufacturing.10 Manufacturing Systems (continued)  Computer-Integrated  Simplify  Automate  Integrate  Supports Manufacturing (CIM) the concepts of flexible manufacturing systems. McGraw-Hill/Irwin . & total quality management  Computer-Aided Engineering (CAE)  Computer-Aided Design (CAD)  Material Requirements Planning (MRP) Copyright © 2004. The McGraw-Hill Companies. Inc.

The McGraw-Hill Companies. Inc.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. . All rights reserved.

Also called numerical control Copyright © 2004.12 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. The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin . Inc.

The McGraw-Hill Companies.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. McGraw-Hill/Irwin . Inc. & hiring Job placement Copyright © 2004. All rights reserved.

14 Human Resource Systems (continued) Human Resource Information Systems (continued) Performance appraisals Employee benefits analysis Training and development Health. . The McGraw-Hill Companies. & security McGraw-Hill/Irwin Copyright © 2004. All rights reserved. Inc. safety.

All rights reserved. Copyright © 2004. Inc. Allows employees to perform HRM tasks online. The McGraw-Hill Companies.15 Human Resource Systems (continued) HRM and the Internet Allows companies to process most common HRM applications over their intranets. McGraw-Hill/Irwin . Allows companies to provide around-theclock services to their employees. Allows companies to disseminate valuable information faster.

Inc. and development programs McGraw-Hill/Irwin Copyright © 2004.16 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. All rights reserved. The McGraw-Hill Companies. Supported .

. All rights reserved.17 Accounting Systems Record and report business transactions and other economic events Accounting Systems Online McGraw-Hill/Irwin Copyright © 2004. Inc. The McGraw-Hill Companies.

Inc. McGraw-Hill/Irwin . The McGraw-Hill Companies. All rights reserved. Helps provide high-quality service while minimizing investment in inventory & inventory carrying costs Copyright © 2004.18 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.

and payments to. All rights reserved. Inc. The McGraw-Hill Companies.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. suppliers Copyright © 2004. Accounts McGraw-Hill/Irwin .

McGraw-Hill/Irwin . accounts payable.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. The McGraw-Hill Companies. & other accounting information systems Copyright © 2004. All rights reserved. Inc. payroll.

. All rights reserved. McGraw-Hill/Irwin Copyright © 2004. The McGraw-Hill Companies.21 Financial Management Systems Supports financial managers in decisions concerning The financing of the business The allocation & control of financial resources within the business. 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. The McGraw-Hill Companies. .23 Financial Management Systems (continued) Investment Management Helps the financial manager make buy. sell. Inc. 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.

. Inc. The McGraw-Hill Companies.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. All rights reserved.

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. Inc. The McGraw-Hill Companies. .

The McGraw-Hill Companies. . All rights reserved. Inc.26 Section II Cross-Functional Enterprise Systems McGraw-Hill/Irwin Copyright © 2004.

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. All rights reserved. . The McGraw-Hill Companies. Inc.

28 Cross-Functional Enterprise Applications (continued)  Enterprise Application Architecture McGraw-Hill/Irwin Copyright © 2004. . All rights reserved. The McGraw-Hill Companies. Inc.

29 Cross-Functional Enterprise Applications (continued) Focused on accomplishing fundamental business processes in concert with the company’s customer. The McGraw-Hill Companies. . & employee stakeholders McGraw-Hill/Irwin Copyright © 2004. All rights reserved. Inc. partner. supplier.

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. Inc. McGraw-Hill/Irwin . The McGraw-Hill Companies. Also provides middleware that Performs data conversion & coordination Provides application communication & messaging services Provides access to the application interfaces Copyright © 2004.

Copyright © 2004. All rights reserved.31 Enterprise Application Integration (continued) Business value Integrates front-office and back-office applications to allow for quicker. McGraw-Hill/Irwin . more effective response to business events and customer demands Improves customer and suppler experience with the business because of its responsiveness. The McGraw-Hill Companies. Inc.

McGraw-Hill/Irwin . The McGraw-Hill Companies. All rights reserved. Inc.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.

. All rights reserved. The McGraw-Hill Companies. Inc.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.

All rights reserved. . The McGraw-Hill Companies.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. Inc.

Inc. The McGraw-Hill Companies. 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. .

. 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. Inc. The McGraw-Hill Companies.

All rights reserved. Inc.37 Transaction Processing Systems (continued) McGraw-Hill/Irwin Copyright © 2004. The McGraw-Hill Companies. .

Collaborate – work together cooperatively on joint projects and assignments Copyright © 2004.38 Enterprise Collaboration Systems Cross-functional e-business systems that enhance communication. The McGraw-Hill Companies. McGraw-Hill/Irwin . Inc. coordination. & collaboration Communicate – share information with each other Coordinate – coordinate individual work efforts & use of resources with each other. All rights reserved.

McGraw-Hill/Irwin . All rights reserved. Inc. The McGraw-Hill Companies.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.

McGraw-Hill/Irwin . All rights reserved. The McGraw-Hill Companies. Team members can meet at the same time and place in a “decision room” setting Copyright © 2004. Inc.40 Enterprise Collaboration Systems (continued) Electronic conferencing Data & voice conferencing Videoconferencing Chat systems Discussion forums Electronic meeting systems Synchronous.

. The McGraw-Hill Companies. All rights reserved. Inc.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. 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. . Inc. what other solutions could there be for the problem of information system incompatibility in business besides EAI systems? Referring McGraw-Hill/Irwin Copyright © 2004.

43 Discussion Questions (continued) Referring to the Charles Schwab & Co. 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. All rights reserved. The McGraw-Hill Companies. How McGraw-Hill/Irwin . example. Inc. and competitive advantage? Copyright © 2004. marketing management.

The McGraw-Hill Companies. All rights reserved. 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. Inc.

The McGraw-Hill Companies. All rights reserved. how do enterprise collaboration systems contribute to bottom-line profits for a business? Copyright © 2004. Referring McGraw-Hill/Irwin . Inc.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.

The McGraw-Hill Companies. Inc. All rights reserved.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 FleetBoston’s use of IT to support their targeted marketing programs? Copyright © 2004. What McGraw-Hill/Irwin .

. The McGraw-Hill Companies. Inc. All rights reserved.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.

.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. All rights reserved. Inc. The McGraw-Hill Companies.

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. .

Inc. The McGraw-Hill Companies. 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. as well as reducing the cost and time of the design process? Can McGraw-Hill/Irwin Copyright © 2004. All rights reserved.51 Real World Case 2 (continued) What is the business value of JCI’s B2B portal? collaboration systems improve the quality of the products that are designed. .

All rights reserved. & 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? McGraw-Hill/Irwin Copyright © 2004. . Inc.52 Real World Case 3 – Union Pacific. The McGraw-Hill Companies. Corporate Express.

.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. Inc. The McGraw-Hill Companies. All rights reserved.

54 Real World Case 4 – Baxter International What key HR applications are provided by Baxter’s Web-based HR system? are some other Web-based HR applications they might implement? What McGraw-Hill/Irwin Copyright © 2004. . Inc. The McGraw-Hill Companies. All rights reserved.

Inc.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. All rights reserved. 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. .

The McGraw-Hill Companies.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. All rights reserved. . Inc.

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. . Inc. All rights reserved. The McGraw-Hill Companies.

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