Unit 6: e-business Systems LH 7

• Introduction
• Cross-functional enterprise applications
• Enterprise application integration
• Transaction processing systems
– The transaction processing cycle
– Enterprise collaboration systems: tools for enterprise
collaboration
• Functional business systems
– Introduction, IT in business
– Marketing systems: interactive marketing, targeted marketing,
sales force automation
– Manufacturing systems: computer-integrated manufacturing
– Human resource systems: HRM and Internet, HRM and
corporate Intranets
– Accounting Systems: online Accounting systems
– Financial management systems
Learning Objectives

• 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

1-2
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
– Production
– Operations management

1-3
Enterprise Business Systems

• E-business means using the Internet, other networks, and IT to

support
– Electronic commerce
– Enterprise communications and collaboration
– Web-enabled business processes
• E-commerce is the buying, selling, and marketing of products,
services, and information over the Internet and other networks

1-4
Cross-Functional Systems

• Cross the boundaries of traditional business functions

– Used to reengineer and improve vital business processes all
across the enterprise

1-7
Enterprise Application Architecture

1-8
Enterprise Application Architecture

• Provides a conceptual framework

– Helps visualize the basic components, processes, and interfaces
of major e-business applications.

• Focuses on accomplishing fundamental

business processes in concert with
– Customers
– Suppliers
– Partners
– Employees

1-9
Enterprise Application Architecture

• Enterprise Resource Planning (ERP)

– Concentrates on the efficiency of internal production,
distribution, and financial processes

• Customer Relationship Management (CRM)

– Focuses on acquiring and retaining profitable customers via
marketing, sales, and services

• Partner Relationship Management (PRM)

– Aims at acquiring and retaining partners who
can enhance the selling and distribution of products and services

1-10
Enterprise Application Architecture

• Supply Chain Management (SCM)

– Focuses on developing the most efficient and effective
sourcing and procurement processes.

• Knowledge Management (KM)

– Focuses on facilitating internal group collaboration and
decision support

1-11
Enterprise Application Integration

• EAI software connects cross-functional systems

• Serves as middleware to provide
– Data conversion
– Communication between systems
– Access to system interfaces

1-12
How EAI Works

1-13
Transaction Processing Systems

• Cross-functional information systems that process data resulting

from the occurrence of business transactions
– Transactions include sales, purchases, deposits, withdrawals,
refunds, and payments
– Online transaction processing (OLTP) is a real-time system
that captures transactions immediately

1-14
The Transaction Processing Cycle

1-16
Enterprise Collaboration Systems (ECS)
• EC systems are cross-functional information
systems that enhance team and workgroup
– Communication
– Coordination
– Collaboration
• Systems may include
– Networked PC workstations
– Servers
– Databases
– Groupware and application packages

1-17
 ECS Tools

1-18
 Functional Business Systems
• A variety of types of information systems
that support the business functions of
– Accounting
– Finance
– Marketing
– Operations management
– Human resource management

1-19
 Case 2: Advertising & Marketing
Changes
• The Internet is causing a paradigm shift in
advertising
– Advertisers are moving away from TV, newspapers,
and magazine ads
– Soaring profits from selling online targeted ads are
boosting company values
– The Web is the first global advertising medium
• Broadband
– Encourages uses to spend more time surfing
– Allows more creative ad formats

1-20
 Case Study Questions
• How do Google’s online ad revenue sources
and strategy differ from Yahoo’s?
– Which online ad strategy is superior for
attracting advertising from small companies?
– For attracting large companies?

1-21
 IT in Business

1-23
 Marketing Systems
• Marketing systems are concerned with
– Planning, promotion, and sale of existing products
in existing markets
– Development of new products and new markets
– Better attracting and serving present and
potential customers

1-24
 Marketing Information Systems

1-25
 Interactive Marketing
• Interactive Marketing
– A customer-focused marketing process
– Uses the Internet, intranets, and extranets
– Establishes two-way transactions between a business
and its customers or potential customers
• Goal
– Profitably use networks to attract and keep customers
– Get customers to help create, purchase, and improve
products and services

1-26
Targeted Marketing

• An advertising and promotion management

concept with five targeting components

1-27
Targeted Marketing Components

• Community: customized ads to appeal to specific virtual

communities
• Content: ads placed on a variety of selected websites, aimed at a
specific audience
• Context: ads placed on web pages that are relevant to a product or
service
• Demographic/Psychographic: web marketing aimed at specific types
or classes of people
• Online behavior: promotions tailored to each visit to a site by an
individual

1-28
 Sales Force Automation
• Outfit sales force with notebook computers,
web browsers, and sales contact software
– Connect them to marketing websites and the
company intranet
• Goals
– Increase personal productivity
– Speed up capture and analysis of sales data
– Gain strategic advantage

1-29
 Manufacturing Information Systems
• Supports the production/operations functions
– Includes all activities concerned with planning and
control of the processes producing goods
or services

1-30
 Computer-Integrated Manufacturing

1-31
 CIM Objectives
• Simplify production processes, product designs,
and factory organization
• Automate production processes and the
business functions that support them
• Integrate all production and support
processes using
– Networks
– Cross-functional business software
– Other information technologies
1-32
 CIM Systems
• Computer-aided manufacturing (CAM)
– 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

1-33
 Human Resource Management (HRM)
• Information systems designed to support
– Planning to meet personnel needs
– Development of employees to their full potential
– Control of all personnel policies and programs

1-34
 HRM Systems

1-35
 HRM and the Internet
• Recruiting employees using the corporate
website and commercial recruiting services
• Posting messages in selected Internet
newsgroups
• Communicating with job applicants via e-mail

1-36
 HRM and Corporate Intranets
• Corporate intranet uses
– Process common HRM transactions
– Allow around-the-clock HRM services
– Disseminate information faster than through previous
company channels
– Collect information from employees online
– Allow HRM tasks to be performed with little HRM
department intervention
– Training

1-37
 Employee Self-Service
• Intranet applications can allow employees to
– View benefits
– Enter travel and expense reports
– Verify employment and salary information
– Access and update personal information
– Enter time-sensitive data

1-38
Accounting Information Systems
An Accounting as an information system (AIS) is a system of
collecting and processing financial and accounting data that are used by
decision makers.

Internal and External Users:

Internal users are owners, manager and employees. External user are
people outside the business (Investor, supplier, banks, customers)

, inventory control, accounts receivable, accounts payable,

payroll, and general ledger systems.

1-39
Typically, these systems include transaction processing
systems

– Order processing
– Inventory control
– Accounts receivable
– Accounts payable
– Payroll
– General ledger systems

1-40
Accounting Information Systems

1-41
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.
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 42
 Financial Management Systems
• Supports business managers and professionals
making decisions concerning
– The financing of a business
– The allocation and control of financial
resources within a business

1-43
 Financial Management System
Example

1-44
Case 3: Improving Supply-Chain Results

• Supply chains are a kludge of systems

– Internal manufacturing, warehousing, inventory control,
planning, shipping, and logistics
– Relationships with suppliers and partners
– Increasing dependence on customer input

• Now being replace with two state-of-the-art, major

software types
– Supply-chain execution
– Supply-chain planning

1-45
 Case 4: The Business Case for EAI
• EAI involves using software to connect a
variety of applications into a cohesive unit
– Helps align systems more closely with
business processes
• EAI Projects
– Costly and complex ($200,000 to $400,000)
– Technical staff need lots of training

1-47
 Case Study Questions
• 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 Baxter International, GE Power, and Corporate
Express as examples
• What is the major difference in the business
value of the EAI projects at Baxter
International, GE Power, and Corporate
Express?
1-48
 Case Study Questions
• What are some of the challenges in
developing and implementing EAI systems?
– How can companies meet these challenges?

1-49