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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 doesn’t do any good to have
great customer information that’s 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
company’s 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 Brunswick’s 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.
• It’s 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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