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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
..
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Accounting,
Finance,
Human resource management,
Marketing, and
Production and operations management.
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Learning Objectives (continued)

Identify the cross-functional enterprise
system concept.
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Functional Information Systems

1.
2.
3.
4.
5.
ISs can be classified by the specific
organizational functions.
Marketing-Sales
Manufacturing
Human Resource
Accounting
Finance
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Functional Areas in a
Business
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•Compensation
•Vacation
•Skills/Training
Human Resources
•A/R
•A/P
•Payroll
•General Ledger
Accounting
•Receiving
•Fulfillment
•Process control
•Purchasing
•Cash Management
•Asset Management
•Budgeting
Business
Funtion
Operations
Financing
•Order Taking
•CRM
•Self-service
Sales
Marketing
•Retail Pricing
•Sales Promotions
•Sales Force Management.
•Customer Loyalty
•Interactive Marketing
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Marketing Systems
The Sales and Marketing Function is
responsible for selling the organization's
product or service.
 Marketing Information Systems are
computerized systems that support major
marketing activities such as promotion,
advertising, sale of existing products in
existing markets and the development of
new products.
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Marketing Systems (continued)

Some of the marketing information systems:
 1. Interactive Marketing
 Based on using information systems to
attract customers in creating, purchasing
and improving products or services (Web
forms, e-mails, questionnaires, discussion
groups).
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Marketing Systems (continued)

2. Targeted marketing: Important tool in developing
advertising and promotion strategies.

Five targeting components
 Community: companies can customize their web
advertising messages and promotion methods to
appeal to people in specific communities. Ex: arts and
crafts hobbyists, sporting fans.
 Context : advertising such as banners or pop-ups can
be placed on various website pages, in addition to
company’s website.
 Content : advertising appears only in web pages that
are relevant to the content of a product or service.
 Demographic: marketing efforts can be aimed only at
specific types of people: unmarried, middle income,
and male college graduates.
 Online behavior: advertising and promotion efforts
can be tailored to each visit to a site by an individual.
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Marketing Systems (continued)
IT can help companies create customer
databases of both existing and potential
customers.
 The Internet opens the door to a new
advertising medium.
 Online advertising via e-mail and banners
is growing rapidly.
 IT helps companies to expedite the
ordering and fulfillment of customized
products.
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Manufacturing Systems
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The manufacturing function is responsible for
actually producing the firm's goods and services.
Manufacturing systems deal with the planning,
development and maintenance of production
facilities, the establishment of production goals,
storage and availability of production materials
and the scheduling of equipment facilities,
materials, and labor required.
Manufacturing Information Systems support
these activities.
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Manufacturing Systems (cont’d)

A few of the IT supported manufacturing areas
are:

Computer-integrated manufacturing (CIM)

Inventory management

Project management

Material requirements planning
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Manufacturing Systems (continued)
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1. Computer-Integrated Manufacturing (CIM)the automated version of the manufacturing
process.
The goal of CIM is to create flexible, agile
manufacturing processes that efficiently produce
products of the highest quality.
Supports the concepts of flexible manufacturing
systems, agile manufacturing, & total quality
management.
Computer-Aided Manufacturing (CAM)- Automates
the production process.
Computer-Aided Design (CAD)-Automates product
and process design using computers and
sophisticated graphics software.
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Manufacturing Systems (continued)

Ex: Designers use computers to make better
basketballs, baseballs, and other sport equipment
at Spalding Sports Worldwide. This company uses
imaging software (CAD) to improve its product
development process. Developers create, share,
discuss and update product specifications online;
they no longer send paper copies to offices
around the world. They reduced development
time from one and one-half years to a few
months.
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Manufacturing Systems (continued)
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2. Inventory management: Determines how
much inventory to keep.
A large number of commercial inventory software
packages to automate the application of the
inventory models (when to order, how much to
order, how to track the level of inventory for each
item) are available at low cost.
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Manufacturing Systems (continued)
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3. Project management: Planning, directing, and
controlling the project resources to meet the technical,
cost, and time constraints of a project.
Several IT tools are available to support and help manage
projects.
4. Material Requirements Planning (MRP) is software
that facilitates the plan for purchasing or producing parts,
subassemblies, or materials in the case of interdependent
items.
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Human Resource Systems
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Human resource function is responsible for
attracting, developing and maintaining the
firm’s work force.
Human resource information systems support
 Identifying potential employees
 Creating programs to develop employee’s
talents and skills.
 Recruitment, selection, & hiring
 Job placement
 Training
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Human Resources Systems
Web-based systems have increased the popularity of
human resources information systems which provide
applications mainly related to acquiring, hiring,
rewarding, developing, training, protecting and
retaining human resources.
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Recruitment is finding employees, testing them,
and deciding which ones to hire. The Web has
enhanced the recruitment process.
Human Resources Maintenance and Development
 Performance Evaluation
 Training and Human Resources Development
 Personnel Planning
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Human Resource Systems (continued)
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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.
 Help human resource managers plan and
monitor employee recruitment, training, and
development programs.
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Human Resource Systems (continued)
•
Edify
Corporation’s employee-service system
allows users to access information available an
employee portal and also via voice-recognition
phone, kiosks, or faxes. The package offers
intranet-based automation of company
procedures, collective bargaining agreements,
employees’ handbooks, phone directories, pay
scales, job banks, benefits, and training.
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Human Resource Systems (continued)
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Oracle Corporation conducts its flexible benefits
enrollment program on its employee portal. The
employees give the program high marks because
they feel it is simple and fast. Employees do not
have to wait for a rigid company-wide starting
date, and forms do not get lost. Furthermore,
employees can see the trade-offs between
various benefits, since the system calculates the
cost of each benefit. Oracle allows new hires to
input benefits data online. Finally, Oracle created
links from its portal pages to Fidelity
Investments’ 401(k) pages, so employees can
learn about funds and pension plans online as
well as register for the plans.
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Human Resource Systems (continued)
•
Aetna
Health Plan’s directory of primary care
physicians, hospitals, medical services, and health
information is available on the employees portal
around the clock. The company also offers
insurance options online.
•
Apple Computers, Inc. conducts extensive
education and development activities on its
employee portal, including a remote
management-training program.
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Human Resource Systems (continued)

Auto manufacturer DaimlerChrysler has an
international workforce of 370,000 employees
with manufacturing facilities in 37 countries.
Recruiting for DaimlerChrysler is big business.
The company used the eRecruit module of
PeopleSoft’s HRM product to eliminate much of
the paperwork and streamline its recruiting
process. The software enables job applicant to fill
out application forms and post and update their
resumes online. Human resource professionals
and managers hiring for specific positions can
view and evaluate interview results. Not only the
recruitment process become more efficient, but
the company has also saved money and freed
human resource professionals to do analytical
work rather than paperwork.
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Comparison of Traditional HR to E-HR
Key HR process
Traditional HR
E-HR
Recruitment
and selection
Paper
resumes and
paper postings
Electronic
Selection
Positions
filled in months
Limited by geographical
barriers
Manual review of
resumes
Positions
Compensation
and benefits
Time
spent on
paperwork
Changes made by HR
Time
Training and
development
Standardized
Flexible
classroom
training
Development process is
HR-driven
resumes
and Internet
filled in
weeks or days
Unlimited access to
global applications
Electronic review
spent on
assessing market
salaries
Changes made by
employees online
online
training
Development
process is employee- 23
driven
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Accounting Systems
The accounting function is responsible for
maintaining and managing the firm’s
financial records-receipts, payroll- to an
account for the flow of funds in a firm.
 Accounting information systems support
these activities. Record and report
business transactions and other economic
events.
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Accounting Systems
Many companies are using or developing
network links to their trading partners
through the use of the Internet and other
networks for applications such as accounts
receivable, accounts payable, general
ledger, and payroll.
 Payroll systems receive and maintain
data from employee time cards and other
work records. Produces paychecks, reports
for management and government.
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Payroll TPS
INPUT
Payroll master file
PROCESS
Calculating pay
Calculating cost of taxes
etc.
Payroll
system
Data elements in payroll
master file
Employee number
Employee name
Employee department
Employee occupation
Employee pay rate
Earnings
State tax
OUTPUT
Management
reports
Government
documents
Employee
checks
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Accounting Systems
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Accounts receivable systems keep
records of amounts owed by customers
from data generated by customer
purchases and payments. Produce
invoices to customers, provide managers
with reports to help them control the
amount of credit extended and collection
of money owed.
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Accounting Systems

Accounts payable systems keep track
of data concerning purchases from and
payments to suppliers. Prepare checks in
payment and produce cash management
reports, help ensure prompt and accurate
payment of suppliers to maintain good
relationships, provide tight financial
control over all cash activities.
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Accounting Systems

General ledger systems consolidate data
from accounts receivable, accounts
payable, payroll, and other accounting
information systems. Produce the income
statement and balance sheet of the firm at
the end of each accounting period.
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Financial Management Systems

The finance function is responsible for
managing the firm’s financial assets such
as cash, stocks, bonds and other
investments in order to maximize the
return on these financial assets.
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Financial Management Systems
Major financial information systems
include: cash management, investment
management, financial forecasting and
planning.
 Cash management systems collect
information on all cash receipts within a
company on a real-time. Produce daily,
weekly, or monthly forecasts of cash
receipts, allow businesses to deposit or
invest excess funds more quickly.
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Financial Management Systems
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Investment management is a difficult task.
Many companies invest large amounts of money
in stocks, bonds or real estate. Some of these
investments have billion of dollars of assets.
Portfolio of securities can be managed with the
help of portfolio management software packages.
Online management services are available from
hundreds of online sources on the Internet such
as NYSE, Bloomberg, Dow Jones, etc.
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Financial Management Systems

Capital budgeting involves evaluating the
profitability and determining the optimum mix of
capital projects. Several software packages are
available to support capital budgeting. It makes
easier to build complex budgets. Most
spreadsheet packages include built-in-functions
of financial models such as NPV (net present
value), IRR (internal rate of return) so financial
analysts can easily build capital budgeting
evaluation applications.
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Major Business Functions
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Cross-functional Enterprise Applications
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Enterprise systems allow companies to
integrate information across operations on
a company-wide basis rather than storing
information in separate places.
They provide a central repository common
to all corporate users.
The major enterprise applications are ERP,
CRM and SCM.
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Cross-functional Enterprise Information
Systems
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History
Sales
Analysis
Profiling
Bar Coding
Accounting
ERP
SPARS
CRM
Receiving
Point-of-Sale
SCM
Service
Purchasing
Inventory
Control
Payroll
Installations
Integration of Cross-Functional Information Systems tears down barriers
between and among departments & corporate headquarters and reduces
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duplication of effort.