1

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

Introductionto

e-Business Systems

2

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

Learning Objectives

Give examples of how Internet and otherinformation technologies support businessprocesses within the business functions of ..Accounting,Finance,Human resource management,Marketing, andProduction and operations management.

3

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

Learning Objectives (continued)

Identify the following cross-functional systemconcepts, and how they can provide significantbusiness value to a company:Cross-functional enterprise systemsEnterprise application integrationTransaction processing systemsEnterprise collaboration systems

4

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

Section I

Functional Business Systems

5

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

IT in Business

“Business managers are moving from atradition where they could avoid, delegate, orignore decisions about IT to one where theycannot create a marketing, product,international, organization, or financial planthat does not involve such decisions.”

6

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

Marketing Systems

Marketing Information Systems provideinformation technologies that support majorcomponents of the marketing function.Interactive MarketingCustomer focused marketing processBased on using Internet, intranets, &

extranets to establish two-waycommunications between customers orpotential customers and the businessCustomers become involved in product

development, delivery, & service issues

7

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

Marketing Systems (continued)

Targeted marketingFive targeting componentsCommunityContentContextDemographic/psychographicOnline behavior

8

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

Marketing Systems (continued)

Sales Force AutomationThe sales force is connected to marketing

websites on the Internet, extranets, & thecompany intranetIncreases productivity of sales forceSpeeds up the capture & analysis of sales

dataAllows management to provide improved

delivery information & better support ofthe sales force.

9

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

Manufacturing Systems

Support the production/operations function

Assists firms in planning, monitoring, &controlling inventories, purchases, & the flowof goods and services

10

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

Manufacturing Systems (continued)

Computer-Integrated Manufacturing (CIM)SimplifyAutomateIntegrate

Supports the concepts of flexible manufacturingsystems, agile manufacturing, & total qualitymanagementComputer-Aided Engineering (CAE)Computer-Aided Design (CAD)Material Requirements Planning (MRP)

11

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

Manufacturing Systems (continued)

Computer-Aided Manufacturing (CAM)Automate the production process

Manufacturing Execution Systems (MES)Performance monitoring systems for factory

floor operations

12

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

Manufacturing Systems (continued)

Process ControlThe use of computers to control an ongoing

physical process

Machine ControlThe use of a computer to control the actions

of a machine.Also called numerical control

13

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

Human Resource Systems

Human Resource Information SystemsSupportPlanning to meet the personnel needs of

the businessDevelopment of employees to their full

potentialRecruitment, selection, & hiringJob placement

14

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

Human Resource Systems (continued)

Human Resource Information Systems(continued)Performance appraisalsEmployee benefits analysisTraining and developmentHealth, safety, & security

15

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

Human Resource Systems (continued)

HRM and the InternetAllows 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.

16

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

Human Resource Systems (continued)

StaffingSupported by information systems that

record and track human resources tomaximize their use

Training and DevelopmentHelp human resource managers plan and

monitor employee recruitment, training,and development programs

17

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

Accounting Systems

Record and report business transactions andother economic events

Online Accounting Systems

18

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

Accounting Systems (continued)

Six widely used accounting systemsOrder processingCaptures & processes customer orders and

produces data needed for sales analysis andinventory control

Inventory ControlProcesses data reflecting changes in items in

inventory.Helps provide high-quality service while

minimizing investment in inventory &inventory carrying costs

19

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

Accounting Systems (continued)

Accounts ReceivableKeeps records of amounts owed by

customers from data generated bycustomer purchases and payments

Accounts PayableKeeps track of data concerning purchases

from, and payments to, suppliers

20

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

Accounting Systems (continued)

PayrollReceives and maintains data from

employee time cards and other workrecords

General LedgerConsolidates data received from accounts

receivable, accounts payable, payroll, &other accounting information systems

21

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

Financial Management Systems

Supports financial managers in decisionsconcerningThe financing of the businessThe allocation & control of financial

resources within the business.

22

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

Financial Management Systems (continued)

Major financial management systemcategoriesCash ManagementCollects information on all cash receipts

and disbursements on a real-time orperiodic basis

23

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

Financial Management Systems (continued)

Investment ManagementHelps the financial manager make buy,

sell, or hold decisions for each type ofsecurityHelps the financial manager develop the

optimum mix of securities in order tominimize risk and maximize return

24

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

Financial Management Systems (continued)

Capital BudgetingInvolves evaluating the profitability and

financial impact of proposed capitalexpendituresAllows financial managers to analyze long-

term expenditure proposals for plant andequipment

25

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

Financial Management System (continued)

Financial Forecasting & PlanningEvaluate the present and projected

financial performance of the companyHelp determine financing needs and

analyze alternative methods of financingExplore what-if and goal-seeking questions

26

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

Section II

Cross-Functional Enterprise Systems

27

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

Cross-Functional Enterprise Applications

Integrated combinations of informationsubsystems that share information resourcesand support business processes across thefunctional unitsA strategic way to use IT to share information

resources & improve efficiency & effectiveness

28

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

Cross-Functional Enterprise Applications (continued)

Enterprise Application Architecture

29

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

Cross-Functional Enterprise Applications (continued)

Focused on accomplishing fundamentalbusiness processes in concert with thecompany’s customer, supplier, partner, &employee stakeholders

30

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

Enterprise Application Integration (EAI)

Software enables users to model the businessprocesses involved in the interactions thatshould occur between business applications.

Also provides middleware thatPerforms data conversion & coordinationProvides application communication &

messaging servicesProvides access to the application interfaces

31

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

Enterprise Application Integration (continued)

Business valueIntegrates front-office and back-office

applications to allow for quicker, moreeffective response to business events andcustomer demandsImproves customer and suppler experience

with the business because of itsresponsiveness.

32

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

Transaction Processing Systems

Cross-functional information systems that processdata resulting from the occurrence of businesstransactionsTransactions – events that occur as part of doing

businessSalesPurchasesDepositsWithdrawalsRefundsPayments

33

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

Transaction Processing Systems (continued)

Online transaction processing systemsReal-time systems that capture and

process transactions immediatelyAdds value to product or service

through superior customer service

34

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

Transaction Processing Systems (continued)

Transaction Processing CycleData entryThe capture of business data

Transaction processingTwo basic waysBatch processing where transaction data are

accumulated & processed periodicallyReal-time processing where data are processed

immediately after a transaction occurs

35

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

Transaction Processing Systems (continued)

Database maintenanceCorporate databases are updated to reflect

the day-to-day business transactions

Document and report generationA variety of documents and reports are

produced

36

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

Transaction Processing Systems (continued)

Inquiry processingInquiries and responses concerning the

results of transaction processing activity

37

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

Transaction Processing Systems (continued)

38

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

Enterprise Collaboration Systems

Cross-functional e-business systems thatenhance communication, coordination, &collaborationCommunicate – share information with each

otherCoordinate – coordinate individual work

efforts & use of resources with each other.Collaborate – work together cooperatively

on joint projects and assignments

39

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

Enterprise Collaboration Systems (continued)

Tools for Enterprise CollaborationElectronic communicationE-mailVoice mailFaxWeb publishingBulletin boardsPagingInternet phone systems

40

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

Enterprise Collaboration Systems (continued)

Electronic conferencingData & voice conferencingVideoconferencingChat systemsDiscussion forumsElectronic meeting systemsSynchronous. Team members can meet

at the same time and place in a “decisionroom” setting

41

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

Enterprise Collaboration Systems (continued)

Collaborative work managementCalendaring & schedulingTask & project managementWorkflow systemsKnowledge management

42

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

Discussion Questions

Why is there a trend toward cross-functionalintegrated enterprise systems in business?

Referring to the example on Dell Computer,what other solutions could there be for theproblem of information system incompatibilityin business besides EAI systems?

43

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

Discussion Questions (continued)

Referring to the Charles Schwab & Co.example, what are the most important HRapplications a company could offer to itsemployees via a Web-based system?

How do you think sales force automationaffects salesperson productivity, marketingmanagement, and competitive advantage?

44

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

Discussion Questions (continued)

How can Internet technologies be involved inimproving a process in one of the functions ofbusiness?

What are several e-business applications thatyou might recommend to a small company tohelp it survive and succeed in challengingeconomic times?

45

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

Discussion Questions (continued)

Which of the 14 tools for enterprisecollaboration do you feel are essential for anybusiness to have today? Which do you feel areoptional?

Referring to the General Electric example,how do enterprise collaboration systemscontribute to bottom-line profits for abusiness?

46

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

Real World Case 1 – Cypress Semiconductor & FleetBoston

How does the use of Internet technologies tosupport the marketing function at CypressSemiconductor improve business andcustomer value?

What are the benefits and potential challengesof FleetBoston’s use of IT to support theirtargeted marketing programs?

47

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

Real World Case 1 (continued)

Why do IT-based targeted marketingprograms sometimes produce negativebusiness results?

How can negative business results be avoided?

48

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

Real World Case 1 (continued)

How can customer segmentation and targetedmarketing programs that focus on customerprofitability avoid “ignoring customers withlow current returns but high potential”?

49

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

Real World Case 2 – Johnson Controls

Why is the exchange of “tribal knowledge”important in product design?

How do Web-based systems support suchcollaborations?

50

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

Real World Case 2 (continued)

Why is it important to provide visibilitythroughout a supply chain?

How is JCI attempting to provide thisvisibility?

51

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

Real World Case 2 (continued)

What is the business value of JCI’s B2Bportal?

Can collaboration systems improve the qualityof the products that are designed, as well asreducing the cost and time of the designprocess?

52

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

Real World Case 3 – Union Pacific, Corporate Express, & BestBuy

How could an enterprise applicationintegration system help a firm to better serveits customers?

How could enterprise application systemsimprove a company’s business interactionswith its suppliers?

53

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

Real World Case 3 (continued)

What major challenges are faced by businessesthat implement EAI initiatives?

How can companies meet those challenges?

54

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

Real World Case 4 – Baxter International

What key HR applications are provided byBaxter’s Web-based HR system?

What are some other Web-based HRapplications they might implement?

55

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

Real World Case 4 (continued)

What business value does Baxter derive fromtheir Web-based HR approach?

What value do their employees receive fromsuch HR systems?

56

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

Real World Case 4 (continued)

How could viewing employees as customers orclients change how HR services are providedto employees by Web-based HR systems?

57

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

Real World Case 5 – IBM Corporation

Why have many companies been reluctant tosupport instant messaging in the workplace?

What are the advantages of instant messagingover e-mail and voice mail for enterprisecollaboration?

58

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

Real World Case 5 (continued)

What do you see as the major disadvantages ofusing instant messenger instead of e-mail orvoice mail?

Do you recommend that companies encourageand support the use of IM tools for enterprisecollaboration?