Electronic Business Systems 7 Electronic Business Systems © 2002 McGraw-Hill Companies

Enterprise resource planning Customer relationship management Chapter Objectives Identify each of the following cross-functional e-business systems and give examples of how they can provide significant business value to a company and its customers and business partners. Enterprise resource planning Customer relationship management Enterprise application integration Supply chain management Groupware © 2002 McGraw-Hill Companies

The e-Business Application Architecture This figure gives you a good overview of the interrelatedness, interdependence, and integration of the e-business applications that are vital components of the successful operations and management of an e-business enterprise. This Figure represents an e-business application architecture, which illustrates the application components, interrelationships, and interfaces with customers, employees, business partners, and other stakeholders of an e-business enterprise. Notice how many e-business applications are integrated into cross-functional enterprise application clusters like: 1. Enterprise resource planning 2. Customer relationship management 3. Decision support. 4. Supply chain management 5. Selling chain management. Teaching Tips This slide corresponds to Figure 7.2 on pp. 216 relates to the material on pp. 216 - 217.. © 2002 McGraw-Hill Companies

Enterprise Resource Planning Integrated Logistics Production Planning Sales Distribution, Order Management Customer/ Employee Accounting and Finance Human Resources Enterprise resource planning (ERP) is a cross-functional enterprise system that serves as a framework to integrate and automate many of the business processes that must be accomplished within the manufacturing, logistics, distribution, accounting, finance, human resource functions of a business. ERP software is a family of software modules that supports the business activities involved in these vital back office processes. ERP is being recognized as a necessary ingredient for the efficiency, agility, and responsiveness to customers and suppliers that an e-business enterprise needs to succeed in the dynamic world of e-commerce. Companies are finding major business value in installing ERP software in two major ways: 1. ERP creates a framework for integrating and improving their back-office systems that results in major improvements in customer service, production, and distribution efficiency. 2. ERP provides vital cross-functional business processes and supplier and customer information flows supported by ERO systems. Teaching Tips This slide corresponds to Figure 7.4 on pp. 218 relates to the material on pp. 217-219. © 2002 McGraw-Hill Companies

Customer Relationship Management Sales Cross-Sell Up-Sell TeleSales Store Front and Field Service Marketing and Fulfillment Customer Service and Support Retention and Loyalty Programs Contact Management Customer relationship management (CRM): A cross-functional e-business application that integrates and automates many customer serving processes in sales, direct marketing, account and order management, and customer service and support. CRM systems also create an IT framework that integrates all of these processes with the rest of a company’s business operations. CRM systems consist of a family of software modules that perform the business activities involved in such front office processes. CRM software provides the tools that enable a business and its employees to provide fast, convenient, dependable, and consistent service to its customers. Business benefits of CRM are many. Examples include: 1. Allows a business to identify and target their best customers; those who are the most profitable to the business, so they can be retained as lifelong customers for greater and more profitable services. 2. Enables real-time customization and personalization of products and services based on customer wants, needs, buying habits, and life cycles. 3. Also used to keep track of when a customer contacts the company, regardless of the contact point. 4. Enables a company to provide a consistent customer experience and superior service and support across all the contact points a customer chooses. Teaching Tips This slide corresponds to Figure 7.6 on pp. 220 relates to the material on pp. 220-221. © 2002 McGraw-Hill Companies

Supply Chain Management Schedule Make Deliver Transportation Planning Demand Order Commitment Advance Scheduling Manufacturing Distribution Internetworked Supply Chain Management Supply Chain Life Cycle SCM Functional Processes Integrated Solution Commit Supply Chain Management: Integrating management practices and information technology to optimize information and product flows among the processes and business partners within a supply chain. SCM is a top strategic objective for many companies. It is an absolute requirement if they want to meet their e-commerce customer value imperative: what the customer wants, when and where it’s wanted, at the lowest possible cost. The interrelationships with other businesses needed to build and sell a product make up a network of business relationships that is called the supply chain. Cross-functional e-business systems like supply chain management reengineer and streamline traditional supply chain processes. The demands of e-commerce are pushing manufacturers to use their intranets, extranets, and e-commerce Web portals to help them reengineer their relationships with suppliers, distributors, and retailers. The objective is to significantly reduce costs, increase efficiency, and improve supply chain cycle times. SCM software can also help to improve interenterprrise coordination among supply chain process players. The result is much more effective distribution and channel networks among business partners. All of the objectives of supply chain management are aimed at achieving agility and responsiveness in meeting the demands of a company’s customers and the needs of their business partners. Teaching Tips This slide corresponds to Figure 7.8 on pp. 223 relates to the material on pp. 2222-223. © 2002 McGraw-Hill Companies

Functional Business Information Systems Production Operations Marketing Human Resource Management Finance Accounting Functional Business Systems Functional Business Systems: Information systems within a business organization that support one of the traditional functions of business such as marketing, finance, or production. Functional business systems can be either operations or management information systems. Marketing: Accounting: - Customer relationship management - Order processing - Interactive marketing - Inventory control - Sales force automation - Accounts receivable - Accounts payable Human Resource Management - Payroll - Compensation analysis - General ledger - Employee skills inventory - Personnel requirements forecasting Finance: - Cash management Productions/Operations - Credit management - Manufacturing resource planning - Investment management - Manufacturing execution systems - Capital budgeting - Process control - Financial forecasting Teaching Tips This slide corresponds to Figure 7.12 on pp. 232 and relates to the material on pp. 232-244. © 2002 McGraw-Hill Companies

Marketing Information Systems Interactive Sales Force Automation Customer Relationship Management Sales Market Research and Forecasting Advertising and Promotions Product Marketing is concerned with the planning, promotion, and sale of existing products in existing markets and the development of new products and new markets to better serve present and potential customers. Marketing information systems assist marketers in meeting the information needs in each of the following areas: Sales Management. Here the information system helps plan, monitor, and support the performance of salespeople and sales of products and services. Sales Force Automation. Here the information system automates the recording and reporting of sales activity by salespeople and the communications and sales support from sales management. Product Management. Here the IS helps plan, monitor, and support the performance of products, product lines, and brands. Advertising and Promotion. Here information systems help select media and promotional methods and control and evaluate advertising and promotion results. Sales Forecasting. An information system can rapidly produce short- and long-term sales forecasts. Market Research. The tools of an information system can assist researchers in collecting and analyzing internal and external data on market variables, development, and trends. Marketing Management. Information systems can help marketing managers develop marketing strategies and plans based on corporate goals and market research and sales activity data, and monitor and support overall marketing activities. © 2002 McGraw-Hill Companies

Manufacturing Information Systems Engineering Systems CAD CAE Computer- Aided Process Planning Manufacturing Execution Shop Floor Scheduling Machine Control Process Control Robotic Control Computer Integrated Manufacturing Resource Production Forecasting Quality Control Remote Worker Supplier Extranet Intranet Manufacturing Information Systems support the production/operations function, which includes all activities concerned with the planning and control of the processes that produce goods and services. These operational systems can be divided into the following categories: Computer-Integrated Manufacturing. CIM stresses that the computer use in factory automation must be to: Simplify (reengineer) 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 and robots. Integrate all production and support processes using computers and telecommunications networks. Process Control. Process control is the use of computers to control an ongoing physical process. Process control software uses mathematical models to analyze the ongoing process and compare it to standards or forecasts of required results. Machine Control. Also called numerical control, it uses computer programs for machine tools to convert geometric data from engineering drawings and machining instructions from process planning into commands that control the machines. Robotics. Robotics is the technology of building and using machines (robots) with computer intelligence and computer-controlled human like physical capabilities. Computer-Aided Engineering. Manufacturing engineers use powerful workstations with enhanced graphics and computational capabilities to simulate, analyze, and evaluate models of product design in less time and at lower cost than constructing physical prototypes. © 2002 McGraw-Hill Companies

Human Resource Management Manpower Planning Labor Force Tracking Labor Cost Analysis Turnover Recruitment Workforce Skill assessment Performance evaluation Payroll control Benefits Administration Compensation effectiveness Contract costing Salary forecast Succession planning appraisal plans Training Career matching Staffing Training & Development Strategic Systems Tactical Operational The human resource management (HRM) function involves the recruitment, placement, evaluation, compensation, and development of employees Goal of HRM is the effective and efficient use of the human resources of a company. Human resource information systems are designed to support: 1. Planning to meet the personnel needs of the business 2. Development of employees to their full potential 3. Control of all personnel policies and programs. Originally, businesses used computer-based information systems to: (1) Produce paychecks and reports, (2) maintain personnel records,and (3) analyze the use of personnel in business operations. Many firms have developed HRIS that support: 1. Recruitment, selection, and hiring. 2. Job placement 3. Performance appraisals 4. Employee benefits analysis 5. Training and development 6. Health, safety, and security. Teaching Tips This slide corresponds to Figure 7.21 on pp. 239 and relates to the material on pp. 238-240. © 2002 McGraw-Hill Companies

Accounting Information Systems Accounting Information Systems are the oldest and most widely used information systems in business. They record and report business transactions and other economic events. Operational accounting systems emphasize legal and historical record-keeping and the production of financial statements. Management accounting systems focus on the planning and control of business operations. Six common purposes of accounting systems include: Order Processing. Or, sales order processing is an important transaction processing system which captures and processes customer orders and produces invoices for customers and data needed for sales analysis and inventory control. Inventory Control. These systems track and monitor levels of and changes in inventory. They may be programmed to notify managers if some threshold level of inventory is reached that requires a decision. They may also be equipped to handle routine re-order information. Accounts Receivable. Accounts receivable systems keep records of amounts owed by customers from data generated by customer purchases and payments. Accounts Payable. Accounts payable systems keep track of data concerning purchases from and payments to suppliers. Payroll. Payroll systems receive and maintain data from employee time cards and other work records to produce paychecks and other documents such as earning statements, payroll reports, and labor analysis reports. General Ledger. General ledger systems consolidate data received from accounts receivable, accounts payable, payroll, and other accounting information systems. Teaching Tips This slide corresponds to Figure 7.23 on pp. 241 and relates to the material on pp. 241-243. © 2002 McGraw-Hill Companies

Financial Information Systems Planning Cash Management Investment Capital Budgeting Financial Information Systems support financial managers in decisions concerning the financing of the business and the allocation and control of financial resources. Key areas for financial information systems include: Cash and Securities Management. Information systems collect information on all cash receipts and disbursements within a company on a realtime or periodic basis. Further, many businesses invest their excess cash in short-term marketable securities and these portfolios can be managed by systems software. Capital Budgeting. The IS assists the capital budgeting process by helping to evaluate the profitability and financial impact of proposed capital expenditures. Financial Forecasting. The financial information system package of the organization will have a variety of statistical forecasting packages to provide analytical techniques that result in economic or financial forecasts of national and local economic conditions, wage levels, price levels, and interest rates. Financial Planning. Financial planning systems use financial planning models to evaluate the present and projected performance of a business or of one of its divisions or subsidiaries. They also help determine the financing needs of a business and analyze alternative methods of financing. Teaching Tips This slide corresponds to Figure 7.26 on pp. 243 and relates to the material on pp. 243-244. © 2002 McGraw-Hill Companies

Chapter Summary The e-Business Application Architecture reflects the key e-business applications and their interrelationships. Cross-functional enterprise applications cross the boundaries of traditional business functions. These systems focus on supporting integrated clusters of business processes. Supply Chain Management relies on information technology and management practices to optimize information and product flows among the processes and business partners within the supply chain. © 2002 McGraw-Hill Companies

Chapter Summary (cont) A transaction processing system is an information system that processes data resulting from the occurrence of business transactions. Traditional functional business systems support specific business functions including marketing, accounting, finance, production/operations, and human resource management. Marketing information systems support traditional and e-commerce processes and management of the marketing function. © 2002 McGraw-Hill Companies

Chapter Summary (cont) Computer-based manufacturing systems help a company simplify, automate, and integrate many of the activities needed to quickly produce high-quality products to meet changing customer demands. Human resource information systems support human resource management in organizations. © 2002 McGraw-Hill Companies