Chapter 7 e-Business Systems McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

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

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

Enterprise Business Systems Use Internet, 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

RWC 1: Enterprise Architects 4 crucial Cs Connection Collaboration Communication Customers All projects fit in the overall strategy Best for company, not individual departments

Cross-Functional Systems Cross the boundaries of traditional business functions Reengineer and improve vital business processes R&D overlaps Marketing and Manufacturing Cross the boundaries of traditional business functions Used to reengineer and improve vital business processes all across the enterprise R&D overlaps Marketing and Manufacturing

Enterprise Application Architecture Provides a conceptual framework Components Processes Interfaces Focuses on accomplishing fundamental business processes in concert with Customers Suppliers Partners Employees 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 Supply Chain Management (SCM) Focuses on developing the most efficient and effective sourcing and procurement processes the complete sequence of suppliers that contribute to creating a good or service and delivering it to business users and final customers 1. Supply chain begins when the raw materials used in production are delivered to the producer 2. Continues with the actual production activities that create finished goods. 3. Finally the finished goods move through the producer's distribution channels to end customers. Knowledge Management (KM) Focuses on facilitating internal group collaboration and decision support

Implementing Global Applications Globalization vs true-blue American formula What is Globalization? What is the true-blue American business formula? Working virtually is critical Why? What is the difference between decision making approach in UK and US? Globalization - take on a whole world view True-blue American formula - force fitting their visions in offices Must allow for global collaboration different languages, cultures, time zones workers in UK - rely heavily on qualitative research -- take time making decisions Americans - action oriented Holding tight control is destructive

Enterprise Application Integration EAI connects cross-functional systems Serves as middleware to provide Data conversion Communication between systems Access to system interfaces

How EAI Works Enterprise Application Integration - EAI software connects cross-functional systems Serves as middleware to provide Data conversion Communication between systems Access to system interfaces Costly - components are expensive Painful - learning curve Worth it - GM 80% savings Smaller companies tougher call EAI is infrastructure and cost justification is always tough for infrastructure Only thing more expensive is not using these tools

Transaction Processing Systems Cross-functional information systems that process data resulting from the occurrence of business transactions Transactions Sales, purchases, deposits, withdrawals, refunds, and payments Online transaction processing (OLTP) Real-time system Captures transactions immediately 7-11

The Transaction Processing Cycle

ECS Tools 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 Also FIGURE 7.9 page 282 QuickPlace by Lotus Development helps virtual workgroups set up Web based work spaces for collaborative work assignments.

Exploring Virtual Worlds Virtual world - training Rollovers Multicar pileups Life threatening injuries Police training Military use

Functional Business Systems Information systems that support Accounting Finance Marketing Operations management Human resource management A variety of types of information systems that support the business functions of Accounting Finance Marketing Operations management Human resource management

Marketing systems are concerned with Existing products in existing markets New products and new markets Serving present and potential customers 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

RWC 2: Unified Financial Reporting Originally non-uniform reporting 14 general ledgers 12 reporting tools 17 financial data repositories 300,000 spreadsheets Finance Tranformation Program - Focus Common definitions, rules and procedures Trade-offs to target core functionalities All subscribe to central book of record Unify all financial people

IT in Business Examples of functional business information systems. Note how they support the major functional areas of business.

Marketing Information Systems Interactive Marketing A customer-focused marketing process Uses the Internet, intranets, and extranets Establishes two-way transactions Customers Potential customers Goal Profitably use networks to attract and keep customers Get customers to help create, purchase, and improve products and services

Advertising and promotion management concept Targeted Marketing Advertising and promotion management concept Five targeting components An advertising and promotion management concept with five targeting 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 Cookie files Digital billboards to deliver Advertising Headlines Weather updates Programming information Traffic advisories

Sales Force Automation Outfit sales force Notebook computers, Web browsers Sales contact software Marketing websites Company intranet Goals Increase personal productivity Speed up capture and analysis of sales data Gain strategic advantage Outfit sales force with notebook computers, web browsers, and sales contact software Marketing websites Company intranet Goals Increase personal productivity Speed up capture and analysis of sales data Gain strategic advantage Also FIGURE 7.14 page 289 This Web-based sales force automation package supports sales lead management of qualified prospects, and management of current customer accounts.

Computer-Integrated Manufacturing Manufacturing Information Systems Supports production & operations Includes all activities concerned with planning and control of the processes producing goods or services 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 Types of CIM Systems Computer-aided engineering (CAE) Computer-aided design systems (CAD) Material requirements planning (MRP) Plan the types of material needed in the production process Integrate MRP with production scheduling and shop floor operations 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

Information systems designed to support HRM Systems 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

Posting in Internet newsgroups Communicating with job applicants via HRM and the Internet Recruiting employees Corporate website Commercial recruiting services Posting in Internet newsgroups Communicating with job applicants via e-mail Monster.com HotJobs.com CareerBuilder.com

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

Employee Self-Service (ESS) Intranet applications allow employees to View benefits Enter travel and expense reports Verify employment and salary information Access and update personal information Enter time-sensitive data Provide hiring systems 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 Also FIGURE 7.17 page 293 An example of an employee hiring review system.

Accounting Information Systems Oldest and most widely used information system in business Records and reports business transactions and economic events Produces financial statements Forecasts future conditions Legal and historical record keeping GAAP Typically consist of Order processing Inventory control Accounts receivable Accounts payable Payroll General ledger systems

Business Accounting Systems Also FIGURE 7.20 page 296 An example of an online accounting report.

Financial Management System Supports business managers and professionals making decisions concerning The financing of a business The allocation and control of financial resources within a business Also FIGURE 7.22 page 297 An example of strategic financial planning using a multiple scenario approach. Note the effect on earnings per share.

RWC 3: Cisco Systems TelePresence Strong competition Biggest challenge Life-like, in-person experiences Promises to revolutionize collaboration Strong competition HP - Halo telepresence system Polycom - high-end telepresence system Biggest challenge Innovation and growth Cisco TelePresence creates life-like, in-person experiences, and promises to revolutionize the way teams collaborate in the future. The system weighs in at just over a ton and requires a room at least 15 by 19 feet. It uses the Cisco MCS 7800 series server and the 7970G IP phone, running SIP over a 6-Mbps or better connection. It uses three 65-inch HD plasma displays and an internal Gigabit Ethernet switch. Cisco faces strong competition from HP, which introduced its Halo telepresence system, and videoconferencing leader Polycom, which offers a high-end telepresence system. Where do they work? Business is in California Work where they live - some in Illinois Rebecca Jacoby non-techie - came up through manufacturing ranks Biggest challenge innovation and growth Jacoby mantra - "to lead the next phase of the internet, Cisco must reinvent its own processes The first few years were pretty painful... technology isn't the limiting factor.... people resist change .... go from command and control to collaboration Where do WE see that? In this class room - comfortable with the prof or a few dominant students carrying the conversation, reluctant to join in

RWC 4: Strategic Information Systems Electronic hiring system Significant payoff is significant Filling job openings two weeks faster Saving at least $1,500 per job. HR called to be a strategic business partner, IT provides innovative solutions. Workforce is the biggest expense HR is becoming a strategic partner Workforce optimization - HCM - Human Capital Management bring them in and track them over time Last paragraph - As we move from an industrial to a knowledge economy it's not what you manufacture but what your people know that give you competitive advantage