Supporting the User Interaction with BusinessE

MIS 300, Chapter 52 Basic Concepts Electronic Commerce   Infrastructure for E-commerce – supporting the electronic business environment   Transaction Processing Systems – supporting the user interface with business   Enterprise Computing – information across the organization   

MIS 300, Chapter 53 Principles and Learning Objectives -1 E-commerce is a new way of conducting business, and as with any other new application of technology, it presents both opportunities for improvement and potential problems.   –Identify several advantages of e-commerce. –Identify some of the major challenges that companies must overcome to succeed in e-commerce and m- commerce. –Describe some of the current uses and potential benefits of m-commerce. –Identify several e-commerce applications.

MIS 300, Chapter 54 Principles and Learning Objectives -2 E-commerce requires the careful planning and integration of a number of technology infrastructure components.   –Outline the key components of technology infrastructure that must be in place for e-commerce to succeed. –Discuss the key features of the electronic payment systems needed to support e-commerce.

MIS 300, Chapter 55 Principles and Learning Objectives -3 An organization’s transaction processing system (TPS) must support the routine, day-to-day activities that occur in the normal course of business and help a company add value to its products and services.   –Identify the basic activities and business objectives common to all TPSs. –Explain some key control and management issues associated with TPSs. –Identify the challenges multinational corporations must face in planning, building, and operating their TPSs.

MIS 300, Chapter 56 Principles and Learning Objectives -4 Implementation of an enterprise resource planning (ERP) system enables a company to achieve many benefits by creating a highly integrated set of systems.   –Discuss the advantages and disadvantages associated with the implementation of an ERP system.

MIS 300, Chapter 57 An Introduction to Electronic Commerce Business-to-consumer (B2C) e-commerce: customers deal directly with the organization, avoiding any intermediaries Amazon.comAmazon.com Business-to-business (B2B) e-commerce: participants are organizations Consumer-to-consumer (C2C) e-commerce: participants are individuals, with one serving as the buyer and the other, the seller E-bay.comE-bay.com B C C

MIS 300, Chapter 58 The Supply Chain Suppliers Focal Firm (Producer or Service Provider) Buyers The Value Chain coexists with the supply chain, adding “value” at every link in the chain Procurement, inbound logistics, production, outbound logistics, sales, servicing

MIS 300, Chapter 59 The E-Commerce Supply Chain Suppliers Focal Firm (Producer or Service Provider) Buyers These links are all electronic. Info is maintained in data bases

MIS 300, Chapter 510 E-Commerce Supply Chain Management Supply chain management is a key value chain composed of: –Demand planning –Supply planning –Demand fulfillment It’s actually a supply network. The supply chain is the upstream aspect of the value chain. The value chain is actually a value network.

MIS 300, Chapter 511 The E-Commerce Supply Chain (continued) Figure 5.1: Supply Chain Management

MIS 300, Chapter 512 The E-Commerce Supply Chain (continued) E-commerce supply chain management allows businesses an opportunity to achieve: –Increased revenues and decreased costs –Improved customer satisfaction –Inventory reduction across the supply chain

MIS 300, Chapter 513 Mobile Commerce Mobile commerce (m-commerce) relies on the use of wireless devices, such as personal digital assistants, cell phones, and smart phones, to place orders and conduct business What does it mean to “be mobile”? Issues confronting m-commerce –User-friendliness of the wireless device –Network speed –Security

MIS 300, Chapter 514 Mobile Commerce (continued) Handheld devices used for m-commerce have limitations that complicate their use Wireless application protocol (WAP): a standard set of specifications for Internet applications that run on handheld, wireless devices

MIS 300, Chapter 515 E-Commerce Applications: Retail and Wholesale Electronic retailing (e-tailing): the direct sale from business to consumer through electronic storefronts, typically designed around an electronic catalog and shopping cart model Cybermall: a single Web site that offers many products and services at one Internet location Manufacturing, repair, and operations (MRO) goods and services

MIS 300, Chapter 516 Manufacturing To raise profitability and improve customer service, many manufacturers move their supply chain operations onto the Internet Electronic exchange: an electronic forum where manufacturers, suppliers, and competitors buy and sell goods, trade market information, and run back- office operations

MIS 300, Chapter 517 Manufacturing (continued) Figure 5.3: Model of an Electronic Exchange

MIS 300, Chapter 518 Marketing Market segmentation: the identification of specific markets to target them with advertising messages Technology-enabled relationship management: use of detailed information about a customer’s behavior, preferences, needs, and buying patterns to set prices, negotiate terms, tailor promotions, add product features, and otherwise customize the entire relationship with that customer

MIS 300, Chapter 519 Investment and Finance Online stock trading –Portfolio tracker Online banking –Electronic bill presentment 

MIS 300, Chapter 520 E-commerce Technology, Infrastructure, and Development Figure 5.4: Key E-Commerce Technical Components

MIS 300, Chapter 521 Hardware Storage capacity and computing power required of the Web server depends on: –Software that will run on the server –Volume of e-commerce transactions Web site hosting

MIS 300, Chapter 522 Software Security and identification Retrieving and sending Web pages Web page construction –Static Web page –Dynamic Web page

MIS 300, Chapter 523 Software (continued) E-commerce software must support: –Catalog management –Product configuration –Shopping-cart facilities

MIS 300, Chapter 524 Software (continued) Figure 5.5: Electronic Shopping Cart

MIS 300, Chapter 525 Electronic Payment Systems Digital certificate: an attachment to an message or data embedded in a Web page that verifies the identity of a sender or a Web site Electronic cash: an amount of money that is computerized, stored, and used as cash for e-commerce transactions

MIS 300, Chapter 526 Electronic Payment Systems (continued) Electronic wallet: a computerized stored value that holds credit card information, electronic cash, owner identification, and address information Credit card Charge card Debit card Smart card 

MIS 300, Chapter 527 An Overview of Transaction Processing Systems Provide data for other business processes: –Management information system/decision support system (MIS/DSS) –Special-purpose information systems Process the detailed data necessary to update records about the fundamental business operations Include order entry, inventory control, payroll, accounts payable, accounts receivable, and the general ledger.

MIS 300, Chapter 528 An Overview of Transaction Processing Systems (continued) Figure 5.6: TPS, MIS/DSS, and Special Information Systems in Perspective

MIS 300, Chapter 529 Traditional Transaction Processing Methods and Objectives Batch processing system: method of computerized processing in which business transactions are accumulated over a period of time and prepared for processing as a single unit or batch Online transaction processing (OLTP): computerized processing in which each transaction is processed immediately, without the delay of accumulating transactions into a batch

MIS 300, Chapter 530 Traditional Transaction Processing Methods and Objectives (continued) Figure 5.7: Batch Versus Online Transaction Processing

MIS 300, Chapter 531 Transaction Processing Activities TPSs –Capture and process data that describes fundamental business transactions –Update databases –Produce a variety of reports Transaction processing cycle: the process of data collection, data editing, data correction, data manipulation, data storage, and document production

MIS 300, Chapter 532 Transaction Processing Activities (continued) Figure 5.8: Data Processing Activities Common to TPSs

MIS 300, Chapter 533 Transaction Processing Activities (continued) Data collection –Should be collected at source –Should be recorded accurately, in a timely fashion Data editing Data correction

MIS 300, Chapter 534 Transaction Processing Activities (continued) Data manipulation Data storage Document production and reports

MIS 300, Chapter 535 Basic TPS Applications Table 5.4: Systems That Support Order Processing

MIS 300, Chapter 536 Order Processing Systems Order entry Sales configuration Shipment planning Shipment execution

MIS 300, Chapter 537 Order Processing Systems (continued) Inventory control Invoicing Customer relationship management Routing and scheduling

MIS 300, Chapter 538 Order Processing Systems (continued) Figure 5.10: Order Processing Systems

MIS 300, Chapter 539 Purchasing and Accounting Systems Purchasing transaction processing systems include: –Inventory control –Purchase-order processing –Receiving –Accounts payable

MIS 300, Chapter 540 Purchasing and Accounting Systems (continued) Accounting transaction processing systems include: –Budget –Accounts receivable –Payroll –Asset management –General ledger

MIS 300, Chapter 541 Purchasing and Accounting Systems (continued) Figure 5.11: Integration of a Firm’s TPSs

MIS 300, Chapter 542 TPS Control and Management Issues Business continuity planning: identification of the business processes that must be restored first in the event of a disaster and specification of what actions should be taken and who should take them to restore operations

MIS 300, Chapter 543 Transaction Processing System Audit Does the system meet the business need for which it was implemented? What procedures and controls have been established? Are these procedures and controls being used properly? Are the information systems and procedures producing accurate and honest reports?

MIS 300, Chapter 544 International Issues Issues that multinational corporations face in planning, building, and operating their TPSs –Different languages and cultures –Disparities in IS infrastructure –Varying laws and customs rules –Multiple currencies 

MIS 300, Chapter 545 Enterprise Resource Planning: An Overview of Enterprise Resource Planning Enterprise resource planning (ERP) systems are used in large, midsized, and small companies Real-time monitoring of business functions Timely analysis of key issues, such as quality, availability, customer satisfaction, performance, and profitability

MIS 300, Chapter 546 An Overview of Enterprise Resource Planning (continued) Steps in running a manufacturing organization using an ERP system: –Develop demand forecast –Deduct demand forecast from inventory –Determine what is needed for production –Check inventory for needed raw materials

MIS 300, Chapter 547 An Overview of Enterprise Resource Planning (continued) Steps in running a manufacturing organization using an ERP system (continued): –Schedule production –Assess need for additional production resources –Financial forecasting

MIS 300, Chapter 548 Definition The adoption of an integrated, comprehensive set of applications that communicate easily with one another to handle all of a firm’s business

MIS 300, Chapter 549 Basic Philosophy Division of labor, basis of bureaucracy isn’t whole story Business is an integrated, tightly cohesive system Structure follows form follows function follows information! Redundancy, duplication are bad Variety is the enemy

MIS 300, Chapter 550 Typically, corporate IT use is … Sales POS System Production System Accounts Receivable Finance Spreadsheet Sales Mgmt Software Production Mgmt Application Accounting System Debt Management Application Sales EIS Production DSS Corporate Accountability Finance ESS Management Level Division, Function, Responsibility

MIS 300, Chapter 551 Fragmented, Fractured… Sales POS System Production System Accounts Receivable Finance Spreadsheet Sales Mgmt Software Production Mgmt Application Accounting System Debt Management Application Sales EIS Production DSS Corporate Accountability Finance ESS Management Level Division, Function, Responsibility No communication across functions No aggregation or dissemination across levels of responsibility

MIS 300, Chapter 552 Integration Proceeds in Two Dimensions Sales POS System Production System Accounts Receivable Finance Spreadsheet Sales Mgmt Software Production Mgmt Application Accounting System Debt Management Application Sales EIS Production DSS Corporate Accountability Finance ESS Division, Function, Responsibility Common data formats, real-time data processing, client- server platforms, and Internet-based extranets enable data to move “seamlessly” across divisional boundaries, lubricating the movement of semi-finished inventory, product, etc. One barrier to integration is removed. Common user interfaces enable better communication and movement of human resources among divisions 1. Cross- Functional

MIS 300, Chapter 553 Typically, corporate IT use is … Sales POS System Production System Accounts Receivable Finance Spreadsheet Sales Mgmt Software Production Mgmt Application Accounting System Debt Management Application Sales EIS Production DSS Corporate Accountability Finance ESS Management Level Central repositories, common formats, real-time processing, updated security, mobile technologies enable executives, managers, supervisors and workers at all levels to create, access, use, and update information according to their needs. 2. Vertical- ly Integra- ted

MIS 300, Chapter 554 Result? Sales data generated from POS Available to Sales Managers to forecast demand And to production stations for schedule generation And to production management to monitor productivity, anticipate problems And to CFO to update information for loan repayment, renegotiation And to customers to estimate delivery time, options, etc. Extra- net And to all em- ployees to keep them informed about working conditions Intra- net

MIS 300, Chapter 555 Why Is Enterprise Computing Important? Integrates the supply chain Provides for organizational learning Introduces strong IT efficiencies through common approaches Solves management problems of burgeoning IT costs (consolidation) Recognizes IT’s central role in integration, lubrication of business processes

MIS 300, Chapter 556 What Makes ERP/EC Difficult? Sheer volume of data Divisional lore Actual divisions of labor Human nature (undesirability of change) Poorly thought-through problem statement High initial cost Legacy systems, sunk costs Near-monopoly supplier situation (SAP, Bahn, Peoplesoft, Oracle are really only suppliers)

MIS 300, Chapter 557 Advantages and Disadvantages of ERP Elimination of costly, inflexible legacy systems Improvement of work processes Increase in access to data for operational decision making Upgrade of technology infrastructure Expense and time in implementation

MIS 300, Chapter 558 Advantages and Disadvantages of ERP (continued) Difficulty implementing change Difficulty integrating with other systems Risks in using one vendor Risk of implementation failure 

MIS 300, Chapter 559 Summary In business-to-consumer (B2C) e-commerce, customers deal directly with the organization In business-to-business (B2B) e-commerce, the participants are organizations In consumer-to-consumer (C2C) e-commerce, the participants are individuals Supply chain management is composed of demand planning, supply planning, and demand fulfillment Mobile commerce (m-commerce) uses wireless devices to place orders and conduct business

MIS 300, Chapter 560 Summary (continued) Transaction processing systems (TPSs) process the detailed data necessary to update records about the fundamental business operations Transaction processing cycle: data collection, data editing, data correction, data manipulation, data storage, and document production Order processing TPSs: order entry, sales configuration, shipment planning, shipment execution, inventory control, invoicing, customer relationship management, and routing and scheduling

MIS 300, Chapter 561 Summary (continued) Purchasing TPSs: inventory control, purchase-order processing, receiving, and accounts payable Accounting TPSs: budget, accounts receivable, payroll, asset management, and general ledger Enterprise resource planning (ERP) systems permit timely analysis of key issues, such as quality, availability, customer satisfaction, performance, and profitability