McGraw-Hill/Irwin

Copyright 2008, The McGraw-Hill Companies, Inc. All rights reserved.

Chapter

7
Electronic Business Systems

McGraw-Hill/Irwin

Copyright 2008, 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

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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
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Enterprise Business Systems

E-business means using the Internet, other 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

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Case 1: Hiltons Data-Driven Hospitality

OnQ is part of Hilton Hotel Corp.s customerrelationship-management strategy
Give employees a clearer idea of who the customers are Track customer experiences Combine with frequent-guest program to build loyalty across eight hotel brands Measure of success is share of wallet

About 70 percent of OnQ is custom coded

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Case Study Questions

What are the benefits and drawbacks of the OnQ system at Hilton?
What does Hilton have to do to create a competitive advantage through OnQ? Is it possible to have too much information about a customer?

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Cross-Functional Systems
Cross the boundaries of traditional business functions
Used to reengineer and improve vital business processes all across the enterprise

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Enterprise Application Architecture

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Enterprise Application Architecture

Provides a conceptual framework
Helps visualize the basic components, processes, and interfaces of major e-business applications

Focuses on accomplishing fundamental business processes in concert with

Customers Suppliers Partners Employees

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Enterprise Application Architecture

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
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Enterprise Application Architecture

Supply Chain Management (SCM)
Focuses on developing the most efficient and effective sourcing and procurement processes

Knowledge Management (KM)

Focuses on facilitating internal group collaboration and decision support

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Enterprise Application Integration

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

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How EAI Works

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Transaction Processing Systems

Cross-functional information systems that process data resulting from the occurrence of business transactions
Transactions include sales, purchases, deposits, withdrawals, refunds, and payments
Online transaction processing (OLTP) is a real-time system that captures transactions immediately

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Transaction Processing Systems

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The Transaction Processing Cycle

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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
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ECS Tools

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Functional Business Systems

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

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Case 2: Advertising & Marketing Changes

The Internet is causing a paradigm shift in advertising
Advertisers are moving away from TV, newspapers, and magazine ads Soaring profits from selling online targeted ads are boosting company values The Web is the first global advertising medium

Broadband
Encourages uses to spend more time surfing Allows more creative ad formats
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Case Study Questions

Why are companies like Chrysler now looking more favorably at the Internet as a great medium for their advertising dollars?
What has happened to change their view?

How do Googles online ad revenue sources and strategy differ from Yahoos?
Which online ad strategy is superior for attracting advertising from small companies? For attracting large companies?

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Case Study Questions

If you were in Julie Roehms position at Chrysler, how would you distribute Chryslers advertising dollars among online and traditional TV and print media?

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IT in Business

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Marketing Systems
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

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Marketing Information Systems

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Interactive Marketing
Interactive Marketing
A customer-focused marketing process Uses the Internet, intranets, and extranets Establishes two-way transactions between a business and its customers or potential customers

Goal
Profitably use networks to attract and keep customers Get customers to help create, purchase, and improve products and services
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Targeted Marketing
An advertising and promotion management concept with five targeting components

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Targeted Marketing 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
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Sales Force Automation

Outfit sales force with notebook computers, web browsers, and sales contact software
Connect them to marketing websites and the company intranet

Goals
Increase personal productivity Speed up capture and analysis of sales data Gain strategic advantage

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Manufacturing Information Systems

Supports the production/operations functions
Includes all activities concerned with planning and control of the processes producing goods or services

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Computer-Integrated Manufacturing

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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
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CIM Systems
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

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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

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HRM Systems

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HRM and the Internet

Recruiting employees using the corporate website and commercial recruiting services
Posting messages in selected Internet newsgroups Communicating with job applicants via e-mail

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HRM and Corporate Intranets

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 Training

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Employee Self-Service
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

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Accounting Information Systems

The oldest and most widely used information system in business
Records and reports business transactions and economic events Produces financial statements

Forecasts future conditions

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Accounting Information Systems

Typically consists of
Order processing Inventory control Accounts receivable Accounts payable

Payroll
General ledger systems

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Accounting Information Systems

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Financial Management Systems

Supports business managers and professionals making decisions concerning
The financing of a business The allocation and control of financial resources within a business

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Financial Management System Example

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Case 3: Improving Supply-Chain Results

Supply chains are a kludge of systems
Internal manufacturing, warehousing, inventory control, planning, shipping, and logistics Relationships with suppliers and partners Increasing dependence on customer input

Now being replace with two state-of-the-art, major software types

Supply-chain execution Supply-chain planning

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Case Study Questions

What is the business value of SCM systems for Brunswick and Whirlpool?
Does the business value of SCM depend upon what type of business a company is in? How does Brunswicks approach to SCM differ from that of Whirlpool?
Is one approach superior to all others?

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Case 4: The Business Case for EAI

EAI involves using software to connect a variety of applications into a cohesive unit
Helps align systems more closely with business processes

EAI Projects
Costly and complex ($200,000 to $400,000) Technical staff need lots of training

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Case Study Questions

Why has EAI recently become a critical part of the IT strategy at many organizations, and a high-ranking project of top IT executives?
Use Baxter International, GE Power, and Corporate Express as examples

What is the major difference in the business value of the EAI projects at Baxter International, GE Power, and Corporate Express?

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Case Study Questions

What are some of the challenges in developing and implementing EAI systems?
How can companies meet these challenges?

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