Chapter 6

E-Business: Intra-
Business
E-Commerce
Internal Communication
Historically, paper
Updating a paper procedures manual

Outdated material

Numerous misunderstandings

Some legal actions
B2Employee E-commerce
Maintain online Web site
E-business more general than B2E
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Figure 6.1 Miami Universitys online
publications and policies.

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B2C vs. Intra-business E-commerce
Consumer oriented B2C
Revolutionary
Aggressive and risky
First movers
Intra-business and B2B
Evolutionary
Methodical
In business context

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 Figure 6.3 The value chain.

Inbound Production Outbound Sales and Customer

logistics processes logistics marketing service

Information technology infrastructure

Upstream Downstream

The key to intra-business e-commerce

is improving value chain efficiency.
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Inbound logistics
Purchase components
Purchase raw materials

Figure 6.4 The

Production
R&D value chain for a
Engineering/product design
Order components
Order raw materials
personal
Manufacture products
computer
Outbound logistics
manufacturer.
Inventory management Sales & Customer
Order entry marketing service
Order fulfillment

Information technology infrastructure

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Inbound
logistics

Production
R&D
Engineering/product design
Order components
Order raw materials
Manufacture products Figure 6.5
Design/build/maintain production line
Manufacture components Each value
Configure/setup production runs
Deliver materials to production line chain
Manufacture subassemblies
Configure/setup production runs process
Deliver components to production line
Assemble final product consists of
Configure/setup production runs
Deliver subassemblies to production line sub-
processes.
Outbound Sales & Customer
logistics marketing service

Information technology infrastructure

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Efficiency and Effectiveness
Objective: reduce operating costs
Efficiency gains

Within individual processes
Across the value chain
Efficiency-based competitive
advantage
Hidden from public view
Relatively easy to sustain
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 Figure 6.6 The organizational
pyramid.

CEO

Before computers,
companies organized Operations
Marketing &
Sales
CFO CIO

along functional lines.

Functional groups Production Sales Accounting Operations

exchanged paperwork.
Early computer
Database
Purchasing Advertising Payroll
administrator

applications supported Warehouse

Market
research
Auditing
Systems &
programming

a single function.
Distribution Finance

Product
development
Personnel

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 Figure 6.7 A manual payroll system.
Collect
timesheets

Record
timesheets

Payroll was done

manually until at Compile
payroll

least the late 1950s.

Prepare
checks

Deliver
checks

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 Figure 6.8 Automating selected
processes made payroll more
efficient.

Automate expensive processes first

Record
Compile payroll timesheets

Prepare (print) paychecks

Automate remaining manual
processes next Compile
payroll
Record timesheets
Objectiveprocess optimization.
Print
checks

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 Figure 6.9 Islands of automation.
Other functional Island A

groups Sales

Sales Sales report

Sales report

Accounting Sales report

Purchasing Island B
Payroll Island D
Inventory Accounts
recievable
Island C
Production Inventory

Independent fiefdoms A/R report

Office political base Island E

Bills Billing
Sub-optimization

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 Figure 6.10 The competitive advantage
model.

Stimulus for action

Competition forced
Information sharing
Integration across First major move
value chain
Including legacy
applications Customer acceptance

Competitor catch up moves First mover expansion moves

Commoditization

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Incompatibilities
Hardware, software, and data
Data redundancy was a major
problem
Same data value on multiple files
Independently maintained
Values differed
Data formats differed
Solution central database
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New Approaches to System
Development
Information system planning
Elevated to strategic level
Information technology infrastructure
Basic blueprint for technology integration
Enterprise data model (EDM)
Business process reengineering
Process improvements in context
Problem legacy applications

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Partitioning Order Entry
Client Server
Display online Record order
order form Read quantity on
Display order hand
acknowledgement Access A/R
Error-check form Validate stock
data Check credit

Either Calculate taxes and total

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 Figure 6.17 A two-tier client/server
application.
Server
Maintenance problem Data/information logic

Multiple copies of software

on multiple clients
Development problem
Multiple client platforms
Middleware

Fat clients
Presentation logic
Business logic

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Figure 6.18 A three-tier client/server
application.
Web Server
Middleware Business logic
Transaction management

Database Server
Data/information logic

Middleware

Thinner clients
Presentation logic
Some business logic

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 Figure 6.19 Enterprise application
integration.

Objective: coordinate Purchased

applications
all applications,
databases, and info
technologies.
Legacy Web based
applications
EAI applications

Enterprise resource New and old

planning (ERP) client/server
applications
Means of implementing
the EAI principle

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Virtual Value Chain
Digital picture of value chain
Coordinate and monitor processes
Organizational (not local) efficiency
Applications
Fuel business process reengineering
Mirror or replace physical processes
Data mining

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Web Services
Application server software
A server for middleware
Scalable platform
Application service provider (ASP)
Intermediary that supplies applications
Including mission-critical applications
Management service provider (MSP)
Intermediary that manages IT services

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 Corporate Intranets
Private corporate network
Uses standard Internet protocols
TCP/IP
HTML and HTTP
Browser and Web server
Internet and intranet differences
Intranet is smaller in scope
Intranet limited to organizations
employees

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 Legacy application

Legacy message

Middleware

TCP/IP
Legacy message
wrapper
Figure 6.22
Encasing a legacy
message in a
TCP/IP wrapper
allows a legacy Company intranet Company intranet

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communicate with Copyright 2003, Addison-Wesley
Figure 6.23 Some examples of
groupware.
E-mail
Scheduling and calendars
Whiteboarding
Chat rooms and bulletin boards
Video conferencing
Electronic meetings
Document management
Workflow management
Collaborative writing
Group decision support systems

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Figure 6.24 Typical enterprise portal
services.
Structured data Collaboration
management User
Unstructured data administration
management Expense account
Content management
management
Ordering supplies
Information
filtering
Security
Search capabilities
Personalization

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Geographically Dispersed Value
Chains
Value chain more complex
Options
Secure private network
Value added network
Public network (e.g., Internet)
Virtual private network
Security
Firewalls
User identification
Authentication

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