1. Fundamentals & Ethics of Information Systems-IS 201
Chapter 7
E-commerce,TPS and ERP
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2. Learning Objectives
Electronic and mobile commerce are evolving, providing new ways of conducting business that present both potential benefits and problems
Describe the current status of various forms of e-commerce, including B2B, B2C, C2C, and m-commerce
Identify several e-commerce and m-commerce applications
Identify several advantages associated with the use of e-commerce and m-commerce
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3. Learning Objectives (continued)
E-commerce and m-commerce require the careful planning and integration of a number of technology infrastructure components
Identify the key components of technology infrastructure that must be in place for e-commerce and m-commerce to work
Discuss the key features of the electronic payment systems needed to support e-commerce and m-commerce

4. Learning Objectives (continued)
An organization must have information systems that 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 transaction processing systems (TPS)

5. Learning Objectives (continued)
A company that implements an enterprise resource planning (ERP) system is creating a highly integrated set of systems, which can lead to many business benefits
Discuss the advantages and disadvantages associated with the implementation of an enterprise resource planning system

6. Learning Objectives (continued)
A company that implements a customer relationship management (CRM) system is building a source of information about customers that can improve sales, marketing, and customer service
State the objective of a customer relationship management system and describe several of its basic functions

7. Learning Objectives (continued)
There are many potential international issues associated with the operation of enterprise systems
Identify the challenges that multinational corporations face in planning, building, and operating their enterprise systems

8. Outline E-commerce M-commerce E-payment
Transaction Processing Systems (TPS)
ERP system
CRM
SCM HR
MRP
Marketing, Accounting and Finance

9. Why Learn About E- and M-Commerce
Electronic and mobile commerce:
Have transformed many areas of our lives and careers
One fundamental change has been:
The manner in which companies interact with their suppliers, customers, government agencies, and other business partners

10. What is E-Commerce? E-Commerce:
Conducting business activities electronically over computer networks
Business activities that are strong candidates for conversion to e-commerce:
Paper-based
Time-consuming
Inconvenient for customers
Forms of e-commerce: B2B, B2C, C2C

11. Business-to-Business (B2B)
Subset of e-commerce
All participants are organizations
Useful tool for connecting business partners in a virtual supply chain to cut resupply times and reduce costs

12. Business-to-Consumer (B2C)
Form of e-commerce in which customers deal directly with an organization and avoid intermediaries
Disintermediation:
The elimination of intermediate organizations between the producer and the consumer

13. Consumer-to-Consumer (C2C)
Subset of e-commerce that involves consumers selling directly to other consumers
Popular sites:
Bidzcom, Craigslist, eBid, Kijiji
ePier, Ibidfree, Ubid, and Tradus
Etsy is a C2C Web site that:
Specializes in the buying and selling of handmade and antique items
Facilitates sales worth more than $10 to $13 million each month

15. e-Government Use of information and communications technology to:
Simplify the sharing of information
Speed formerly paper-based processes
Improve the relationship between citizen and government
Forms of e-Government
Government-to-consumer (G2C)
Government-to-business (G2B)
Government-to-government (G2G)

16. Mobile Commerce
Mobile commerce (m-commerce) relies on the use of wireless devices
The Internet Corporation for Assigned Names and Numbers (ICANN):
Created a .mobi domain to help attract mobile users to the Web

17. M-Commerce in Perspective
The market for m-commerce in North America:
Maturing much later than in Western Europe and Japan
M-commerce spending in the United States:
Grew from $369 million in sales in 2008 to $1.2 billion in 2009
M-commerce will succeed only if it provides users with real benefits

18. E- and M-Commerce Applications
Many B2B, B2C, C2C, and m-commerce applications are being used in:
Retail and wholesale
Manufacturing
Marketing and advertising
Price comparison
Couponing
Investment and finance
Banking and e-boutiques

19. E-commerce in manufacture

20. Advantages of E- and M-Commerce
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21. E- and M-Commerce Technology Infrastructure

22. Web Server Hardware Key e-commerce infrastructure ingredient:
Web server hardware platform complete with the appropriate web server OS
Key decision facing new e-commerce companies:
Whether to host their own Web site or to let someone else do it (cloud computing)
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23. Web Server Software
Each e-commerce Web site must have Web server software to perform fundamental services:
Security and identification
Retrieval and sending of Web pages
Web site tracking
Web site development
Web page development

24. E-Commerce Software
Investigate and install e-commerce software to support five core tasks:
Catalog management to create and update the product catalog
Product configuration to help customers select the necessary components and options
Shopping cart facilities to track the items selected for purchase
E-commerce transaction processing
Web traffic data analysis to provide details to adjust the operations of the Web site

25. M-Commerce Hardware and Software
For m-commerce to work effectively:
The interface between the wireless, handheld device and its user must be improved
Encryption can provide secure transmission
Wireless Application Protocol (WAP):
Standard set of specifications for Internet applications that run on handheld, wireless devices

26. Electronic Payment Systems
Electronic cash:
An amount of money that is computerized, stored, and used as cash for e-commerce transactions
Credit, charge, debit, purchase p-, and smart cards:
Smart card:
Credit card-sized device with an embedded microchip to provide electronic memory and processing capability
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27. Electronic Payment Systems (cont.)
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28. Electronic Payment Systems (cont.)
P-Card:
Credit card used to streamline (simplify) the traditional purchase order and invoice payment processes
Payments using cell phones:
Available options:
Payments linked to your bank account
Payments added to your phone bill
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29. Transaction Processing Systems
Transaction processing systems (TPSs):
Capture and process detailed data necessary to update records about fundamental business operations
Include order entry, inventory control, payroll, accounts payable حسابات دائنة, accounts receivable حسابات مدينة, general ledger دفتر الحسابات, etc.
Provide employees with data to help them achieve their goals
Information Systems Essentials, Sixth Edition

30. Transaction Processing Systems (cont.)
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31. Traditional Transaction Processing Methods and Objectives
Batch processing system:
Data processing in which business transactions are:
Accumulated over a period of time
Prepared for processing as a single unit or batch
Online transaction processing (OLTP):
Data processing in which each transaction is processed immediately

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34. 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

36. TPS Activities

37. Data Collection
Capturing and gathering all data necessary to complete the processing of transactions
Data collection can be:
Manual
Automated via special input devices
Data should be:
Collected at source
Recorded accurately, in a timely fashion

38. Data Editing (double-check)
Checking data for validity and completeness to detect any problems
Examples:
Quantity and cost data must be numeric
Names must be alphabetic

39. Data Correction Reentering data that was not typed or scanned properly
Error messages must specify the problem so proper corrections can be made

40. Data Manipulation
Performing calculations and other data transformations related to business transactions
Can include:
Classifying data
Sorting data into categories
Performing calculations
Summarizing results

41. Data Storage Updating one or more databases with new transactions
Storing data in the organization’s database for further processing
Updating one or more databases with new transactions
After being updated, this data can be further processed and manipulated by other systems

42. Document Production and Reports
Generating output records, documents, and reports:
Hard-copy paper reports
Displays on computer screens
Results from one TPS can be inputs to another system

43. TPS For Small and Medium-Size Enterprises (SMEs)

44. Enterprise Resource Planning
ERP systems:
Central to the organization
Ensure information can be shared across all business functions (organization’s units)
Employ a central database of key operational and planning data that can be shared by all
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45. Traditional Information System with Closed Database Architecture
Business Enterprise
Products
Materials
Order Entry
System
Manufacturing
and
Distribution
System
Procurement
System
Supplier
Customer
Purchases
Orders
Customer
Sales
Account Rec
Production
Scheduling
Shipping
Vendor
Accts Pay
Inventory
Customer Database
Manufacturing Database
Procurement Database
Traditional Information System with Closed Database Architecture

46. Enterprise Resource Planning (cont.)

47. Advantages of ERP
Improved access to data for operational decision making
Improving integration and flexibility
Fewer errors
Improved speed and efficiency
Continuous involvement and commitment of the top management

48. Disadvantages of ERP
Expensive (can costs 100 thousands to millions of dollars)
Time-consuming (can take months to years) to implement
Difficulty integrating with other systems
Difficulty in loading data into new ERP system
Risks in using one vendor
Risk of implementation failure
Resistance for acceptance with the company

49. ERP for Small and Medium-Size Enterprises (SMEs)
Many SMEs elect to implement open-source ERP systems
With open-source software:
Anyone can see and modify the source code to customize it to meet their needs
SME can use ERP based on cloud computing
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50. ERP Components
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51. Supply Chain Management (SCM)
A system that includes:
Converting raw materials to finished products and warehousing and delivering finished product to customers
Planning, executing, and controlling all activities involved in raw material sourcing and procurement
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52. SCM
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53. Customer Relationship Management (CRM)
An information system that manages the day-to-day interactions with customers

54. Customer Relationship Management
Key features of a CRM system:
Contact management
Sales management
Customer support
Marketing automation
Data Analysis
Social networking
Access by smartphones
Import contact data

55. MRP
Manufacturing Resource Planning an IS that helps monitor and control processes related to production includes software that helps in scheduling

56. Marketing Information System
A marketing information system serves as a central repository for the tasks of a marketing department and analyzes data gathered from surveys

57. Human Resource Management
A human resources management(HRM) manages one or more human resources functions
Employee Relationship Management Systems (ERMS) manage communication between employees and the business

58. Accounting and Finance IS
Accounting software manages everyday transactions
Billing software helps the company join purchases with customer payments
Financial software helps managers budget, forecast, and analyze

59. Accounting and finance IS

60. Hosted Software Model for SME
Many business application software vendors:
Are pushing the use of the hosted software model for SMEs such as cloud computing
Using the hosted software model:
Means the small business firm does not need to employ a full-time IT person to maintain key business applications

61. Hosted Software Model for SME (cont.)
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62. International Issues Associated with Enterprise Systems
Challenges that must be met by an enterprise system of a multinational company include:
Different languages and cultures
Disparities in IS infrastructure
Varying laws and customs rules
Multiple currencies

63. Summary Electronic commerce: Mobile commerce:
Conducting business activities electronically over computer networks
Mobile commerce:
The use of wireless devices such as cell phones and smartphones to facilitate the sale of goods or services—anytime, anywhere
Electronic payment systems:
Key component of the e-commerce infrastructure

64. Summary (continued) Transaction Processing System (TPS)
Enterprise resource planning (ERP) software
Supports the efficient operation of business processes
SCM, CRM, MIS, HRM, MRP