1. 1 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Chapter 5 Introduction to e-Business Systems

2. 2 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. 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, and  Production and operations management.

3. 3 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives (continued)  Identify the following cross-functional system concepts, and how they can provide significant business value to a company:  Cross-functional enterprise systems  Enterprise application integration  Transaction processing systems  Enterprise collaboration systems

4. 4 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Section I Functional Business Systems

5. 5 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. IT in Business  “Business managers are moving from a tradition where they could avoid, delegate, or ignore decisions about IT to one where they cannot create a marketing, product, international, organization, or financial plan that does not involve such decisions.”

6. 6 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Marketing Systems  Marketing Information Systems provide information technologies that support major components of the marketing function.  Interactive Marketing  Customer focused marketing process  Based on using Internet, intranets, & extranets to establish two-way communications between customers or potential customers and the business  Customers become involved in product development, delivery, & service issues

7. 7 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Marketing Systems (continued)  Targeted marketing  Five targeting components  Community  Content  Context  Demographic/psychographic  Online behavior

8. 8 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Marketing Systems (continued)  Sales Force Automation  The sales force is connected to marketing websites on the Internet, extranets, & the company intranet  Increases productivity of sales force  Speeds up the capture & analysis of sales data  Allows management to provide improved delivery information & better support of the sales force.

9. 9 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Manufacturing Systems  Support the production/operations function  Assists firms in planning, monitoring, & controlling inventories, purchases, & the flow of goods and services

10. 10 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Manufacturing Systems (continued)  Computer-Integrated Manufacturing (CIM)  Simplify  Automate  Integrate  Supports the concepts of flexible manufacturing systems, agile manufacturing, & total quality management  Computer-Aided Engineering (CAE)  Computer-Aided Design (CAD)  Material Requirements Planning (MRP)

11. 11 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Manufacturing Systems (continued)  Computer-Aided Manufacturing (CAM)  Automate the production process  Manufacturing Execution Systems (MES)  Performance monitoring systems for factory floor operations

12. 12 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Manufacturing Systems (continued)  Process Control  The use of computers to control an ongoing physical process  Machine Control  The use of a computer to control the actions of a machine.  Also called numerical control

13. 13 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Human Resource Systems  Human Resource Information Systems  Support  Planning to meet the personnel needs of the business  Development of employees to their full potential  Recruitment, selection, & hiring  Job placement

14. 14 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Human Resource Systems (continued)  Human Resource Information Systems (continued)  Performance appraisals  Employee benefits analysis  Training and development  Health, safety, & security

15. 15 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Human Resource Systems (continued)  HRM and the Internet  Allows companies to process most common HRM applications over their intranets.  Allows companies to provide around-the- clock services to their employees.  Allows companies to disseminate valuable information faster.  Allows employees to perform HRM tasks online.

16. 16 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Human Resource Systems (continued)  Staffing  Supported by information systems that record and track human resources to maximize their use  Training and Development  Help human resource managers plan and monitor employee recruitment, training, and development programs

17. 17 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Accounting Systems  Record and report business transactions and other economic events  Online Accounting Systems

18. 18 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Accounting Systems (continued)  Six widely used accounting systems  Order processing  Captures & processes customer orders and produces data needed for sales analysis and inventory control  Inventory Control  Processes data reflecting changes in items in inventory.  Helps provide high-quality service while minimizing investment in inventory & inventory carrying costs

19. 19 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Accounting Systems (continued)  Accounts Receivable  Keeps records of amounts owed by customers from data generated by customer purchases and payments  Accounts Payable  Keeps track of data concerning purchases from, and payments to, suppliers

20. 20 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Accounting Systems (continued)  Payroll  Receives and maintains data from employee time cards and other work records  General Ledger  Consolidates data received from accounts receivable, accounts payable, payroll, & other accounting information systems

21. 21 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Financial Management Systems  Supports financial managers in decisions concerning  The financing of the business  The allocation & control of financial resources within the business.

22. 22 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Financial Management Systems (continued)  Major financial management system categories  Cash Management  Collects information on all cash receipts and disbursements on a real-time or periodic basis

23. 23 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Financial Management Systems (continued)  Investment Management  Helps the financial manager make buy, sell, or hold decisions for each type of security  Helps the financial manager develop the optimum mix of securities in order to minimize risk and maximize return

24. 24 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Financial Management Systems (continued)  Capital Budgeting  Involves evaluating the profitability and financial impact of proposed capital expenditures  Allows financial managers to analyze long- term expenditure proposals for plant and equipment

25. 25 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Financial Management System (continued)  Financial Forecasting & Planning  Evaluate the present and projected financial performance of the company  Help determine financing needs and analyze alternative methods of financing  Explore what-if and goal-seeking questions

26. 26 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Section II Cross-Functional Enterprise Systems

27. 27 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Cross-Functional Enterprise Applications  Integrated combinations of information subsystems that share information resources and support business processes across the functional units  A strategic way to use IT to share information resources & improve efficiency & effectiveness

28. 28 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Cross-Functional Enterprise Applications (continued)  Enterprise Application Architecture

29. 29 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Cross-Functional Enterprise Applications (continued)  Focused on accomplishing fundamental business processes in concert with the company’s customer, supplier, partner, & employee stakeholders

30. 30 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Enterprise Application Integration (EAI)  Software enables users to model the business processes involved in the interactions that should occur between business applications.  Also provides middleware that  Performs data conversion & coordination  Provides application communication & messaging services  Provides access to the application interfaces

31. 31 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Enterprise Application Integration (continued)  Business value  Integrates front-office and back-office applications to allow for quicker, more effective response to business events and customer demands  Improves customer and suppler experience with the business because of its responsiveness.

32. 32 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Transaction Processing Systems  Cross-functional information systems that process data resulting from the occurrence of business transactions  Transactions – events that occur as part of doing business  Sales  Purchases  Deposits  Withdrawals  Refunds  Payments

33. 33 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Transaction Processing Systems (continued)  Online transaction processing systems  Real-time systems that capture and process transactions immediately  Adds value to product or service through superior customer service

34. 34 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Transaction Processing Systems (continued)  Transaction Processing Cycle  Data entry  The capture of business data  Transaction processing  Two basic ways  Batch processing where transaction data are accumulated & processed periodically  Real-time processing where data are processed immediately after a transaction occurs

35. 35 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Transaction Processing Systems (continued)  Database maintenance  Corporate databases are updated to reflect the day-to-day business transactions  Document and report generation  A variety of documents and reports are produced

36. 36 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Transaction Processing Systems (continued)  Inquiry processing  Inquiries and responses concerning the results of transaction processing activity

37. 37 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Transaction Processing Systems (continued)

38. 38 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Enterprise Collaboration Systems  Cross-functional e-business systems that enhance communication, coordination, & collaboration  Communicate – share information with each other  Coordinate – coordinate individual work efforts & use of resources with each other.  Collaborate – work together cooperatively on joint projects and assignments

39. 39 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Enterprise Collaboration Systems (continued)  Tools for Enterprise Collaboration  Electronic communication  E-mail  Voice mail  Fax  Web publishing  Bulletin boards  Paging  Internet phone systems

40. 40 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Enterprise Collaboration Systems (continued)  Electronic conferencing  Data & voice conferencing  Videoconferencing  Chat systems  Discussion forums  Electronic meeting systems  Synchronous. Team members can meet at the same time and place in a “decision room” setting

41. 41 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Enterprise Collaboration Systems (continued)  Collaborative work management  Calendaring & scheduling  Task & project management  Workflow systems  Knowledge management

42. 42 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Discussion Questions  Why is there a trend toward cross-functional integrated enterprise systems in business?  Referring to the example on Dell Computer, what other solutions could there be for the problem of information system incompatibility in business besides EAI systems?

43. 43 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Discussion Questions (continued)  Referring to the Charles Schwab & Co. example, what are the most important HR applications a company could offer to its employees via a Web-based system?  How do you think sales force automation affects salesperson productivity, marketing management, and competitive advantage?

44. 44 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Discussion Questions (continued)  How can Internet technologies be involved in improving a process in one of the functions of business?  What are several e-business applications that you might recommend to a small company to help it survive and succeed in challenging economic times?

45. 45 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Discussion Questions (continued)  Which of the 14 tools for enterprise collaboration do you feel are essential for any business to have today? Which do you feel are optional?  Referring to the General Electric example, how do enterprise collaboration systems contribute to bottom-line profits for a business?

46. 46 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 1 – Cypress Semiconductor & FleetBoston  How does the use of Internet technologies to support the marketing function at Cypress Semiconductor improve business and customer value?  What are the benefits and potential challenges of FleetBoston’s use of IT to support their targeted marketing programs?

47. 47 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 1 (continued)  Why do IT-based targeted marketing programs sometimes produce negative business results?  How can negative business results be avoided?

48. 48 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 1 (continued)  How can customer segmentation and targeted marketing programs that focus on customer profitability avoid “ignoring customers with low current returns but high potential”?

49. 49 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 2 – Johnson Controls  Why is the exchange of “tribal knowledge” important in product design?  How do Web-based systems support such collaborations?

50. 50 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 2 (continued)  Why is it important to provide visibility throughout a supply chain?  How is JCI attempting to provide this visibility?

51. 51 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 2 (continued)  What is the business value of JCI’s B2B portal?  Can collaboration systems improve the quality of the products that are designed, as well as reducing the cost and time of the design process?

52. 52 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 3 – Union Pacific, Corporate Express, & Best Buy  How could an enterprise application integration system help a firm to better serve its customers?  How could enterprise application systems improve a company’s business interactions with its suppliers?

53. 53 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 3 (continued)  What major challenges are faced by businesses that implement EAI initiatives?  How can companies meet those challenges?

54. 54 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 4 – Baxter International  What key HR applications are provided by Baxter’s Web-based HR system?  What are some other Web-based HR applications they might implement?

55. 55 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 4 (continued)  What business value does Baxter derive from their Web-based HR approach?  What value do their employees receive from such HR systems?

56. 56 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 4 (continued)  How could viewing employees as customers or clients change how HR services are provided to employees by Web-based HR systems?

57. 57 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 5 – IBM Corporation  Why have many companies been reluctant to support instant messaging in the workplace?  What are the advantages of instant messaging over e-mail and voice mail for enterprise collaboration?

58. 58 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Real World Case 5 (continued)  What do you see as the major disadvantages of using instant messenger instead of e-mail or voice mail?  Do you recommend that companies encourage and support the use of IM tools for enterprise collaboration?