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    Lecture Format Chapter Chapter 7 Lecture

    ; Identify each of the following cross-functional e-business systems and give

    examples of how they can provide significant business value to a company and its

    customers and business partners.

    a) Enterprise resource planning

    Learning b) Customer relationship management

    Objectivesc) Enterprise application integration

    d) Supply chain management

    e) Online transaction processing 目的

    f) Enterprise collaboration

    ; 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.

    1. Cross-Functional e-Business Applications

    2. Online Transaction Processing Key 3. Functional Business Systems Lecture 4. Marketing Contents 5. Human Resource Management

    6. Accounting and Finance




    Section I: Cross-Functional e-Business Systems

     e-Business Applications:

    This chapter explores the fast-changing world of electronic business and commerce applications of information technology. e-Business is the use of the Internet and other

     networks and information technologies to support electronic commerce, enterprise

    communications and collaboration, and web-enabled business processes both within an 6 internetworked enterprise, and with its customers and business partners.

    Distinction between e-commerce and e-business:

    ; e-Commerce is defined as buying and selling over digital media.

    ; e-Business encompasses e-commerce, but also includes both front- and back-office

    applications that form the engine for modern business. e-Business redefines old

    business models, with the aid of technology, to maximize customer value.

    Analyzing Netro Corp. and Lightwave Microsystems

    We can learn a lot about how information technologies are

    transforming and improving the management of the manufacturing

    processes of e-business enterprises from this case. Take a few minutes

    to read it, and we will discuss it (See Netro Corp. and Lightwave

    Microsystems: The Business Value of Web-Based Manufacturing

    Systems in Section IX).

e-Business Application Architecture: [Figure 7.2]

    James A. OBrienEleventh EditionIntroduction to Information Systems4

    The e-Business Application Architecture

Figure 7.2 shows how organizations are using e-business systems to build

    interrelationships to each other and to customers, employees, business partners, and other stakeholders of an internetworked e-business enterprise.

Figure 7.2 is an excellent illustration of the concept of e-business application

    architecture. It presents an overview of e-business applications and their

    interrelationships within an internetworked e-business enterprise. Organizations are

    building interrelationships to each other and to customers, employees, business partners, and other stakeholders of an internetworked e-business enterprise.

Cross-Functional Enterprise Systems:

Many organizations are using information technology to develop integrated

    cross-functional enterprise systems that cross the boundaries of traditional business

    functions in order to reengineer and improve vital business processes all across the enterprise. These organizations view cross-functional enterprise systems as a strategic way to use IT to share information resources and improve the efficiency and effectiveness of business processes, thus helping an e-business attain its strategic


Information systems typically are integrated combinations of cross-functional business

    systems. Such systems support business processes, such as:

    ; Product development

    ; Production

    ; Distribution

    ; Order management

    ; Customer support

Enterprise Resource Planning (ERP) : [Figure 7.4] James A. OBrienEleventh EditionIntroduction to Information Systems5

    Enterprise Resource Planning


    SalesAccountingDistribution,and FinanceOrder



    Figure 7.4 discusses five major application clusters in customer relationship


Enterprise resource planning (ERP) is a cross-functional enterprise system that serves

    as a framework to integrate and automate many of the business processes that must be accomplished within the manufacturing, logistics, distribution, accounting, finance, and human resources functions of a business. Characteristics of ERP software include:

    ; ERP software is a family of software modules that supports the business activities

    involved in vital back-office processes.

    ; ERP is viewed as a necessary ingredient for the efficiency, agility, and

    responsiveness to customers and suppliers that an e-business enterprise needs to

    succeed in the dynamic world of e-commerce.

Business value of ERP software:

    ; ERP creates a framework for integrating and improving back-office systems that

    result in major improvements in customer service, production, and distribution


    ; ERP provides vital cross-functional information quickly on business performance to

    managers to significantly improve their ability to make better business decisions

    across the enterprise.

Customer Relationship Management (CRM): [Figure 7.6]

    James A. OBrienEleventh EditionIntroduction to Information Systems6

    Customer Relationship Management

    Retention保持力Marketing and&LoyaltyFulfillmentProgramsSalesStore FrontCross-Selland FieldUp-SellCustomerServiceTeleSalesService and


    Contact Management

    Figure 7.6 shows some of the major application clusters in customer relationship


    ; It costs six times more to sell to a new customer than to sell to an existing one.

    ; A typical dissatisfied customer will tell eight to ten people about his or her


    ; Company can boost its profits 85 percent by increasing its annual customer retention

    by only 5 percent.

    ; The odds of selling a product to a new customer are 15 percent, whereas the odds of

    selling a product to an existing customer are 50 percent.

    ; Seventy percent of complaining customers will do business with the company again

    if it quickly takes care of a service snafu.

    ; More than 90 percent of existing companies don’t have the necessary sales and

    service integration to support e-commerce.

Customer relationship management:

    ; CRM is described as a cross-functional e-business application that integrates and

    automates many customer-serving processes in sales, direct marketing, accounting

    and order management, and customer service and support.

    ; CRM systems create an IT framework that integrates all the functional processes

    with the rest of a company’s business operations.

    ; CRM systems consist of a family of software modules that perform the business

    activities involved in such front office processes.

    ; CRM software provides the tools that enable a business and its employees to provide

    fast, convenient, dependable, and consistent service to its customers.

CRM programs typically include:

    ; Sales. CRM software tracks customer contacts and other business and life cycle

    events of customers for cross -selling and up-selling.

; Direct Marketing and Fulfilment. CRM software can automate tasks such as

    qualifying leads, managing responses, scheduling sales contacts, and providing

    information to prospects and customers.

    ; Customer Service and Support. CRM helps customer service managers quickly

    create, assign, and manage service requests. Help desk software assists customer

    service reps in helping customers whom are having problems with a product or

    service, by providing relevant service data and suggestions for resolving problems.

Examples of business benefits of customer relationship management include:

    ; CRM allows a business to identify and target their best customers; those who are the

    most profitable to the business, so they can be retained as lifelong customers for

    greater and more profitable services.

    ; CRM enables real-time customization and personalization of products and services

    based on customer wants, needs, buying habits, and life cycles.

    ; CRM can keep track of when a customer contacts the company, regardless of the

    contact point.

    ; CRM enables a company to provide a consistent customer experience and superior

    service and support across all the contact points a customer chooses.

Enterprise Application Integration: [Figure 7.7]

    James A. OBrienEleventh EditionIntroduction to Information Systems7

    Cross-Functional Integrated Systems

    Enterprise ApplicationEnterprise ApplicationEnterpriseClusterClusterApplicationFront OfficeBack OfficeIntegrationApplicationsApplicationsCRM ApplicationERP ApplicationCustomer ServiceDistributionCustomersField ServiceManufacturingSales OrderSchedulingBusiness PartnersProduct ConfigFinance


    Figure 7.7 shows how ERP software is being used to support the business activities involved in the back-office processes. These activities are vital components of an ERP system, and they are used to integrate and automate many of the business processes that

    must be accomplished within an organization.

    Many companies have moved from functional mainframe legacy systems to integrated cross-functional enterprise applications. This typically has involved installing:

    ; Enterprise resource planning (ERP) software

    ; Supply chain management (SCM) software

    ; Customer relationship management (CRM) software

    These cross-functional enterprise software applications focus on supporting integrated clusters of business processes involved in the operations of a business.

    Enterprise application integration (EAI) software is becoming available, which interconnects these enterprise application clusters. EAI software:

    ; Enables users to model the business processes involved in the interactions that

    should occur between business applications.

    ; Provides middleware that performs data conversion and coordination, application

    communication and messaging services, and access to the application interfaces


    ; Integrate a variety of enterprise application clusters by letting them exchange data

    according to rules derived from the business process models developed by users.

    ; Integrate the front-office and back-office applications of an e-business, so they work

    together in a seamless, integrated way. This is a vital capability that provides real

    business value to an e-business enterprise that must respond quickly and effectively

    to business events and customer demands.

Supply Chain Management: [Figure 7.8]

     James A. OBrienEleventh EditionIntroduction to Information Systems8

    Supply Chain Management

    SupplyScheduleMakeDeliverCommitChain确定时间委托事项Life Cycle


    AdvanceDistributionTransportationAdvanceDistributionSCMSchedulingPlanningPlanningSchedulingPlanningIntegratedInternetworked Supply Chain ManagementInternetworked Supply Chain ManagementSolution

    Figure 7.8 outlines the Internet technologies and supply chain management software that can help companies reengineer and integrate the functional processes in the supply chain

    life cycle

    Supply chain management (SCM) is a management concept that integrates the management of supply chain processes. Many companies are making SCM a top strategic objective of their e-business initiatives. It is an absolute requirement if they want to meet their e-commerce customer value imperative. Companies are reengineering their supply chain processes through the aid of Internet technologies and supply chain management software. The goal of supply chain management is to:

    ; Give customer what they want

    ; Give customers what they want, and where they want it

; Give customers what they want, where they want it, and at the lowest possible cost.

The goal of SCM is to:

    ; Reduce costs

    ; Increase efficiency

    ; Increase profits

    ; Improve supply chain cycle times

    ; Improve performance in relationships with customers and suppliers

    ; Develop value-added services that give a company a competitive edge

    According to the Advanced Management Council, supply chain management has three business objectives:

    ; Get the right product to the right place at the least cost.

    ; Keep inventory as low as possible and still offers superior customer service.

    ; Reduce cycle times. Supply chain management seeks to simplify and accelerate

    operations that deal with how customer orders are processed through the system and

    ultimately filled, as well as how raw materials are acquired and delivered for

    manufacturing processes.

Online Transaction Processing

Online transaction processing systems play a strategic role in electronic commerce.

    ; Many firms are using the Internet, extranets, and other networks that tie them

    electronically to their customers or suppliers for online transaction processing


    ; These real-time systems, which capture and process transactions immediately, can

    help them provide superior service to customers and other trading partners.

    ; OLTP systems add value to a company’s products and services, and thus give them

    an important way to differentiate themselves from their competitors.

The Transaction Processing Cycle: [Figure 7.11]

    James A. OBrienEleventh EditionIntroduction to Information Systems9

    Transaction Processing Systems

    Document124Dataand ReportTransactionTransactionEntryGenerationProcessingProcessingBatchBatchOnline/RealtimeOnline/Realtime




    Figure 7.11 illustrates the transaction processing cycle. Stress to students that

    transaction-processing systems use a five-stage cycle of data entry, transaction

    processing, database maintenance, document and report generation, and inquiry

    processing activities.

    Transaction processing systems capture and process data describing business transactions. Then they update organizational files and databases, and produce a variety of information products for internal and external use.

A transaction processing cycle consists of several basic activities, which involve:

    ; Data entry activities

    ; Transaction processing activities

    ; Database maintenance activities

    ; Document and report generation

    ; Inquiry processing activities.

    Data Entry

    The input activity in TPS involves a data entry process. In this process, data is captured

    or collected by recording, coding, and editing activities.

    Trend: Move from traditional (manual) data entry systems toward source data automation (automated systems). The reason for this trend is that direct methods are more efficient and reliable than manual systems.

Examples of devices used in data automation include:

    ; Point-of-sale (POS) transaction terminals

    ; ATM (Automated Teller Machine) terminals

    ; Optical character recognition (OCR) scanners and wands

    ; PCs and network computers with cash drawers as intelligent POS terminals

    ; Portable digital radio terminals and pen-based tablet PCs for remote date entry

; PCs equipped with touch screens and voice recognition systems for data entry

    ; Bar coded tags

    ; Magnetic stripe cards

    ; Electronic website on the Internet.

Transaction Processing

Transaction processing systems process data in two basic ways:

    ; Batch Processing - transaction data are accumulated over a period of time and

    processed periodically.Real-time Processing - (also called online processing),

    where data are processed immediately after a transaction occurs. All online

    transaction processing systems incorporate real-time processing capabilities. Many

    online systems also depend on the capabilities of fault tolerant systems that can

    continue to operate even if parts of the system fail.

Database Maintenance:

An organization’s data must be maintained by its transaction processing systems so that

    they are always correct and up-to-date. Therefore, transaction processing systems update the corporate database of any organization to reflect changes resulting from

    day-to-day business transactions.

Document and Report Generation:

Transaction processing systems produce a variety of documents and reports.

Examples of transaction documents include:

    ; Purchase orders

    ; Paychecks

    ; Sales receipts

    ; Invoices

    ; Customer statements.

Transaction reports might take the form of a transaction listing such as a payroll register,

    or edit reports that describe errors detected during processing.

Inquiry Processing:

    Many transaction processing systems allow you to use the Internet, intranets, extranets, and Web browsers or database management query languages to make inquiries and

    receive responses concerning the results of transaction processing activity. Typically,

    responses are displayed in a variety of prespecified formats or screens.

Examples of queries include:

    ; Checking on the status of a sales order

    ; Checking on the balance in an account

    ; Checking on the amount of stock in inventory

Enterprise Collaboration

Enterprise collaboration systems provide tools to help us collaborate - to communicate

    ideas, share resources, and coordinate our cooperative work efforts as members of the many formal and informal process and project teams and workgroups that make up many of today’s organisations.

    The goal of enterprise collaboration systems is to enable us to work together more easily and effectively by helping us to:

    ; Communicate - sharing information with each other

    ; Coordinate - coordinating our individual work efforts and use of resources

    with each other

    ; Collaborate - working together cooperatively on joint projects and assignments

Enterprise collaboration systems (ECS) are cross-functional e-business systems that

    enhance communication, coordination, and collaboration among the members of business teams and workgroups.

Tools for Enterprise Collaboration: [Figure 7.12]

    James A. OBrienEleventh EditionIntroduction to Information Systems10

    Tools for Enterprise Collaboration




    CollaborativeCollaborativeElectronicElectronicElectronicElectronicE-MailData ConferencingCalendaringWorkWorkCommunicationsConferencingCommunicationsConferencingVoice Mail, I PhoneVoice ConferencingTask and Project MgtManagementManagementToolsToolsWeb PublishingVideoconferencingWorkflow SystemsToolsToolsToolsToolsFaxingDiscussion ForumsKnowledge Mgt

    Electronic Meetings Document Sharing

    Figure 7.12 shows groupware tools for electronic communications, conferencing, and

    collaborative work supporting enterprise collaboration.

    Many industry analysts believe that the capabilities and potential of the Internet, as well

    as intranets and extranets, are driving the demand for enterprise collaboration tools in

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