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Chapter8_ECommerce.ppt Chapter8_ECommerce.ppt Presentation Transcript

  • Concepts in Enterprise Resource Planning Third Edition Chapter Eight ERP and Electronic Commerce
  • Objectives
    • After completing this chapter, you will be able to:
    • Describe business-to-business e-commerce
    • Explain the importance of ERP to the success of a company engaged in e-commerce
    • Describe the function of an application service provider (ASP)
    • Describe the delivery of ERP services through an ASP
    • Describe Web services and SAP’s NetWeaver
    • Describe the unique components of NetWeaver
    • Explain why accessing an ERP system through a Web browser is efficient
    • Define XML and its significance to ERP
    • Define RFID and its future role in logistics and sales
    Concepts in Enterprise Resource Planning, Third Edition
  • Introduction
    • Effectively competing in high-volume e-commerce may be impossible without the infrastructure provided by Enterprise Resource Planning (ERP)
    • Companies can integrate ERP systems with the Internet and “rent” ERP software from special-purpose software companies
    • NetWeaver: SAP’s Web services platform
    • XML is becoming the new markup language of the Internet
    • Use of radio frequency identification (RFID) devices in managing movement of goods in the supply chain
    Concepts in Enterprise Resource Planning, Third Edition
  • Electronic Commerce Background
    • Today most companies conduct at least part of their business operations through electronic commerce (e-commerce)
    • E-commerce: conduct of business over the Internet
    • Most of the business growth on the Internet has been in the area of business-to-business (B2B) e-commerce
    • Business-to-consumer (B2C) e-commerce
    Concepts in Enterprise Resource Planning, Third Edition
  • Business-to-Business E-Commerce
    • Buying and selling between two companies over the Internet
    • Companies might be manufacturers, suppliers, wholesalers, or retailers
    • Transforming the way companies work with each other
    • Electronic Data Interchange (EDI)
      • Electronic computer-to-computer transfer of standard business documents
      • Been used by companies since the 1960s
      • Value-added network (VAN) : intermediary Internet-based network run by an outside EDI service provider
    Concepts in Enterprise Resource Planning, Third Edition
  • Business-to-Business E-Commerce (cont’d.)
    • Electronic data interchange (EDI) (cont’d.)
      • Benefits of EDI:
        • Costs of paper, printing, and postage have almost disappeared
        • Errors have been minimized
        • Ordering is fast and efficient
        • Suppliers and buyers are “locked” into business relationships
    Concepts in Enterprise Resource Planning, Third Edition
  • Business-to-Business E-Commerce (cont’d.)
    • Internet-based procurement
      • Use of Internet technologies for procurement activities
      • Benefits:
        • Less expensive to use the Internet than private EDI networks
        • Purchasing costs further reduced as suppliers compete for orders on buyer’s Web site
    Concepts in Enterprise Resource Planning, Third Edition
  • Business-to-Business E-Commerce (cont’d.)
    • Internet-based procurement (cont’d.)
      • Electronic marketplace : gathering place for buyers and sellers on the Internet
      • Exchanges : one type of B2B electronic marketplace
        • Typically, the focus is on a single industry
      • Private exchange
        • One type of industry marketplace
        • Membership is restricted to select participants
    Concepts in Enterprise Resource Planning, Third Edition
  • Business-to-Business E-Commerce (cont’d.)
    • Internet auctions and reverse auctions
      • B2B e-commerce allows companies to do online bidding through auctions and reverse auctions
      • Reverse auctions : one buyer and many sellers
      • Internet-based auctions are changing the way in which commodities are purchased
        • Internet has replaced the intermediary
        • Pricing is open and dynamic
    Concepts in Enterprise Resource Planning, Third Edition
  • Business-to-Business E-Commerce (cont’d.)
    • Electronic commerce security
      • Security is a major concern with e-commerce
      • Denial of service (DoS) attacks
        • Attackers block access to a Web-based service through a variety of means, including bombarding a site with so many messages that the site cannot handle the volume
      • Measures used by companies to protect their networks, Web sites, and privacy of customer data
        • Virus-scanning software, encryption, intrusion detection, etc.
    Concepts in Enterprise Resource Planning, Third Edition
  • E-Commerce and ERP
    • Each technology complements the other, and each is necessary for success
    • Back-office processing
      • Efficient back-office operation is crucial for any company’s success
      • E-commerce often exacerbates problems and reveals weaknesses in current back-office systems
    • Integrating Internet front-office operation and ERP back-office operation is fundamental in today’s business environment
    Concepts in Enterprise Resource Planning, Third Edition
  • Fitter Snacker and E-Commerce
    • Currently, Fitter Snacker has neither a Web-based ordering system nor an ERP system
    • FS executives looking at two IS investment options:
      • Implement a Web-based ordering system, or
      • Implement an ERP package
    • If Web-based ordering system implemented without implementing an ERP package:
      • FS’s unintegrated information system would not be able to handle the additional Internet orders
    • An attractive Web site does not provide enough benefit on its own for an e-commerce business to stay afloat
    • Conventional back-office systems must be in place and operating correctly for the business to flourish
    Concepts in Enterprise Resource Planning, Third Edition
  • Using ERP through an Application Service Provider
    • Many companies today outsource some of their operations to an outside service provider
    • Outside service provider sometimes called a third party
    • Outsourcing can simplify management of ERP systems
    Concepts in Enterprise Resource Planning, Third Edition
  • Application Service Providers
    • Application service provider (ASP) : company that provides management of applications for a company over a network
      • Network is usually the Internet
    • ASP owns the hardware and rights to the software
    • ASP employs workers who run outsourced applications
    • Users of the system are the company’s employees
    Concepts in Enterprise Resource Planning, Third Edition
  • Concepts in Enterprise Resource Planning, Third Edition Figure 8-1 ERP responsibilities in-house versus with an ASP
  • Application Service Providers (cont’d.)
    • Advantages of using an ASP
      • Affordability
      • Shorter implementation time
      • Expertise
    • Disadvantages of using an ASP
      • Security
      • Bandwidth/response time
      • Flexibility
      • No frills
      • Technical, not business focus
    Concepts in Enterprise Resource Planning, Third Edition
  • Application Service Providers (cont’d.)
    • Other considerations
      • Companies should carefully scrutinize the ASP’s contract before signing it to uncover:
        • Hidden costs
        • Other potential problems
      • SAP is offering an ASP version of its ERP product for midsized companies
        • Business ByDesign: delivered to customers over the Web
    Concepts in Enterprise Resource Planning, Third Edition
  • NetWeaver
    • Web services : combination of software tools that lets various programs within an organization communicate with other applications
      • Also known as SOA, or service-oriented architecture
    • Benefit of adopting SOA
      • Ability to add new applications quickly
    • Implementing SOA is not easy
    • Return on an SOA investment is often difficult to determine
    Concepts in Enterprise Resource Planning, Third Edition
  • NetWeaver Tools and Capabilities
    • SAP’s NetWeaver: collection of components that support business transactions over the Internet
      • Modules included: Enterprise Portal, Mobile Infrastructure, Business Intelligence, Master Data Management, and Exchange Infrastructure
    • Enterprise Portal
      • mySAP.com
      • Gives users complete access, or a portal, to all their work on a single screen, using links to all major aspects of their jobs
    Concepts in Enterprise Resource Planning, Third Edition
  • NetWeaver Tools and Capabilities (cont’d.)
    • Mobile Infrastructure
      • Allows users to access and work with data through mobile devices such as PDAs, cell phones, and pagers
    • Business Intelligence (BI)
      • Incorporates a data warehouse and data mining tools
      • Can be delivered in a personalized manner with Enterprise Portal
    Concepts in Enterprise Resource Planning, Third Edition
  • NetWeaver Tools and Capabilities (cont’d.)
    • Master Data Management
      • Provides data consistency within a company’s SAP system
    • Exchange Infrastructure
      • Allows different applications to share data
      • Companies don’t have to write code to enable different applications to transmit data
    Concepts in Enterprise Resource Planning, Third Edition
  • NetWeaver at Work for Fitter Snacker
    • Amy Sanchez: salesperson, works from home
      • She logs on to SAP system with her laptop computer, using the SAP GUI
    • Donald Brown: salesperson, deals with distributors
      • Tester for new NetWeaver SAP server
      • Every day logs on to his Enterprise Portal
      • Also uses SAP’s Mobile Infrastructure and Business Intelligence modules
    Concepts in Enterprise Resource Planning, Third Edition
  • Duet
    • Microsoft and SAP have been working on Duet
    • Intended to let companies access SAP data and processes using the familiar Microsoft Office interface
    • Goal of Duet
      • Expand and simplify adoption of SAP ERP by making workers more efficient
    • Duet has numerous advantages
    Concepts in Enterprise Resource Planning, Third Edition
  • Duet Challenges
    • Duet brings its own challenges
      • Companies must be using a relatively current version of SAP ERP
      • Companies must run Microsoft server software
      • May require company to use other SAP products
    • Growing competition between SAP and Microsoft in the ERP software market
    Concepts in Enterprise Resource Planning, Third Edition
  • Duet Architecture Concepts in Enterprise Resource Planning, Third Edition
  • Accessing ERP Systems over the Internet
    • ERP vendors now offer access to their systems through a Web browser
      • Web browsers such as Microsoft Internet Explorer or Netscape Navigator
    • Users and systems administrators find it much more efficient to access ERP systems through the browser
      • Avoids the time-consuming installation of the standard ERP GUI
    Concepts in Enterprise Resource Planning, Third Edition
  • XML
    • Extensible Markup Language (XML)
      • New programming language of the Internet
      • Uses tags that define the data contained within them
    • XML-coded data can go directly from a Web page into a database
      • Data does not have to pass through middleware or be rekeyed into the system
    • Internet pages written in Hypertext Markup Language (HTML)
      • HTML specifies only how your information will look when viewed through a browser
    • XML users can create their own tags
      • Customized tags in the document describe, or define, the data
    Concepts in Enterprise Resource Planning, Third Edition
  • XML Example Concepts in Enterprise Resource Planning, Third Edition Figure 8-5 Fitter Snacker document in XML
  • XML (cont’d.)
    • ERP systems now accept data in XML format
      • Using XML, companies can transfer data from their Web sites directly into their ERP systems
        • Streamlines data entry, reduces errors, and reduces server loads
    • XML is very attractive to smaller companies
      • Small companies often transfer data over telephone lines or using fax machines
      • Using XML makes electronic data transfer much more affordable
    Concepts in Enterprise Resource Planning, Third Edition
  • Radio Frequency Identification Technology
    • Radio frequency identification ( RFID ) technology
      • Becoming an efficient way of tracking items through a supply chain
      • RFID device: small package, or tag, that includes a microprocessor and an antenna and can be attached to products
    • RFID technology has become inexpensive enough to be cost-effective
    • Wal-Mart is in the process of implementing an RFID system for its supply chain
    Concepts in Enterprise Resource Planning, Third Edition
  • Radio Frequency Identification Technology (cont’d.)
    • Pharmaceutical firms working toward adopting RFID technology
      • To comply with upcoming FDA regulations that would require track-and-trace technology on all drug packages to prevent counterfeiting
    • Procter & Gamble is using RFID technology to collect information about the sales of its products
    • SAP’s ERP software is RFID-ready
    • Through NetWeaver, SAP can integrate RFID data into both SAP and non-SAP applications
    Concepts in Enterprise Resource Planning, Third Edition
  • Summary
    • E-commerce is transforming the way companies do business
    • Business-to-business e-commerce is changing the way companies buy and sell goods
    • ERP is an essential component for all forms of e-commerce
    • Application service providers (ASPs) are allowing companies to use ERP without a large initial investment
    • Web services, or service-oriented architecture, offers a combination of software tools that lets various programs within an organization communicate with other applications
    • SAP’s Web services platform is NetWeaver
    • Users of ERP systems often access those systems through a Web browser
    • XML, or Extensible Markup Language, defines data on a Web page
    • RFID devices, or radio frequency identification devices, are used in tracking items in transit
    Concepts in Enterprise Resource Planning, Third Edition