Chapter 5 SG (Intro to e-Business Systems)
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Chapter 5 SG (Intro to e-Business Systems)

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Chapter 5 SG (Intro to e-Business Systems) Chapter 5 SG (Intro to e-Business Systems) Document Transcript

  • 5 Introduction to e-Business Systems I. CHAPTER OVERVIEW Foundation Concepts: Introduction to e-Business Systems describes how information systems integrate and support enterprisewide business processes and the business functions of marketing, manufacturing, human resource management, accounting, and finance. Functional Business Systems - Functional business information systems support the business functions of marketing, production/operations, accounting, finance, and human resource management through a variety of e- business operational and management information systems summarized in Figure 5.1 Marketing - Marketing information systems support traditional and e-commerce processes and management of the marketing function. Major types of marketing information systems include interactive marketing at e- commerce websites, sales force automation, customer relationship management, sales management, product management, targeted marketing, advertising and promotion, and market research. Thus, marketing information systems assist marketing managers in electronic commerce product development and customer relationship decisions, as well as in planning advertising and sales promotion strategies and developing the e-commerce potential of new and present products, and new channels of distribution. Manufacturing - Computer-based manufacturing information systems help a company achieve computer- integrated manufacturing (CIM), and thus simplify, automate, and integrate many of the activities needed to quickly produce high-quality products to meet changing customer demands. For example, computer-aided design using collaborative manufacturing networks helps engineers collaborate on the design of new products and processes. Then manufacturing resource planning systems help plan the types of resources needed in the production process. Finally, manufacturing execution systems monitor and control the manufacture of products on the factory floor through shop floor scheduling and control systems, controlling a physical process (process control), a machine tool (numerical control), or machines with some humanlike work capabilities (robots). Human Resources Management - Human resource information systems support human resource management in organizations. They include information systems for staffing the organization, training and development, and compensation administration. HRM websites on the Internet or corporate intranets have become important tools for providing HR services to present and prospective employees. Accounting and Finance - Accounting information systems record, report, and analyze business transactions and events for the management of the business enterprise. Examples of common accounting information systems include order processing, inventory control, accounts receivable, accounts payable, payroll, and general ledger systems. Information systems in finance support financial manager in decisions regarding the financing of a business and the allocation of financial resources within a business. Financial information systems include cash management, online investment management, capital budgeting, and financial forecasting and planning. Cross-Functional Enterprise Systems - Major e-business applications and their interrelationships are summarized in the enterprise application architecture of Figure 5.18 many e-business applications are integrated cross-functional enterprise applications like enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (SCM), which also reengineer the business processes involved. Enterprise collaboration systems (ECS) support and enhance communication and collaboration among the teams and workgroups in an organization. These systems themselves are being interconnected with enterprise application integration (EAI) software so that the business users of these applications can more easily access the information resources they need to support the needs of customers, suppliers, and business partners. Refer to Figures 5.19, 5.23, and 5.25 for summary views of the e-business applications of EAI systems and enterprise collaboration systems. 87
  • Transaction Processing Systems - Online transaction processing systems play a vital role in e-commerce. Transaction processing involves the basic activities of (1) data entry, (2) transaction processing, (3) database maintenance, (4) document and report generation, and (5) inquiry processing. Many firms are using the Internet, intranets, extranets, and other networks for online transaction processing to provide superior service to their customers and suppliers. See Figure 5.22 II. 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. • Identify the following cross-functional concepts, and give examples of how they can provide significant business value to a company. • Cross-functional enterprise systems • Enterprise application integration • Transaction processing systems • Enterprise collaboration systems Learning Objective 1: 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. The objective is to learn enough about the ways in which information technology supports business processes in the five key functional areas of a business to be able to point out examples. The body of the text gives some examples. The case studies are excellent sources of more examples. Your own experience in your organization or observations of other organizations can provide examples. Know what the five primary functional areas are and be able to cite an example of IM/IT support for each one. Be sure you can explain why the function works better with the support that you cite. If you can cite several examples based on the breakdown of the five functions below, so much the better. Within each of the five functions know what each of the following is essentially concerned with: ● Marketing systems ● Interactive marketing ● Targeted marketing ● Sales force automation ● Manufacturing systems ● Computer-Integrated Manufacturing (CIM) ● Computer-Aided Manufacturing (CAM) ● Manufacturing Execution Systems (MES) ● Human Resource Systems ● Traditional I/S support: pay, personnel records, personnel utilization analysis ● Human Resource Information System (HRIS) extended capabilities ● Recruitment ● Job placement ● Performance appraisals ● Benefit management ● Training and development ● Health, safety, and security ● Accounting systems 88
  • ●Online accounting ●Order processing ●Inventory control ●Accounts receivable and payable ●Payroll ●General ledger ● Financial management systems ● Cash and investment management ● Capital budgeting ● Financial forecasting and planning Learning Objective 2: Identify the following cross-functional concepts, and give examples of how they can provide significant business value to a company. • Cross-functional enterprise systems • Enterprise application integration • Transaction processing systems • Enterprise collaboration systems The concept of cross-functional systems is especially important because these systems bring together data and information from parts of the organization that might otherwise be operating in much more isolation. All of the business functions depend on each other in various ways. Enhancing the interaction and communication between the functions can create new efficiencies, increase effectiveness, and open opportunities to restructure processes and support entirely new business initiatives. You should know what each of the four concepts above is concerned with and in what ways each one helps integrate the five functional areas. V. KEY TERMS AND CONCEPTS - DEFINED Accounting Systems: Information systems that record and report business transactions, the flow of funds through an organization, and produce financial statements. This provides information for the planning and control of business operations, as well as for legal and historical record-keeping. Accounts Payable: A record of purchases from suppliers. Accounts Receivable: A record of amounts owed by customers. Batch Processing: A category of data processing in which data is accumulated into “batches” and processed periodically. Computer-Aided Manufacturing: The use of computers to automate the production process and operations of a manufacturing plant. Also called factory automation. Computer-Integrated Manufacturing: An overall concept that stresses that the goals of computer use in factory automation should be to simplify, automate, and integrate production processes and other aspects of manufacturing. Cross-Functional Integrated Systems: Information systems that are integrated combinations of business information resources across the functional units of an organization. 89
  • e-Business: 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 internetworked enterprise, and with its customers and business partners. Enterprise Application Architecture Using the Internet and other networks for e-commerce, collaboration, and business process. Businesses use these technologies to establish interrelationships to each other and to customers, employees, business partners, and other stakeholders of an internetworked e-business enterprise. Enterprise Application Integration: A cross-functional e-business application that integrates front-office applications like customer relationship management with back-office applications like enterprise resource management. Enterprise Collaboration Systems: The use of groupware tools and the Internet, intranets, extranets, and other computer networks to support and enhance communication, coordination, collaboration, and resource sharing among teams and workgroups in an internetworked enterprise. Financial Management Systems: Information systems that support financial managers in the financing of a business and the allocation and control of financial resources. Includes cash and securities management, capital budgeting, financial forecasting, and financial planning. Functional Business Systems: Information systems within a business organization that support one of the traditional functions of business such as marketing, finance, or production. Functional business systems can be either operations or management information systems. General Ledger: A collection of financial records of a firm. Human Resource Systems: Information systems that support human resource management activities such as recruitment, selection and hiring, job placement and performance appraisals, and training and development. Interactive Marketing: A dynamic collaborative process of creating, purchasing, and improving products and services that builds close relationships between a business and its customers, using a variety of services on the Internet, intranets, and extranets. Inventory Control: The activity of monitoring and controlling the inventory. Machine Control: The technology of controlling machine tools by computers. Manufacturing Execution Systems: MES are performance monitoring information systems for factory floor operations. They monitor, track, and control the five essential components involved in a production process: materials, equipment, personnel, instructions and specifications, and production facilities. Manufacturing Systems: Information systems that support the planning, control, and accomplishment of manufacturing processes. This includes concepts such as computer-integrated manufacturing (CIM) and technologies such as computer-aided manufacturing (CAM) or computer-aided design (CAD). Marketing Systems: 90
  • Information systems that support the planning, control, and transaction processing required for the accomplishment of marketing activities, such as sales management, advertising and promotion. Online Accounting Systems: Online accounting information systems are using the Internet, intranets, extranets, and other networks to be directly involved in the processing of transactions between a business and its customers and suppliers. Online HRM Systems: Online HRM systems are using the Internet to actively recruit for employees through recruitment sections of their corporate web sites and commercial recruitment services and databases on the World Wide Web. Online Investment Systems: Online investment systems are using the Internet and other networks in order to make buying, selling, or holding decisions for each type of security so that an optimum mix is developed that minimizes risk and maximizes investment income for the business. Online Transaction Processing Systems: A realtime transaction processing system. Order Processing: The activities involved in processing orders from customers. Payroll: A record of the employees to be paid and the amount due to each. Process Control: The use of a computer to control an ongoing physical process such as petrochemical production. Realtime Processing: Data processing in which data is processed immediately rather than periodically. Also called online processing. Sales Force Automation: The use of computers to automate sales recording and reporting by sales people, as well as communications and sales support. Targeted Marketing: Targeted marketing has become an important tool in developing advertising and promotion strategies for a company’s electronic commerce web sites. Targeted marketing includes five targeting components: community, content, context, demographic/psychographic, and online behavior. Transaction Processing Cycle: A cycle of basic transaction processing activities including data entry, transaction processing, database maintenance, document and report generation, and inquiry processing. 91