Professional Documents
Culture Documents
E-Business (Electronic-Business)
The use of Internet technologies to internetwork and empower business processes,
electronic commerce, and enterprise communication and collaboration within a company
and with its customers, suppliers, and other business stakeholders.
“It’s happening right before our eyes: a vast and quick reconfiguration of commerce on an evolving
e-business foundation. What is the difference between e-commerce and e-business? We define e-
commerce as buying and selling over digital media. E-business, in addition to encompassing e-
commerce, includes both front- and back-office applications that form the engine for modern
business. E-business is not just about e-commerce transactions; it’s about redefining old business
models, with the aid of technology, to maximize customer value.”
Remember that 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.
The days of manufacturing products and placing them in inventory are withering, as more
and more companies switch from that build-to-stock model to a build-to-order manufacturing
environment, where products are custom-built or assembled to specific customer orders. Thus,
companies like Netro Corp. and Lightwave Microsystems are relying on Web-based manufacturing
execution systems and other collaborative e-business applications to support a detailed online
view of the status of manufacturing processes that is shared among a company’s employees,
suppliers, and customers. This enables agile manufacturing companies to be responsive to
changing customer requirements during the production process, and make realtime adjustments to
improve the efficiency and quality of manufacturing processes.
“Integration of the enterprise has emerged as a critical issue for organizations in all business
sectors striving to maintain competitive advantage. Integration is the key to success. It is the key to
unlocking information and making it available to any user, anywhere, anytime.”
Information systems in the real world typically are integrated combinations of cross-
functional business systems. Such systems support business processes, such as product
develop, production, distribution, order management, customer support, and so on. Many
organizations are using information technology to develop integrated cross-functional enterprise
systems that cross the boundaries of traditional business functions (such as marketing and
finance), 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 objectives. See Figure 7.3
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For example, as we have seen in the Real World Cases, business firms are turning to
Internet technologies to help them reengineer and integrate the flow of information among their
internal business processes and their customers and suppliers. Companies are using the World
Wide Web and their intranets and extranets as a technology platform for their cross-functional and
interorganizational enterprise systems.
In addition, many companies have moved from functional mainframe-based legacy
systems to integrated cross-functional client/server applications. This typically has involved
installing enterprise resource planning (ERP), supply chain management (SCM), or customer
relationship management (CRM) software from SAP America, Baan, PeopleSoft, Oracle, and
others. Instead of focusing on the information processing requirements of business functions, such
enterprise software focuses on supporting integrated clusters of business processes involved in
the operations of a business.
“ERP is the backbone of e-business. In other words, ERP is a business operating system, the
equivalent of the Windows operating system for back-office operations.”
Figure 7.5 illustrates some of the cross-functional business processes and supplier and
customer information flows supported by ERP systems. As we will see several times in this
text, installing ERP systems successfully is not an easy task because of the major changes
to a company’s business processes required by ERP software. Now let’s look at how a
global corporation views the business value of ERP systems.