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Chapter

7-8
Electronic Business Systems

McGraw-Hill/Irwin

Copyright 2008, The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives
Identify the following cross-functional enterprise
systems, and give examples of how they can
provide significant business value to a company
Enterprise application integration
Transaction processing systems
Enterprise collaboration systems

7-3

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
Production
Operations management
7-4

Enterprise Business Systems

E-business means using the Internet, other
networks, and IT to support
Electronic commerce
Enterprise communications and collaboration
Web-enabled business processes

E-commerce is the buying, selling, and

marketing of products, services, and information
over the Internet and other networks

7-5

Enterprise Application Architecture

7-6

Enterprise Application Architecture

Provides a conceptual framework
Helps visualize the basic components, processes,
and interfaces of major e-business applications

Focuses on accomplishing fundamental

business processes in concert with

Customers
Suppliers
Partners
Employees

7-7

Enterprise Application Architecture

Enterprise Resource Planning (ERP)
Concentrates on the efficiency of internal
production, distribution, and financial processes

Customer Relationship Management (CRM)

Focuses on acquiring and retaining profitable
customers via marketing, sales, and services

Partner Relationship Management (PRM)

Aims at acquiring and retaining partners who
can enhance the selling and distribution of
products and services
7-8

Enterprise Application Architecture

Supply Chain Management (SCM)
Focuses on developing the most efficient and
effective sourcing and procurement processes

Knowledge Management (KM)

Focuses on facilitating internal group
collaboration and decision support

7-9

Enterprise Application Integration

EAI software connects cross-functional systems
Serves as middleware to provide
Data conversion
Communication between systems
Access to system interfaces

7-10

How EAI Works

7-11

Transaction Processing Systems

Cross-functional information systems that
process data resulting from the occurrence of
business transactions
Transactions include sales, purchases, deposits,
withdrawals, refunds, and payments
Online transaction processing (OLTP) is a realtime system that captures transactions
immediately

7-12

The Transaction Processing Cycle

7-13

Enterprise Collaboration Systems (ECS)

EC systems are cross-functional information
systems that enhance team and workgroup
Communication
Coordination
Collaboration

Systems may include

Networked PC workstations
Servers
Databases
Groupware and application packages
7-14

ECS Tools

7-15

Functional Business Systems

A variety of types of information systems
that support the business functions of

Accounting
Finance
Marketing
Operations management
Human resource management

7-16

IT in Business

7-17

Marketing Systems
Marketing systems are concerned with
Planning, promotion, and sale of existing
products in existing markets
Development of new products and new markets
Better attracting and serving present and
potential customers

7-18

Marketing Information Systems

7-19

Interactive Marketing
Interactive Marketing
A customer-focused marketing process
Uses the Internet, intranets, and extranets
Establishes two-way transactions between a
business and its customers or potential customers

Goal
Profitably use networks to attract and keep
customers
Get customers to help create, purchase, and
improve products and services
7-20

Targeted Marketing
An advertising and promotion management
concept with five targeting components

7-21

Targeted Marketing Components

Community: customized ads to appeal to specific
virtual communities
Content: ads placed on a variety of selected
websites, aimed at a specific audience
Context: ads placed on web pages that are
relevant to a product or service
Demographic/Psychographic: web marketing
aimed at specific types or classes of people
Online behavior: promotions tailored to each
visit to a site by an individual
7-22

Sales Force Automation

Outfit sales force with notebook computers,
web browsers, and sales contact software
Connect them to marketing websites and the
company intranet

Goals
Increase personal productivity
Speed up capture and analysis of sales data
Gain strategic advantage

7-23

Manufacturing Information Systems

Supports the production/operations functions
Includes all activities concerned with planning
and control of the processes producing goods
or services

7-24

Human Resource Management (HRM)

Information systems designed to support
Planning to meet personnel needs
Development of employees to their full potential
Control of all personnel policies and programs

7-25

HRM Systems

7-26

Accounting Information Systems

The oldest and most widely used information
system in business
Records and reports business transactions and
economic events
Produces financial statements
Forecasts future conditions

7-27

Accounting Information Systems

Typically consists of
Order processing
Inventory control
Accounts receivable
Accounts payable
Payroll
General ledger systems

7-28

Accounting Information Systems

7-29

Financial Management Systems

Supports business managers and professionals
making decisions concerning
The financing of a business
The allocation and control of financial
resources within a business

7-30

Financial Management System Example

7-31

Customer Relationship Management

A customer-centric focus
Customer relationships have become a companys
most valued asset
Every companys strategy should be to
find and retain the most profitable
customers possible

8-32

What is CRM?
Managing the full range of the customer
relationship involves
Providing customer-facing employees with a
single, complete view of every customer at
every touch point and across all channels
Providing the customer with a single, complete
view of the company and its extended channels

CRM uses IT to create a cross-functional

enterprise system that integrates and automates
many of the customer-serving processes
8-33

Application Clusters in CRM

8-34

Contact and Account Management

CRM helps sales, marketing, and service
professionals capture and track relevant
data about
Every past and planned contact with prospects
and customers
Other business and life cycle events of customers

Data are captured through customer touchpoints

Telephone, fax, e-mail
Websites, retail stores, kiosks
Personal contact
8-35

Sales
A CRM system provides sales reps with the
tools and data resources they need to
Support and manage their sales activities
Optimize cross- and up-selling

CRM also provides the means to check on a

customers account status and history before
scheduling a sales call

8-36

Marketing and Fulfillment

CRM systems help with direct marketing
campaigns by automatic such tasks as

Qualifying leads for targeted marketing

Scheduling and tracking mailings
Capturing and managing responses
Analyzing the business value of the campaign
Fulfilling responses and requests

8-37

Customer Service and Support

A CRM system gives service reps real-time
access to the same database used by sales
and marketing
Requests for service are created, assigned,
and managed
Call center software routes calls to agents
Help desk software provides service data
and suggestions for solving problems

Web-based self-service enables customers

to access personalized support information
8-38

Retention and Loyalty Programs

It costs 6 times more to sell to a new customer
An unhappy customer will tell 8-10 others
Boosting customer retention by 5 percent can
boost profits by 85 percent
The odds of selling to an existing customer are
50 percent; a new one 15 percent
About 70 percent of customers will do business
with the company again if a problem is quickly
taken care of
8-39

Retention and Loyalty Programs

Enhancing and optimizing customer retention
and loyalty is a primary objective of CRM
Identify, reward, and market to the most loyal
and profitable customers
Evaluate targeted marketing and relationship
programs

8-40

Supply Chain Management (SCM)

Fundamentally, supply chain management
helps a company

Get the right products

To the right place
At the right time
In the proper quantity
At an acceptable cost

8-41

Goals of SCM
The goal of SCM is to efficiently
Forecast demand
Control inventory
Enhance relationships with customers, suppliers,
distributors, and others
Receive feedback on the status of every link in
the supply chain

8-42

What is a Supply Chain?

The interrelationships
With suppliers, customers, distributors, and
other businesses
Needed to design, build, and sell a product

Each supply chain process should add value to

the products or services a company produces
Frequently called a value chain

8-43

Supply Chain Life Cycle

8-44

Electronic Data Interchange

EDI
One of the earliest uses of information technology
for supply chain management
The electronic exchange of business transaction
documents between supply chain trading partners
The almost complete automation of an ecommerce supply chain process
Many transactions occur over the Internet, using
secure virtual private networks

8-45

Typical EDI Activities

8-46

Roles and Activities of SCM in Business

8-47