Chapter 7 Electronic Business Systems

James A. O'Brien, and George Marakas Management Information Systems, 9th ed. Boston, MA: McGraw-Hill, Inc., 2009. ISBN: 13 9780073376769

Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

Learning Objectives
1. 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

2. Give examples of how Internet and other information technologies support business processes within the business functions of Accounting, Finance, Human resource management, Marketing, Production, and Operations management
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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
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Case 1: Cisco Systems

Cisco TelePresence creates life-like, in-person experiences, and promises to revolutionize the way teams collaborate in the future. The system weighs in at just over a ton and requires a room at least 15 by 19 feet. It uses the Cisco MCS 7800 series server and the 7970G IP phone, running SIP over a 6-Mbps or better connection. It uses three 65-inch HD plasma displays and an internal Gigabit Ethernet switch. Cisco faces strong competition from HP, which introduced its Halo telepresence system, and videoconferencing leader Polycom, which offers a high-end telepresence system.
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Case Study Questions

1. What are the main business benefits of the collaboration technologies described in the case? How do these go beyond saving on corporate travel? Provide several specific examples. Michelle Damrow of Polycom notes Cisco is betting on a proprietary standard for its TelePresence product, while competitors are going with interoperability. Do you agree with Ciscos strategy? Why or why not? Defend your answer. Think about the I-Zone wiki described in the case, Ciscos forum for new business ideas, and its seeming success in that regard. Why do you think that is the case? Do these technologies foster creativity, provide an opportunity to communicate already existing ideas, or both? Defend your answer.

2.

3.

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Cross-Functional Systems
Cross the boundaries of traditional business functions
Used to reengineer and improve vital business processes all across the enterprise

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Enterprise Application Architecture

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Enterprise Application Architecture

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

Focuses on accomplishing fundamental business processes in concert with

Customers Suppliers Partners Employees
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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 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

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Enterprise Application Integration

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

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How EAI Works

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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

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Transaction Processing Systems

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The Transaction Processing Cycle

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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
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ECS Tools

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Functional Business Systems

A variety of types of information systems that support the business functions of
Accounting Finance Marketing Operations management Human resource management

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Case 2: OHSU, Sony, Novartis, and Others

Oregon Health & Science University (OHSU) is using Oracle Corp.s iRecruitment application which is part of Oracles EBusiness HR Management System suite, enables managers to request a new employee and process applications electronically. The software handles most of the time-consuming administrative work, including routing requisition forms to the appropriate managers and posting the job on the Web site. The payoff is significant. The university is filling job openings two weeks faster than it once did and saving at least $1,500 per job. More and more HR is being called to be a strategic business partner, and professionals in this area are turning to IT for innovative solutions.
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Case Study Questions

1. What are some of the business benefits of the technologies described in the case? Provide several examples beyond the mere automation of transactionoriented processes. 2. Do you think the business value of these strategic HRM applications depends on the type of business a company is in, for instance, consulting, manufacturing, or professional services? Why or why not? Explain. 3. What are some of the challenges and obstacles in developing and implementing HRM systems? Are these unique to this type of systems? What strategies would you recommend for companies to meet those challenges? Provide several specific recommendations.
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IT in Business

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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

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Marketing Information Systems

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

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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

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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

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Manufacturing Information Systems

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

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Computer-Integrated Manufacturing

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CIM Objectives
Simplify production processes, product designs, and factory organization Automate production processes and the business functions that support them Integrate all production and support processes using
Networks Cross-functional business software Other information technologies
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CIM Systems
Computer-aided manufacturing (CAM)
Automate the production process

Manufacturing execution systems (MES)

Performance monitoring information systems for factory floor operations

Process control
Control ongoing physical processes

Machine control
Controls the actions of machines
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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

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HRM Systems

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HRM and the Internet

Recruiting employees using the corporate website and commercial recruiting services Posting messages in selected Internet newsgroups Communicating with job applicants via email

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HRM and Corporate Intranets

Corporate intranet uses
Process common HRM transactions Allow around-the-clock HRM services Disseminate information faster than through previous company channels Collect information from employees online Allow HRM tasks to be performed with little HRM department intervention Training
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Employee Self-Service
Intranet applications can allow employees to
View benefits Enter travel and expense reports Verify employment and salary information Access and update personal information Enter time-sensitive data

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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

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

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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

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Financial Management System Example

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Case 3: Hiltons Data-Driven Hospitality

OnQ is part of Hilton Hotel Corp.s customer-relationship-management strategy
Give employees a clearer idea of who the customers are Track customer experiences Combine with frequent-guest program to build loyalty across eight hotel brands Measure of success is share of wallet

About 70 percent of OnQ is custom coded

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Case Study Questions

1. What are the benefits and drawbacks of the OnQ system at Hilton? 2. What does Hilton have to do to create a competitive advantage through OnQ? 3. Is it possible to have too much information about a customer?

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Case 4: Yahoo, Google, and Chrysler

Today companies are spending more money on online advertising. With the increase in online advertising, Yahoo and Google have become the most highly prized media companies in the world. Yahoo has led the way in persuading large companies to use online advertising instead of traditional media. According to a survey, sixty-three percent said that online advertising was a brand building tool equal to or better than advertising on TV or in print.
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Case Study Questions

1. Why are companies like Chrysler now looking more favorably at the Internet as a great medium for their advertising dollars? What has happened to change their view? 2. How do Googles online ad revenue sources and strategy differ from Yahoos? Which online ad strategy is superior for attracting advertising from small companies? For attracting advertising from large companies? Defend your position. 3. If you were director of marketing communications at Chrysler, how would you distribute Chryslers advertising dollars among online and traditional TV and print media? Defend your position.
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