UCI 202 Topic 2 E-Business Systems
UCI 202 Topic 2 E-Business Systems
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Lecture Notes
2.1 Definitions
E-business – is the use of the Internet, other network and information technologies to support electronic
commerce, enterprise communication and collaboration, and web-enabled business processes both within
the enterprise and with its customers and business partners.
Information systems that support e-business processes can be classed into two broad classes:
a) Functional area information systems
b) Cross-functional area information systems
Functional area information systems (FAISs) provide information mainly to lower- and middle-level
managers in the functional areas. They use this information to help them plan, organize, and control
operations.
A term coined to describe a customer focused marketing process that is based on the Internet, intranets
and extranets to establish a two-way communication between a business and its customers or potential
customers.
In interactive marketing, customers are not just passive participants but are actively engaged in a network
enabled proactive and interactive processes.
The goal of interactive marketing is:
(i) Profitably use networks to attract and keep customers
(ii) Get customers to help create, purchase, and improve products and services
This is enabled by various Internet technologies like: Chart and discussion groups, Web forms and
questionnaires, e-mail correspondence, and social networks e.g. Facebook.
Benefits include: rich collection of marketing data; new product ideas; increased sales; and strong customer
relationships.
Sales-Force Automation
Systems use mobile computing and Internet technologies to automate many processing activities for sales
support and management.
The sales force is being equipped with notebook computers, web browsers and Sales Contacts
Management software that connect them to marketing websites on the Internet, extranets and their
company intranets.
Benefits include:
(i) Increases the personal productivity of sales people
(ii) Dramatically speeds up the capture and analysis of sales data from the field to marketing
managers at the company headquarters.
(iii) Allows the marketing management to improve sales support by delivering key information in time to
them.
Engineering Systems
Computers help engineers design products using both Computer-aided engineering (CAE) and Computer-
aided design (CAD) systems.
They are also used to better production processes using Computer-aided Process planning
(i) Inventory management—how much inventory to order, how much inventory to keep, and when to order
new inventory.
(ii) Quality control—controlling for defects in incoming material and defects in goods produced
(iii) Materials requirements planning—planning process that integrates production, purchasing, and inventory
management of interdependent items (MRP)
(iv) Manufacturing resource planning—planning process that integrates an enterprise’s production, inventory
management, purchasing, financing, and labor activities (MRP II)
(v) Just-in-time systems—principle of production and inventory control in which materials and parts arrive
precisely when and where needed for production (JIT)
Manufacturing Execution Systems
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 (robotics).
The Internet has become a major force for change in HRM e.g.
(i) Recruitment via the company website & commercial recruiting services
(ii) Source of a wealth of information and contacts about employers and job hunters.
(iii) Posting messages in selected Internet newsgroups
(iv) Communicating with job applicants via e-mail
(v) Advertisement of vacancies
3. Capital Budgeting
The capital budgeting process involves evaluating the probability and financial impact of proposed capital
expenditure.
These systems make heavy use of spreadsheet models that incorporate present value analysis of expected
cash flow and probability analysis of risk to determine optimum mix of capital projects for a business.
Advantages of ERPs
1. Efficiency - ERP creates a framework for integrating and improving back-office systems that result in
major improvements in customer service, production, and distribution efficiency.
2. Decision support - ERP provides vital cross-functional information quickly on business performance to
managers to significantly improve their ability to make better business decisions across the enterprise.
3. Improved quality of products and services.
4. Decreases production/operational costs
5. Improves enterprise agility
Disadvantages of ERPs
In the past, customer data were located in many isolated systems in various functional areas, such as
finance, distribution, sales, service, and marketing. In addition, e-commerce generated huge amounts
of customer data that were not integrated with the data in the functional area ISs.
CRM systems were designed to address these problems by providing information and tools to deliver a
superior customer experience and to maximize the lifetime customer value for a firm.
CRM systems integrate customer data from various organizational sources, analyze these data, and
then provide the results to both employees and customer touch points.
A customer touch point is a method of interaction with a customer, such as telephone, e-mail, a
customer service or help desk, conventional mail, a Web site, and a store.
Properly designed CRM systems provide a single, enterprisewide view of each customer.
These systems also provide customers with a single point of contact within the enterprise as well as a
unified view of the enterprise.
CRM systems provide applications in three major areas: sales, marketing, and customer service.
(i) Sales
Sales force automation (SFA) functions in CRM systems make salespeople more productive by helping
them focus on the most profitable customers.
SFA functions provide data such as sales prospect and contact information, product information,
product configurations, and sales quotes.
SFA software can integrate all the information about a particular customer so that the salesperson can
put together a personalized presentation for that customer.
(ii) Marketing
CRM systems support marketing campaigns by providing prospect and customer data, product and
service information, qualified sales leads, and tools for analyzing marketing and customer data.
In addition, they enhance opportunities for cross-selling, upselling, and bundling.
Cross-selling refers to the marketing of complementary products to customers. For example, a bank
customer with a large balance in his or her checking account might be directed toward CDs or money
market funds.
Up-selling is the marketing of higher-value products or services to new or existing customers. For
example, if you are in the market for a television, a salesperson will show you a plasma-screen TV next
to a conventional TV, in hopes that you will pay extra for a clearer picture.
Bundling is a type of cross-selling in which a vendor sells a combination of products together at a
lower price than the combined costs of the individual products. For example, your cable company might
offer a package that includes basic cable TV, all the movie channels, and broadband Internet access
for a lower price than these services would cost individually.
6. Customers can view their account balances or check the shipping status of their orders at any time
from their computers or cell phones. If you order books from Amazon, for example, you can find the
anticipated arrival date.
7. Many companies allow customers to create their own individual Web pages. These pages can be
used to record purchases and preferences, as well as problems and requests. For example, you
can create your own personalized Google Web page by visiting www.google.com/ig.
8. FAQs are the simplest and least expensive tool for dealing with repetitive customer questions.
Customers use this tool by themselves, which makes the delivery cost minimal. However,
nonstandard questions still require an individual e-mail.
9. E-mail has become the most popular tool of customer service. Inexpensive and fast, e-mail is used
primarily to answer inquiries from customers. However, firms also rely on e-mail to disseminate
product and other information (for example, confirmations) and to conduct correspondence
regarding any topic.
Benefits of CRM
CRM Failures
Goals of SCM
(i) Forecast demand
(ii) Control inventory
(iii) Enhance relationships with customers, suppliers, distributors, and others
(iv) Receive feedback on the status of every link in the supply
SCM is frequently subdivided into supply chain planning applications, such as demand and supply
forecasting, and supply chain execution applications, such as inventory management, logistics
management, and warehouse management.
Companies increase their use of Internet technologies to enhance integration and collaboration with
their business partners and improve the operational efficiency and business effectiveness of their
supply chains.
The term supply chain comes from a picture of how the partnering organizations are linked together.
A typical supply chain, which links a company with its suppliers and its distributors and customers
Supply chain involves three segments:
1. Upstream - where sourcing or procurement from external suppliers occurs
2. Internal - where packaging, assembly, or manufacturing takes place
3. Downstream - where distribution takes place, frequently by external distributors
The flow of information and goods can be bidirectional. For example, damaged or unwanted products
can be returned, a process known as reverse logistics.
Challenges of SCM
1. Data entry
• This is capture of business data about a transaction.
• Correct capture of data is a challenge.
• Organizations try to automate the TPS data entry as much as possible because of the large volume
involved, a process called source-data automation.
2. Transaction Processing
• Transaction processing systems process data in two ways
(i) Batch processing – transaction data are accumulated over a period of time and processed
periodically.
(ii) Realtime processing – data are processed immediately after a transaction occurs.
3. Database maintenance – TPS update the corporate databases to reflect changes on the day-to-day
business transactions to ensure that they are up-to-date and correct.
4. Report generation – TPS produce a variety of reports that are used in decision making at various levels
of the organization.
5. Inquiry Processing – many TPS allow inquiries about transactions. Responses are usually displayed in
a variety of prespecified formats or screens.
1. E-business _______________.
A. is the same as e-commerce
B. is narrower in scope than e-commerce
C. uses the Internet and information technology to support e-commerce
D. is just techno-speak and hype; it is no different than traditional business
2. Moving from mainframe-based legacy systems to integrated, cross-functional client/server applications typically
involves installing _______________ software.
A. enterprise resource planning
B. supply chain management
C. customer relationship management
D. All of the choices are correct.
4. _______________ is defined as the use of the Internet and other networks and information technologies to
support electronic commerce, enterprise communication and collaboration, and Web-enabled business processes,
both within a networked enterprise and with customers and business partners.
A. Electronic business
B. Enterprise collaboration
C. Cross-functional system management
D. Supply chain management
5. According to the Real World Case, customer relationship management software is easier to implement when a
company is _______________.
A. large
B. old
C. profitable
D. young
6. Which of the following applications focuses on the efficiency of a firm's internal production, distribution, and
financial processes?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management
7. Which of the following applications focuses on acquiring and retaining profitable customers via marketing, sales,
and service processes?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management
8. Which of the following applications focuses on providing a firm's employees with tools that support group
collaboration and decision support?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management
9. Which of the following applications focuses on developing the most efficient and effective sourcing and
procurement processes with suppliers for the products and services needed by a business?
A. Customer relationship management
B. Enterprise resource planning
C. Knowledge management
D. Supply chain management
10. A cross-functional information system for a manufacturing company supports all the following new product
development processes for R&D/Engineering except:
A. Product Testing.
B. Production Start.
C. Market Research.
D. Product Design.
11. A cross-functional information system for a manufacturing company supports all the following new product
development processes for Marketing except:
A. Component Design.
B. Customer Feedback.
C. Market Research.
D. Market Test.
12. A cross-functional information system for a manufacturing company supports all the following new product
development processes for Manufacturing except:
A. Product Design.
B. Production Start.
C. Equipment Design.
D. Product Release.