Chapter 7: E-Business Systems
1. Cross-Functional Enterprise Systems
- Enterprise Resource Planning (ERP): Integrated software modules that facilitate
business, supplier, and customer information flows. Supports internal business processes
and serves as the backbone of business operations.
- Customer Relationship Management (CRM): Focuses on managing customer
relationships, providing a single view of the customer across all touchpoints. Aims to
increase sales, improve customer service, and enhance customer retention.
- Supply Chain Management (SCM): Manages the flow of products from suppliers to
customers, ensuring the right products are delivered at the right time and cost. Involves
forecasting demand, enhancing relationships, and controlling inventory.
- Enterprise Application Integration (EAI): Middleware that connects cross-functional
systems, enabling data conversion and communication between different applications.
- Transaction Processing Systems (TPS): Real-time systems that process business
transactions (e.g., sales, purchases) and support online transaction processing (OLTP).
- Enterprise Collaboration Systems (ECS): Enhance communication, coordination, and
collaboration within teams and workgroups using networked systems, groupware, and
application packages.
2. Functional Business Systems
- Accounting Information Systems: Record and report business transactions, produce
financial statements, and forecast future conditions.
- Financial Management Systems: Support decision-making related to financing and
resource allocation within a business.
- Human Resource Management (HRM) Systems: Support planning, development, and
control of personnel policies and programs. Includes recruitment, training, and employee
self-service via intranets.
- Marketing Systems: Focus on marketing information systems, interactive marketing,
targeted marketing, and sales force automation.
- Manufacturing Information Systems: Support production and operations functions,
including computer-integrated manufacturing (CIM), computer-aided design (CAD), and
material requirements planning (MRP).
3. E-Business and E-Commerce
- E-Business: Uses the Internet and IT to support electronic commerce, enterprise
communications, and web-enabled business processes.
- E-Commerce: Involves buying, selling, and marketing products, services, and information
over the Internet and other networks.
Key Takeaways for MBA Students
1. Integration is Key: Cross-functional systems like ERP, CRM, and SCM are essential for
integrating business processes across departments, leading to improved efficiency and
decision-making.
2. Customer-Centric Focus: CRM systems are critical for managing customer
relationships, improving customer retention, and driving sales. However, successful
CRM implementation requires clean, well-organized data.
3. Supply Chain Optimization: SCM helps businesses manage the flow of goods and
services efficiently, but it requires accurate demand forecasting and collaboration across
the supply chain.
4. Real-Time Data Processing: Transaction processing systems (TPS) and online
transaction processing (OLTP) are crucial for real-time data capture and processing,
enabling businesses to respond quickly to market changes.
5. Digital Transformation: E-business and e-commerce are transforming traditional
business models, enabling companies to reach global markets and operate more
efficiently.
Practical Applications in Real-World Business Settings
1. CRM in Retail: Retailers like Berlin Packaging use CRM to track customer interactions,
manage sales pipelines, and improve customer service, leading to increased sales and
customer loyalty.
2. ERP in Manufacturing: Companies like Perdue Farms use ERP systems to streamline
operations, manage inventory, and improve supply chain efficiency, especially during
high-demand periods like holidays.
3. SCM in E-Commerce: Online retailers use SCM tools to manage inventory, forecast
demand, and ensure timely delivery of products, especially during peak shopping
seasons.
4. EAI in Financial Services: Banks and financial institutions use EAI to integrate
disparate systems, enabling seamless data flow between customer service, accounting,
and risk management systems.
5. HRM in Healthcare: Organizations like Oregon Health & Science University use HRM
systems to streamline recruitment, reduce hiring time, and improve employee self-service
capabilities.
Executive Summary
This chapter explores the role of cross-functional enterprise systems (ERP, CRM, SCM) and
functional business systems (accounting, finance, HRM, marketing) in driving business
efficiency and customer satisfaction. Key takeaways include the importance of integration,
customer-centric strategies, and real-time data processing. Practical applications highlight how
these systems are used in retail, manufacturing, e-commerce, and healthcare to optimize
operations, improve decision-making, and enhance customer experieances. Digital
transformation through e-business and e-commerce is reshaping traditional business models,
enabling companies to compete in a global, digital economy.
