Topic I - Moving Towards E-Business

7/28/2019 Topic I - Moving Towards E-Business

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Subject Code: 209

Basics of e-Businessand

Decision Support Systems

byProf. Yogendra [email protected]


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Topic I

Moving towards e-Business


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Basics of e-Business and DSS Yogendra Jagtap3

Work Systems, Information

Systems, and E-Business

e-Business= the practice of performing& coordinating business processesthrough the extensive use of Information

Technology (IT) IT = computer and communication

technologies

e-Business does NOT equal the Internet,though the growth of the Internet acted as avery powerful catalyst


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Work System= a system in whichpeople and/or machines perform abusiness process using resources (e.g.,

information, technology) to createproducts/services for internal or externalcustomers


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Information System= a work system thatprocesses information, thereby supportingother work systems

Capture Transmit

Store

Retrieve

Manipulate Display


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Four Main Themes:

Businesses operate through systems Business professionals are part of all

phases of building & maintaining

information systems Technological advances drive business

innovation

The success of IT-based systems is NOTguaranteed


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1. Businesses operatesthrough Systems


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Systems & Subsystems

System = a set of interacting componentsthat operate together to accomplish apurpose

Subsystem = a system component Has all the features of a system, but it is part

of a larger system


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Viewing a Firm as a System


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System Terminology:

Purpose The reason for the systems existence

The reference for measuring the systems success

Boundary Separates the system from its environment

Environment

Everything pertinent to the system that is outside theboundary


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Inputs Objects & information that enter the system

from the environment

Outputs Objects & information that enter the

environment from the system


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Alters Work System Framework


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The Work System Framework

The concept of a work system can be used to visualize

almost any system that operates in an organization.

The Work System Framework helps you think about

business processes and the information systems that

support them. It focuses on the workbeing done.

Workis the application of human and physical resourcessuch as people, equipment, time, effort, and money to

generate outputs used by internal or external customers.

It ideas from several prominent management theoriesincluding Total Quality Management, Business

Process Re-Engineering, and Systems Theory.


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Examples of Information SystemsSupporting Business Processes Bar-code scanners and computers identify items sold and

calculate the bill (Performing customer checkout).

Airline reservation system keeps track of flights and

accepts reservations for customers (making airline

reservations).

System that identifies people by scanning and analyzing

voice prints (preventing unauthorized access to restricted

areas).

Word processing system for typing and revising book

chapters (Writing a book).


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Elements of the Work System

Framework: The internal or external customersof the

business process

The products and/orservices generated by thebusiness process.

The steps in the business process.

The participantsin the business process.

The informationthe business process uses orcreates.

The technology (if any) the business processuses.


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The Work System Framework The Work System framework implies that

although people sometimes speak of computersas systems, the system business professionalsshould focus on is the system performing thework.

The system performing the work is muchbroader than the technology. It includes thebusiness processes, the participants, anyinformation used, and any technology used.

The links are two-way, implying that theelements should be in balance. Also, changes inone place may result in changes in otherelements.


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Consider Some Work Systems

Ordering a Pizza Use of an Automated Teller Machine

Hiring a New employee


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Business Processes & the Value

Chain

Business process A related group of steps (sub-processes) and/or

activities that use resources (including

information) to create value for internal orexternal customers

Sub-process= a well-defined part of a process

Activity= less well-defined process component Often an important role of IT is to transform an

activity into a better-defined sub-process


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A process must add value for itscustomers

Always analyze whether a process or

subprocess adds value or not An obvious but surprisingly often overlooked

point


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Business Processes & Functional

Areas

Traditional organizational structure iscentered around functional areas May reinforce an inward-looking orientation

Functional silos

Current trend: reorganize around

customer-oriented processes


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us ness processes an unct ona areas obusiness


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Three Types of Processes

Processes that crossfunctional areas

Processes related to a

specific functional area

Activities &subprocesses occurring

in every functional area

Possible

problems whenfunctional areasareoveremphasized


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Question:

What are some typicalfunctional areas in a Collegeor University?


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Some Functional Areas in a Typical

College or University

Admissions

Records and Registration

Financial Aid

Human Resources

Accounts Payable

Budget, Finance, andAccounting

Parking Services

Academic Department

University Advancement

Student Services

Residence Life

Public Safety

Student CareerDevelopment

Health Services


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The Value Chain

The set of processes used by a firm tocreate value for its customers. Includes:

Primary processesdirectlycreate the

value as perceived by the customers

Support processesindirectlycreate valueby supporting the primary processes


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Primary processes for a hypothetical

restaurant

Question: Give some examples of restaurants thatfollow this value chain.


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The Supply Chain & the Customer

Experience

Note: Opportunities to increase value for the Customer may existoutside the Company.


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Supply Chain the Transactions, Co-ordination, and movement of Goodsbetween the Firm and its Suppliers

Each layer provides an opportunity toincrease value to the Customer and/orimprove efficiency

Basic approach: Standardized electronic links

Long-term agreements


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The Trend towards e-Business

Much more than a cool Web site! e-Commerce the part of e-Business that

the customer experiences directly

B2B (Business-to-Business) vs. B2C(Business-to-Consumer)


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2. Phases in Building &Maintaining Systems


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Business Professionals Play an ImportantRole in all 4 Phases


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1. Initiation

Defining the need for a new work systemor for the change of an existing one

May occur as result of a known problem,

or as part of a planning process


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2. Development

Acquiring & Configuring Hardware,Software, and other Resources

Decide how the different parts of the system

will operate Acquire the resources

Create the documentation

Testing


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3. Implementation

Making the new process operational Planning

User training

Conversion to the new system Follow-up


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4. Operation & Maintenance

Supporting the ongoing operation of thesystem

Efforts to enhance it and correct possible

problems


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3. IT as a Driving Force forInnovation


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Main Trends

Greater miniaturization, speed, andportability

Greater connectivity + continuingconvergence of computing and

communications Greater use of digitized information &

multimedia

Better software and user interfaces Growth of Telecommuting

IT B d I ti i E


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IT Based Innovations in Every

Business Function

Product Design Procurement Systems

Manufacturing Systems

Sales and Marketing

Delivery Systems

Customer Service Systems Finance Systems


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Computer-Aided Design (CAD)

Enable designers to visualizehow aproduct will look.

The need to produce physical mock-ups

has been significantly reduced. Originally applied in engineering and

architecture, it is now being applied in

other areas such as surgery, clothesdesign, and hairdressing.


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CAD inunexpected places

Supply Chain Management


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Supply Chain Management EDI (Electronic Data Interchange) is changing

the entire model of supply chain managementinbusinesses.

The cost of processing simple transactions canbe reduced by more than an order of magnitude

SCM and EDI are essential ingredients to thetransformation of relationships between suppliers

and customers.

Among the most notable initial applications wasBaxter Healthcare where hospital supplies were

ordered directly with computer terminals inhospital stock rooms.

The Basic Supply Chain


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The Basic Supply ChainManagement Process

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Customers link to suppliers usingEDI


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Manufacturing

Computer-integrated manufacturing(CIM)integrates the use of technology across themanufacturing process, not just the designphases.

The information contentof a product is the valuethat is added through use of informationsystems rather than not using them.

Mass production techniques allows for masscustomization.


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Mass Customization:Building a customized bicycle

S l d M k ti


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Sales and Marketing IT has drastically changed the approach to

marketing.

Amazon.com capitalizes on electronic

commerce. Point of Sales (POS) systems provide new ways

to affect marketing - e.g. linking information

about the customer with the sale. Loyalty Cards at Supermarkets

Ask for your Home Zip code

Discreet observation and collection.

All to better improve the addressabilityinmarketing.

D li d L i ti S t


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Delivery and Logistics Systems

Delivery (logistics) Systems transport materialswhere they are needed.

The need for accurate and accessibleinformation on where a product is located. U.S. Army experience in Gulf War

Federal Express New products are being developed: Instead of

delivering physical goods such as paper andforms, consider what can be delivered over the

network. Consider impact of Global Positioning Systems.

C S i


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Customer Service

The need for information on a customerscurrent status.

Work is still needed to integrate some voice-response systems with customer databases(e.g. Bank Help Centers).

Have the right information available when youneed it. Optical Scan relevant documents

Be able to initiate transactions and processthem immediately. e.g. Car Rental Returns


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Finance Systems

Consider how technology is being used toreplace currency as a form of barter.

Direct DepositPayroll.

Smart cards. Electronic stock trading.

Web-Based Real Estate Marketing

Eliminate the middleman and commissions.


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Question?

How have any of these innovationsaffected you?

Can you identify any IT-based

innovations that have affectedbusiness functions?

Why does the technology providesuch innovation?

Topic I - Moving Towards E-Business

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