Electronic Business Systems
IV: LECTURE NOTES Section I: Enterprise Business Systems
This chapter introduces the fast-changing world of business applications of information technology, which increasingly consists of what is popularly called e-business applications. e-Business is the use of the Internet and other networks and information technologies to support electronic commerce, enterprise communications and collaboration, and Web-enabled business processes, both within a networked enterprise, and with its customers and business partners. Distinction between e-commerce and e-business: e-Commerce is defined as buying and selling over digital media. e-Business encompasses e-commerce, but also includes both front- and back-office applications that form the engine for modern business. e-Business redefines old business models, with the aid of technology, to maximize customer value.
Analyzing Hilton Hotels We can learn a lot about the challenges and benefits of customer relationship management systems from this case. Take a few minutes to read it, and we will discuss it (See Hilton Hotels Corporation: Data-Driven Hospitality in Section IX).
Cross-Functional Enterprise Systems:
Many companies today are using information technology to develop integrated cross-functional enterprise systems that cross the boundaries of traditional business functions in order to reengineer and improve vital business processes all across the enterprise. These organizations view cross-functional enterprise systems as a strategic way to use IT to share information resources and improve the efficiency and effectiveness of business processes, and develop strategic relationships with customers, suppliers, and business partners.
Enterprise Application Architecture: [Figure 7.3] Figure 7.3 is an excellent illustration of the concept of enterprise application architecture. It illustrates the interrelationships of the major cross-functional enterprise applications that many companies have or are installing today. This architecture spotlights the roles these business systems play in supporting the customers, suppliers, partners, and employees of a business.
Enterprise Application Integration: [Figure 7.4]
How does a business interconnect some of the cross-functional enterprise systems? Enterprise application integration (EAI) software is being used by many companies to connect major e-business applications. EAI software: Enables users to model the business processes involved in the interactions that should occur between business O’Brien, Management Information Systems, 7/e IM - Chapter 7 pg. 1
applications. Provides middleware that performs data conversion and coordination, application communication and messaging services, and access to the application interfaces involved. Integrate a variety of enterprise application clusters by letting them exchange data according to rules derived from the business process models developed by users. Integrate the front-office and back-office applications of an e-business, so they work together in a seamless, integrated way. This is a vital capability that provides real business value to an e-business enterprise that must respond quickly and effectively to business events and customer demands.
Transaction Processing Systems
Transaction processing systems (TPS) are cross-functional information systems that process data resulting from the occurrence of business transactions. Transactions are events that occur as part of doing business, such as sales, purchases, deposits, withdrawals, refunds, and payments. Transaction processing activities are needed to capture and process data. Therefore TPS play a vital role in supporting the operations of an e-business enterprise. Online transaction processing systems play a strategic role in electronic commerce. • Many firms are using the Internet, extranets, and other networks that tie them electronically to their customers or suppliers for online transaction processing (OLTP). • These real-time systems, which capture and process transactions immediately, can help them provide superior service to customers and other trading partners. • OLTP systems add value to a company’s products and services, and thus give them an important way to differentiate themselves from their competitors.
The Transaction Processing Cycle: [Figure 7.6] Transaction processing systems capture and process data describing business transactions. Then they update organizational files and databases, and produce a variety of information products for internal and external use. A transaction processing cycle consists of several basic activities, which involve: Data entry activities Transaction processing activities Database maintenance activities Document and report generation Inquiry processing activities.
Data Entry The input activity in TPS involves a data entry process. In this process, data is captured or collected by recording, coding, and editing activities. Trend: Move from traditional (manual) data entry systems toward source data automation (automated systems). The reason for this trend is that direct methods are more efficient and reliable than manual systems. Examples of devices used in data automation include: Point-of-sale (POS) transaction terminals ATM (Automated Teller Machine) terminals Optical character recognition (OCR) scanners and wands PCs and network computers with cash drawers as intelligent POS terminals Portable digital radio terminals and pen-based tablet PCs for remote date entry PCs equipped with touch screens and voice recognition systems for data entry O’Brien, Management Information Systems, 7/e IM - Chapter 7 pg. 2
Bar coded tags Magnetic stripe cards Electronic website on the Internet.
Transaction Processing Transaction processing systems process data in two basic ways: • Batch Processing - transaction data are accumulated over a period of time and processed periodically. • Real-time Processing - (also called online processing), where data are processed immediately after a transaction occurs. All online transaction processing systems incorporate real-time processing capabilities. Many online systems also depend on the capabilities of fault tolerant systems that can continue to operate even if parts of the system fail.
Database Maintenance: An organization’s data must be maintained by its transaction processing systems so that they are always correct and up-to-date. Therefore, transaction processing systems update the corporate database of any organization to reflect changes resulting from day-to-day business transactions.
Document and Report Generation: Transaction processing systems produce a variety of documents and reports. Examples of transaction documents include: • Purchase orders • Paychecks • Sales receipts • Invoices • Customer statements. Transaction reports might take the form of a transaction listing such as a payroll register, or edit reports that describe errors detected during processing.
Inquiry Processing: Many transaction processing systems allow you to use the Internet, intranets, extranets, and Web browsers or database management query languages to make inquiries and receive responses concerning the results of transaction processing activity. Typically, responses are displayed in a variety of prespecified formats or screens. Examples of queries include: • Checking on the status of a sales order • Checking on the balance in an account • Checking on the amount of stock in inventory
Enterprise Collaboration Systems
Enterprise collaboration systems provide tools to help us collaborate - to communicate ideas, share resources, and coordinate our cooperative work efforts as members of the many formal and informal process and project teams and workgroups that make up many of ...