chapter 6 e-business: intra-business e-commerce. copyright © 2003, addison-wesley internal...

Chapter 6

E-Business: Intra-Business

E-Commerce

Copyright © 2003, Addison-Wesley

Internal Communication

Historically, paper Updating a paper procedures manual

Outdated material Numerous misunderstandings Some legal actions

B2Employee E-commerce Maintain online – Web site

E-business more general than B2E


Figure 6.1 Miami University’s online publications and policies.


B2C vs. Intra-business E-commerce

Consumer oriented B2C Revolutionary Aggressive and risky First movers

Intra-business and B2B Evolutionary Methodical In business context


Figure 6.3 The value chain.

Inboundlogistics

Productionprocesses

Outboundlogistics

Sales andmarketing

Customerservice

Information technology infrastructure

Upstream Downstream

The key to intra-business e-commerce is improving value chain efficiency.


Figure 6.4 The value chain for a personal computer manufacturer.

Inbound logisticsPurchase componentsPurchase raw materials

ProductionR&DEngineering/product designOrder componentsOrder raw materialsManufacture products

Outbound logisticsInventory managementOrder entryOrder fulfillment

Sales &marketing

Customerservice



Figure 6.5 Each value chain process consists of sub-processes.

ProductionR&DEngineering/product designOrder componentsOrder raw materialsManufacture products

Design/build/maintain production lineManufacture components

Configure/setup production runsDeliver materials to production line

Manufacture subassembliesConfigure/setup production runsDeliver components to production line

Assemble final productConfigure/setup production runsDeliver subassemblies to production line

Sales &marketing

Customerservice


Inboundlogistics

Outboundlogistics


Efficiency and Effectiveness

Objective: reduce operating costs Efficiency gains

Within individual processes Across the value chain

Efficiency-based competitive advantage Hidden from public view Relatively easy to sustain


Figure 6.6 The organizational pyramid.

Before computers, companies organized along functional lines.

Functional groups exchanged paperwork.

Early computer applications supported a single function.

CEO

OperationsMarketing &

SalesCFO CIO

Production

Purchasing

Warehouse

Distribution

Productdevelopment

Sales

Advertising

Marketresearch

Accounting

Payroll

Auditing

Finance

Personnel

Operations

Databaseadministrator

Systems &programming


Figure 6.7 A manual payroll system.

Payroll was done manually until at least the late 1950s.

Collecttimesheets

Recordtimesheets

Compilepayroll

Preparechecks

Deliverchecks


Figure 6.8 Automating selected processes made payroll more efficient.

Automate expensive processes first Compile payroll Prepare (print) paychecks

Automate remaining manual processes next

Record timesheets Objective—process optimization.

Recordtimesheets

Compilepayroll

Printchecks


Figure 6.9 Islands of automation.

Other functional groups

Sales Accounting Purchasing Inventory Production

Independent fiefdoms

Office political base Sub-optimization

Island ASales

Island BPayroll

Island CInventory

Island DAccountsrecievable

Island EBilling

Sales report

A/R report

Sales report

Sales report

Bills


Figure 6.10 The competitive advantage model.

Competition forced Information sharing Integration across

value chain Including legacy

applications

Stimulus for action

First major move

Customer acceptance

Competitor catch up moves First mover expansion moves

Commoditization


Incompatibilities

Hardware, software, and data Data redundancy was a major

problem Same data value on multiple files Independently maintained Values differed Data formats differed

Solution – central database


New Approaches to System Development

Information system planning Elevated to strategic level

Information technology infrastructure Basic blueprint for technology integration Enterprise data model (EDM)

Business process reengineering Process improvements in context

Problem – legacy applications


Partitioning Order Entry

Client Display online

order form Display order

acknowledgement Error-check form

data

Server Record order Read quantity on

hand Access A/R Validate stock Check credit

Either – Calculate taxes and total


Figure 6.17 A two-tier client/server application.

Maintenance problem Multiple copies of

software on multiple clients

Development problem Multiple client platforms

Middleware

ServerData/information logic

Fat clientsPresentation logicBusiness logic


Figure 6.18 A three-tier client/server application.

Middleware

Web ServerBusiness logicTransaction management

Thinner clientsPresentation logicSome business logic

Database ServerData/information logic

Middleware


Figure 6.19 Enterprise application integration.

Objective: coordinate all applications, databases, and info technologies.

Enterprise resource planning (ERP)

Means of implementing the EAI principle

Purchasedapplications

New and oldclient/serverapplications

EAI Web basedapplications

Legacyapplications


Virtual Value Chain

Digital picture of value chain Coordinate and monitor processes Organizational (not local) efficiency

Applications Fuel business process reengineering Mirror or replace physical processes Data mining


Web Services

Application server software A server for middleware Scalable platform

Application service provider (ASP) Intermediary that supplies applications Including mission-critical applications

Management service provider (MSP) Intermediary that manages IT services


Corporate Intranets Private corporate network Uses standard Internet protocols

TCP/IP HTML and HTTP Browser and Web server

Internet and intranet differences Intranet is smaller in scope Intranet limited to organization’s

employees


Figure 6.22 Encasing a legacy message in a TCP/IP wrapper allows a legacy application to communicate with the intranet.

Legacy message

Legacy application

TCP/IPwrapper

Legacy message

Company intranet

Middleware

Company intranet


Figure 6.23 Some examples of groupware.

E-mail Scheduling and calendars Whiteboarding Chat rooms and bulletin boards Video conferencing Electronic meetings Document management Workflow management Collaborative writing Group decision support systems


Figure 6.24 Typical enterprise portal services.

Structured data management

Unstructured data management

Content management

Information filtering Search capabilities

Collaboration User

administration Expense account

management Ordering supplies Security Personalization


Geographically Dispersed Value Chains

Value chain more complex Options

Secure private network Value added network Public network (e.g., Internet) Virtual private network

Security Firewalls User identification Authentication

chapter 6 e-business: intra-business e-commerce. copyright © 2003, addison-wesley internal...

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