Transcript Figure 7.1 The value chain.

Chapter 6
E-Business: Intra-Business
E-Commerce
Internal Communication
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Historically, paper
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Updating a paper procedures manual
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B2Employee E-commerce
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Outdated material
Numerous misunderstandings
Some legal actions
Maintain online – Web site
E-business more general than B2E
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Figure 6.1 Miami University’s online
publications and policies.
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B2C vs. Intra-business E-commerce
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Consumer oriented B2C
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Revolutionary
Aggressive and risky
First movers
Intra-business and B2B
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Evolutionary
Methodical
In business context
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Figure 6.3 The value chain.
Inbound
logistics
Production
processes
Outbound
logistics
Sales and
marketing
Customer
service
Information technology infrastructure
Upstream
Downstream
The key to intra-business e-commerce is
improving value chain efficiency.
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Inbound logistics
Purchase components
Purchase raw materials
Production
R&D
Engineering/product design
Order components
Order raw materials
Manufacture products
Figure 6.4 The
value chain for a
personal computer
manufacturer.
Outbound logistics
Inventory management
Order entry
Order fulfillment
Sales &
marketing
Information technology infrastructure
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Customer
service
Inbound
logistics
Figure 6.5
Each value
chain process
consists of
sub-processes.
Production
R&D
Engineering/product design
Order components
Order raw materials
Manufacture products
Design/build/maintain production line
Manufacture components
Configure/setup production runs
Deliver materials to production line
Manufacture subassemblies
Configure/setup production runs
Deliver components to production line
Assemble final product
Configure/setup production runs
Deliver subassemblies to production line
Outbound
logistics
Sales &
marketing
Information technology infrastructure
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Customer
service
Efficiency and Effectiveness
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Objective: reduce operating costs
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Efficiency gains
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Within individual processes
Across the value chain
Efficiency-based competitive advantage
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Hidden from public view
Relatively easy to sustain
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Figure 6.6 The organizational pyramid.
CEO
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Before computers,
companies organized
along functional lines.
Functional groups
exchanged paperwork.
Early computer
applications supported
a single function.
Operations
Marketing &
Sales
CFO
CIO
Production
Sales
Accounting
Operations
Purchasing
Advertising
Payroll
Database
administrator
Warehouse
Market
research
Auditing
Systems &
programming
Distribution
Finance
Product
development
Personnel
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Figure 6.7 A manual payroll system.
Collect
timesheets
Record
timesheets
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Payroll was done
manually until at least
the late 1950s.
Compile
payroll
Prepare
checks
Deliver
checks
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Figure 6.8 Automating selected processes
made payroll more efficient.
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Automate expensive processes
first
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Automate remaining manual
processes next
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Compile payroll
Prepare (print) paychecks
Record timesheets
Record
timesheets
Compile
payroll
Print
checks
Objective—process optimization.
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Figure 6.9 Islands of automation.
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Other functional groups
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Sales
Accounting
Purchasing
Inventory
Production
Island A
Sales
Sales report
Sales report
Sales report
Island B
Payroll
Independent fiefdoms
Office political base
Sub-optimization
Island D
Accounts
recievable
Island C
Inventory
A/R report
Bills
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Island E
Billing
Figure 6.10 The competitive advantage model.
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Competition forced
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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
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Incompatibilities
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Hardware, software, and data
Data redundancy was a major problem
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Same data value on multiple files
Independently maintained
Values differed
Data formats differed
Solution – central database
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New Approaches to System Development
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Information system planning
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Information technology infrastructure
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Basic blueprint for technology integration
Enterprise data model (EDM)
Business process reengineering
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Elevated to strategic level
Process improvements in context
Problem – legacy applications
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Partitioning Order Entry
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Client
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Display online order
form
Display order
acknowledgement
Error-check form
data
Server
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Record order
Read quantity on
hand
Access A/R
Validate stock
Check credit
Either – Calculate taxes and total
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Figure 6.17 A two-tier client/server
application.
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Maintenance problem
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Server
Data/information logic
Multiple copies of software on
multiple clients
Development problem
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Multiple client platforms
Middleware
Fat clients
Presentation logic
Business logic
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Figure 6.18 A three-tier client/server
application.
Web Server
Business logic
Transaction management
Middleware
Database Server
Data/information logic
Middleware
Thinner clients
Presentation logic
Some business logic
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Figure 6.19 Enterprise application integration.
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Objective: coordinate all
applications, databases,
and info technologies.
Legacy
applications
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Enterprise resource
planning (ERP)
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Means of implementing
the EAI principle
Purchased
applications
EAI
New and old
client/server
applications
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Web based
applications
Virtual Value Chain
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Digital picture of value chain
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Coordinate and monitor processes
Organizational (not local) efficiency
Applications
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Fuel business process reengineering
Mirror or replace physical processes
Data mining
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Web Services
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Application server software
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Application service provider (ASP)
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A server for middleware
Scalable platform
Intermediary that supplies applications
Including mission-critical applications
Management service provider (MSP)
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Intermediary that manages IT services
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Corporate Intranets
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Private corporate network
Uses standard Internet protocols
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TCP/IP
HTML and HTTP
Browser and Web server
Internet and intranet differences
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Intranet is smaller in scope
Intranet limited to organization’s employees
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Legacy application
Legacy message
Figure 6.22 Encasing
a legacy message in a
TCP/IP wrapper allows
a legacy application to
communicate with the
intranet.
Middleware
TCP/IP
wrapper
Legacy message
Company
intranet
Company
intranet
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Figure 6.23 Some examples of
groupware.
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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
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Figure 6.24 Typical enterprise portal
services.
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Structured data
management
Unstructured data
management
Content
management
Information filtering
Search capabilities
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Collaboration
User administration
Expense account
management
Ordering supplies
Security
Personalization
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Geographically Dispersed Value Chains
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Value chain more complex
Options
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Secure private network
Value added network
Public network (e.g., Internet)
Virtual private network
Security
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Firewalls
User identification
Authentication
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