Concepts in Enterprise Resource Planning Third Edition

1. Concepts in Enterprise Resource Planning Third Edition Chapter Eight ERP and Electronic Commerce

2. Objectives Concepts in Enterprise Resource Planning, Third Edition 2 After completing this chapter, you will be able to: Describe business-to-business e-commerce Explain the importance of ERP to the success of a company engaged in e-commerce Describe the function of an application service provider (ASP) Describe the delivery of ERP services through an ASP Describe Web services and SAP’s NetWeaver

3. Objectives (cont’d.) Concepts in Enterprise Resource Planning, Third Edition 3 Describe the unique components of NetWeaver Explain why accessing an ERP system through a Web browser is efficient Define XML and its significance to ERP Define RFID and its future role in logistics and sales

4. Introduction Concepts in Enterprise Resource Planning, Third Edition 4 Effectively competing in high-volume e-commerce may be impossible without the infrastructure provided by Enterprise Resource Planning (ERP) Companies can integrate ERP systems with the Internet and “rent” ERP software from special-purpose software companies NetWeaver: SAP’s Web services platform

5. Introduction (cont’d.) Concepts in Enterprise Resource Planning, Third Edition 5 XML is becoming the new markup language of the Internet Use of radio frequency identification (RFID) devices in managing movement of goods in the supply chain

6. Electronic Commerce Background Concepts in Enterprise Resource Planning, Third Edition 6 Today most companies conduct at least part of their business operations through electronic commerce (e-commerce) E-commerce: conduct of business over the Internet Most of the business growth on the Internet has been in the area of business-to-business (B2B) e-commerce Business-to-consumer (B2C) e-commerce

7. Business-to-Business E-Commerce Concepts in Enterprise Resource Planning, Third Edition 7 Buying and selling between two companies over the Internet Companies might be manufacturers, suppliers, wholesalers, or retailers Transforming the way companies work with each other

8. Business-to-Business E-Commerce (cont’d.) Concepts in Enterprise Resource Planning, Third Edition 8 Electronic Data Interchange (EDI) Electronic computer-to-computer transfer of standard business documents Been used by companies since the 1960s Value-added network (VAN): intermediary Internet-based network run by an outside EDI service provider

9. Business-to-Business E-Commerce (cont’d.) Concepts in Enterprise Resource Planning, Third Edition 9 Electronic data interchange (EDI) (cont’d.) Benefits of EDI: Costs of paper, printing, and postage have almost disappeared Errors have been minimized Ordering is fast and efficient Suppliers and buyers are “locked” into business relationships

10. Business-to-Business E-Commerce (cont’d.) Concepts in Enterprise Resource Planning, Third Edition 10 Internet-based procurement Use of Internet technologies for procurement activities Benefits: Less expensive to use the Internet than private EDI networks Purchasing costs further reduced as suppliers compete for orders on buyer’s Web site

11. Business-to-Business E-Commerce (cont’d.) Concepts in Enterprise Resource Planning, Third Edition 11 Internet-based procurement (cont’d.) Electronic marketplace: gathering place for buyers and sellers on the Internet Exchanges: one type of B2B electronic marketplace Typically, the focus is on a single industry Private exchange One type of industry marketplace Membership is restricted to select participants

12. Business-to-Business E-Commerce (cont’d.) Concepts in Enterprise Resource Planning, Third Edition 12 Internet auctions and reverse auctions B2B e-commerce allows companies to do online bidding through auctions and reverse auctions Reverse auctions: one buyer and many sellers Internet-based auctions are changing the way in which commodities are purchased Internet has replaced the intermediary Pricing is open and dynamic

13. Business-to-Business E-Commerce (cont’d.) Concepts in Enterprise Resource Planning, Third Edition 13 Electronic commerce security Security is a major concern with e-commerce Denial of service (DoS) attacks Attackers block access to a Web-based service through a variety of means, including bombarding a site with so many messages that the site cannot handle the volume Measures used by companies to protect their networks, Web sites, and privacy of customer data Virus-scanning software, encryption, intrusion detection, etc.

14. E-Commerce and ERP Concepts in Enterprise Resource Planning, Third Edition 14 Each technology complements the other, and each is necessary for success Back-office processing Efficient back-office operation is crucial for any company’s success E-commerce often exacerbates problems and reveals weaknesses in current back-office systems Integrating Internet front-office operation and ERP back-office operation is fundamental in today’s business environment

15. Fitter Snacker and E-Commerce Concepts in Enterprise Resource Planning, Third Edition 15 Currently, Fitter Snacker has neither a Web-based ordering system nor an ERP system FS executives looking at two IS investment options: Implement a Web-based ordering system, or Implement an ERP package If Web-based ordering system implemented without implementing an ERP package: FS’s unintegrated information system would not be able to handle the additional Internet orders

16. Fitter Snacker and E-Commerce (cont’d.) Concepts in Enterprise Resource Planning, Third Edition 16 An attractive Web site does not provide enough benefit on its own for an e-commerce business to stay afloat Conventional back-office systems must be in place and operating correctly for the business to flourish

17. Using ERP through an Application Service Provider Concepts in Enterprise Resource Planning, Third Edition 17 Many companies today outsource some of their operations to an outside service provider Outside service provider sometimes called a third party Outsourcing can simplify management of ERP systems

18. Application Service Providers Concepts in Enterprise Resource Planning, Third Edition 18 Application service provider (ASP): company that provides management of applications for a company over a network Network is usually the Internet ASP owns the hardware and rights to the software ASP employs workers who run outsourced applications Users of the system are the company’s employees

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