Section 2.3: Bullet Text Study Guide
Chapter Contents


Systems that Span the Enterprise

Enterprise applications are systems that span functional areas, focus on executing business processes across the business firm, and include all levels of management. Enterprise applications help businesses become more flexible and productive by coordinating their business processes more closely.

There are four major enterprise applications:

  1. Enterprise systems

  2. Supply chain management systems

  3. Customer relationship management systems

  4. Knowledge management systems

Each of these enterprise applications integrates a related set of functions and business processes to enhance the performance of the organization as a whole.

Figure 2-11


FIGURE 2-11 ENTERPRISE APPLICATION ARCHITECTURE
Enterprise applications automate processes that span multiple business functions and organizational levels and may extend outside the organization.

Enterprise systems, or enterprise resource planning (ERP) systems, model and automate many business processes, such as filling an order or scheduling a shipment, with the goal of integrating information across the entire company and eliminating complex, expensive links between computer systems in different areas of the business. Information that was previously fragmented in different systems can seamlessly flow throughout the organization so that it can be shared by business processes in manufacturing, accounting, human resources, and other areas of the firm. Discrete business processes from sales, production, finance, and logistics can be integrated into company-wide business processes that flow across organizational levels and functions.

The enterprise system collects data from various key business processes and stores the data in a single comprehensive data repository where they can be used by other parts of the business. Managers emerge with more precise and timely information for coordinating the daily operations of the business and a firm-wide view of business processes and information flows.

Figure 2-12


FIGURE 2-12 ENTERPRISE SYSTEMS
Enterprise systems integrate the key business processes of an entire firm into a single software system that enables information to flow seamlessly throughout the organization. These systems focus primarily on internal processes but may include transactions with customers and vendors.

Supply chain management (SCM) systems help businesses manage relationships with their suppliers. These systems provide information to help suppliers, purchasing firms, distributors, and logistics companies share information about orders, production, inventory levels, and delivery of products and services so that they can source, produce, and deliver goods and services efficiently.

SCM systems increase firm profitability by lowering the costs of moving and making products and by enabling managers to make better decisions about how to organize and schedule sourcing, production, and distribution.

Supply chain management systems are one type of interorganizational system because they automate the flow of information across organizational boundaries. Firms that skillfully manage their supply chains get the right amount of products from their source to point of consumption with the least amount of time and the lowest cost.

Figure 2-13


FIGURE 2-13 EXAMPLE OF A SUPPLY CHAIN MANAGEMENT SYSTEM
Customer orders, shipping notifications, optimized shipping plans, and other supply chain information flow among Haworth’s Warehouse Management System (WMS), Transportation Management System (TMS), and its back-end corporate systems.

Customer relationship management (CRM) systems focus on coordinating the business processes surrounding a firm's interactions with its customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention. They consolidate customer data from multiple sources and communication channels to help firms identify profitable customers, acquire new customers, improve service and support, and target products and services more precisely to customer preferences.

The value of a firm's products and services is based not only on its physical resources but also on intangible knowledge assets. Some firms perform better than others because they have better knowledge about how to create, produce, and deliver products and services. Knowledge management systems support processes for discovering and codifying, sharing, and distributing knowledge, as well as processes for creating new knowledge and integrating external sources of knowledge.

Companies that do not have the resources to invest in enterprise applications can still achieve some measure of information integration by using intranets and extranets.
  • Intranets typically present information to employees through a private portal that provides a single point of access to information from several different systems and to documents using a Web interface. Corporate portals often feature e-mail, collaboration tools, and tools for searching for internal corporate systems and documents. Companies can connect their intranets to internal company transaction systems, enabling employees to take actions central to a company's operations, such as checking the status of an order or granting a customer credit.

  • Extranets expedite the flow of information between the firm and its suppliers and customers. They can allow different firms to work collaboratively on product design, marketing, and production.

Enterprise applications and technologies are transforming firms' relationships with customers, employees, suppliers, and logistic partners into digital relationships using networks and the Internet.

Electronic business, or e-business, refers to the use of digital technology and the Internet to execute the major business processes in the enterprise. E-business includes activities for the internal management of the firm and for coordination with suppliers and other business partners. It also includes electronic commerce, or e-commerce. E-commerce is the part of e-business that deals with the buying and selling of goods and services over the Internet. It encompasses activities supporting those market transactions, such as advertising, marketing, customer support, security, delivery, and payment.

E-government refers to the application of the Internet and networking technologies to digitally enable government and public sector agencies' relationships with citizens, businesses, and other arms of government. In addition to improving delivery of government services, e-government can make government operations more efficient and also empower citizens by giving them easier access to information