ERP & E-Commerce

Prepared by: Ahlam Ansari

ERP (Enterprise Resource Planning)

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ERP
Facilitates business, supplier, and customer information flows The backbone of business processes

A cross-functional enterprise system

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Supports basic internal business processes

An integrated suite of software modules

Characteristics of ERP
ERP software is a family of software modules that supports the business activities involved in vital back-office processes.

ERP gives a company an integrated real-time view of its core business processes, such as production, order processing and inventory management. ERP systems track business resources (such as cash, raw materials, and production capacity), and the status of commitments made by the business (such as customer orders, purchase orders, and employee payroll), no matter what department has entered the data into the system.

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Characteristics of ERP (continued)

ERP software suites typically consist of integrated modules of:
Manufacturing Distribution Sales Accounting Human Resource applications
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ERP Application Components

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Benefits and Challenges of ERP

ERP Business Benefits

ERP Challenges

1. Quality & efficiency

1. High risk & cost

2. Hardware and software are a small part of overall project
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2. Decreased costs
3. Decision support 4. Enterprise agility

3. Failure can cripple or kill a business

Costs of implementing a new ERP system

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Causes of ERP Failures

Common Causes of ERP Failure
Underestimating the complexity of planning, development, training Failure to involve affected employees in planning and development

Over-reliance on ERP vendor or consultants

Insufficient training

Insufficient data conversion and testing

Trying to do too much, too fast

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E-Commerce

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Electronic Commerce
Relies on the resources of the Internet, intranets, extranets, and other technologies

Is more than just buying and selling products online

Is the online process of developing, marketing, selling, delivering, servicing, and paying for products & services transacted on internetworked, global marketplaces of customers, with the support of a worldwide network of business partners.

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Electronic Commerce Fundamentals

E-commerce is changing the shape of competition

E-commerce is changing the speed of action

E-commerce is changing streamlining of interactions , products and payments from customers to companies and from companies to suppliers

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The Scope of e-Commerce

There are a range of business processes involved in the marketing, buying, selling, and servicing in e-commerce. Companies involved in e-commerce as either buyers or sellers rely on Internet-based technologies and ecommerce applications and services to accomplish marketing, discovery, transaction processing, and product and customer service processes. The Internet, Intranets, and extranets provide vital electronic commerce links between the components of a business and its customers, suppliers, and other business partners. This allows companies to engage in three basic categories of electronic commerce applications.

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Categories of e-Commerce

Business-toConsumer (B2C)

Business-toBusiness (B2B)
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Consumer-toConsumer (C2C)

B2C e-Commerce

Online customer support

Interactive order processing

Secure electronic payment systems

e-commerce websites that provide virtual storefronts and multimedia catalogues .

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B2B e-Commerce

Secure Internet or extranet e-commerce websites

Electronic data interchange (EDI) via the Internet or extranets for computer-to-computer exchange of ecommerce documents
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C2C e-Commerce

C2C is an important e-commerce alternative for B2C or B2B e-commerce.

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Personal advertising of products or services to buy or sell by consumers at electronic newspaper sites, consumer ecommerce portals, or personal websites is an important form of C2C e-commerce.

Bricks and Clicks in E-Commerce

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Bricks and Clicks

It is a business model by which a company integrates both offline (bricks) and online (clicks) presences.

A popular example of the bricks and clicks model is when a chain of stores allows the customer to order products either online or physically in one of their stores, also allowing them to either pick-up their order directly at a local branch of the store or get it delivered to their home. There are many alternative combinations of this model.

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Alternatives and benefits trade-offs for an integrated or separate e-commerce business

Spin-Off

Strategic Partnership

Joint Venture

InHouse Division

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Separation Greater Focus More Flexibility Access to Venture Funding

Integration Established Brand Stored Information Purchasing Leverage Distribution Efficiencies

Spin Off
The creation of an independent company through the sale or distribution of new shares of an existing business/division of a parent company. Eg. Barnesandnoble.com

Strategic Partnership
A formal alliance between two commercial enterprises, where each possesses one or more business assets that will help the other. Eg. Rite Aid and DrugStore.com
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Joint Venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. Eg. KB Toys BrainPlay.com

In-House Division
Conducting an activity or operation within a company, instead of relying on outsourcing. A firm uses its own employees and time to keep a division or business activity, such as financing or brokering, in-house. Eg. OfficeDepot.com

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Other Clicks and Bricks Strategies

Other clicks and bricks strategies range from: Partial e-commerce integration using joint ventures and strategic partnerships. Complete separation via the spin-off of an independent e-commerce company.

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Benefits and challenges of a completely separate clicks and bricks strategy Access to venture capital funding, create an entrepreneurial culture, attract quality management, maintain a high degree of business flexibility, and accelerate decision-making.

Benefits of a partially integrated clicks and bricks strategy Sharing established brands Sharing key business information Joint buying power Distribution efficiencies

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Questions??? to be Discussed.

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1. Explain Enterprise Resource Planning in detail. 2. What is E-commerce? Explain the clicks and bricks strategy of Ecommerce.
3. What is e-commerce? Explain the three basic categories of e-commerce with examples.
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References
[1] Management Information Systems, 6th/Ed.

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THANK YOU

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