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E-Business and ERP Systems: Understanding Their Integration and Implementation Challenges

This chapter delves into the essential aspects of e-business and Enterprise Resource Planning (ERP) systems. It contrasts e-business with traditional brick-and-mortar firms and discusses its major forms, such as B2C and B2B. The chapter examines the foundational elements of ERP systems, their common modules, and the frequent causes of ERP failures, such as inadequate training and poor management. Successful ERP implementation strategies are outlined, alongside the role of application service providers in facilitating e-business operations. The content is aimed at enhancing understanding of these critical business components.

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E-Business and ERP Systems: Understanding Their Integration and Implementation Challenges

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  1. Chapter 10 E-business and Enterprise Resource Planning Systems

  2. Outline • Expected outcomes • E-business • ERP systems • Application service providers

  3. Expected outcomes • Explain the nature of e-business, comparing and contrasting it with traditional “brick-and-mortar” organizations. • Discuss major forms of e-business. • Describe the basic nature, purpose and structure of ERP systems. • Give examples and analyze the causes of ERP system failures. • List and discuss steps associated with successful ERP implementations. • Discuss the role of application service providers in e-business.

  4. E-business • Defining feature Business is transacted via computer networks. • Benefits • Expanded marketing • Reduced operating costs • Streamlined operations • Product / service delivery • Costs • Network setup • Different internal controls • Customer distrust potential • Consequences of technology breakdowns

  5. E-business • Five major categories • Business to consumer www.travelocity.com • Business to business www.officedepot.com • Government to consumer www.sec.gov • Government-to-business www.sba.gov • Consumer-to-consumer www.angieslist.com Lecture break 10-1 Suggest one additional example of each e-business category. Do not repeat those found in the chapter.

  6. ERP systems • Relational databases designed to provide comprehensive, integrated information about an organization • One form of event-driven AIS • Common modules • Customer relationship management • Human resource management • Supply chain management • Financial management

  7. ERP systems • Failure causes • Human resource related • Poor top management leadership • Poor project management • Inadequate education & training • Unrealistic expectations • Project seen as IT only • Business process related • Trying to maintain status quo • Automating poor processes • Bad match between processes and system • Technology related • Inaccurate data • Technical issues

  8. ERP systems • Conditions for success • Organizational commitment • Clear communication • View as enterprise-wide venture • Select compatible system • Resolve multi-site issues • Ensure data accuracy • Lecture break 10-2 Working with a group of three to five students, explain how one of the following could relate to ERP projects: • Database normalization • Expectancy theory • Systems development life cycle • COSO frameworks

  9. Application service providers • Description • Third-party entity • Deploys, hosts & manages access to packaged application • Delivers software-based services over a network • Examples • Web hosting • E-mail providers • Transaction processing • E-mail security • Virtual offices

  10. Application service providers • ASPs can present additional internal control challenges and issues • Service organization audits can address some of them • Old standard • Statement of Auditing Standards 70 (SAS 70) • Replaced since text was published

  11. Application service providers • New standard • Statement on Standards for Attestation Engagements 16 (SSAE 16) • Motivated by two forces • Misuse of SAS 70 • Convergence with international standards

  12. Classroom assessment • This chapter has focused on e-business, ERP systems and application service providers. • Form a group of three to five students. • Select one of those three topics. • As a group, write down: • Three things you know about the topic. • Three things you want to know about the topic.

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