Description
Many e-business applications are integrated into cross-functional enterprise application clusters like enterprise resource planning, customer relationship management, supply chain management, selling chain management or decision support.
Economy Informatics, no. 1/2002
54
Enterprise Resource Planning – the Backbone of E-Business
Lect. Marian STOICA, PhD.
Economy Informatics Department, Academy of Economic Studies Bucharest
Many e-business applications are integrated into cross-functional enterprise application clus-
ters like enterprise resource planning, customer relationship management, supply chain man-
agement, selling chain management or decision support.
Integration of the enterprise has emerged as a critical issue for organizations in all business
sectors striving to maintain competitive advantage.
Keywords: enterprise resource planning, information and communication technology, e-
business, information systems.
ntegration is the key to success, to
unlocking information and making it
available to any user, anywhere and any-
time. Many organizations are using today
information and communication technol-
ogy to develop integrated cross- functional
enterprise systems that cross the bounda-
ries of the traditional business and organi-
zation functions (like marketing, account-
ing or finance). The main goal of this tactic
is that to reengineer and improve vital
business processes all across the enterprise.
Such an organizations view cross-
functional enterprise systems as a strategic
way to use information and communica-
tion technology to share information re-
sources and improve the efficiency and ef-
fectiveness of business process for helping
e-business strategic objectives (figure 1).
Enterprise resource planning is a cross-
functional enterprise system that serves as
a framework to integrate and automate
many of the e-business processes that must
be accomplished within the manufacturing,
logistics, distribution, accounting, finance
and human resources functions of a busi-
ness.
Once the organization has a clear view of
how information and communication tech-
nology can support the business, we can
use that view to identify specific areas of
opportunity or need within the business.
Two key areas are business processes and
information needs, both of which informa-
tion and communication technology can
support. The identification of processes
and information needs can be performed
together or individually in systems plan-
ning. Either way, both consider how in-
formation and communication technology
supports the business and both result in a
preliminary list of the information and
communication technology systems the or-
ganization needs.
The business processes within the organi-
zation are simply the groups of activities
that we use to accomplish the organiza-
tion’s work. Today, many of these proc-
esses require information and communica-
tions technology systems support.
One method of identifying specific proc-
esses that require information and commu-
nication technology support is the value
chain method. This method examines how
the organization adds value to its products
and services. More specifically we can see
which business processes either add or re-
duce value for the customer.
The value chain method for e-business
Once we have a general view of how in-
formation and communication technology
can support the e-business is important that
we reinforce this view by ensuring techno-
logical support for all important business
processes. The value chain method views
the organization as a series of processes,
each of which adds value to the product or
service for the client. Customers patronize
the organization because they add the
value.
I
Economy Informatics, no. 1/2002
55
Customer
Feedback
Market Research
& Tests
Product
Design
Process
Design
Equipment
Design
Production
Start
Fig. 1. The new product development process for e-business
If we view the organization as a value
chain, we can also identify the important
processes in adding value for customers
and identify information and communica-
tion system that support those processes.
Figure 2 depicts the components of value
chain. The chain of primary value proc-
esses along the bottom half takes the raw
materials and makes, delivers, markets and
sells and services the organization’s prod-
ucts or services.
Processes along the top half of the chain
such as management, accounting, finance,
legal, human resources, research, devel-
opment and purchasing support the pri-
mary value processes. The organization re-
quires these support value processes to en-
sure the smooth operation of the primary
value processes. All value chain processes
have an individual value. These processes,
combined in most organizations have a to-
tal value greater than the sum of their indi-
vidual value. This additional value is
called value-added.
The value chain is composed of primary
value and support value processes. From
Economy Informatics, no. 1/2002
56
left to right and along the bottom half of
the chain, the organization creates its
product or service through primary value
processes. Greater value-added means a
competitive advantage and greater profits.
Service
after
the sale
Management, Accounting, Finance, Legal
Human Resource Management
Research and Development
Acquisitions
Receive and
store raw
materials
Deliver the
product or
service
Make the
product or
service
Market and
sell the pro-
duct/service
S
u
p
p
o
r
t
V
a
l
u
e
P
r
o
c
e
s
s
e
s
P
r
i
m
a
r
y
V
a
l
u
e
P
r
o
c
e
s
s
e
s
Value-
Added
Fig. 2. The components of a value chain in organization
In this context, many organizations began
installing enterprise resource planning sys-
tems as a vital conceptual foundation for
reengineering their business processes and
as the software engine required to accom-
plish these new cross- functional processes.
“Now the enterprise resource planning is
being recognized as a necessary ingredient
for the efficiency, agility and responsive-
ness to customers and suppliers that an e-
business enterprise needs to succeed in the
dynamic world of information society.”
[O’Brien]
References
Daft R.L., Organisation Theory and
Design (4
th
ed.), West Publishing Com-
pany, St. Paul 1992
Dertouzos M.L., What will be; How the
New World of Information Will Change
Our Lives, USA 1997, © Ed. Tehnica,
Bucuresti 2000
Ducheyne D., The Information Society,
in Gent Works, nr. 107, iunie 1996
eEurope – An Information Society for
All, Progress Report, For the Special
European Council on Employment,
Economic reforms and Social Cohesion
Economy Informatics, no. 1/2002
57
– Towards a Europe based on Innova-
tion and Knowledge, Lisbon, 23-24
march 2000
Ghilic-Micu, B., Stoica, M., e-
Activities in information society, Eco-
nomic Publishing House, Bucharest
2002
Haag, S., Cummings M., Dawkins, J.,
Management Information Systems for
the Information Age, Irwin McGraw-
Hill, USA 1998
Kumar, K., Christiaanse, E., From
static supply chains to dynamic supply
webs: principles for radical re-design
in the age of information, Proceedings
of ICIS 99, Association for Information
Systems, 1999
McConnell R.C., Brue L. S., Econom-
ics – Principles, Problems, and Poli-
cies, Irwin McGraw-Hill, USA 1996
Nicolescu O., Management comparat.
Uniunea Europeana, SUA si Japonia,
Economic Publishing House, Bucharest
1997
O’Brien, J.A., Managing Information
Technology in the E-Business Enter-
prise, Irwin McGraw-Hill, USA 2002
doc_423352471.pdf
Many e-business applications are integrated into cross-functional enterprise application clusters like enterprise resource planning, customer relationship management, supply chain management, selling chain management or decision support.
Economy Informatics, no. 1/2002
54
Enterprise Resource Planning – the Backbone of E-Business
Lect. Marian STOICA, PhD.
Economy Informatics Department, Academy of Economic Studies Bucharest
Many e-business applications are integrated into cross-functional enterprise application clus-
ters like enterprise resource planning, customer relationship management, supply chain man-
agement, selling chain management or decision support.
Integration of the enterprise has emerged as a critical issue for organizations in all business
sectors striving to maintain competitive advantage.
Keywords: enterprise resource planning, information and communication technology, e-
business, information systems.
ntegration is the key to success, to
unlocking information and making it
available to any user, anywhere and any-
time. Many organizations are using today
information and communication technol-
ogy to develop integrated cross- functional
enterprise systems that cross the bounda-
ries of the traditional business and organi-
zation functions (like marketing, account-
ing or finance). The main goal of this tactic
is that to reengineer and improve vital
business processes all across the enterprise.
Such an organizations view cross-
functional enterprise systems as a strategic
way to use information and communica-
tion technology to share information re-
sources and improve the efficiency and ef-
fectiveness of business process for helping
e-business strategic objectives (figure 1).
Enterprise resource planning is a cross-
functional enterprise system that serves as
a framework to integrate and automate
many of the e-business processes that must
be accomplished within the manufacturing,
logistics, distribution, accounting, finance
and human resources functions of a busi-
ness.
Once the organization has a clear view of
how information and communication tech-
nology can support the business, we can
use that view to identify specific areas of
opportunity or need within the business.
Two key areas are business processes and
information needs, both of which informa-
tion and communication technology can
support. The identification of processes
and information needs can be performed
together or individually in systems plan-
ning. Either way, both consider how in-
formation and communication technology
supports the business and both result in a
preliminary list of the information and
communication technology systems the or-
ganization needs.
The business processes within the organi-
zation are simply the groups of activities
that we use to accomplish the organiza-
tion’s work. Today, many of these proc-
esses require information and communica-
tions technology systems support.
One method of identifying specific proc-
esses that require information and commu-
nication technology support is the value
chain method. This method examines how
the organization adds value to its products
and services. More specifically we can see
which business processes either add or re-
duce value for the customer.
The value chain method for e-business
Once we have a general view of how in-
formation and communication technology
can support the e-business is important that
we reinforce this view by ensuring techno-
logical support for all important business
processes. The value chain method views
the organization as a series of processes,
each of which adds value to the product or
service for the client. Customers patronize
the organization because they add the
value.
I
Economy Informatics, no. 1/2002
55
Customer
Feedback
Market Research
& Tests
Product
Design
Process
Design
Equipment
Design
Production
Start
Fig. 1. The new product development process for e-business
If we view the organization as a value
chain, we can also identify the important
processes in adding value for customers
and identify information and communica-
tion system that support those processes.
Figure 2 depicts the components of value
chain. The chain of primary value proc-
esses along the bottom half takes the raw
materials and makes, delivers, markets and
sells and services the organization’s prod-
ucts or services.
Processes along the top half of the chain
such as management, accounting, finance,
legal, human resources, research, devel-
opment and purchasing support the pri-
mary value processes. The organization re-
quires these support value processes to en-
sure the smooth operation of the primary
value processes. All value chain processes
have an individual value. These processes,
combined in most organizations have a to-
tal value greater than the sum of their indi-
vidual value. This additional value is
called value-added.
The value chain is composed of primary
value and support value processes. From
Economy Informatics, no. 1/2002
56
left to right and along the bottom half of
the chain, the organization creates its
product or service through primary value
processes. Greater value-added means a
competitive advantage and greater profits.
Service
after
the sale
Management, Accounting, Finance, Legal
Human Resource Management
Research and Development
Acquisitions
Receive and
store raw
materials
Deliver the
product or
service
Make the
product or
service
Market and
sell the pro-
duct/service
S
u
p
p
o
r
t
V
a
l
u
e
P
r
o
c
e
s
s
e
s
P
r
i
m
a
r
y
V
a
l
u
e
P
r
o
c
e
s
s
e
s
Value-
Added
Fig. 2. The components of a value chain in organization
In this context, many organizations began
installing enterprise resource planning sys-
tems as a vital conceptual foundation for
reengineering their business processes and
as the software engine required to accom-
plish these new cross- functional processes.
“Now the enterprise resource planning is
being recognized as a necessary ingredient
for the efficiency, agility and responsive-
ness to customers and suppliers that an e-
business enterprise needs to succeed in the
dynamic world of information society.”
[O’Brien]
References
Daft R.L., Organisation Theory and
Design (4
th
ed.), West Publishing Com-
pany, St. Paul 1992
Dertouzos M.L., What will be; How the
New World of Information Will Change
Our Lives, USA 1997, © Ed. Tehnica,
Bucuresti 2000
Ducheyne D., The Information Society,
in Gent Works, nr. 107, iunie 1996
eEurope – An Information Society for
All, Progress Report, For the Special
European Council on Employment,
Economic reforms and Social Cohesion
Economy Informatics, no. 1/2002
57
– Towards a Europe based on Innova-
tion and Knowledge, Lisbon, 23-24
march 2000
Ghilic-Micu, B., Stoica, M., e-
Activities in information society, Eco-
nomic Publishing House, Bucharest
2002
Haag, S., Cummings M., Dawkins, J.,
Management Information Systems for
the Information Age, Irwin McGraw-
Hill, USA 1998
Kumar, K., Christiaanse, E., From
static supply chains to dynamic supply
webs: principles for radical re-design
in the age of information, Proceedings
of ICIS 99, Association for Information
Systems, 1999
McConnell R.C., Brue L. S., Econom-
ics – Principles, Problems, and Poli-
cies, Irwin McGraw-Hill, USA 1996
Nicolescu O., Management comparat.
Uniunea Europeana, SUA si Japonia,
Economic Publishing House, Bucharest
1997
O’Brien, J.A., Managing Information
Technology in the E-Business Enter-
prise, Irwin McGraw-Hill, USA 2002
doc_423352471.pdf