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Chapter 10

E-business and Enterprise

Resource Planning Systems

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Outline

• Learning objectives

• Nature & forms of e-business

• Enterprise resource planning systems

• Application service providers

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Learning objectives

1. Explain the nature of e-business, comparing and contrasting it with traditional “brick-and-mortar” organizations.

2. Discuss major forms of e-business.

3. Describe the basic nature, purpose, and structure of enterprise resource planning systems.

4. Give examples and analyze the causes of ERP system failures.

5. List and discuss steps associated with successful ERP implementations.

6. Discuss the role of application service providers in e-business.

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Nature & forms of e-business

• Central feature

Business is transacted

over a network.

• Forms– B 2 C

www.graze.com

– B 2 Bwww.oracle.com

– G 2 Cwww.irs.gov

– G 2 Bwww.sba.gov

– C 2 Cwww.eharmony.com

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Enterprise resource planning

systems

• Purpose

Providing comprehensive information for decision making

• Nature

– Fundamentally, relational databases

– Modular organization

• Major companies

– Oracle (PeopleSoft)

– SAP

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Enterprise resource planning

systems

Table 10.1

Modular organization of ERP systems

Generic module

name

Primary stakeholder

group

Module components in

SAP

Customer

relationship

management (CRM) Customers Sales and distribution

Human resource

management (HRM) Employees Human resources

Supply chain

management (SCM) Vendors Materials management

Financial

management Stockholders Financial accounting

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Enterprise resource planning

systems

• Selected failure

causes

– Poor top management

leadership

– Unrealistic

expectations

– Inaccurate data in the

system

– Significant technical

difficulties

• Selected conditions

for success

– Obtain organizational

commitment.

– Communicate

strategic goals clearly.

– View ERP as an

enterprise-wide

venture.

Umble, E., and M. Umble. 2002. “Avoiding ERP Implementation

Failure.” Industrial Management, January/February, pp. 25–34.

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Application service providers

An organization that provides a

contractual service to deploy, host and

manage applications for customers

remotely from a centralized location.

Jaruzelski, Ribeiro and Lake (2014)

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Application service providers

• ASP types

– Enterprise

ERP systems

– Local / regional

Payroll services for

companies in Denver

– Specialist

Online diversity

compliance training

– Vertical market

Patient billing for

hospitals

– Volume business

Comprehensive human

resource services for mid-

range businesses in

Nashville

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Application service

providers• Title

Reporting on Controls at

a Service Organization

• Three report types

– SOC 1

Financial reporting

– SOC 2

Security, confidentiality,

privacy and related areas

– SOC 3

Less detailed version of

SOC 2

• Using ASPs

involves risk.

• The risk can

complicate a

financial

statement audit.

• The AICPA issued

SSAE 16 to help

address that risk

in the context of

an audit.

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