AIS Chapter 3

Electronic business

- Application of electronic networks (including the Internet) to exchange information and link business processes among organizations and individuals -include interaction between faceback‐office(i.e., internal) processes, such as distribution, manufacturing, and accounting, and front‐office (i.e., external) processes, such as those that connect an organization to its customers and suppliers.

Batch Processing Subprocesses

1)Business event occurs: (Information is recorded on a source document.) For example, if you think of one of the small businesses you might frequent, such as a used book store, they often have you bring the books you want to purchase to a clerk at the front of the store. The clerk then writes a description of the items purchased on a sales slip (prepared in duplicate) and totals the sale. The clerk returns one copy to you and stuffs the other copy into the cash register drawer. This traditional process is similar in an e-commerce environment. When the event occurs online, the product may be shipped (or downloaded), and the receipt may be sent by e-mail. 2)Record business event data( A batch of source documents is entered in a computerized format) , the owner-manager or the employee closing up at the end of the day may take responsibility for keying all the sales slips into a PC for storage on a disk. The PC becomes simply a data entry device for keying in the sales data. Upon completing the entry, the copies of the sales receipts are clipped together and stored in a file cabinet for possible future reference. In an e-business system, this step may occur at the same time that the business event occurs. At that point, the seller's system may store the event record in a temporary electronic file with other events for later processing. 3)Update master data( The computer processes the entered information and updates the master data) taking prior inventory totals and subtracting the items sold to derive the new inventory levels. The new inventory levels are accordingly written to an updated master data store. The sales event data also is stored in a more perma- nent data store, such as the sales data store. It is not uncommon for the owner- manager of the used book store to either take the data stores home and process them on a computer or, even more likely, to take the information to a public accountant for processing. 4)Generate outputs( After the update, periodic outputs (i.e. reports) are generated for management) docu- ments as a sales report and an inventory update report. For this small store, both reports would probably go to the owner-manager.

Internet Commerce

: Computer‐to‐computer exchange of business event data in structured or semi‐structured formats via Internet communication that allows the initiation and consummation of business events. adically simplifies e-business by allowing the organization that is receiv- ing and processing business event data to project template formats across the Inter- net to business partners for easy data entry and data transmission.

Internet market exchanges

Brings together a variety of suppliers in a given industry with one or more buyers in the same industry to provide Internet commerce through organized markets. Suppliers can put their products online, generally feeding into electronic catalogs that allow the buyer(s) to sort through alternatives from different suppliers and electronically place an order. Often, only one supplier will carry a cer- tain item, but efficiencies are still gained by avoiding the PO process

Electronic Document Management (EDM)

Capture, storage, management, and control of document images for the purpose of supporting management decision making and facilitating business event data processing. Business applications fall into two categories: document storage and retrieval(For example, mortgages, deeds, and liens are archived and made available to the public for such uses as title searches. Other documents in this category include birth certificates, death certificates, marriage licenses, banking-account signature cards, user manuals, price lists, and catalogs)/ business event data processing.( For example, loan and insurance applications must pass through several stages, such as origination, underwriting, and closing. ) Benefits: reduced cost of handling and storing paper, improved productivity and customer service, enhanced management of workflow and faster processing.

Electronic Data Interchange(EDI)

Computer‐to‐ computer exchange of business data in structured formats that allow direct processing of those electronic documents by the receiving computer system.Computer and communications technologies have been successfully applied by organizations to improve accuracy and control and to eliminate paper within their information systems applications. had a significant impact on streamlining data communication among organizations.

Electronic mail

Non‐standardized messages between individuals linked via a communications network.

Internet auction markets

Provide an Internet base for companies to put products up for bid or for buyers to put proposed purchases up for bid., a scenario common to the eBay exchange, a market participant puts an item up for bid, sets a minimum bid price, and awaits completion of the bidding process. While this market is fairly successful for B2C Internet commerce, it is not so effective for B2B Internet commerce.

Batch processing

The aggregation of several business events over some period of time with the subsequent processing of these data as a group by the information system. Executing the journal entry transfers as a batch is a more efficient way of maintaining the financial statements than transferring each business event individually to create a complete set of financial statements after each event was recorded

B2C

Where one business makes a commercial transaction with a consumer Ex,For instance, your favorite pizza joint or sandwich shop may accept e-mail or online ordering—allowing you to avoid being put on hold when you phone in your order and avoid the risk of having the employee who is taking your order recording the wrong ingredients for your pizza or sandwich. You simply create the order yourself and send it off, reducing the need for people to answer the phones and take orders.

B2B

Where one business makes a commercial transaction with another Ex Amazon with other supply vendors, If you are in the self- checkout line at Walmart and scan an item, not only are sales recorded, but the ware- house inventory balance is also updated. Walmart vendors read that data, and if the warehouse quantities fall below the reorder point for the item, the vendor ships replenishment stock to the Walmart warehouse automatically.7

Online Real‐Time (OLRT) Processing

gather business event data at the time of occur- rence, update the master data essentially instantaneously, and provide the results aris- ing from the business event within a very short amount of time—that is, in real time. - Also known as immediate mode (little or no delay occurs between any two data processing steps)

standing data

include relatively permanent portions of master data, such as the credit limit on customer master data and the selling price and warehouse location on inventory master data.

Data maintenance

includes activities related to adding, deleting, or replacing the standing data portions of master data.

Information processing

includes data processing functions related to economic events such as accounting events, internal operations such as manufacturing, and financial statement preparation such as adjusting entries.

Periodic mode

is the processing mode in which a delay exists between the various data processing steps. is heavily dependent on the use of batch processing, and although technically not the same, the two terms are often used interchangeably. cons: the only time the master data are up to date is right after the processing has been completed. As soon as the next business event occurs, the master data are again no longer up to date. A

Master Data

repositories of relatively permanent data maintained over an extended period of time. contain data related to entities—persons and organizations (e.g., employees, customers), places (e.g., buildings), and things (e.g., accounts receivable, inventory). Two types of updates can be made: Information processing and Data maintenance. (Inventory, Employee, Vendor , Customer)

Immediate mode

the data processing mode in which little or no delay occurs between any two data processing steps. is often used interchangeably with real-time processing.

Online Transaction Entry (OLTE)

use of data entry devices allows business event data to be entered directly into the information system at the time and place that the business event occurs. • Merges the traditional subprocesses of business event occurrences (usually eliminating a source document) and records business event data into a single operation. • Considered online because the data entry device is connected to the computer. When you take your books to the clerk at the counter in these stores, the clerk generally keys or scans the purchase straight into the cash register. at this point, the sales items are being entered into a terminal that is creating (recording) a log of the sales event (the sales event data store), retrieving price list information, and generating duplicate cop- ies of the sales receipt. One copy of the sales receipt is given to you (the customer), and a second copy may be placed in the cash register drawer eliminates the need to have one person enter business event data on a source document and then have a second person perform the data entry to convert the business event data to a computer-ready form. The use of such technologies eliminates the human error that can result from entering the data manually.

Communication Networks

• Local area networks (LANs) • Wide area networks (WANs) • Internet • Intranet • Extranet