p

C HAPTER
E-Busi11ess Enterprise: A
2 Digital Firm

LEARNING OBJEC.TIVES .

• Understa nding para digm shift to E -enterprise

• Conventional organisation vs £ -enterprise Organisatio n
• Drivers of E -business Enterprise
• E -business Models
• Customer Centric £ -business System
• E -business Organisation Structure
• Use of \Vorkflow and Workgroup Application Model
• Role of Enterprise Software: ERP /SCM/CRM
• £ -business Models and Applications
• Components of £ -business Models
• Digital Firm
• Real Time Enterprise

2.1 INTRODUCTION TO 'E-BUSINESS ENTERPRISE: A DIGITAL FIRM'

With the emergence of Internet, business organisation of 20th century has undergone struc-
tural, cultural and qualitative change, the way business is done and a new organisation struc-
ture has emerged known as E-business enterprise. E-business enterprise enables employees,
professionals, teams, groups, vendors, customers to perform business operations through
electronic exchange of data and information anywhere at any time. The business operations
are performed through E-communication and E-collaboration initiatives. Therefore, E-busi-
ness enterprise has a global market, reach, source and global competition. Due to extensive
use of technology, the enterprise is now called a Digital Firm.
Due to Internet capabilities and web technology, traditional business organisation defini-
tion has undergone a change where scope of the enterprise now includes other company
locations, business partners, customers and vendors. It has no geographic boundaries as it
can extend its operations where Internet works. All this is possible due to Internet and ~eb
moving traditional paper driven organisation to information driven Internet enabled Digital
 A I \

E-Business Enterprise: A Digital Firm • 27

Firm. Digital Firm is open twenty-four hours, and being independent managers, vendors,
customers transact business any time from anywhere.
Internet capabilities have given Digital Firm a cutting edge capability advantage to in-
crease the business value. It has opened new channels of business as buying and selling
can be done on Internet. It enables to reach new markets across the world anywhere due to
communication capabilities. It has empowered customers and vendors/suppliers through
secured access to information to act, wherever necessary. The cost of business operations has
come down significantly due to the elimination of paper driven processes, faster communica-
tion and effective collaborative working. The effect of these radical changes is the reduction in
administrative and management overheads, reduction in inventory, faster delivery of goods
and services to the customers.
In Digital Firm traditional people organisation based on 'Command Control' principle is
absent. It is replaced by people organisation who are empowered by information and knowl-
edge to perform their role. They are supported by information systems, application packages,
decision supported systems. It is no longer functional, product, and project or matrix organi-
sation of people but E-organisation where people work in network environment as a team or
work group in virtual mode.
Digital Firm is more a process driven, technology enabled, and uses its own information
and knowledge to perform. It is lean in size, flat in structure, broad in scope and a learning
organisation. In Digital Firm most of the things are electronic, use digital technologies and
work on databases, knowledge bases, directories and document repositories. The business
processes are conducted through enterprise software like ERP, SCM, and CRM supported
by data warehouse, decision support, knowledge management and content management
systems.
The term 'E- Business enterprise' was coined to convey the use of Internet and IT in key
resource management processes and to transact the business with customers, suppliers and
business partners. ERP, SCM, CRM were the main applications in the business. The applica-
tion of Internet and information technology was in key core areas of busin~ss. These ap-
plications, however did not integrate the entire cycle of business, starting 'from Customer
to finishing at Customer: Customer Ordering to Delivery to Customer Service'. With the
advancement of Internet, Web, communication, network and information technology the
business process management scope not only crossed the boundaries of the organisation but
embraced every aspect of the business, making,all its operations 'Digital'. That is capturing,
validating, processing, decision making, storing, and delivering. The extent of use of these
technologies is so much across the boundaries of the organisation that E- Business enterprise
is now called a "Digital Firm".
Digital describes electronic technology that generates, captures, validates, and stores, and
processes data in terrru, of two states: positive and non-positive. Positive is expressed or rep-
resented by the number 1 and non-positive by the number 0. The alphabets of this language
are 'Zero and One' and hence digital.
Prior to digital technology, electronic transmission was limited to analog technology, which
conveys data as electronic signals of varying frequency or amplitude that are added to car-
rier waves of a given frequency. Broadcast and phone transmission has conventionally used
analog technology.
 4
28 Managem en.t Information Systems
~
Digital firms extensively use computing, convergence, and coi:itent management tec:hn_
gies on internet platform for all E-business rrocesses, transactional and relational. Di ~lo.
firms rely heavily on Interne t and information technology to conduct the E-busin gJ,ta,1
erations. The complete change over to digit~l _platform ma~~s organisation and its ac:~~i~P-
more flexible, profitable, competitive and efficient than traditional people and process dri;es
. . en
orgarusahon. . . .
In today 's new world of business, orgarusations face multiple challenges--globat· .
. d t· . isation
maintaining a connected mobile workf orce, an d increase compe ition. To maintain h .'
competitive advantage, organisations must adapt and get better through process innov ttieu
. . . d . a on
capturing strategic insights, and dehvenng customise services. ,
Unified communications technologies improve efficiency and effectiveness of su
1
chains by enabling stakeholders to collaborat~, located anywhere in ~ifferent time zones~lJ
ferent function.al teams and experts along with external supply cham and logistics partner
can share data and information to act fast. With integrated UC capabilities into business pr~
cesses, employees can quickly and easily find the right person and communicate from within
the software applications and business processes currently in use.
Enterprise software makes business processes digital, unified communications makes col-
laboration digital.
Going digital has a clear strategic advantage to the firm and its stake holders. Supply chain
management systems, Customer Relationship management Systems, Enterprise Manage-
ment Systems (ERPs), and Knowledge management Systems are the main systems which
drive the function of a digital firm. The key feature of a digital firm is its ability to transact
business efficiently across the traditional boundaries of the business organisation. In a digital
firm seamless integration of systems and processes operating on different platforms at cus-
tomers, suppliers and business partners is easily possible.
In digital firm relationships with customers, suppliers, and employees are digital, meaning
all transactions, communications, pictures, images, drawings, data, and information are ex-
changed through digital medium. Customer orders, delivery, billing and payment, purchases
and so on are through web and internet using enterprise software. Information like product
details is communicated through web to the customer. Using organisation's Web por_tal cus-
tomer can build the order to the self requirement accessing this information and post it to the
organisation's order book, keep its track and so on.
CMan.aging The £-enterprise: Digital Firm)
.Today most of the business organisations are using Internet technology, network,
wireless technology for improving the business performance measured in terms of co st: e
ant
ficiency, competitiven~ss and pr~fitability. They are us_ing E-business, E-comm~rce s?lu~~
to reach faraway locations to deliver product and services. The enterprise solutions bke . \
bus1-
SCM, and CRM run on Internet (lntemet/Extranet) & Wide Area Network (WAN). The . .
ness processes across the organisation and outside run on E-technology platform using digi-
tal technology. Hence today's business firm is also called E-enterprise or Digital firm.
The paradigm shift to Digital Firm has brought four transformations, namely
• Domestic business to global business.
\
• Industrial manufacturing economy to knowledge based service economy.
 E -Business Enterprise: A Digital Firm 29

• Enterprise Resource Management to Enterprise Network Management.

• Manual document driven business process to paperless automated electronically
transacted business process.
This paradigm shift has added new challenges for management to tackle. It has opened
larger market but not without severe competition from more competitors. Market and busi-
ness risks have increased. Then differentiating factors in manufacturing process and products
are no longer competitive advantage. What is critically important is service to the customer
and customer satisfaction. Customer satisfaction and high level customer service is possible
using knowledge based proactive management systems.
These transformations have made conventional organisation design obsolete. The basis
of conventional organisation design is command and control which is now collaborate and
control. This change has affected the organisation structure, scope of operations, reporting
mechanisms, work practices, workflows, and business processes at large. The comparison
between conventional organisation design and Digital Firm is summarised in Table 2.1.

Table 2.1 Comparison Between Conventional Design Vs. Digital Firm

Conventional Organisation Design Digital Firm
• Top heavy organisation structure • Flat organisation structure
• Work and work place location at one place • Separation of work from workplace location.
• Manual and document based work flows • Paperless work flows
• High administrative and management overheads • Low overheads due to lean organisation
• lnflex1ble, rigid and longer business process cycles • Flexible, agile and responsive process cycles
• Private business process systems for self-use. • Public business processes and systems for use by
They are barred for usage to customer, vendors, customers, vendors and business partners
and business partners
• Low and selective usage of technology • Use Internet, wireless and network technologies at
all work centres

In E-enterprise, business is conducted electronically. Buyers and sellers through Internet

drive the market and Internet based web systems. Buying and selling is possible on Internet.
Books, CDs, computer, white goods and many such goods are bought and sold on Internet.
The new channel of business is well known as E-commerce. On the same lines, banking, in-
surance, healthcare are being managed through Internet. E-banking, E-billing, E-audit, & use
of Credit cards, Smart card, ATM, E-money are the examples of the E-commerce application.
Managers in Digital Firm must be highly IS and IT literate to meet their own information
and knowledge needs. Major management challenge to build and use MIS is developing com-
petitive information systems, understanding the character of global business heterogeneity,
variability & risk, creation of IS and IT platform for achieving MIS goals.
Having discussed so much good about Digital Firm, its management has some challenges
to meet.
To achieve the said benefits of Digital Firm it is necessary to redesign the organisation to
realize the benefits of digital firm. The organisation structure lean and flat. Get rid of rigid
. f
 4
30 Managemen t Information. Systems

established infrastructure such as branch office, zonal office. Allow people to w o ~

w here. Autom ate processes after reengineering to cut down process cycle time. any.
Another ch allenge is to convert domestic _p rocess design_to w?rk for international Proc
w h ere integration of multinational infor?'at10n systems usmg ~hfferent communication stess,
dards, country specific accounting practices, and laws of security are to be adhered stncu;-
Intemet and networkin g technology has thrown another challenge to enlarge the s
. . cope of
organisation where custom ers and vend~rs b ecome par t o f the or?an1sation. This technolo
offers a solution to comn1 unicate, coordm~te, and coll~borat~ with custo~ers, vendors an~
business partners. This is just not a technical change m busmess operations_but a cultural
change in the nlindset of managers_an~ workers _to look beyond the ~~nventional organisa-
tion. It means changing the organ1sat10n behav10ar to take competitive advantage of the
Digital technology.
The last but not least important, is the challenge to organise and implement information
architecture and information technology platforms, considering multiple locations and mul-
tiple information needs arising due to global operations of the business into a comprehensive
MIS.

_v.2 ORGANISATION OF BUSINESS IN DIGITAL FIRM

Internet technology is creating a universal bench or platform for buying and selling of goods,
commodities and services.
Essentially Internet and networks enable integration of information, facilitate communica-
tion, and provide access to everybody from anywhere. And software solutions make them
faster and self-reliant as they can analyse data information, interpret and use rules and guide-
lines for decision-making. These enabling capabilities of technology have given rise to four
business models that together work in an E-enterprise organisation. They are
• E-business • E-communication
• E-commerce • E-collaboration
These models work successfully because Internet technology provides the infrastructure
for running the entire business process of any length. It also provides e-mail and other com-
munication capabilities to plan, track, monitor and control the business operations thro~gh
th.e workers located anywhere. It is capable of linking to disparate systems such as lo~iStics,
~ta acquisition, radio frequency used systems and so on. Low cost connectivity physical &
vrrt~.l, and ~iversal standards of Internet technology make it a driving force to change con-
ventional business model to Digital model.
Inte~t has enabled organisations to change their business process and practi~es. Ith:~
dra~aticall~ reduce~ cost of data and information processing, its sending and stonng. Infie
mation and mformation products are available in electronic media and are a resident on
network.. Once everyone is co~nected electronically, information ~an flow seamlessly
any location to ~ny ot~er location. For example, product information is available on an d
fr:
ganisation website which also has a feature of order placement. An order placed is proces~~e
at the backend and status of acceptance, rejection is communicated instantaneously to _
tomer. Such order is then placed directly on the order board for scheduling and execut10J1f.
These basic capab1·1 ities
cus · · o f Interne t h ave given
· · to number of business models. Sorne 0
nse
them are given in Table 2.2.
 E -Business Enterprise: A Digital Firm 31
Table 2.2 Business Models of Digital Firm

Business Model Description Example

Virtual Store Provides information about produ ct, and amazon.com, rediff.com, ebay.com .
sell s and delivers directly to cu stomer or
business organisation.
Information Store Provides information of interest and earns yahoo.com, msn.com
revenue from sharing and advertising. rediff.com, google,
satyaminfoway.com.
Transaction Process Processes bills for payment: telephone, elec- icici.com
1
tricity, money transfer & banking transac- billjunction.com
tions, membership for club registration.
seekandsource.com

/ Online Marketing Provides a marketing platform where buyers eauction.com

and sellers can meet to exchange informa- seekandsource.com
tion, negotiate and place order for delivery.
Examples are shoes, commodities.
Content Selling News, music, photos, articles, pictures, greet- timesofindia.com
ings are stored and sold at a price. gartner.com
aberdeen.com
Online Service Offers services to individuals and business Railway, restaurant, airlines booking.
at large and generates revenue. Examples: Online maintenance service. Online
Tours and travels, manpower recruiting and examination.
maintenance services.
Virtual Communities Provides platform to meet people of com- Linux Group New Groups Application
mon interests. Software user,groµps, profes- Package User Groups Community
sional groups like doctors, managers, user Groups
groups.

E-Learning Provides contents, E-books, CDs, lessons, sifyelearning.com

conducts test and offers certification.

We now discuss in detail how E-business enterprise model, and E-business process adds
value in management process. Such E-business enterprise model is shown in Fig. 2.1. Source
Adapted and Modified from Ravi Kalakota and Marcia Robinson. MIS, Fifth edition, James
A'. O' Brien, 1MH.
The Internet and networks provide platform and various capabilities whereby communi-
cation, collaboration, and conversion has become significantly faster, transparent and cheap-
er. These technologies help to save time, resource and enable faster decision-making. The
technology adds speed and intelligence in the business process improving quality of service
to the customer.
The business process of serving the customer to offer goods, products or services is made
of following components.
• Enquiry Processing • Order Manufacturing
• Order Preparation • Order Status Monitoring
 32 ~~~~~~r±_'!!!-1:!!:~- ~S~s~te~ms~------------------
Management Information Y -----
-
E-commerce
Applications on
Website Potals ----- \ -

,,- / _/ / / / - - - --A;::p::p:.:.lit~tio~n~s~-------... ----- -------

~ ~ =?!

-:(
,
,,
►-\
, 'l , ,
,
\,..
I ,

J·
' . . ,
/

.. I
I

Collaboration work
E-communication E-mails, Voice Mail Chat E-<X>flabOraUon Applications, Work flow
Application on systems Voice conferencing AppUcatJon Work Group
Internet, Intranet, Extranet E-meetng Application

Fig. 2.1 Digital Firm Model

• Order Placement • Order Dispa tch ing

• Order Confirmation • O rder BiJling
• Order Planning • Order Receiva ble Accounting
• Order Scheduling • Ord er Paym ent Processing
The entire process in parts or full can be handled through these technologies and software
sol~tions. It provides important strategic, competitive advantage. Further the technology is
fleXIble and capable of handling any business models such as
• Retailing, Trading, Auctioning
• Manufacturing, Distribution & Selling
• Outsourcing, Subcontracting
• Servicing, Training, Learning, Consulting
The resultant effect
. is the reductio nm· cos t O f b usmess
· operations improved customer
1oya lty an d _retentio~ ~d better quality offer to the customer. ,
Four maJor applications mentioned e r · ·
details of each one of them. ar ier make this achievement possible. We go into

2.3 E-BUSINESS
The scope of E-business is limited to executin core . . .
These processes would have external interfa lik? busmess process of the orgarusabon.
ce e suppli ul-
tants and so on. The core business processes of th :rs, _customers, contractors, cons
turing, selling, distri_bution, deli_very and accountine ~iarusation are procurement, manufac:
plication packages like Enterpnse Resource P l ~ ( ese core processes are bes t run by ap
wider including customer, suppliers and di§tributorsg aE~. I~ enterprise d efinition is ma~e
M anagement (SCM) is best suited for planning and e~e~~l~cation p~ckage like Supply Cha~
tion of entire business p rocess.

rd
 E -Business Enterprise: A Digital Firm 33

Ip addition to these core prQ_£esses, o~a~ satiQt.:_1~ _use Internet enabled systems and other
technologies to handle these_processes more _effectivezy., Table 2.3 illustrates such Internet
enabled systems.
I

Tabel 2.3 Internet Enabled Technology Applications

Application 1/lustration Technology

Transaction Processing Order booking from remote Wireless, PDAs
location Bar code reading, RFID
Receipt processing at Data Processing
warehouse LAN, WAN, Database
Workflow Insurance claim Intranet, Client/Server
Leave application Use of stored procedures
Travel advance payment and intelligent trigger.
Work Group Engineering design DBMS capabilities of Data
Employee database for pay and Information sharing
roll, tax applications through Internet/Intranet
Process Control
•
Shop floor applications to Embedded technology
run machines Use of intelligent chips and
To control process based output sensors
Automated Go/No Go Use of programmable logic
Quality/Checking applications
- controllers

Transaction processing, workflow, work group and process control applications are the
back~nd support systems to main E~ /SCM enterprise management systems.
For example, when a supplier sends goods, it is received in the warehouse. This event is
processed E-way using £-business systems suite. The receipt, documents and packages are
read by bar coding system or RFID. Then receipt processing is done to confirm the validity
of dispatch by the supplier, confirmation of quality, acknowledging the receipt, updating the
inventory, communication of receipt to manufacturing, updating the purchase order, effect-
ing material accounts and supplier accounts, creating a liability in payables and posting it
into cash flow projections. You will observe that receipt processing is first done at locations
like warehouse, and 'Procurement' module of ERP takes over to effect seamlessly all updates
and changes.
In this event processing, workflow system is used where quality of goods is checked, con-
firmed and certified in stages by three agencies in the organisation. This event is processed
by a work group, which includes receiver at the warehouse, QA inspector, and warehouse
manager playing their respective role in the receipt processing as specified in the workgroup
application. Having accepted the goods, automated and process controlled goods movement,
warehouse system takes over, and reads the receipt record to move the goods physically to
assigned bin in a rack.
E-business systems use internet/ intranet/ extranet capabilities to process an event in
seamless manner covering all technical, commercial, business aspects and implications of an
event. They perform internal business operations and interface with external agencies. Use of
 - 0
- ~M~a~n~a~g~e~m~e~n~t_!_l~n[!_fo~r~ma
~ t~io~n~S
~~y s~t~e m
~ s _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _______
34
. d d designed conventional business model to cust0
£-business systems has redefine an re Irler
centric process model as shown in Fig. 2- 2 ·
- - -service
---=-----:--:--:~
Providers
---i
Suppliers, vendors, Subcontractors,
Distributors, Dealers, Retailers, Consultants

Managers
Production
for
Knowledge Logistics Control,
Workers Accounting Strategic
es, Cost, Value, B planning
and Performance and
E-business Marketing Performance
Drivers Sales monitoring

Buyer
Customer, Distributor, Dealer,
Retailers, Organisations

Fig. 2.2 Customer Centric £-business System

E-business system scope manages cross-functional ap p lication systems as a single bu~iness

process. It integrates cross functions seamlessly, automates the tasks, and updates the infor-
mation in real time. The ERP /SCM and now customer ~lations management system (C~ ).
is a family of software solution packages dedicated to core management of functions of busi-
ness. They are supported by frontend and backend systems and applications designed for
transaction processing, workflow management, work group processing and automated pro-
cess control. £-business systems use client/ server architecture and run on Internet platform.
E-business s stems are foundation for other Enterprise applications, namely E-commerce,
E-communications, an -co a ora on.
The current E-business system scope is build through ERP dedicated to manufa~turin~
resource management for effective use of capacity and enhancing productivity. SCM 1s d~di
cated to logistics and distribution management and CRM is dedicated to customer relations
management for customer satisfaction.
£-business essentially concentrates on functional business information systems and ~eir
integration. Traditionally five business systems are recognised as Marketing, Production,
Procurement, H~an Resource, and Accounting & Finance. These functional systems ~ E-
busine~~ have become ~ore int~lligent and knowledge driven as against information driven
in traditional way of doing business. Let us discuss them in brief.
IT the backbone of E-ente rise, enables more recise tar et marketing towards int~
'
..-d ·ence. Organisa· fions use web sites
· and or o store an s are orma on , use ~ et-
au J to conunurucate, coord mate . - - - - - - _ _ _ , . - - - --:r----:---t ua1
and collaborate amon st structured teams and v 1r
wor s mployees use no teb 00k computers, Personal Digital • ·
Assistant (PD As . M ost 0
f the
teams. E
 A. ~ l
I rr ~etps
1'

ff") N))\ {<e-t1 n9 ~lfJ\et() OM 'f'()Oou-fadw.h1<3 -~~ tt-J"J .

_ _ _ __ _ _ __ _ _ __ _ _ _ _ _E_ _.::..:._:,.:.:.:..=:..::.:.:.~:..:.::...-
-Business Enterp rise: A Digital __:::___ _ __
Firm 35
processes are au_ton~ated and they use Internet, Intranet, and Extranet fo r communication and
E-business application packages to run the fw1ctional systems in integrated manner.
In Marketing System, IT hel s to reach customer directl and is in the osition to under-
stand customer behaviour, c!-1stomer 's emographic / psychogryfic profile; It then helps to
segment market by customer for advertising, promotion and contact.
In Manufacturing System, IT helps to automate number of management processes relating
to resource, capaci1?', _engineering & design, maintenance, and support. The application of t
rr is so strong that 1t 1s termed as Computer Inte~ated Manufacturing (CIM) or Computer
Aided Manufacturing (CAM).
CIM adds value in the manufacturing by way of simplification of processes in production
and design. Automation of simplified processes using process control devices, numerically
controlled machines and robots and lastly integration of all core and support processes con-
tributes to manufacturing excellence.
In Human Resource management systems extensive use of Internet is made to automate
processes of HR planrung, sdtedafutg, requirement analysis, training and develop~ent. The
entire chain of HR planning, advertising, recruitment and selection is an automated one. HR
administration is a huge area of application which is wholly IT enabled. It handles payroll,
leave planning, movement, career planning and succession.
In Accounting and Finance system, IT application is very strong. E-business applications
in this area arerapa"bte of accounting every business entity such as material, men, machines,
cash, customer, vendor and so on. All processes, which deal with transaction, computing,
accounting and analysis, are automated using system intelligence and knowledge driver
intelligent systems.
The architecture of these processes enables to receive inputs from other functional systems
like marketing, nµnufacturing, and HR, and process the same to account and analyze the im-
pact on the business performance, be it cost, profit or productivity. An integrated E-business
system is capable of forecasting resources requirement, managing·resources, budgeting capi-
tal, sales, and manpower, and measuring financial performance.

2.4 E-COMMERCE
E-commerce is a second big application next to ERP. It essentially deals with buying and
selling of goods. With the advent of internet and web technology, E-commerce today cov-
ers an entire commercial scope online including design and developing, marketing, selling,
delivering, servicing, and paying for goods. Some E-commerce applications add order track-
ing as a feature for customer to know the delivery status of the order. Figure 2.3 shows the
E-commerce process model.
The entire model successfully_':orks on web platform and uses Internet technology.
E-commerce process has two participants, namely buyer and seller, like in traditional busi-
ness model. And unique and typical to E-commerce there is one more participant known as
'Merchant Server'. Merch~t ~erver role in E~commerce _ensure secures payment to seller by
authorisation and authentication of commercial transaction.
1'5' 36 ~
- ~ ~E~~t!l ~
Managemcn
nfi~<1~rn~i~a~
t i~o1~1~S~y~st~e~rr::
1,s:___ _ __ _ __ _ _ _ _ _ _ __
--------
- ► ► -
-►
Marketing,
Advertising
Production
Customer Interaction,
Negotia~n.
Payment,
l
Configuration Ordering and Processing

Servicing Delivery Processing

Problem Solving
Support
,Ill('.
Dispatching
Customer Acceptance
. l
fig. 2.3 E-commerce Process Model

~
/tE-commerce process model. can. be viewed in fo ur ways and categories.
• B 2 C: Business Orgarusation to Customer
• B 2 B: Business Organisation to Business
• C 2 B: Customer to Business Organisation
• C 2 C: Customer to Customer
In B2C model, business organisation uses websites or p ortals to offer information about
product, through multimedia clippings, catalogs, product configuration guidelines, customer
histories and so on. Anew customer interacts with the site and uses interactive order process-
ing system for order placement. On placement of order, secured payment systems comes into
operation to authorise and authenticate p ayment to seller. The delivery system then takes
over to execute the delivery to customer.
In B2B model, buyer and seller are business organisations. They exchange technical and
commercial information through websites and portals. Then model works on similar line like
82C_. More advanced B2B model uses Extranet and conducts business transactions based on
th
e inf~rmation status displayed on the buyers application server. Auto component industry
uses this model for supplying parts and components to auto manufacturer based on the in-
ventory levels and production programme.
In C2B model, customer initi t ti ft • On
the f h . . a es ac ons a er logging on to seller's website or to server.
server o t e selling organisation E f th
customer. The entire Internet bankin, -commerce applications are present the for use o e
the bank transacts b f . g process works on C2B model where account holder of
transfer and so on.
num er o reqwrements su h kin
c as see g account balance, payment, mone
y

In C2C model, customer partici ates . th

tion website. In this model web .tP . m e process of selling and buym · g through the auc-
' SI e IS used for p
E-newspaper website is an exam 1 Of d
I · s
. . ersona advertising of products or service .
P e a vertismg and ll"
In all models, there are two ch se mg of goods to the consumer.
. d th anne 1s: one channel d l . . and
s h anng, an ano er channel deals w ·th th ea s with information delivery
illustrations of the two channels are li;t d belcommercial aspect of buying and selling. Some
e e ow for all th f
In B2B model, th e participants in E-bu . e our models.
. 1 smess are tw 0 . .
seller, distnbutor-dea er and so on. orgarusations with relations as buyer-
 E -Business Enterprise: A Digital Firm 37

Infonnation Delivery Application

• Issuing business circular
• Product catalogues publications
• News clippings
• Messaging
rransaction Processing Application
• Order processing
• Order execution
• Payment processing
• Money transfer
In B2C model, the participants in E-bus iness are an organisation, and customer as an indi-
vidual. The customer is an individual consumer. The E-business applications in B2C are the
following:
Information Delivery and Sharing Application
• Organisation manual
• Database of knowledge
• Business information

Transaction Processing Application

• Payments to employee
• Issue of shares/bonds
• Delivery through courier
In C2B, the customer/consumer deals with business organisation in individual capacity.
Information Delivery and Sharing Application
• Downloading of information from website/portal
• Viewing the bank balance
• Seeing manuals/drawings/pictures/images, and so on
Transaction Processing Application
• Requesting an item
• Obtaining travel advance
• Inquiry processing
• Credit card payment
• Cash withdrawal through ATM
b In C2C, both the parties are individuals and play the r 1 f b
e. o e o uyer / seller as the case may

Information Delivery and Sharing Application

• Messaging e-mail
• Reports I
-
88
• N~w~ ~1\'IUP·"
• Interests gn1 ur~
Transaction Processing Application
• Payment approYals
• Memos
• Sanctions and confirmations
• Issues and receipts
tion delivery and sharing application is built on back-end systems, which
Broaell y, informa Th f th
d process it to create information databases. e users o ese databases could
d t
collect a a an . f b 11 Th . . h
be organisations or individuals in the capa_c1ty o uyder or.se er. _e ?artic1pfanthts av~ an
authorised access to information and have nghts to rea , wnte or use 1t many o e applica-
tion.
In transaction processing applications, participants draw the information, use the business
rules and follow a process to achieve the results. Information or material is transacted using
electronic process using information and business rules. There is a well-defined input to pro-
duce the predefined output based on business rules and on satisfying certain conditions.
In more specific terms, ERP/ supply chain management is a typical B2B model where in-
formation is shared and business is transacted between two o rganisations. The organisations
could be a manufacturer and a vendor, a manufacture r and a courier service partner, or a
manufacturer and a bank, and is built on trust and confidence. Hence, information is shared ~
with confidence and business is transacted on the basis of agreed rules and regulations. In
B2B model, procurement, inventory, distribution and payments are managed using E-busi-
ness technology.
In B2~, ~essaging and information downloading is a big application. Inter organisation
commuru~ation applications, like news bulletin, communicating change of rules, announce-
ments '.pnce .revisions are very common m • 82C . In the case of bank, announcmg . new mterest
.
rates, financial products . f b
.. . , openmg o new ranch, and so on is a communication application.
Crediting interest on fix d d . di .
are applications th t f _e epositS,. vidend on shares, refund of unused share amount
11
model-is outside tha a m_ th ~ domam of B2C, where partner 'C'-an individual in B2C
e orgarusation.
_In ~2B model, a customer interacts w.th inf .
pnce information configures th I ormation databases such as product catalogues,
livered after the electronic e Prod uct, compares the cost, places the order and have it de-
t d d. payment process Th d . .
sys ems an ifferent services are ch · e pro ucts like computers books CDs, music
are a big a~p lication
· of C2B modelpur Th ased thr?ugh E-commerce application. ' ' payments
Bill
are other big app lications
· · e electroruc
where informatio . maiJ , VI·d eo conferencing and news groups
In C2C model, E-business revol n Is shared through electronic communications.
th · · di ·d al ves around tw O ·
err m . VI u capacities and play a desi mtlividuals who deal with each other in
a?er I officer, brother I sister. ~-mailing, sen~;tetrole a~ buyer/ seller, teacher/ student, man-
gifts are the C2C model applications. g greetings, payments, ordering and sending
In all models, basic business and comm . .
documents. Table 2.4 shows an example 0 ~cation processes are execut d tlw gh .
ese documents. e ou e 1ectroruc
 E -Business Enterprise: A Digital Fi~

Table 2.4 Paper document Vs E-document

Information on paper Information on £-document

Product information brochure Product catalogue document database

Order on paper Electronic order

Confirmation letter E-mail

Payment cheque .
Electronic cash, credit ca rd, E-cheque

Information vs E-document
All transactions are paperless hence, confirmations, approvals, signatures are electronically
1.
carried out and the participant is informed through £-communications.
The organisations, which are in £-business in a big way, are listed in Table 2.5.

Table 2.5 Organisations in E-business

Service Organisation £-business Model

Internet banking ICICI B2C
www.icici.com
HDFC
www.hdfc.com -
C2B

Complete business cycle BHPVL 828

www.bhpvl.com
Dalmia Industries
www.dalmiaindustries.com 828
Billing Citibank B2C
Bill payments ICICI B2B
www.Billjunction.com B2B and C2B
News sharing Times of India B2C
www.timesofindia.com
Tendering
Gujrat Refineries 82B
www.gujrefin.com
.§:eetings/messag_~g Through ISP
C2C
VSNL,MTNL
Buying
Satyam lnfoway
(28
www.sa tyaminfoway.com
Selling
Gloster Cables
82B
www.glostercables.com
Information Sharing
IT space
B2B
www.itspace.com
Servicing 82(
LG Ltd.www.lgsi.com
Configuring of product 82(
IBM/Dell/LG
and complete business cycle C2B
 --
40 Management Information Systems

It should be noted that B2B business models actually run with the help of B2C, C2B and
C2C models. !hes~ models work unde~ the umb~ella of ~2B. ~e execution process using
these models 1s assisted by portals, websites, E-mail, web directones, Internet Service Provid-
ers (ISP). Each organisation in £-business environment has its website and E-mail address
and they are linked from portals, which provide basic information. The portal is a website
dedicated to specified class of items where focus is on information about the items and not
so much on who makes it? They essentially are information providers to users to transact
through E-business models. Some portals have scope of buying and selling besides informa-
tion sharing. Search engines like Yahoo, Alta Vista, and Lycos are higher-level portals, which
help you find web address of buyers and sellers for you to choose your E-business partner.
In E-business models, we have considered two parties who engage in business activity. But
to perform these activities certain intermediaries are required to handle the communication
traffic between the two parties in 82B, B2C, C2B and C2C. The intermediaries are:

Hardware Suppliers: Server, clients, routers and network card providers

• Network access providers: ISP, EDI, DoT
• Information access providers: Browsers such as Netscape, Adobe and Internet Ex-
plorer.
• Payment processors: Master Card, Visa.
• Website design providers: Consultants and web developing companies.
• Web directory providers: Yahoo, Alta VISta, and Lycos.

Digital Firm Models are developed using these intermediaries. The components of
E-business models are:
• Internet for external communication
• lntranet/Extranet for internal communication
• Network and TCP /IP protocols and tools for delivery mechanism
• ~eb server and web browsers software for access, process and download and mail-
mg.
• Back-end integrated sys tems f or application
. .
processes
The people involved in E-business model other than users of the models are:
• Web master
• Content provider
• Web designer
• Content designer
• Web developer/programmer • ur b dminis"
ne a trator
Web master controls the website inflow/ outflo •
the traffic. The role is similar to OBA . RDBM w, ~ontent management and regulation of
and visualises the requirement of th marti Sdenvu-onment. Web designer conceptualises
eP es an creates a web d · hich · ttr cti
useful and easy to handle. He plays a role of an architect an es!gn, ~ 1;5 a a ve,
website. Web developer/programmer writes web pages usin d an mtenor designer of the
script and other tools. They are also involved in programme ,; ~ , DHTML: XML, CGI
ing, information processing, providing links to other sites, wri~~t~or transaction P~~-
to o ther databases and to back-end ERP or legacy system. Cont gt rf~ces for connecti~ty
en providers are responsible
 E -Business Enterprise: A Digital Firm 41

to create text, ·images and a multimedia input to the site. These people are subject experts
and are key people in making a website a grand success. They have to write contents of the
website looking into the needs of the target website visitors. The contents should address the
needs of the users of the website. The content designers give website layout, icons, position-
ing and display ideas to deliver the contents to the viewers immediately. They provide input
in terms of aesthetics, colours, navigating through different information layers, and so on.
Web administrator maintains the website. He is a troubleshooter. In case of any problem,
web administrator is the first contact point of users/viewers to solve their difficulties. The job
is to keep the website very responsive and keep contents latest and up-to-date. Web admin-
istrator is responsible to make viewer analysis in terms of visits to website, areas visited and
business generated.
A Digital Firm structure model is given in Fig. 2.4.
I MD I

I Chief Information Officer I

)•
l
Organisation for Information Organisation for
Backend system Technology Providers Web

I
I I
ERP/
SCN/
CRM
Data Acquisition and
Processing systems
I OBA
I
,1
l System
Administration
I IWeb Master I
ISystem Designers I I r Web Author I
I \ Network \
[ Programmers I Engineers

Web designers. Content provides

Programmers , and designers
Fig. 2.4 Digital Firm Organisation Structure
~ buying and selling does not succeed throu h E-c
which are standard in nature, and customer doe~ not ommerce. The produ~ts and services,
seller, are best suited for E-commerce E-comme ltuhav~ a great need of interaction with
E co . . rce cu re is mostly virtual d .
- mmerce site must create confidence in the bu er showin .. an rmpersonal.
mance assurance and post sale support Faster pro y . . g competitive prices, perfor-
buyin d 11' · cessmg m every step and •
g an se mg cycle is very much essential. The look a d covenng entire
should be customer friendly and attractive Finall . n feel of E-commerce website
transactions, and order fulfillment is an abs~lute y, se~unty and reliability of information
necessity. ,
2.S E-COMMl)NICATION
In E-business world, E-communication syste . b
to share information by messages or store ~ is a .ackbone of all processes whose role is
tomer. This is done through many applicationso~ation to download on access by the cus-
syStems. MoS t popular and widely used
42 Management Information Systems

. . 1 tl1ese systems both parties communicate

messaging system is e-mail & V~1:~mail. Thro~g {' t and search mails supporting the refer-
on ongoing basis. It provides fac1hties to store, he e e e to one communication is needed.
. t . 15· popular w en on
ence need of the user. Th1s sys em . systems available are voice conferenc-
· ation in rea 1time, • •
When there is a need of commumc . . ten,s " oice conferencing 1s conducted on
. · 1eeting sys · vi
ing, Video conferencing and electronic n t rked PCs with Internet telephone connec-
k . aker phones or ne wo d' f ..
telephone networ usmg spe . b. .f of video and au 10 or participants situated
11
tivity. Video conferencing provides capa ; ie~ecomes an interacting and effective commu-
at different locations. Video conferencn;g ~-s~ boarding and document sharing. In electronic
O 1
nication system when it has a ~a~re wt· room with networked PCs and online screen
. tkpants
1 sit m a mee mg . .
meeting system, par . d PC network is chosen for commurucation, and access
projector to discuss the.meeting:~:~ on the screen for common viewing. This system is
databases and processmg and P J g • f n within small groups.
ful tO 1 some problems, and commuruca 10
use so ve . . tern which is a kind of offline is known as web publishing.
Another E-commurucation sys t 1 d .
. . b
Web publishing uses we s1 es a ·t nd portals for storing documents, ca a ogues,
t In thi rawmgs, pie-
tures and so on for sharing. Such information is stored on docum~~ sb. bl' shin~yst~m, a user
search es, nav1ga· tes, seIec ts and downloads document for self-use. vve pu. 1s. g 1s popular
amongs t researCh Organisations' educational bodies, governmentinforganisations, · and large
business and commercial bodies. These organisations have large o:rmation set and docu-
ment to share with the community.
£-communication systems are capable of sending ~ess~ges, ~ocuments, and ~es ~ any ~..
format over Internet. The communication could be online m offline mode and onlme m real
time mode. All £-communication systems have sufficient safeguards, which make them se-
cured for use. Internet and web technologies are used for forming different interest groups to
communicate and share the information. These groups are popularly known as 'user groups'
who have common interest in subject, technology or tool, and come together with the objec-
tive of improving the quality of subject of interest by sharing the experience.
Enterprise information portal is another tool used for information posting and communi-
cation to users or customers. Portal is a web-based interface on an integrated intemet/intra-
net/ extranet platform allowing customers to use application and other services. It provides
secured access to all users/ consumers to search information, analyse the situation and com-
municate. The difference between a website and a portal is that the latter is a comprehensive
multi ose re ository of information, appli~ations, tools to serve the conswners. Most of
e inform_ation needs are met at one p ace like portal eliminating excessive surfing, quick ac-
c_es~ to var~o~ resources_and application. Relatively, website is a very focussed platform with
limited ob1ective of sharing and communicating the informatipn.

2.6 E-COLLABORATION
Every business has nurnbe~ of work scenarios where group of people work together to com-
plete the tasks and to achieve a common objective. The groups could be teams or virtual
teams with different_member strength. !hey come together to perform a task to achieve some
results. ~e process 1s called c.ollaboration. !he collaboration now is possible with e-technol-
ooies, which put these teams m network with Internet support for comm . ti' to
o- d Th b'1li . uruca on, acces5
different databases an servers. ese capa _ties help to create collaborative work systems
and allow members to work together cooperatively on projects and assignments. The biggest
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _E~-~B~u~s~i~n~es=s~E~n~t=e~ry~r~i=se=:~A:..::_D~igi~·t~a~lF~ir~m~_43 1
advantage of E-collaboration is that it taps the collective wisdom, knowledge and experi-
ence of the members. The collaboration team or group could be within the organisation and
between the organisations as well.
Since, E-collaboration works on an Internet platform and uses web technology, work
group/ team need not be at one physical location. They can be at different locations and form
a virtual team to work on project or assignment.
E-collaboration uses E-communication capabilities to perform collaborative tasks, or
project assignment. Its effectiveness is increased by a software 'GroupWare' that eoables
the members of the group to share information, invoke an application and work together
to create documents and share them and so on. GroupWare is a collaboration software. For 1.
example, Lotus Notes, Novell GroupWare, Microsoft exchange and Netscape communicator
are GroupWare tools. These tools are designed to make communication and coordination
between members of the group more easily, disregarding their physical location.
£-collaboration helps work effectively on applications like calendering and scheduling
tasks, event, project management, workflow applications, work group applications, docu-
,ment creation and sharing, and knowledge management. Figure 2.5 shows an £-collaboration
system Model.
- -- ----
,,
- - -- - -
' ,, ,'" , t ' I
PCs
t '
''
''
,I
,I
',I Work Group ',
I Organisation
I (Workers of the Organisation) '
\
I
I
I
I
I
I
I PCs
PCs
t,
t t I
I
\
I

I
I
t t Virtual Team
(Buyer and Suppliers)
\
\

t t
'' I
PCs
'' ,I
,I

' ,I
,I

\
\ ....
\
\ Customer
-------
',,, ,,' -,It I
, Supplier Organisation ,

,,"/
LAN - J~,, •
------
Fig. 2.5 E-Collaboration System Model
 E-collaboration system components are Internet, Intranet, Extranet and LAN, WAN net-
works for communication through GroupWare tools, browsers. Application packages are
software suit, which help process customer requirements. It is supported by databases pres-
ent on various servers like mail server, material database, knowledge server, document server
and so on.
Having understood the E-collaboration system let us know where it is successfully applied
in business. There are five main applications, which are very popular amongst E-business
community. They are:

Preparation of Calendars and Schedules

Organisation plans a number of meetings, appointments, schedules where number of people
are involved and they need to be informed about their participation in a number of events.
GroupWare tools help in automatic scheduling, notification and reminding to the partici-
pants. Group Ware tools help in time management, arranging the meetings without conflict in
availability of the persons. ,, ..~-ft'e.6

Project Management
Teams manage projects, and a high-level collaboration among team members, and within
teams is absolutely necessary for expeditious project process execution towards completion.
GroupWare tools provide capabilities by scheduling, tracking and charting the group status
on various aspects of project.

Work Flow Management

There are many tasks in an organisation, which require progressive incremental working as
the flow moves forward . The entire process has steps, that contribute to incremental value
of task. The workflow is managed by a group of personnel, each having a specific role and
responsibility in the task.
The Group Ware tools handle communication between sta es tri
support member to erform, and secure the com let
s age. roup are tools work best where work is to be performed step by step. Another pop-
ular application is electronic document processing. For example, in project management,
contracts are created and finalised between a customer or a vendor and the organisation.
Such contract has a number of sections like technical, commercial, legal, performance and
obligation and so on. These documents are prepared step by step by different experts in the
organisation. In other words, contract document preparation work flows from stage to stage
in segment towards the goal of publication.

Work Group Application

a
Work Group Application differs from workflow to the extent that in workflow process or
transaction is handled while in workgroup the members of the OU share a common d a-
t base and erfo · ective ro es to a ·eve some co on goa . e concept of a
a r group {s that a set of information has a m tip e use and the concerned users draw this
WO th . 1
information to perform err roe.
 E-Business Enterprise: A Digital Firm 45

are in a network and use Group Ware tools to communicate co-

Members o f the wor k group 1
•
ordinate, and co11a b oral~e by sharing knowledge , software and databases to comp ete a group
assignment. Fig. 2.6 shows the work.flow and workgroup model.
Work Group
Work Flow
(Parallel Processing)
(Serial Processing)

PCs PCs

PCs
DB
Group Ware
Application
Software
PCs PCs

PCs PCs
Report Report
on
Output

Fig. 2.6 Workflow and Workgroup Application Model

Let us illustrate these two models using an event in the business such as receipt of material
for a job to be processed on the shop floor. In this event there is a transaction receipt of mate-
rial, which needs to be processed, and then a workgroup will use this information of material
receipt. Each member of this workgroup has a different goal.
In workflow application different members with a single goal of processing receipt of
material for inventory, process transaction in its logical serial order. While in work group ap-
plication, three members have different assignments, in a sense independent of each other but
they share information of receipt of material to complete their assignment.
All four applications: E-business, E-commerce, £-communication and £-collaboration run
on Internet, Intranet, Extranet and other networks and use web technology extensiv ely. In the
execution of these applications, £-organisation uses GroupWare software and tools. Group-
Ware is capable of handling core processes like communication, integration, collaboration
and delivery, and expedites processing of transaction, application and system. The Group-
Ware thus becomes an integral part of the enterprise E-solution, designed to manage the
enterprise business.
For all four applications, packaged software solutions are available broadly called as Enter-
prise Resource Planning (ERP), Customer Relation Management (CRM), and Supply Chain
Management (SCM). All three packages are then integrated in one customise suit known as
Enterprise Application Integration (EAI). EAI supports E-organisation functioning through
MIS. •
 46 Management Information Systems

Table 2.6 Shows Workflow and Work Group Application in Material Receipt Event.
Work Flow Work Group

Step Member Member Role Step Member Member Role -

1. Check at the Security Guard Enter receipt re- Schedules Production Issues job work
consignment cord of the the job Planner order
gate
2. Open Store Supervi- Enter receipt Process for is- Shop Checks invento-
sor record of items sue of material Engineer ry reserves ma-
consignment
in the consign- requisition terial, triggers
& scrutinise
ment material requi-
documents
sition process
3. Inspect the Inspector Enter in spec - Prepare a pick Stores lncharge Trigger a pro-
items tion record, ac- list for issue cess of pick list
ceptance and for issue
rejections
4. Accept in Stores lncharge Up
stores

MIS in E-organisation deviates from traditional report forma ts to automated intelligent

knowledge driven system. It enforces manager to act quickly to response displayed on the
screen. Most of the decisions of middle and operation al management are delegated to IT-
enabled information and knowledge driven systems. They are supported by the rule based
transaction processing system, decision sup port systems, expert systems, artificial intelli-
gence (AI) systems, and data warehouse and mining systems. MJS in £-organisation deviates
from the conventional model of 'Capture - Comp u te - Process - Analyse - Report - Think and
Act' to 'Point - Click - Respond - Act'.

~ REAL TIME ENTERPRISE

Real Trme E~terpris~ (RTE) is a special case of a digital firm. In RTE the business need~ are to
be execute~ m rea~ time mode. That is any request needs to be serviced or respon~ed ms~an-
taneously ~ re~l ~e. This means capturing the input, data/information/event m rea~ timE
and processmg It Immediately through real time information collaboration. In RTE the infor-
~tion ~ not scattered but it is available immediately and accessible instantaneously in real
time. It IS extracted from transaction paper documents, databases and Emails, and processed
~d store~ fo~ ready use o~ de~and in real time. It is also being updated continuously in real
time making It current for Just m time use when called for.
The goal of RTE is to provide accurate and timely information to decision makers within
and outside the organisation. The other goal of RTE is to connect all operations and enable all
information to be shared in real ~e. ~TE operates on a platform built out of Strategy, Tech:
nology and People. ~TE are_benefited m shortening the 'Order to Cash', 'Issue to Resolution
and 'Lead to Order cy~le times. In RTE the collaboration between people and processes is
through automated busmess processes.
_In RTE customers build and en_ter th eir orders, check inventory, track shipments make
secured payments a nd seek real time support to enquiries. Supplie rs assess and moni tor
 E-Business Enterprise: A Digital Firm 47
customer demand, check inventory, build delivery details, deliver and bill the customer. Busi-
ness partners work in collaboration to obtain business leads, conduct joint campaigns and
promotions, and convert a prospect into a customer.
In RTE, Internet and other complementary technologies are used for real time automation
and integration of Enterprise resource planning, marketing and sales, sales force manage-
ment, accounting, customer servicing, billing and payment, and e-mails carrying actionable
information. In RTE the information, resident and inaccessible in spreadsheets, ERP, CRM,
SCM etc, is extracted and stored in central repository giving a single real time view of the
data. RTE is a model of demand driven enterprise working on integrated platform of Back
office and Front office systems. Figure 2.7 is a digital model of an engineering firm producing
engineering products. The processing of data, information, transactions, applications in large
enterprise systems run on digital platform. In E- enterprise/ digital firm: All data and infor-
mation is in digital format available from any storage location to all authorised persons.

Delivery

Eng. Data, Machine data,

Customer Data, Installation
Drawings, Process sheets,
Order data, Testing & Product
Process Design, Tools data,
Commercial Data Acceptance Data
BOMs Labor standards

CAD/CAM/CAE/PLM ERP/SCM /CAM

Knowledge management, Business Intelligence Content ~anage_ment Systen:,s
Unified communications: A combination of Instant messaging, voice over IP, video conferencing,
virtual meetings. Collaboratlon tools Vlrtualization

Fig. 2.7 Model of a Digital Firm for an Engineering Product Company

An efficiently working RTE would have the following characteristics.

• Business process automation bridging the gap between organisations, systems and
processes across the organisation.
• Real time creation and storage of information ready for exchange to customers,
vendors and business partners.
• Processes to ensure currency and consistency of information across the global
network.
48 Managem ent Information S ystems

.
• Event dnven processes w1•th au toma ted sense and respond trigger eliminating h Uinan
intervention.

fs WHAT ARE THE TECHNOLOGY OPTIONS FOR

BECOMING A REAL TIME ENTERPRISE?
RTE is not a revolution. It is an innovation of doing exiSting _processes better fro~ all angles
using wide range of technologies name~y Internet, ~eh, WirelesS, IT, Comm~cation and
RFID and more. To become a RTE, it reqwres ch~ges m the pro~ess through ~usmess Process
Reengineering, followed by evaluation _of various technolo?1es ~or adoption and adapta-
tion to produce desired results. The chmce of technology _o r its~ largely depends on the
business processes chosen to go real time. The next requirement is to see that such ch •
li . lr d oice
integrates well on the existing platform and c~rrelated app cations _a ea Yin place in the
organisation. The primary goal of RT approach is to ens~e collabo~ation ~oughout and be-
yond the enterprise. The vision of RTE is about co_nducting -~e busmess w~thout any human
or technological bottlenecks. This is very challengmg and difficult, but feasible, if technolo
is handled with care and caution. ~
RTE functions with the help of four technology components:
• Internet/Intranet & Web Technology: While ability of this technology to assist real tim
processing by sourcing d~ta/ information from all resources is undoubtedly high, it':
success depends upon widespread acceptance on the security, design and develop-
ment complexity and its integration in existing IS and IT platform.
?reat care should be taken about Web-Services and industry standards while select-
mg the technology and the service provider.
There are over 20 different Web- Services standards and protocols.
• Enterprise So•tware
'J'
· Orgaru·
• • sa tions p 1anrung
· to_move over RT processing mostly
would have an enterprise software like ERP SCM or CRM Th 1 d. t ·
software solutions offer in . . ., . . e ea mg en erpnse
from th . . f tegration capability. This however needs to be examined
O
I tfr t e view point its suitability and the degree of collaboration it offers.
• n as ructure supporting RTE . Org . ti
&
basic network (LAN /WAN In amsa ons co~templating to go over as RTE have
organisations. Most of them wo:I.;;'et/Extranet) infras":1cture within ~d ~cross the
infrastructure, offering a sin have data warehousing systems which 1s the soft
1
then needed in the event of go:,:ource of data for the organisation to access. What is
system teal time as well Thi~ i g over to RT processing is making data warehousing
. . s a very challengm· d .
• Solution providers for Information sh . . g an complex task to achieve.
suite to maximise real time inf ari~g. HoSt ed solution providers offer application
. ormation sharing This . uild
an integrated application around b . · swte offers capability to b
po~i.t ory, like D ata Warehouse Th usmess proces . s workflows and common data re-
ti th . 1 . e cost of informati
on, en, is ower because of usin h on sharing across the organiza·
g a osted solution.
 E-Business Enterpriset A Digital Firm 49
WhyOrg . .
antzations are Moving Toward R
s eaI Tune Man
There are five forces which are dri . this agement of Business?
. vmg movement
1. The differentiation between competi.ti

ery.
.
quality of delivery in terms of cost ._; __on andd the organisation is zeroing down t th
, uiue an speed RTE
.
O e
approach ensures such deliv-
ij.
2. The demand for operational excellence thr
· thr
b y information ough value bas d
ough score card and dash board e management supported
3. The competition is now on how you integrate SCM
and leverage the integration to mutual ad t and CRM on the platform of ERP
van age.
4. The rapid development and convergence of .
Ubiquitous Computing, Neural Network Patt:;ergmg _t~chnologies such as RFID,
into Internet, web, IT Network Commuru'. ti recWiogrution, and Mobile computing
· ' ' ca on , rreless technology Th
no1Ogles enable automation of processes with 1 th . . · ese tech-
eas uman intervention
5. It offers competitive advantage due to ·
• Availability of superior competitive intelligence.
• Reduced response time to customer call.
• Transparency and visibility to entire value chain.
• Significant reduction in cost of serving customer needs.
To build s~tainable co~petitive advantage an organisation needs a real time response to
all the_events_ m the orgarusation. Transforming to RTE is the solution. There are many ways
to achieve this, but the best long term strategy is to invest first in systems thatate built to
support RTE.

BPO a 'Digital Firm'

The internet supports collaborative processes on a global scale. Business Process Outsourc-
ing (BPO) enables new forms of cooperation amongst organisations. With the help of internet,
organisations can be established without the use of 'brick and mortar' buildings and business
functions could be carried out by outsourcing them to internet connected organisations. This
form of an organisation is called a digital firm or RTE, where most of the business functions
have been digitized. Even though the business is going on, still there is no existence of a
corporate office, branch offices and factories in the vicinity to keep rolling in the work. The
internet can link thousands of organisations into a single network, creating the foundation
for a vast digital market place. In a digital market, many buyers and sellers exchange infor-
mation, products, services and payments. Through computers and networks these systems
function like electronic intermediaries in integrated manner as a single process. Buyers and
sellers can complete purchase and sale transactions digitally, regardless of their location.
All information driven functions are outsourced to the other companies while only the core
competencies remain with the original enterprise. For example all cell phone companies ~ve
outsourced all customer related functions like billing, recovery and queries. These comparues
then concentrate on business expansion, marketing and improving cell phone device with
features and facilities.
The impact of going digital is on the way the business is conducted by the organisation
in the internet world.
50 Management Information Systems

• The organisations have become flat as they focus on processes driven by the~ core
competency. And other processes are outsourced to other organisation who are m the
network.
• Decision making is decentralised and delegated to people who are empowered by the
knowledge.
• Organisations have become flexible in meeting customer expectations due to digital
culture of conducting the business. The product or service can be easily redesigned to
fulfill specific need of the customer. The organisations have become more agile.
• Inforn1ation being available from any location, the work and the person need not be
at fixed location. The location independence adds further flexibility into the organisa-
tions operations.
• Low transaction and coordination costs is a reality due reduced overhead, cycle times
and ease in coordinating various agencies for achieving a common goal.
• Empowerment of people by knowledge has made people more productive and ef-
ficient.
• Collaborative work and teamwork has become a dire necessity because of distributed
and flexible nature of work.

KEY TERMS

E-Business I Commerce I Virtual Store

Communication/ Collaboration Digital Finn
Virtual Communication E-learning
E-BusinessModeIB:B2C,B2B, C2B,C2C E-Business Network
E-Collaboration System Model PDAs
RFID Real Tune Enterprise
Work.flow Customer Centric E-Business
ICP /IP protocol Portal

REVIEW QUESTIONS

1 Define E-organisation, E-business, E-communication, E-commerce, E-collaboration and their

role in E-enterprise.
2 _ Compare and contrast E-enterprise business model with traditional business organisation
model .
3 What is the value addition in E-enterprise business model going e-way for managing busi-
_
ness?
4. What is the role of following tools and technologies in E-enterprise business.
• Internet
• Intranet
 E-Business ~nterpri.f.fe: A l)i14itaLFu m ., f} .,

• Extranet
• Web
• Portal
• GroupWare
• Telecommunication Network
5. Explain the strength of ERP, SCM, CRM and why it is necessa ry to integrate them by a soluti01
like Enterprise Application Integration (EAI).
6. Explain how in E-enterprise, manager 's role and responsibilities are changed. Explain ho~
manager is a knowledge worker in E-enterprise.
7. Explain how going e-way for managing business has affected the organisation. It is said tha
E-organisations are lean, flat, learned, agile and knowledge driven.
8. Search and compare E-commerce sites for following items.
(a) Car (b) Book (c) SCM package.
9. Explain in E-enterprise wny following benefits are realised.
• Reduction in business operation cost.
• Reduction in process cycle time.
• Intelligent use of human resource.
• More close customer interaction.
• Effective response to feed forward control system.
• Point - Click-Act MIS.
• Increase in HR productivity.
10. VISit following websites and write a two-=-p age analysis report on how participants are benefitec
by IT-enabled E-business enterprise.
• www.1c1c1.com
• www.bhel.com
• www.rediff.com
• www.satyaminfoway.com
11. Visit following websites and perform the given activities.
• www.ibrn.com
- Order a notebook computer
• www.hdfc.com
- Apply for a home loan online.
Write a technical note on your experience of using these websites.

CONFIRM YOUR UNDERSTANDING

1. In E-business enterprise traditional _ _ _ _ and control principle of operation is absent. 1·

is replaced by people organisation empowered by _ _ _ _ and -----..--
2. Three major transformations in E-business are as following:
Industrial Manufacturing Economy to _ _ _ _ __, ______, _____ Economy;
Resources Management to _ _ _ _ Resource Management;
Top heavy organisation structure to organisation structure.