Learning Objectives

By the end of this chapter, you will be able to:

  • Define e-business and differentiate it from e-commerce.
  • Define an enterprise system.
  • Describe the purpose of the three main types of enterprise systems: ERP, SCM, and CRM.

E-Business

E-business (Electronic Business) is the use of internet technologies to conduct all forms of business, not just buying and selling. While e-commerce specifically refers to the buying and selling of goods and services online, e-business is a broader term that includes e-commerce as well as all other online business activities, such as online customer service, internal communication, and collaboration with business partners.

Enterprise Systems

Enterprise systems are large-scale, integrated information systems that span across the entire organization and support business processes across multiple functional areas. They are designed to break down the information silos created by separate departmental systems and provide a single, unified source of data.

There are three main types of enterprise systems:

1. Enterprise Resource Planning (ERP)

  • Purpose: To integrate and manage all of the core business processes of an organization, such as finance, HR, manufacturing, and supply chain, in a single system.
  • Goal: To provide a “single source of truth” for the entire organization and improve operational efficiency.

2. Supply Chain Management (SCM)

  • Purpose: To manage the flow of goods, data, and finances related to a product or service, from the procurement of raw materials to the delivery of the final product to the end customer.
  • Goal: To improve the efficiency and effectiveness of the supply chain to reduce costs and increase customer satisfaction.

3. Customer Relationship Management (CRM)

  • Purpose: To manage all of a company’s relationships and interactions with its current and potential customers.
  • Goal: To improve business relationships in order to drive customer loyalty, retention, and revenue growth.

Summary

E-business encompasses all online business activities, with e-commerce being a key subset. To support the complexity of modern e-business, organizations rely on large-scale enterprise systems. The three main types are ERP systems, which integrate all core internal processes; SCM systems, which manage the flow of goods and services with partners; and CRM systems, which manage all interactions with customers.

Key Takeaways

  • E-business is broader than e-commerce and includes all online business activities.
  • Enterprise systems are large, integrated systems that span the entire organization.
  • ERP integrates internal processes, SCM manages external supply partners, and CRM manages customers.

Discussion Questions

  1. Is a company’s internal employee portal an example of e-business? Why or why not?
  2. How do ERP, SCM, and CRM systems work together?
  3. Can a small business operate without any enterprise systems? What challenges might it face?