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.
- Explain how ERP, SCM, and CRM work together in a business process.
- Identify the benefits and challenges of implementing enterprise systems.
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.
| E-commerce | E-business |
|---|---|
| Buying and selling online | All business activities conducted using internet technology |
| Customer-facing transactions | Internal and external processes |
| Example: ordering a phone on Daraz | Example: online ordering plus supplier portal, HR intranet, online support |
| A subset of e-business | The broader concept |
Examples of e-business activities: online recruitment, video meetings with suppliers, e-procurement, intranet portals for employees, online customer support chat, and e-banking with the company’s bank.
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.
- Examples: SAP, Oracle, Microsoft Dynamics 365, Odoo.
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.
- Features: demand forecasting, supplier management, warehouse and transport tracking, and order status sharing with partners.
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.
- Examples: Salesforce, HubSpot, Zoho CRM.
| System | Focus | Main users | Key question it answers |
|---|---|---|---|
| ERP | Internal processes | Finance, HR, production, purchasing | “What is happening inside our business?” |
| SCM | Suppliers and logistics | Purchasing, warehouse, logistics | “Will the right goods arrive at the right time?” |
| CRM | Customers | Sales, marketing, customer service | “Who are our customers and how do we keep them?” |
How They Work Together: Order to Delivery
flowchart LR
C[Customer order captured in CRM] --> E[ERP checks stock and credit]
E --> S[SCM plans purchase and delivery]
S --> D[Goods delivered]
D --> F[ERP records invoice and payment]
F --> C2[CRM updates customer history]
- A salesperson records a dealer’s order in the CRM.
- The ERP checks stock and the dealer’s credit limit, and reserves goods.
- If stock is low, the SCM system orders raw materials from suppliers and schedules transport.
- On delivery, the ERP creates the invoice and records payment in accounts.
- The CRM updates the customer’s history for future offers and service.
Benefits and Challenges
| Benefits | Challenges |
|---|---|
| One integrated, consistent source of data | High cost of software, consultants, and hardware |
| Faster processes across departments | Long and complex implementation (often months or years) |
| Better planning and decision-making | Business processes may need to change to fit the software |
| Improved customer service and supplier coordination | Staff resistance and need for training |
| Easier compliance and reporting | Dependence on the vendor; risk if the system fails |
Cloud-based ERP and CRM (SaaS) have lowered the cost so that small and medium businesses can now use them on a subscription basis.
Nepal Context
Many large Nepali manufacturers, banks, and distributors use ERP systems — international products like SAP or Odoo, or locally developed ERP software — for accounting, inventory, and payroll, often with VAT-compliant billing. Banks use CRM tools to manage loan and deposit customers, and FMCG distributors track dealer orders across districts with sales apps linked to their ERP.
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. Together they connect a customer’s order to purchasing, delivery, and accounts, though implementation is costly and requires organizational change.
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.
- The three systems share data to support end-to-end processes like order to delivery.
- Enterprise systems bring integration and efficiency but are costly and complex to implement.
Discussion Questions
- Is a company’s internal employee portal an example of e-business? Why or why not?
- How do ERP, SCM, and CRM systems work together?
- Can a small business operate without any enterprise systems? What challenges might it face?
Exam-Style Questions
Short answer
- Differentiate between e-business and e-commerce.
- What is ERP? Name two ERP products.
- What is the purpose of CRM?
Long answer
- Explain ERP, SCM, and CRM, and describe how they work together using an order-to-delivery example.
- Discuss the benefits and challenges of implementing enterprise systems in a Nepali company.
