E-BUSINESS SYSTEMWritten By:

Laura Deswita Fonna 1201103040016Laura.deswitafonna@gmail.com

Muhammad Khaidir 1201103040003Khaidir.iap@gmail.com

Raihan Iskandar 1201103040016icaaiskandar@gmail.com

INTERNATIONAL ACCOUNTING PROGRAMFACULTY OF ECONOMYSYIAH KUALA UNIVERSITY2015

INTRODUCTIONThe explosion in the use of the Internet has paved the way for several path-breaking innovations. One of the most interesting and exciting aspects of this evolution is the emergence of electronic business (e-business) as a mainstream and viable alternative to more traditional methods of businesses being conducted today. E-business is defined as the process of using electronic technology to do business. It is the day and age of electronic business. Also the structure of the Web is rapidly evolving from a loose collection of Web sites into organized market places. The phenomena of aggregation, portals, large enterprise sites, and business-to-business applications are resulting in centralized, virtual places, through which millions of visitors pass daily. E-business has become standard operating procedure for the vast majority of companies. Setting up and running an e-business, especially one that processes a large number of transactions, requires technical, marketing and advertising expertise. Consumers like to access to products and services on a 24-by-7 basis, and the easiest way to provide that is to move operations online. The businesses that provide the most reliable, most functional, most user-friendly and fastest services will be the ones that succeed.

BUSINESS AND E-BUSINESSBusinessBusiness is an organization or enterprising entity engaged in commercial, industrial or professional activities. A business can be a for-profit entity, such as a publicly-traded corporation, or a non-profit organization engaged in business activities. Businesses include everything from a small owner-operated company such as a family restaurant, to a multinational conglomerate such as General Electric. To "do business" with another company, a business must engage in some kind of transaction or exchange of value with that company. In this sense, the word "business" can be used to refer to a specific industry or activity, such as the "real estate business" or the "advertising business".

History Of Business1. FeudalismFeudalism is the business or economic systems in which in one class of people (aristocrats) control the property rights to all valuable resources, including people. This system is the oldest of business scheme. It happened in Middle Ages around 500 1500 A.D. In this era, the writings of business had founded and the king had the complete control of this system. The evolution of tenant farming began in this era. To make their estates more profitable landowners assigned the most able workers to take control of specific farms on their estates. The king would award his knights with manor and Land. The peasant (labor) work to pay for the land owned by the Knights. Then, the knights would provide food, shelter, and safety to the peasant. 1. MercantilismMercantilism is the business system in which products are traded across markets and countries until they are put to their most highly valued used. This system was created in the early 1500s by Greeks. From the time of the Phoenician traders onwards, there was a great deal of mercantilism between countries in the Middle East and Europe. They recognize an opportunity to profit from the difference in prices by trading commodities between one market and the next. Merchants and bankers are traders who notice a difference between the value and the price of commodities. This brought wealth to the countries that had the most natural resources to exchange. Few countries that use this system were United States, England and Europe. During the time, the Queen Elisabeth reigns the exchange of gold for resources was successful.

1. CapitalismCapitalism is the economic or business system in which the private ownership of resources becomes the bases for the production and distribution of good and services. In basic, capitalism can be explained by simply saying small-business owners could own merchant sale and produce it at a cheaper rate than their companies. Small companies could capitalize on the basic labor of workers by paying less money for more hours. The capitalist would make more money by forcing workers to work hard so that they can make more money.Capitalism gave rise to increasing conflicts between capitalist and workers. Capitalist are people who personally own or control the physical capital of industrial production such as machinery, factories and distribution networks, raw materials and technology. Capitalism started the social hierarchy. Capitalist has many negative overtones because of industrialists like Rockefeller and Carnegie. 1. E-BusinessE-Business is the powerful business environment that is created when we connect critical business systems directly to customers, employees, vendors, and business partners using intranets, E-Commerce technologies, collaborative applications and the Web. This systems is as an interchange of goods or commodities, especially on a large scale between different countries (foreign commerce)or between different parts of the same country (domestic commerce) trade; business. Business as commerce, occupation, and organization evolved to allow land, labor, capital, and enterprise to be used most productively and profitably.

E-business Electronic Business, also known as "e-Business" or "e-Business", is defined as the utilisation of information and communication technologies (ICT) in support of all the activities of business. Commerce constitutes the exchange of products and services between businesses, groups and individuals and hence can be seen as one of the essential activities of any business. Hence, electronic commerce or e-Commerce focuses on the use of ICT to enable the external activities and relationships of the business with individuals, groups and other businesses.

Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers.In practice, e-business is more than just e-commerce. While e-business refers to more strategic focus with an emphasis on the functions that occur using electronic capabilities, e-commerce is a subset of an overall e-business strategy. E-commerce seeks to add revenue streams using the World Wide Web or the internet to build and enhance relationships with clients and partners and to improve efficiency using the empty vessel strategy. Often, e-commerce involves the application of knowledge management systems. E-business involves business processes spanning the entire value chain: electronic purchasing and supply chain management, processing orders electronically, handling customer service, and cooperating with business partners. Special technical standards for e-business facilitate the exchange of data between companies. E-business software solutions allow the integration of intra and inter firm business processes. E-business can be conducted using the web, the internet, intranets, extranets, or some combination of these.Activities using e-Business tools include: Trading of goods or services online, such as e-Procurement, primarily through the web-sites; Electronic retailing (e-Tailing); Use of the internet, intranets or extranets to conduct research and manage business activities; Web-site marketing; Online communications, such as e-mail; and Online training for staff (e-Learning).E-Business tools include: Mobile phones; Personal digital assistants (PDA); Electronic Data Interchange; File transfer; Facsimile; Video conferencing, internet, intranets and extranets.Enterprise Business SystemEnterprise systems (ES)are large-scaleapplication softwarepackages that support business processes, information flows, reporting, and data analytics in complex organizations. While ES are generally packaged enterprise application software (PEAS) systems they can also be bespoke, custom developed systems created to support a specific organization's needs.Types of enterprise systems include: enterprise resources planning (ERP) systems, enterprise planning systems, and Customer relationship managementsoftware.Althoughdata warehousingorbusiness intelligencesystems are enterprise-wide packaged application software often sold by ES vendors, since they do not directly support execution of business processes, they are often excluded from the term.Enterprise systems are built on software platforms, such as SAPsNet Weaverand Oracle'sFusion, and databases.From a hardware perspective, enterprise systems are the servers, storage and associated software that large businesses use as the foundation for their IT infrastructure. These systems are designed to manage large volumes of critical data. These systems are typically designed to provide high levels of transaction performance and data security.

Cross Functional Enterprise SystemCross functional is a term that refers to efforts that span various departments or tasks in an organization, with an eye toward accomplishing a common goal. In project management, cross functional (cross-functional) is an approach to work in which team members come from different areas of an organization and have different skill sets.A cross functional team places less emphasis on the members' specific roles within the organization and more emphasis on communication and working together to accomplish organizational. For example, adata scienceteam might include a business analyst, a quality engineer and the product managers from different divisions within the organization who will be using the data. Or a software development team for a new vendor offering may include theexecutive sponsorand marketing manager as well as the product, a technical writer, a database manager and the software development team.Setting up a cross functional team can be a challenge forproject managers. Without having worked previously with the individuals involved, it can be difficult to balance the team'ssoft skillsandhard skillsand not end up with too many individuals who have similar skill sets while neglecting other possible team members that would aid the team's goal.All business processes must be supported by cross-functional information system that crosses the boundaries of several business functions. Many companies are moving one step ahead and trying to install integrated cross-functional client-server applications. They are typically falling in these categories: Enterprise applications integration (EAI) Enterprise resource planning (ERP) Supply chain management (SCM) Customer relationship management

Supply Chain ManagementA Supply Chain is a network of supplier, manufacturing, assembly, distribution, and logistics facilities that perform the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these products to customers. Supply chains arise in both manufacturing and service organizations.Supply Chain Management (SCM) is a systems approach to managing the entire flow of information, materials, and services from raw materials suppliers through factories and warehouses to the end customer. SCM is different from Supply Management, which emphasizes only the buyer-supplier relationship. All organizations have supply chains of varying degrees, depending upon the size of the organization and the type of product manufactured. These networks obtain supplies and components, change these materials into finished products and then distribute them to the customer. The supply-chain is the all-inclusive set of links into an end-to-end business process, for example: From the need to the fulfillment From order to delivery From raw materials to shipping From order to cash From an inquiry to a satisfactory response

Customer Relationship ManagementCustomer Relationship Management (CRM) is concerned with the creation, development and enhancement of individualized customer relationships with carefully targeted customers and customer groups resulting in maximizing their total customer life-time value. It is a business strategy that aims to understand, anticipate and manage the needs of an organizations current and potential customers. And also, it is a comprehensive approach which provides seamless integration of every area of business that touches the customer- namely marketing, sales, customer services and field support through the integration of people, process and technology.CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers. The expression CRM is becoming standard terminology, replacing what is widely perceived to be a misleadingly narrow term, relationship marketing. The purpose of CRM: The focus of CRM is on creating value for the customer and the company over the longer term. When customers value the customer service that they receive from suppliers, they are less likely to look to alternative suppliers for their needs. CRM enables organizations to gain competitive advantage over competitors that supply similar products or services.Todays businesses compete with multi-product offerings created and delivered by networks, alliances and partnerships of many kinds. Both retaining customers and building relationships with other value-adding allies are critical to corporate performance. The adoption of C.R.M. is being fuelled by recognition that long-term relationships with customers are one of the most important assets of an organization.CRM developed for a number of reasons: The 1980s onwards saw rapid shifts in business that changed customer power. Supply exceeded demands for most products Sellers had little pricing power The only protection available to suppliers of goods and services was in their relationships with customers.CRM involves the following: Organizations must become customer focused Organizations must be prepared to adapt so that it take customer needs into account and delivers them Market research must be undertaken to assess customer needs and satisfaction.

Enterprise Application Integration EAI (enterprise application integration) refers to the plans, methods, and tools aimed at modernizing, consolidating, and coordinating the computer applications in an enterprise. Typically, an enterprise has existing legacy applications and databases and wants to continue to use them while adding or migrating to a new set of applications that exploit the Internet, e-commerce, extranet, and other new technologies. EAI may involve developing a new total view of an enterprise's business and its applications, seeing how existing applications fit into the new model, and then devising ways to efficiently reuse what already exists while adding new applications and data. Enterprise application integration (EAI) entails integrating applications and enterprise data sources so that they can easily share business processes and data. Integrating the applications and data sources must be accomplished without requiring significant changes to these existing applications and the data. Before EAI, integrating applications and data within a corporate environment has been an expensive and risky proposition.

Enterprise ApplicationEAI Software EAI software enables users to model the business processes involved in the interactions that should occur between business applications. EAI also provides middleware that performs data conversion and coordination, application communication and messaging services, and access to the application interfaces involved. Thus, EAI software can integrate a variety of enterprise application clusters by letting them exchange data according to rules derived from the business process models developed by users. For example, a typical rule might be: When an order is complete, have the order application tell the accounting system to send a bill and alert shipping to send out the product. EAI Software Connects Major e-Business Applications Like CRM and ERP.

Transaction processing systems Transaction processing systems capture and process data describing business transactions. Then they update organizational files and databases, and produce a variety of information products for internal and external use. A transaction processing cycle consists of several basic activities, which involve: Data entry activities Transaction processing activities Database maintenance activities Document and report generation Inquiry processing activities.a) Data entity ActivitiesPurpose of TPS is to capture, store and process data pertaining to all transaction. The input activity in TPS involves a data entry process. In this process, data is captured or collected by recording, coding, and editing activities. Trend: Move from traditional (manual) data entry systems toward source data automation (automated systems). The reason for this trend is that direct methods are more efficient and reliable than manual systems. Examples of devices used in data automation include: Point-of-sale (POS) transaction terminals. ATM (Automated Teller Machine) terminals. Optical character recognition (OCR) scanners. PCs and network computers with cash drawers as intelligent POS terminals. Portable digital radio terminals and pen-based tablet PCs for remote date entry. PCs equipped with touch screens and voice recognition systems for data entry. Bar coded tags. Magnetic stripe cards. Electronic website on the Internet.b) Transaction processing activitiesTransaction processing systems process data in two basic ways:a. Batch Processing: Transaction data are accumulated over a period of time and processed periodically.b. Real-time Processing: (Also called online processing), where data are processed immediately after a transaction occurs. All online transaction processing systems incorporate real-time processing capabilities. Many online systems also depend on the capabilities of fault tolerant systems that can continue to operate even if parts of the system fail.c) Database maintenance activitiesAn organizations data must be maintained by its transaction processing systems so that they are always correct and up-to-date. Therefore, transaction-processing systems update the corporate database of any organization to reflect changes resulting from day-to-day business transactions.d) Document and report generationTransaction processing systems produce a variety of documents and reports. Examples of transaction documents include: Purchase orders Paychecks Sales receipts Invoices Customer statements. Transaction reports might take the form of a transaction listing such as a payroll register, or edit reports that describe errors detected during processing.e) Inquiry ProcessingMany transaction processing systems allow you to use the Internet, intranets, extranets, and Web browsers or database management query languages to make inquiries and receive responses concerning the results of transaction processing activity. Typically, responses are displayed in a variety of pre-specified formats or screens. Examples of queries include: Checking on the status of a sales order Checking on the balance in an account Checking on the amount of stock in inventory

Enterprise collaboration system An Enterprise Collaboration System (ECS) is an information system used to facilitate efficient sharing of documents and knowledge between teams and individuals in an enterprise. ECS tools include the Internet, groupware, various forms of software and hardware and internal and external networks. ECS functions optimally in a collaborative working environment (CWE).ECS solutions include a variety of enterprise communication tools, including email, video conferencing, project management software and collaborative software. ECS has facilitated the creation of the modern e-professional by enabling achieved goals of project teams, workgroups and participants. ECS allows team members to work from different physical locations, divisions, departments or remote areas.

Functional Business SystemFunctional business system is an information system that is intended to provide information relating to the companys business to a group of people who are in parts of the company.Marketing Systems Marketing Information Systems provide information technologies that support major components of the marketing function. Interactive Marketing Customer focused marketing process Based on using Internet, intranets, & extranets to establish two-way communications between customers or potential customers and the business Customers become involved in product development, delivery, & service issues

Market Research Statistical models help market researchers find the best populations for new and existing products Targeted Marketing Database management systems (DBMS) help define potential customers as narrowly as possibleFive targeting components of marketing systems Community: Customize their Web advertising messages and promotion methods to appeal to people in specific communities. Virtual communities. Content: Advertising such as electronic billboards or banners can be placed on various Web site pages, in addition to a companys home page . These message reach the targeted audience. Context: Advertising appears only in Web pages that are relevant to the content of a product or services. So advertising is targeted only at people who are already looking for information about a subject matter. Demographic/psychographic: Marketing efforts can be aimed only at specific type of class of people: unmarried, twenty-something , middle income , male college graduates Online behavior: Advertising and promotion efforts can be tailored to each visit to a site by individual. This strategy is based on Web cookie files recorded on the visitors disk drive from previous visits.Sales Force Automation The sales force is connected to marketing websites on the Internet, extranets, & the company intranet Equipping salespeople with information technology to facilitate productivity IT allows salespeople to present different options for products and services on the spot. Increases productivity of sales force Speeds up the capture & analysis of sales data. Allows management to provide improved delivery information & better support of the sales force.

Manufacturing systems. Support the production/operations function Assists firms in, Planning, monitoring, & controlling inventories, purchases, & the flow of goods and services Plant activity scheduling Material requirement assessment Material reallocation between orders Resource qualification for task completion

Computer-Integrated Manufacturing (CIM)The manufacturing approach of using computers to control the entire production processObjectives of CIM Simplify production processes, product designs and factory organization as a vital foundation to automation and integration. Automate production processes and the business functions that support them with computers machines and robots. Integrate all production and support processes using computers telecommunications networks and other information technologies. Supports the concepts of flexible manufacturing systems, agile manufacturing, & total quality management Computer-Aided Engineering (CAE) Computer-Aided Design (CAD) Material Requirements Planning (MRP) Computer-Aided Manufacturing (CAM) Systems that Automate the production process Manufacturing Execution Systems (MES) Performance monitoring systems for factory floor operations Track, schedule, and control manufacturing processes Collect data such as: Hours machine operates every day of the month Hours the machine is idle and why MES includes shop floor scheduling and control, machine control, robots control, and process control systems. Process Control The use of computers to control an ongoing physical process Machine Control The use of a computer to control the actions of a machine. Also called numerical control

Accounting Systems.AISs automatically post transactions in the books and automate generation of reports for management and legal requirementsRecord and report business transactions and other economic events Online Accounting SystemsAccounting Information Systems are being affected by Internet and client/Server technologies. Using the internet ,intranets, extranets and other networks changes how accounting information systems monitor and track business activity. Six widely used accounting systems Order processing Captures & processes customer orders and produces data needed for sales analysis and inventory control Inventory Control Processes data reflecting changes in items in inventory. Helps provide high-quality service while minimizing investment in inventory & inventory carrying costs Accounts Receivable Keeps records of amounts owed by customers from data generated by customer purchases and payments Accounts Payable Keeps track of data concerning purchases from, and payments to, suppliers Payroll Receives and maintains data from employee time cards and other work records General Ledger Consolidates data received from accounts receivable, accounts payable, payroll, & other accounting information systems Electronic Data Processing (EDP) Audits Ensure electronic systems comply with standard regulations and acceptable rules Ensure systems cannot be manipulated to avoid acceptable principles

Financial information system. The job of financial managers is to manage money as efficiently as possible by: Collecting payables as soon as possible Making payments by the latest time allowed by contract or law Ensuring sufficient funds are available for day-to-day operations Taking advantage of opportunities to accrue the highest yield on funds not used for current activities Supports financial managers in decisions concerning The financing of the business The allocation & control of financial resources within the business. Major financial management system categories Cash Management Collects information on all cash receipts and disbursements on a real-time or periodic basis Investment Management Helps the financial manager make buy, sell, or hold decisions for each type of security Helps the financial manager develop the optimum mix of securities in order to minimize risk and maximize return Capital Budgeting Involves evaluating the profitability and financial impact of proposed capital expenditures Allows financial managers to analyze long-term expenditure proposals for plant and equipment Financial Forecasting & Planning Evaluate the present and projected financial performance of the company Help determine financing needs and analyze alternative methods of financing Explore what-if and goal-seeking questions

EXAMPLE & BENEFIT OF E-BUSINESSExample of E-businessThe Internet is a powerful tool for communication and research, but it also provides businesses with a means of connecting with consumers and generating income. Businesses that generate revenue primarily using the Internet are sometimes called e-businesses. E-businesses can vary greatly in terms of how they provide value to and earn income from consumers. Online businesses also known as e-businesses include traditional businesses, but can also include other more nontraditional business models. The Internet offers a place where anyone can start up a business and make money online with very little cash up front. Business models include a wide vary of markets and approaches where anyone can become successful if they work at it and keep their business website updated and fresh. Auction and Classified Sites Many successful e-businesses owners started out by selling products online via auction or classified sites. Some auction sites even allow you to create your own "store" to sell your goods online at discounted prices. Another business model may include finding items in disrepair, fixing them and selling them online. A good example of this is finding old bicycles, repairing or painting them, and selling them through a classified site or your own website.Digital and Affiliate Marketing One of the most common e-business models includes selling other people's products or services and receiving a commission for the sale. If you decide on the digital or affiliate marketing e-business model, you need to research specific product niches to create your own niche website to market these products. The Federal Trade Commission requires affiliate marketers to be truthful and honest on their recommendations, but many affiliate marketers have been able to successfully transition from full-time day jobs to working from home online using this model.

Freelance Services The Internet provides an excellent place to offer your freelance services to other business entrepreneurs. Whether creating websites for others, generating content for their websites, writing articles for their marketing efforts or selling your photos as a freelancer, the Internet has plenty of room for you to start a freelance e-business. With the explosion of e-book sales through various online retailers, a whole market has sprung up that needs freelance editors, book cover creators, graphic designers, ghostwriters and book marketers.Online Store Some website companies, for a small monthly fee, take all the hassle out of starting an online e-business. These companies typically provide you a domain name, an e-commerce shopping cart, website, marketing tools, reports and payment gateway without you having to obtain these items independently. These companies can even give you access to drop shippers, who send the products to your customers directly without you even having to maintain an inventory. Some of these companies even offer you the option to make your site compatible for mobile devices to increase your sales.

Advantages of E-business: 1. Removes location and availability restrictionsThe internet reaches across the world and spans all time zones. That means that when businesses take their operations online, they have the same capabilities. With a physical store, customers are limited by how close the store is and its hours of operation. E-businesses, on the other hand, are accessible from any area with internet access and open 24 hours a day. Additionally, with commerce on the rise, ebusiness has yet another advantage: being accessible to anyone with a mobile device. Customers are only limited by their mobile network coverage, which goes practically everywhere.

2. Reduces time and money spentWith bills for rent, electricity, telephones and general office upkeep, expenses for physical locations can start to pile up. By taking your business online, you reduce or eliminate a lot of these overhead costs. Plus, things get a lot easier from a logistical standpoint, since one person can do the work of several people. Take mass communicating with customers, for example. Sending a bulk email to a list of customers is easier than sending out 100 direct mailings (paper, postage, staff, etc.). In addition to customer-facing processes, inside processes also become friendlier on the pocketbook when going online. For example, transaction costs are lessened, since theres no need to hire a cashier when shopping cart software lets customers check out themselves. And if thats not enough, ebusiness marketing is often more affordable too, as online advertising tends to cost less than traditional marketing channels.3. Expedites customer serviceWhen customers contact you, they want answers fast. Thanks to email and live chat software, ebusinesses have no trouble fulfilling that need. Plus, these flexible forms of customer service can extend past a physical stores hours of operation. Ebusinesses also offer the convenience of delivering products straight to a customers front door, no braving of traffic needed.4. Shows you how to improveWhen it comes to learning more about your customers, a physical store is no match for an ebusiness. With tools like Google Analytics, its much easier to access information on your sales and customers, at no extra cost. Want to know how a product has fared over the past three months? What about how many returning customers youve had? Unless youre doing some extreme record-keeping, you dont have easy access to this kind of data with a brick and mortar store. This data gives insight into your customers buying behaviors and interests, which is invaluable to improving your business.

5. Keeps your business relevantThe internet is a big part of our lives, and isnt showing signs of leaving anytime soon. Opening an ebusiness keeps you in touch with whats current: it levels the playing field and gives you the resources needed to compete in todays increasingly digital marketplace. For example, having an online presence on social media websites is a big part of getting your name out there. To stay relevant, businesses need to consistently post content on these outlets that interest their consumers. Whats more relevant than the latest online sale or contest?When it comes to ebusiness, both the consumer and the business reap the benefits. Being online makes a business convenient, accessible, affordable and better equipped to help its customers, and when businesses are focused on benefiting their customers, everyone wins.

Conclusion

References :James hall, Accounting Information system, Cengage Learning, Australia, 2008Dave Chaffey, E-business and E-commerce Management 4th Edition, marketing insights limited, 2009james o brien, George m. marakas Management information systems, ,( http://www.sltda.lk)(http://www.techopedia.com)Examples of E-Business: (http://www.ehow.com)(http://onlinebusiness.volusion.com)