Business Information Systems (Technology, development and management for the e-business.
Business Information Systems is business on the Internet for the benefit of all. It is essentially electronic business. The horizon of e-business encompasses the globe, free from the limited scope of customary bricks and mortar shops. It is the selling of products and services online, which is termed also as e-commerce.
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Although the term “electronic commerce” is related more with business to consumer (B2C) applications IT has enabled this to cross over into the business-to-business (B2B) field as well. Through business information systems, purchasing processes are contoured to handle orders and their delivery, thus resulting in minimal paper work and labour required. Earlier, it was a practice to do business in hard copy for invoices and purchase orders. Now, documents in bulk, with particular format or data keying, are transferred electronically. A business can manage its Catalogue online by maintaining it up-to-date and current on its supplies, prices, discounts, without reprinting its catalogues.
The Fine food Company, an established name in the food industry has finally made up its mind to run its business activities on the escalator of latest technology, to keep abreast with the changing times. Earlier, it was operating its business on a paper-based traditional set up. The company wants to increase its turnover by 10% and net profits to 9 per cent and hopes to be accredited for BS5750 within next 6 months.
This decision of the management of the Fine Food Company (FFC) will certainly increase its reputation. A food conglomerate has to cater to a varied customer base through its shops and supermarkets, catering to standard and priority orders for quick delivery. A food company, working in a traditional set up has to handle its sales activities through its sales persons, who receive orders, payments, see through the orders to their fulfillment and answer routine questions. Customers are categorized geographically, depending on a customer’s type and product demand. A sales head can change his mindset to change a customer into a different category at any moment.
The Fine Food Company has appointed an Information systems expert, to manage the affairs of the smooth running of its newly created IT department. In a paper-based communication, order processing can be quite a cumbersome procedure to follow. Order copies have to be retained by sales people and sent to the warehousing and distribution departments in date-wise format so that at the time of delivery, they are accompanied with an invoice and consignment note. The delivery man has to bring back a signed copy of the consignment.
Warehousing involves keeping the produce in different temperature zones and shifting the goods to different locations, upkeep of raw products and finished goods. Card files have to be maintained manually whenever updating is required. David Jenkins has to see that all these complexities can be removed by opting for different solutions that go along with the FFC scheme to incorporate those software solutions with a range of proprietary software like Epicor eWarehouse. A food company’s manufacturing process involves simple repackaging to not so simple enlisting of detail of different recipes. Keeping this in mind, software should integrate with the central system. To run a micro supply chain, different interfaces are required for the stability of the product. Otherwise, the finances of a food company that is still working on obsolete, labour intensive framework, could be quite complex to handle.
Accounts payable are managed with a manual purchase ledger. Financial accounting has to be done by following the legal accounting requirements and Management accounting, which is must to know the inside of the food joint’s accounting information – essential to control a company’s finances. All this requires up-to-date maintenance of manual sales ledger and preparation of weekly reports on the customer’s financial records.
Inventory was also checked against its distributor’s location. FFC has multiple distributors, having varied processes at their locations. An e-business food company like Fine Foods may want to know the details of their product’s price, name of the buyer and the location. Software solutions like Epicor provide a mirror to adjustment transactions. “Epicor eWarehouse has enabled us to mirror our inventory in remote locations, and we have automated the process of the shipping and receiving of data,” says Cummings of B.C. Hot House.
Working of a food house is complex in nature. Farmers sell their products to them; suppliers replenish the stock of packaging material. The entire process of managing the graded and semi-graded products of a range of growers is an uphill task. It involves putting the goods into bins, categorizing them into different packing material etc.
To fulfill the demand, and gain a competitive edge over other players in the food industry, FFC has numerous options and tools to choose from like e-business software solution providers Movex B2B solutions. Core ERP solutions offer dialogue with the customers and add value to the business through information via the Internet.
Another important tool in the e-commerce arena is Data Synchronization. Leading food giant companies are pushing their suppliers to enlist for electronic data interchange (EDI). As there is a high risk of committing errors in maintaining data manually because different departments have no identical way to save product information. Labour intensive methods of compiling and reconciling the data are prone to human errors. The example of Wal-Mart in data synchronization is a prime example for the Industry to follow. Randy Salley, Vice President of Wal-Mart Information Systems has supported the industry standards set by the GSMP choosing UCCnet as their GS1 GDSN Certified recipient data pool. Implementation of this technology is going to result in exact purchase orders, better invoice matching, better than before replacement of stocks. The process has been made easier than before with the arrival of IBM, GXS and other players developing Product Information Management (PIM) systems.
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There is the example of Sun Valley Foods, a Division of Cargill, which has also opted for B2B to improvise on its food product’s development and distribution. It has gone for Supply Chain Management (SCM) as well. The software solution has facilitated a safe hosting extranet along with a personalized portal interface, allowing space for product packaging, marketing and research. It will result in better collaboration between different departments such as warehousing, distribution and sales, removing hindrances like determination of the status of an order, late delivery, incomplete orders and wrong products, which were faced earlier. Now, Warehousing would be prioritizing big orders to small ones to speed marketing and on the whole transaction flow. The information technology platform offers a centralized web-based repository of reporting tools, resulting in no manufacturing delays. The SCM technologies improve the grading of a product as well as its marketing timing.
The Internet facilitates the booking of orders at once to all departments, to proceed to realize it without getting involved in lengthy phone calls. Websites are used as a marketing tool, to offer the retail customers a place to visit the gallery of products and a platform for wholesalers for ordering information, an online catalogue and online order forms. All this is not possible on a traditional platform of working through hard copy. Now, orders are placed with a user name and password and then forwarded to fill an online purchase form.
In fact, it is a wonderful example of assimilation of technology – developed and managed efficiently. Intranets help sales people to know the current financial and sales effect. Real-time financial reports can be generated, eliminating the scope of incomplete sales returns, making Management Accounting an easy task, as accurate information can be accessed and forwarded to all departments. Late publishing of accounts, due to wrong information, is never an issue. Internet and intranet applications have resulted in solid savings and better efficiency. Within the company, the intranet financial report application gives the management sufficient time to go through information in the generated reports and work out a strategy/response accordingly.
Future Benefits – The Fine Food Company is hopeful to benefit by the introduction of the latest technology. Benefits include online access to latest information on the inventory, customer contact, credit status, order position and online nets. It will offer to work on system-to-system basis with big clients who have their own ERP solutions, resulting in contouring of EDI process. XML will enable the swapping of invoices, buying orders and shipping notices straight to the clients, online.
Smaller customers will also benefit through e-business solutions via the Internet. As they don’t have ERP systems, companies would be able to offer additional customer service through their reach to accounts and sales statistics information over the Internet. Big retailers would be able to forecast their demands through the Internet. Once this becomes possible allover the supply line, the company’s e-business infrastructure will be in a position to forecast their stock needs according to their actual demands, resulting in optimization of stocks. Companies can march towards appreciable consumer response and Vendor Managed Inventory, enjoying the benefits of technology and development processes. Future forecasting for large retailers is quite bright, as e-business infrastructure will enable them to place their orders straight to the supplier, through the Internet.
Conclusion: The trend of opting for e-business is catching speed. Businesses are using different forms of Internet-supported services like e-procurement, e-mailing and websites, saving a great deal of time and cost. A business can solve its customer’s technical — hardware and software problems by working on virtual computer systems. This trend is going to continue with the advent of latest technologies like Internet enabled cell phones and PDAs.
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