e-commerce and erp
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E-COMMERCE AND ERP The evolution of business increased the pace of its activities, including interactive relationships between customers and suppliers and distributors, commitment with their employees and society, competing with their rivals and reporting the Government and many more. All of the above activities made business more complex in terms of their performance, disclosing and sharing of information. The information flow is vital for the business’s operations, the flow of information may be vertical, cross-business, and integration of technology with modestly redesigned processes for order handling, purchasing or customer service. The speed of information flow towards external parties directly depends upon the generation of information done by internal parties to business, e.g., if one customer order for particular good (let say A) to the marketing department, but because of lack of information from the either production or logistic department marketing department failed to provide the information to customer which may not be in favor of business, may be lost of customer. The contemporary need of free-flow, accurate and speed of information is much more needed as compare to earlier information system. It is very clear from the above discussion that there are two way of information flow one is outbound and second is inbound information. E-commerce, E-business and ERP are those techniques which disseminate the information as per the need of hour. The word ‘E’ in case of commerce and business refers to the electronic exchange of information. The ERP means Enterprise Resource Planning. Where e-commerce and e-business are different concept of channelizing the information, on other hand ERP is software that assist to e-commerce and e-business in generation, storage, sorting and dissemination of information. E-commerce emphasizes on selling, distribution and making purchase from suppliers. E-business includes e-commerce but also covers internal processes such as production, inventory management, product development, risk management, finance, knowledge management and human resources. E-business strategy is more complex, more focused on internal processes, and aimed at cost savings and improvements in efficiency, productivity and cost savings. And, ERP system are the software tools used to manage enterprise data across the different functions. An ERP system is a packaged business software system that allows a company to “automate and
integrate the majority of its business processes; share common data and practice across the enterprise; and produce and access information in a real-time environment.” e.g., you want to purchase one attractive T-shirt of reebok simply click on mouse and cart your order, make payment through credit-card or debit the amount from your internet banking on-line, after the specified period your order will be shipped to you. In this example there are three activities involved and two out of them are to be done electronically. a. ordering T-shirt is an activity refers to e-commerce, b. transferring the amount as payment refer to e-business, why??? Because you are directing to your banker (a business party) to debit or transfer the amount to reebok company (the second business party). c. the shipment of the order is the part of either supply chain management or logistic system. However you made an order of physical good that cannot be transfer electronically that’s why it has to be done physically. But this only one example, if you want to purchase a software or download a movie from youtorrent by paying chargeable amount that can be delivered on-line. Now, as we know the function of each department is different like production, finance etc., how to console all these function so if one would know to the proceedings of others. For example marketing department get an order of 500 units of a commodity and promise to the customer S KUMAR to dispatch the order after two days without having information regarding stock. Assume that in a working day only 75 units can be produce. When marketing department called to stock manager they shocked to know that they have only 150 units in the stock. What to do????? When finance department came to know that we contract with S KUMAR and he is big defaulter to make payment. What to do??? That would have been better if marketing department well aware of about customer S KUMAR in advance. This cause seems the lack of information between all the functions of business. Ecommerce, however, only assist how to sell, purchase and promote electronically. E-business
assists along with e-commerce, how to produce electronically how to exchange information between two different business parties? But how to console all these functions electronically is assisted by ERP. The difference between e-commerce and ERP can be done as follows:Basis Meaning
E-commerce e-commerce is a concept electronic
services and information of Outbound information
ERP of ERP is a software system which enables e-
goods, commerce to execute itself. or Internal as well as external information is
information towards external to considered.
business is being given importance. Important to Important to and being implemented Important for all levels of management whom
by strategic and tactic level of from operational to strategic level.
management. Training to Since e-commerce is not technical Training to staff is necessary before getting end-users Online
anyone who is computer savvy can any benefit from the ERP make use of it. or E-commerce cannot work without ERP can work with or without internet or
internet or extranet.
extranet but LAN should be there always.
e-commerce depends upon other ERP in itself is software package which software packages to store data and collect, analyze, sort, record the database buildup database e.g., MS-ACESS along with data warehousing and data
or JAVA etc. mining. e-commerce work differently for One ERP solve all the problem of business
different function of same business
through different module. Module is the sub-system of ERP according to function of the business like finance module,
marketing module etc., Dependency It is difficult to execute e-commerce ERP is one of the concepts to assist efunction without e-business and commerce, so ERP in isolation is no Cost
ERP important to implement. e-commerce is less costlier almost Only large organization can afford the cost negligible as compare to ERP
of ERP software, even they have to done
cost-benefit analysis before implementing Data
ERP. e-commerce is not as much secured ERP is sensitive, only specified end-user
as an ERP
can make use of ERP and only for their own-domain, for example the strategic information will not be disclosed at any cost, and however it is consoled or interlinked software. That can be used only
by specified users only not by all. and ERP is useful across the functions of the
finance, storage and distribution e- business starting from customer order and
commerce is not useful and not their request and query to production as per
being used as well.
categorizing customer according to their loyalty,
management and many more.