Chapter 8: Transaction Processing, E-Commerce,

Chapter 8

Transaction Processing, Electronic Commerce, &

Enterprise Resource Planning Systems

Chapter 8 IS for Management2

TPS, MIS, DSS, and AI/ES (Figure 8.1)

Transaction Processing Systems (TPS)Perform routine operations & serve as a foundation for other systems

TransactionsBasic business operations such as customer orders, purchase orders, receipts, time cards, invoices, & payroll checks in an organization


Batch vs. On-Line Transaction Processing (Figure 8.2)

Batch ProcessingA system in which business transactions are accumulated over a period of time & prepared for processing as a single unit or batch

On-Line Transaction Processing (OLTP)A system whereby each transaction is processed immediately, without the delay of accumulating transactions into a batch


Integration and Objectives of TPS

Integration of TPS (Figure 8.3)

Objectives of TPS– Process data generated by & about transactions– Maintain a high degree of accuracy– Ensure data & information integrity and accuracy– Produce timely documents & reports– Increase labor efficiency– Help provide increased & enhanced service– Help build & maintain customer loyalty


Simplified Overview of TPS (Figure 8.4)


DP Activities Common to TPS (Figure 8.5)

A Transaction Processing Cycle– Data Collection– Data Editing– Data Correction– Data Manipulation– Data Storage– Document Production

Source Data Automation: Process of capturing data at its source with minimal manual effort, entered directly into the computer without human intervention


Control and Management Issues

Business Resumption Planning: Process of

anticipating & providing for disasters Disaster Recovery: Implementation of the business

resumption planTPS Audit: Examination of the TPS in an attempt to

answer 3 basic questions• Does the system meet the business need?• What procedures & controls have been established?• Are the procedures & controls being properly used?


Traditional TPS Order Processing (Figure 8.7)

Order ProcessingProcessing an order from entry to delivery, including traditional accounting transactions


Enterprise Resource Planning (ERP) (Table 8.5)

ERP: Real-time monitoring of business functions across the enterprise

Avalon Software Avalon CIMqad.inc MRG/PROOracle Oracle ManufacturingSAP America SAP R/3Baan TritonPeopleSoft PeopleSoftJ.D. Edwards World

Software Vendor Name of Software


Enterprise Resource Planning

Advantages– Eliminate costly, inflexible legacy systems– Provide improved work processes– Provide access to data for operational

decision making– Upgrading technology infrastructure

Disadvantages– Time consuming, difficult, expensive to

implement– Make radical changes in how a company

operates– Lack of vendor responsiveness in light of

high demand


Example of an ERP System - SAP/R3

Clients in the SAP system Application servers in the SAP system Business application programming interfaces

(BAPIs) Database server in the SAP system Objects in the SAP system Repository Tables


SAP Three-Tier Client/Server Architecture (Figure 8.24)

Database servers hold data that are accessed & updated in real-time

Applications servers are used to execute client requests & to update master files

Client desktop computers: The R/3 system is able to support hundreds or thousands of clients (e.g., Pentium PCs)


Business Application Programming Interface (BAPI) (Figure 8.25)


Chapter 8 Case

Case 3: FedEx and SAP team up (pp. 385-86)


Electronic Commerce (E-Commerce)

Business-to-business problems– Inadequate models

– Integrating with existing systems

– Improving relationships with suppliers, customers, & distributors

Consumer problems– Waiting for images to download

– Security of credit information

– Figuring out the ordering process

Currently a small part of all commerce


5 Stage Model of E-Commerce (Figure 8.22)

Stages consumers experience in the sales life cycle:1. Search for & identify supplier(s)

2. Selection & negotiation

3. Purchasing

4. Product & service delivery

a) traditional delivery

b) electronic distribution

5. After-sales service


Forecasted Volume of E-Commerce

Consumer E-Commerce $0.5 billion $ 7 billionBusiness-to-business E-Commerce $8.0 billion $66 billion

1997 2000


Purchasing Products & Services Electronically

Establish credit with suppliers Secure E-Commerce transactions

– Secure credit transactions• Secure Financial Transaction (SET)• Secure Sockets Layer (SSL)• Others

– CyberCash• Electronic wallets, purses, etc.• Digicash options


E-Commerce

Everything you know about e-commerce is WRONG!– CEOs still have control– Online revenues do matter for justifying infrastructure– Profitability is good– It isn’t just clicks versus mortar– Business models may be different– Indirect channels are crucial partners– Going global includes importance of local image– Speed, speed & more speed


E-C Components & Principles (1)

Search engines Portals Virtual community Topical sites Site design

– Ease of use (linking structure, intuitiveness)– Robustness

Push vs. Pull– Push: Web sites can push customized information to

consumer/business– Pull: Consumers/businesses have to search for

information/product/service



Security– Firewalls

– Encryption

– Cookies

– Privacy considerations

• Collecting data

• Changing data (includes merging data)

• Notification of potential uses of data

• Permission to use data for purposes not originally intended



E-Markets– Consumer auctions

– B2B auctions & brokers

– Travel services

– One-click process patented

E-Payments– Cybercash

– Credit cards



Applications– Bill paying– Education– Elections– Entertainment– Extranets– Intranets– Productivity tools– Purchasing– Research


EC & Customer Service

Customer service– 4 out of 5 online purchasers have experienced a failed

purchase

– 25% of those frustrated say they will never go back

– 8% rate of abandonment


EC: Where To Now???

What are trends? What are technological advances? Push vs. Pull

– Push: Advances in technology push applications for the technology to be used

– Pull: Business/consumer needs pull the technology to be developed to meet the needs

Permanence of the Web as “information space” (Tim Berners-Lee, 1999)

Documents

Chapter 8: Transaction Processing, E-Commerce,