Transaction Processing & Enterprise Resource Planning Systems

Chapter 9

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Chapter 9 Outline

• An overview of Transaction Processing Systems

• Traditional Transaction Processing Applications

• Enterprise Resource Planning

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An Overview of Transaction Processing Systems

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TPS, MIS/DSS, and Special Information Systems

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Traditional Transaction Processing Methods & Objectives

• Batch processing systems• On-line transaction processing (OLTP)• On-line entry with delayed processing• Process data generated by and about transactions• Process data generated for and about transactions• Maintain a high degree of accuracy and integrity• Produce timely documents & reports

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Traditional Transaction Processing Methods & Objectives

• Increase labor efficiency• Help provide improved service• Help build and maintain customer loyalty• Achieve competitive advantage

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Batch versus On-Line Transaction Processing

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Integration of a Firm’s TPSs

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Examples of Transaction Processing

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Transaction Processing Systems

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Transaction Processing Activities

• Data collection– Should be collected at source– Should be recorded accurately, in a timely

fashion

• Data editing

• Data correction

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Document Production and Reports

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Control & Management Issues

• Business resumption planning• Disaster recovery

– Backups

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Transaction Processing Audit

• Does the system meet its business requirements?

• Are there procedures and controls? • Are the procedures & controls properly used?

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Order Processing Systems

• Order entry• Sales configuration• Shipment planning• Shipment execution• Invoicing• Customer relationship management (CRM)• Routing and scheduling• Scheduling systems

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Document Production Reports

Traditional Transaction Processing Applications

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Order Processing Systems

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Order Processing Systems

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Order Entry System

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Shipment Planning

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Inventory Status Report

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Invoicing

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Customer Relationship Management

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The 15 Top-Rated CRM Software Packages

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Purchasing Systems

• Inventory control• Purchase order processing• Receiving• Accounts payable

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Purchasing Systems

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Accounts Payable

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Accounts Payable

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Accounting Systems

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Accounts Receivable

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Accounts Receivable Aging Report

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Typical Paycheck Stub

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Payroll Journal

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General Ledger

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General Ledger

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ERP Software Vendors

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International Issues

• Different languages and cultures• Disparities in information systems infrastructure• Varying laws and custom rules• Multiple currencies

Enterprise Resource Planning

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Enterprise Resource Planning

• Real-time monitoring of business functions• Supports human resources, sales, and

distribution• Accommodates the different ways each

company runs business

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Advantages of ERP

• Eliminates costly, inflexible legacy systems• Improved technology infrastructure• Improved work processes• Increased data access for decision making

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Disadvantages of ERP

• Expense & time• Radical change• Integrating with other systems• One vendor risks

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ERP System

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Business Application Programming Interface (BAPI)

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Summary

• Transaction Processing Systems - consist of all components of a CBIS, including databases, telecommunications, and people

• Transaction Processing Systems Methods - batch, on-line, and on-line with delayed processing

• Enterprise resource planning (ERP) software - a set of integrated programs that manage a company’s vital business operations for an entire multisite, global organization

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Principles and Learning Objectives

• An organization’s TPS must support the routine, day-to-day activities that occur in the normal course of business and help a company add value to its products and services.

– Identify the basic activities and business objectives common to all transaction processing systems.

– Describe the inputs, processing, and outputs for the transaction processing systems associated with order, purchasing, and accounting business processes.

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Principles and Learning Objectives

• TPSs help multinational corporations form business links with their business partners, customers, and subsidiaries.

– Identify the challenges that multinational corporations must face in planning, building, and operating their TPSs.

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Principles and Learning Objectives

• Implementation of an enterprise resource planning system enables a company to achieve numerous business benefits through the creation of a highly integrated set of systems.

– Define the term enterprise resource planning system and discuss the advantages and disadvantages associated with the implementation of such a system.

End of Chapter 9