RUPP Management Information System

Information System Analysis

(ISA)

Lecturer :Lim Lyheng

Email: [email protected]

Tel: 097 57 88881

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Lecturer: Mr. Lim Lyheng ( Mse in Computer Application Technology, China)
RUPP Management Information System

Chapter 9
Transaction Processing
and Enterprise Resource
Planning System

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Lecturer: Mr. Lim Lyheng ( Mse in Computer Application Technology, China)
Principles and Learning Objectives
 An organization must have information
systems that support routine, day-to-day
activities and that 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 transaction processing systems
associated with the order processing,
purchasing, and accounting business
functions 3
Principles and Learning Objectives
(continued)
 A company that implements an enterprise resource
planning system is creating a highly integrated set
of systems, which can lead to many business
benefits
 Discuss the advantages and disadvantages
associated with the implementation of an enterprise
resource planning system
 Identify the challenges that multinational
corporations face in planning, building, and
operating their enterprise systems
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RUPP Management Information System

Why Learn Enterprise System?

Who know?

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Lecturer: Mr. Lim Lyheng ( Mse in Computer Application Technology, China)
Why Learn About Enterprise Systems because

 In our service-oriented economy:

 Outstanding customer service has become a
goal of virtually all companies
 Effective use of enterprise systems:
 Will be essential to raise the productivity of
your firm, improve customer service, and
enable better decision making

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An Overview of Transaction Processing
Systems
 Transaction processing systems (TPSs):
 Capture and process detailed data necessary to
update records about fundamental business
operations
 Include order entry, inventory control, payroll,
accounts payable, accounts receivable, general
ledger, etc.
 Provide valuable input to:
 Management information systems, decision
support systems, and knowledge management
systems 7
An Overview of Transaction Processing
Systems (continued)

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Traditional Transaction Processing
Methods and Objectives
 Batch processing system:
 Data processing in which business
transactions are:
 Accumulated over a period of time
 Prepared for processing as a single unit or
batch
 Online transaction processing (OLTP):
 Data processing in which each transaction is
processed immediately 9
Batch Processing Vs. Online Transaction Processing

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11
Traditional Transaction Processing
Methods and Objectives (continued)
 Organizations expect their TPSs to:
 Capture, process, and update databases of business data
 Ensure that the data is processed accurately and
completely
 Avoid processing fraudulent transactions
 Produce timely user responses and reports
 Reduce clerical and other labor requirements
 Help improve customer service
 Achieve competitive advantage

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Traditional Transaction Processing
Methods and Objectives (continued)
 A TPS typically includes the following
types of systems:
 Order processing systems
 Accounting systems
 Purchasing systems

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Traditional Transaction Processing
Methods and Objectives (continued)

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Transaction Processing Systems for
Small and Medium-Size Enterprises
(SMEs)
 Many software packages:
 Provide integrated transaction processing system
solutions for small and medium-size enterprises
(SMEs)
 Camp Logan Cement:
 Was able to get up and running in a month with
Intuit Enterprise Solutions
Transaction Processing Systems for
SMEs (continued)

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 Transaction Processing Activities
 TPSs:
 Capture and process data that describes
fundamental business transactions
 Update databases
 Produce a variety of reports
 Transaction processing cycle:
 The process of data collection, data editing,
data correction, data manipulation, data
storage, and document production
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Transaction Processing Activities (continued)

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 Data Collection
 Capturing and gathering all data necessary
to complete the processing of transactions
 Data collection can be:
 Manual
 Automated via special input devices
 Data should be:
 Collected at source
 Recorded accurately, in a timely fashion

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Point-of-Sale Transaction Processing System

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 Data Editing
 Checking data for validity and
completeness to detect any problems
 Examples:
 Quantity and cost data must be numeric
 Names must be alphabetic

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 Data Correction
 Reentering data that was not typed
or scanned properly
 Error messages must specify the
problem so proper corrections can
be made

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 Data Manipulation
 Performing calculations and other data
transformations related to business transactions
 Can include:
 Classifying data
 Sorting data into categories
 Performing calculations
 Summarizing results
 Storing data in the organization’s database for
further processing

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 Data Storage
 Updating one or more databases with new
transactions
 After being updated, this data can be further
processed and manipulated by other systems

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Document Production and Reports
 Generating output records, documents, and
reports:
 Hard-copy paper reports
 Displays on computer screens
 Results from one TPS can be inputs to another
system

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 Enterprise Resource Planning and
Customer Relationship Management
 Enterprise resource planning (ERP):
 Set of integrated programs that manage a
company’s vital business operations for an
entire organization
 Business process:
 Set of coordinated and related activities that
takes one or more kinds of input and creates
an output of value to the customer of that
process 26
Enterprise Resource Planning and Customer
Relationship Management (continued)

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An Overview of Enterprise Resource Planning

 ERP systems:
 Evolved from materials requirement planning
systems (MRP) developed in the 1970s
 Large organizations:
 The first to take on the challenge of
implementing ERP

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 Advantages of ERP
 Improved access to data for operational
decision making
 Elimination of costly, inflexible legacy
systems
 Improvement of work processes
 Upgrade of technology infrastructure

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 Disadvantages of ERP Systems
 Expense and time in implementation
 Difficulty implementing change
 Difficulty integrating with other systems
 Difficulty in loading data into new ERP system
 Risks in using one vendor
 Risk of implementation failure

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Leading ERP Systems

 No one ERP software solution from a single vendor

is “best” for all organizations
 SAP:
 Largest and most-recognized ERP solution provider
among Fortune 1000 and Global 5000 organizations
 Microsoft and SAP:
 Partnered in the development of Duet

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ERP for Small and Medium-Size Enterprises
(SMEs)
 Many SMEs elect to implement open-source ERP
systems
 Reasons for customization:
 Customization is needed for your other business
systems to work with the ERP package
 You need additional data fields and/or different
field sizes than what comes with the standard
system
 Customization is needed to meet regulatory
requirements
Supply Chain Management (SCM)
 A system that includes:
 Planning, executing, and controlling all
activities involved in raw material sourcing
and procurement
 Converting raw materials to finished
products, and warehousing and delivering
finished product to customers

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 Supply Chain Management (SCM)
(continued)
 Process for developing a production plan:
 Sales forecasting
 Sales and operations plan (S&OP)
 Demand management
 Detailed scheduling
 Materials requirement planning (MRP)
 Purchasing
 Production
 Sales ordering 34
Financial and Managerial Accounting and
ERP
 ERP systems:
 Do not work directly with production machines, so
they need a way to capture information about what
was produced
 Retailers as well as manufacturers:
 Use demand forecasting to match production to
consumer demand and to allocate products to stores

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Financial and Managerial Accounting and
ERP (continued)
 General ledger:
 Main accounting record of a business
 ERP system:
 Captures transactions entered by workers in
all functional areas of the business
 Creates associated general ledger record to
track the financial impact of the transaction

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Financial and Managerial Accounting and
ERP (continued)
 Financial accounting:
 Captures and records all transactions that
affect a company’s financial state
 Uses these documented transactions to
prepare financial statements to external
decision makers
 Managerial accounting:
 Provides data to enable the firm’s managers
to make decisions about current and future
operations 37
 Business Intelligence and ERP
 Business intelligence (BI):
 Gathering enough of the right information to shine
a spotlight on the organization’s performance
 Essential component of an organization’s ERP
system
 BI tools are used to:
 Access all the operational data captured in the ERP
database, analyze performance on a daily basis
 Highlight areas for improvement, and monitor the
results of business strategies

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Customer Relationship Management
 Goal is to understand and anticipate the needs of
current and potential customers
 Used primarily by people in:
 The sales, marketing, and service organizations to capture
and view data about customers and to improve
communications
 CRM software:
 Automates and integrates the functions of sales, marketing,
and service in an organization

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Customer Relationship Management
(continued)

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Customer Relationship Management
(continued)
 Key features of a CRM system:
 Contact management
 Sales management
 Customer support
 Marketing automation
 Analysis
 Social networking
 Access by smartphones
 Import contact data
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Customer Relationship Management
(continued)

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 Hosted Software Model for Enterprise
Software

 Many business application software vendors:

 Are pushing the use of the hosted software
model for SMEs
 Using the hosted software model:
 Means the small business firm does not need
to employ a full-time IT person to maintain
key business applications

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Hosted Software Model for Enterprise
Software (continued)

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 International Issues Associated with
Enterprise Systems

 Challenges that must be met by an enterprise

system of a multinational company include:
 Different languages and cultures
 Disparities in IS infrastructure
 Varying laws and customs rules
 Multiple currencies

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 Different Languages and Cultures
 In some cultures, people do not
routinely work in teams in a networked
environment
 Multinational companies:
 Can establish close connections with
their business partners
 Roll out standard IS applications for all
to use
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 Disparities in Information System
Infrastructure
 Lack of a robust or a common information
infrastructure can create problems
 Many countries’ telecommunications
services are controlled by a central
government or operated as a monopoly
 No incentives to provide fast and inexpensive
customer service

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 Varying Laws and Customs Rules
 Numerous laws can affect collection and
dissemination of data
 Examples:
 Labor laws in some countries prohibit
recording of worker performance data
 Some countries have laws limiting the trans-
border flow of data linked to individuals
 Trade custom rules between nations:
 North American Free Trade Agreement
(NAFTA) 48
 Multiple Currencies
 Enterprise system of multinational companies must
conduct transactions in multiple currencies
 Systems must:
 Be current with foreign currency exchange rates
 Handle reporting and other transactions
 Issue vendor payments and customer statements
 Record retail store payments
 Generate financial reports in the currency of choice

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 Summary
 Transaction processing systems (TPSs):
 Are at the heart of most information systems in
businesses today
 Batch and online processing:
 The collection of transactions into batches
 TPSs perform the following basic activities:
 Data collection, data editing, data correction
 Data manipulation, data storage, document
production

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 Summary (continued)
 Enterprise resource planning (ERP):
 Software that supports the efficient operation
of business processes
 Most firms use ERP systems to:
 Support financial and managerial accounting
and business intelligence
 Organizations are implementing CRM
systems to manage all aspects of customer
encounters
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RUPP Management Information System

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Lecturer: Mr. Lim Lyheng ( Mse in Computer Application Technology, China)
RUPP Management Information System

End of Chapter 9

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Lecturer: Mr. Lim Lyheng ( Mse in Computer Application Technology, China)