Transaction processing, functional applications & integration

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Chapter 7

Transaction Processing

Transaction Processing,

Functional Applications &

pp

Integration

Information Technology For Management 6

th

Edition

Information Technology For Management 6 Edition

Turban, Leidner, McLean, Wetherbe

Lecture Slides by L. Beaubien, Providence College

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Chapter Objectives

R l

f

i

l

d b

i

h

z

Relate functional areas and business processes to the

value chain model

z

Identify functional management information systems

z

Describe the transaction processing system and

demonstrate how it is supported by IT

z

Describe the support provided by IT and the Web to

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Chapter Objectives

(Continued)

Chapter Objectives

(Continued)

D

ib

h

id d b IT

d h W b

z

marketing and sales

z

accounting and finance

z

human resources management

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Functional Areas

– Value Chain

Perspective

The

value chain

m odel views act ivit ies in organizat ions

as eit her prim ary (

reflect ing t he flow of goods and

services

) or secondary (

support ing t he prim ary

)

h

l

f f

(5)

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Transaction Processing Information

S

t

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TPS

– Online Transaction Processing Systems

TPS

Online Transaction Processing Systems

z

With

OLTP

and Web technologies such as an extranet,

g

suppliers can look at the firm’s inventory level or production

schedule in real time. The suppliers themselves, in

partnership with their customers, can then assume

p

responsibility for inventory management and ordering.

z

Interactive Internet TPS

expands OLTP to provide

enhanced real time transaction processing over the

Internet or intranets. Multi-store chains can access a

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TPS

– Managing Production/Operations &

M a n a gin g Pr odu ct ion / Ope r a t ion s & Logist ics

g g

p

Logistics

The product ion and operat ions m anagem ent ( POM) funct ion in an

organizat ion is responsible for t he processes t hat t ransform input s

int o useful out put s. I n com parison t o t he ot her funct ional areas,

POM is very diversified as are t he support ing TPS. I t also differs

id

bl i

i

z

A few of the IT supported POM areas are:

{

In-house logistics and materials management

considerably am ong organizat ions.

{

In-house logistics and materials management

{

Planning production/operations

{

Computer-integrated manufacturing (CIM)

{

Computer-integrated manufacturing (CIM)

{

Product lifecycle management (PLM)

{

Automating design work and manufacturing

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TPS

Managing Production/Operations & Logistics

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TPS

I H

L

i ti

& M t i l M

t

TPS

– In-House Logistics & Materials Management

Logist ics m anagem ent deals wit h ordering, purchasing,

i b

d l

i t i

(

i i

)

d

t b

d l

i t i

inbound logist ics ( receiving) , and out bound logist ics

( shipping) act ivit ies. These logist ical act ivit ies cross

several prim ary and secondary act ivit ies on t he value

chain

z

Inventory management

determines how much

inventory to keep. Overstocking can be expensive;

d

t

k

diti

chain.

so are understock conditions.

z

Manufacturing

quality-control

systems can be

stand-alone systems or part of an enterprise-wide

stand alone systems or part of an enterprise wide

total quality management (TQM) effort. They

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TPS

– Planning Production/Operations

TPS

– Planning Production/Operations

POM

planning is a m aj or com ponent of operat ional syst em s

z Material Requirements Planning (MRP) is software that facilitates the plan for

purchasing or producing parts, subassemblies, or materials in the case of interdependent items. It integrates Master Production Schedules, BOM’s, and Inventory levels.

z Manufacturing Resource Planning (MRP II) adds functionalities to a regular MRP z Manufacturing Resource Planning (MRP II) adds functionalities to a regular MRP

system by determining the costs of parts and the associated cash flow. It also estimates costs of labor, tools, equipment repair, and energy while generating a requirements

report.

z J t i Ti S t i h th t tt t t i i i t f ll ki d z Just-in-Time Systems is an approach that attempts to minimize waste of all kinds

(space, labor, materials, energy, etc.) and to continuously improve processes and

systems. The JIT concept is used in mass customization and build-to-order environments. z Project Management. A project is usually a one-time effort composed of many

interrelated activities, costing a substantial amount of money, and lasting for weeks or years. Software tools such as: program evaluation and review technique (PERT) and the

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TPS –

Computer-Integrated Manufacturing

TPS

Computer-Integrated Manufacturing

CI M

is a concept t hat prom ot es t he int egrat ion of various com put erized

p

g

p

fact ory syst em s. I t has t hree basic goals: ( 1) t he

sim plificat ion

of all

m anufact uring t echnologies and t echniques, ( 2) aut om at ion

of as m any

of t he m anufact uring processes as possible, and ( 3)

int egrat ion and

coordinat ion

of all aspect s of design m anufact uring and relat ed

z

Typical integrated technologies are:

coordinat ion

of all aspect s of design, m anufact uring, and relat ed

funct ions via com put er hardware and soft ware.

{

FMS - Flexible-manufacturing systems

{

JIT – Just-in-Time

{

MRP – Materials Requirements Planning

{

MRP Materials Requirements Planning

{

CAD – Computer Aided Design

{

CAE – Computer Aided Engineering

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TPS –

Computer-Integrated Manufacturing

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TPS

Product Lifecycle Management

M a n a gin g Pr odu ct ion / Ope r a t ion s & Logist ics

TPS

– Product Lifecycle Management

PLM

is a business st rat egy t hat enables

PLM

is a business st rat egy t hat enables

m anufact urers t o cont rol and share product - relat ed

dat a as part of a product s design and developm ent

ff

t W b b

d

l h i

d t h

effort . Web- based supply chains and ot her

t echnologies are em ployed t o aut om at e t his

collaborat ive effort .

z

This electronic-based collaboration can reduce

{

product cost

{

travel expenses

{

costs associated with product-change management

{

time it takes to get a product to market

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TPS

– Product Lifecycle Management

M a n a gin g Pr odu ct ion / Ope r a t ion s & Logist ics

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TPS –

Marketing and Sales Systems

M a r k e t in g a n d Sa le s Syst e m s

TPS

Marketing and Sales Systems

Ch a n n e l syst e m s

are t he TPS involved in t he process of

get t ing a product or service t o cust om ers and dealing

w it h t heir needs. These syst em s link and t ransform

m arket ing, sales, procurem ent , logist ics, and delivery

t i it i

it h t h

t

f

t i

l

act ivit ies wit h ot her corporat e funct ional areas.

z

Some of the channel-system activities are:

y

{

customer relations

{

distribution channels and in-store innovations

{

marketing management

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TPS –

Customer Relations

TPS

Customer Relations

I t is e sse n t ia l for com pa n ie s t o k n ow w h o t h e ir cu st om e r s a r e a n d t o t t t h l I t i d t d i f l t r e a t t h e m pr ope r ly. I n n ova t ive pr odu ct s a n d se r vice s, su cce ssfu l pr om ot ion s, cu st om iz a t ion , a n d cu st om e r se r vice a r e a n e ce ssit y for

m ost or ga n iz a t ion .

z Customer Profiles and Preference Analysis Sophisticated information systems are z Customer Profiles and Preference Analysis. Sophisticated information systems are

being developed to collect data on existing and potential customers, their demographics (age, gender, income level), and preferences.

z Prospective Customer Lists and Marketing Databases.All firms need to know and track

h th i i ti d t ti l t Th ti t li t b

who their existing and potential customers are. These prospective-customer lists can be analyzed and sorted by classification for direct mailing, e-mailing, or telemarketing.

z Mass Customization. Today’s customers prefer customized products. Through mass customization, the practice of maintaining WIP inventory, manufacturers can offer different p g y product configurations at reasonable prices.

z Personalization. Special product offers are made, based on where the customer spent their time and on what they may have purchased.

Ad ti i d P ti S i l ti t d t th

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TPS –

Distribution Channels & In-Store Innovations

TPS

Distribution Channels & In Store Innovations

Organizat ions can dist ribut e t heir product s and services t hrough a variet y

of delivery channels A com pany m ay use it s ow n out let s m fg

of delivery channels. A com pany m ay use it s ow n out let s, m fg.

Represent at ives, or dist ribut ors ( t o nam e a few) .

z

IT-Supported Distribution Channels

{

Internet

{

Internet

{

Location Based Mapping

{

Self-service convenience stores

z

Improving Shopping and Checkout at Retail Stores

z

Improving Shopping and Checkout at Retail Stores

{

Hand-held wireless devices that scan the bar code UPC

{

Smart card or credit card

{

Information kiosk enable customers to view catalogs in stores

{

Information kiosk enable customers to view catalogs in stores

{

Self-checkout machines

{

Check-writers attached to cash registers

{

C

t i

ti

f

i

ti iti

i

t il t

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TPS –

Marketing Management

TPS

Marketing Management

Many m arket ing m anagem ent decision applicat ions are support ed by

y

g

pp

y

com put erized inform at ion syst em s.

z

Pricing of Products or Services.

Sales volumes are largely determined by the

prices of products or services as is profit.

p

z

Salesperson Productivity

.

Salespeople differ from each other in selling skill.

Sales-force automation increases salesperson productivity by providing them

with mobile devices, access to information, etc.

z

Profitability Analysis

profit contribution of certain products and services can be

derived from cost-accounting systems

z

Sales Analysis And Trends

. Marketing. TPS collect sales figures that can be

h d f

t

d

l ti

hi

searched for trends and relationships.

z

New Products, Services, and Market Planning

. New products and services can

be an expensive risk. “ Will it sell?” Requires careful analysis, planning,

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TPS –

Accounting and Finance Systems

TPS

Accounting and Finance Systems

Account ing and finance funct ional areas m anage t he inflow and

out flow of organizat ional asset s. This involves all funct ions of an

organizat ion including payroll, billing, cash m anagem ent , et c.

z

Financial Planning and Budgeting

z

Financial Planning and Budgeting

{

Financial and Economic Forecasting

{

Planning for Incoming Funds

{

Budgeting

{

Capital Budgeting

z

Managing Financial Transactions

z

Managing Financial Transactions

{

Financial and Economic Forecasting

{

Planning for Incoming Funds

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TPS –

Accounting and Finance Systems

(Continued)

z E-Commerce Applications of Financial Transactions

{Gl b l t k h d lti l i

{Global stock exchanges and multiple currencies

{E-Bonds

{Factoring online

{Electronic re presentment of checks

{Electronic re-presentment of checks

{Electronic bill presentment and payments

z Virtual Close

z Expense Management Automation

z Investment Management

{Financial Analysis

{Access to Financial and Economic Reportsp

z Control and Auditing

{Budgetary Control and Auditing

{Financial Ratio Analysis

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TPS –

Human Resources Systems

TPS

Human Resources Systems

Web- based syst em s have increased t he popularit y of hum an

i f

t i

t

hi h

id

li

t i

i l

resources inform at ion syst em s which provide applicat ions m ainly

relat ed t o acquiring, hiring, rewarding, developing, t raining,

prot ect ing and ret aining hum an resources.

R

i

i fi di

l

i

h

d

z

Recruitment is finding employees, testing them, and

deciding which ones to hire. The Web has enhanced the

recruitment process.

{

Position Inventory

{

HRM Portals and Salary Surveys

{

Employee Selection

{

Employee Selection

z

Human Resources Maintenance and Development

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TPS –

Human Resources Systems (Continued)

y

(

)

z

Human Resources Planning and

z

Human Resources Planning and

Management

{

Personnel Planning

g

{

Labor –Management Negotiations

{

Payroll and Employees’ Records

y

p y

{

Benefits Administration

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Managerial Issues

z

Integration of functional information systems

z

Priority of transaction processing

z

Finding Innovation Applications

z

Using the Web

z

Systems Integration

Ethi

l I

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Chapter 7

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