Transaction Processing Systems

Point-of-sale (POS) machines are

a ubiquitous type of transaction Transaction processing systems (TPSs) are the most widely used information processing system. systems. The predominant function of TPSs is to record data collected at the

boundaries of organizations, in other words, at the point where the organization transacts business with other parties. They also record many of the transactions that take place inside an organization. For example, they record the movement of parts from one phase of manufacturing to another, from raw materials to finished products. TPSs include POS machines, which record sales; automatic teller machines, which record cash withdrawals,

deposits, and transfers; and purchase order systems, which record purchases.

A typical example would be the purchase of gasoline at a pump, using a © Anderson Ross/Getty Images credit card. The purchase is recorded by the gasoline company and later at

the credit card-processing bank. After these data elements are collected, the IS can automatically process the data immediately and store it for later access on demand. Transaction processing systems provide most of the data in organizations for further processing by other ISs.

Supply Chain Management Systems The term “supply chain” refers to the sequence of activities involved in producing and selling a

product or service. In industries that produce goods, the activities include marketing, purchasing raw materials, manufacturing and assembly, packing and shipping, billing, collection, and after- the-sale services. In service industries, the sequence might include marketing, document management, and monitoring customer portfolios. Information systems that support these activities and are linked to become one large IS providing information on any stage of a business process are called supply chain management (SCM) systems .

Often, such systems are called enterprise resource planning (ERP) systems , because the information they provide supports the planning of shipping resources such as personnel, funds, raw materials, and vehicles. However, ERP is a misnomer for the systems, because they mainly serve managers in monitoring and modifying business processes as they occur, and not only for planning. The term “supply chain,” too, is somewhat misleading. Business processes do not always take the form of a sequence; some processes take place in parallel. This is true in manufacturing, where two or three teams work on different parts of a product, and in services, where two or three different people peruse a document online and add their input to it within

a certain period of time rather than sequentially. In the production of goods and services, some modules of SCM systems provide support to the major processes. These components include human resources (HR) information systems and cost accounting systems.

SCM systems are the result of systems thinking and support systems thinking. They eliminate the need to reenter data that has already been captured somewhere else in the organization. An

PART 1 THE INFORMATION AGE PART 1 THE INFORMATION AGE

With enterprise applications, many units of the organization can access the same data and share information for their own management tasks or further processing.

Customer Relationship Management Systems Customer relationship management (CRM) systems help manage an organization’s rela-

tionships with its customers. The term refers to a large variety of information systems, from simple ones that help maintain customer records to sophisticated systems that dynamically analyze and detect buying patterns and predict when a specific customer is about to switch to a competitor. Many CRM systems are used by service representatives in combination with a telephone. When a customer telephones, the representative can view the entire history of the customer’s relationship with the company: anything that the customer has purchased, deliveries made, unfulfilled orders, and other information that can help resolve a problem or help the customer find the desired product or service. The main goals of CRM systems are to increase the quality of customer service, reduce the amount of labor involved in serving customers, and learn as much as possible about the buying habits and service preferences of individual customers.

CRM systems are often linked to Web applications that track online shopping and process online transactions. Using sophisticated applications, a company can learn what makes a customer balk just before submitting an online order, or what a customer prefers to see displayed on Web pages. Online retailers such as Amazon.com, Buy.com, and Target.com use applications that construct different Web pages for different customers, even when they search on the same

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Effective CRM systems are accessible to both sales and service people. They enable continuous and smooth interaction with everyone from pro- spective customers to buyers who need after-the-sale service. Both sales people and service crews can view the entire record of a customer and the product purchased and fit the service according to the product service schedule. Because retaining loyal customers is significantly less expensive than acquiring new ones, CRM systems may increase an organization’s profitability.

Business Intelligence Systems

(BI) systems. Usually, these applications consist of sophisticated statistical models, sometimes general and sometimes tailored for an industry or an organization. The applications access large pools of data, usually transactional records stored in large databases called data warehouses . With proper analysis models, BI systems might discover particular buying patterns of consumers, such as combinations of products purchased by a certain demographic group or on certain days; products that are sold at faster cycles than others; reasons for customer’s churns, that is, customers leaving a service provider for a competitor; and other valuable business intelligence that helps managers quickly decide on changing a strategy.

Transaction Processing Systems