Transaction processing, functional applications & integration

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 John Wiley & Sons, Inc.

  Chapter Objectives Chapter Objectives Relate functional areas and business processes to the R l f i l d b i h z value chain model z Identify functional management information systems z Describe the transaction processing system and Describe the transaction processing system and demonstrate how it is supported by IT

Describe the support provided by IT and the Web to Describe the support provided by IT and the Web to

z z production/operations management, including logistics

  (Continued) (Continued) Chapter Objectives Chapter Objectives

  Describe the support provided by IT and the Web to D ib h id d b IT d h W b z marketing and sales z Describe the support provided by IT and the Web to accounting and finance z Describe the support provided by IT and the Web to human resources management Describe the benefits and issues of integrating z functional information systems

• – Value Chain

  Functional Areas 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 act ivit ies) . The organizat ional st ruct ure of firm s is ) h l f f int ended t o support bot h of t hese t ypes of act ivit ies. Functional Areas in a Business Functional Areas in a Business

  Transaction Processing Information Systems S t

• – Online Transaction Processing Systems Online Transaction Processing Systems

TPS TPS

  With OLTP and Web technologies such as an extranet, g z 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 p responsibility for inventory management and ordering.

  Interactive Internet TPS expands OLTP to provide z enhanced real time transaction processing over the Internet or intranets. Multi-store chains can access a centralized computer system no longer requiring in-store processors.

• – Managing Production/Operations &

  TPS

  M a n a gin g Pr odu ct ion / Ope r a t ion s & Logist ics 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 { Automating design work and manufacturing

• – Managing Production/Operations & Logistics

  TPS Managing Production/Operations & Logistics

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

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

• – In-House Logistics & Materials Management

  I H L i ti & M t i l M t

TPS TPS

  

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

i b inbound logist ics ( receiving) , and out bound logist ics d l i t i ( i i ) d t b d l i t i ( shipping) act ivit ies. These logist ical act ivit ies cross several prim ary and secondary act ivit ies on t he value chain chain. z

  Inventory management determines how much inventory to keep. Overstocking can be expensive; so are understock conditions. d t k diti 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 provide information about the quality of incoming

material as well as the quality of work-in-process material as well as the quality of work in process

and finished goods.

  

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

• – Planning Production/Operations – Planning Production/Operations

TPS TPS

  

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

_{Material Requirements Planning (MRP) is software that facilitates the plan for} z _{items. It integrates Master Production Schedules, BOM’s, and Inventory levels. purchasing or producing parts, subassemblies, or materials in the case of interdependent} z z Manufacturing Resource Planning (MRP II) Manufacturing Resource Planning (MRP II) adds functionalities to a regular MRP adds functionalities to a regular MRP

_{costs of labor, tools, equipment repair, and energy while generating a requirements}

_{system by determining the costs of parts and the associated cash flow. It also estimates J Just-in-Time Systems t i Ti S t i is an approach that attempts to minimize waste of all kinds h th t tt t t i i i t f ll ki d} report. z z _{systems. The JIT concept is used in mass customization and build-to-order environments. (space, labor, materials, energy, etc.) and to continuously improve processes and}

  Project Management. A project is usually a one-time effort composed of many z _{years. Software tools such as: program evaluation and review technique (PERT) and the interrelated activities, costing a substantial amount of money, and lasting for weeks or} critical path method (CPM) are used to manage milestones, resources, costs, etc. z z Work Management Systems (WMS) Work Management Systems (WMS) automatically manages the prioritization and automatically manages the prioritization and _{distribution of work. These systems deal with resource allocation and reallocation.} TPS – Computer-Integrated Manufacturing

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

  GT - Group technology TPS – Computer-Integrated Manufacturing

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

  Computer-Integrated Manufacturing

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

• – Product Lifecycle Management Product Lifecycle Management

TPS TPS

  PLM PLM is a business st rat egy t hat enables 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 effort . Web- based supply chains and ot her ff t W b b d l h i d t h t echnologies are em ployed t o aut om at e t his collaborat ive effort .

  This electronic-based collaboration can reduce z { product cost

  { travel expenses costs associated with product-change management

  { { { time it takes to get a product to market time it takes to get a product to market

• – Product Lifecycle Management
• – Product Lifecycle Management

  TPS

  

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

TPS

  M a r k e t in g a n d Sa le s Syst e m s M a r k e t in g a n d Sa le s Syst e m s Marketing and Sales Systems Marketing and Sales Systems

  TPS TPS – 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 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 act ivit ies wit h ot her corporat e funct ional areas. t i it i it h t h t f t i l

  Some of the channel-system activities are: y z { customer relations distribution channels and in-store innovations

  { { marketing management telemarketing

  {

  

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

Customer Relations Customer Relations

  TPS TPS –

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

_{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 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 t t t h l I t i d t d i f l Customer Profiles and Preference Analysis Customer Profiles and Preference Analysis. Sophisticated information systems are Sophisticated information systems are}

m ost or ga n iz a t ion . z z _{(age, gender, income level), and preferences.}

_{being developed to collect data on existing and potential customers, their demographics}

z Prospective Customer Lists and Marketing Databases. All firms need to know and track _{analyzed and sorted by classification for direct mailing, e-mailing, or telemarketing. who their existing and potential customers are. These prospective-customer lists can be h th i i ti d t ti l t Th ti t li t b} z Mass Customization. Today’s customers prefer customized products. Through mass _{product configurations at reasonable prices. customization, the practice of maintaining WIP inventory, manufacturers can offer different p g y}

Personalization. Special product offers are made, based on where the customer spent z _{Ad Advertising and Promotions. ti i d P ti Special promotions or coupons are presented to the S i l ti t d t th their time and on what they may have purchased.} z _{customer via mails, email, wireless and pervasive computing applications.} TPS – Distribution Channels & In-Store Innovations

  

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

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 { Computerization of various activities in retail stores { Video-based systems count and track shoppers in a physical store

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

  TPS TPS – Many m arket ing m anagem ent decision applicat ions are support ed by y g g pp pp y com put erized inform at ion syst em s. z Pricing of Products or Services. Sales volumes are largely determined by the p prices of products or services as is profit. p p

Salesperson Productivity. Salespeople differ from each other in selling skill.

z

  

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 searched for trends and relationships. h d f t d d l ti hi

z New Products, Services, and Market Planning . New products and services can

be an expensive risk. “ Will it sell?” Requires careful analysis, planning, forecasting, and market research. forecasting and market research z Web-Based Systems support marketing and sales through data capture

  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 { Budgeting

  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 Expense Management Automation z ^{Investment Management} { Financial Analysis

  { ^{Access to Financial and Economic Reports p} z Control and Auditing { ^{Budgetary Control and Auditing} { Financial Ratio Analysis { ^{Profitability Analysis and Cost Control} 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 {

  Performance Evaluation {

  Training and Human Resources Development 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 { Employee Relationship Management Managerial Issues 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 z

  Ethical Issues Chapter 7 Chapter 7

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