Good morning! Enterprise Systems An Overview of Transaction - - PowerPoint PPT Presentation

Good morning! Enterprise Systems

An Overview of Transaction Processing Systems

• Transaction processing systems (TPSs):

– Capture and process detailed data necessary to update the

• rganization’s records about fundamental business
• perations

– 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

An Overview of Transaction Processing Systems

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
• There is some delay between an event and the

processing of the related transaction to update the

• rganization’s records

Transaction Processing Methods and Objectives (continued)

• Online transaction processing (OLTP):

– Data processing in which each transaction is processed immediately – At any time, the data in an online system reflects the current status – Many organizations find that OLTP systems enables them to provide faster, more efficient service

Batch Processing vs. OLAP

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

Transaction Processing Methods and Objectives (continued)

A TPS typically includes the following types of systems:

– Order processing systems – Accounting systems – Purchasing systems

Integration of Modern TPSs

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) – Easy to install and operate with a low total cost of

• wnership

– Dozens of such software solutions available – Provide standard interfaces to other vendors’ systems

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

Transaction Processing Activities (continued)

Data Collection

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

Enterprise Resource Planning and Customer Relationship Management (continued)

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

Advantages of ERP

• Improved access to quality data for operational

decision making

• Elimination of costly, inflexible legacy systems
• Improvement of work processes
• Upgrade of technology infrastructure

Challenges in Implementing ERP Systems

• Cost and disruption of upgrades for systems that

must integrate with the ERP system

• Cost and long implementation time
• Difficulty in implementing change
• Management of software customization
• User frustration with the new system

Leading ERP Systems

• No one ERP software solution from a single vendor is

“best” for all organizations

• SAP is the largest and most‐recognized ERP solution

provider among Fortune 1000 and Global 5000

• rganizations
• Oracle has a set of ERP solutions from acquisition of

PeopleSoft, JD Edwards, and Sibel

• Infor is third largest ERP manufacturer

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

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

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 and how many items

• Retailers as well as manufacturers:

– Use demand forecasting to match production to consumer demand and to allocate products to stores

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

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

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

Customer Relationship Management (continued)

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

Product Lifecycle Management (PLM)

PLM – Provides a means of managing all the data associated with the product development, engineering design, production, support, and disposal of manufactured products – Data includes design and process documents, bill of material definitions, product attributes, and documents needed for FDA and environmental compliance – PLM software used by users both internal and external to the organization

Product Lifecycle Management (PLM) (continued)

PLM

– Speeds time to market for latest designs – Improves worker productivity – Makes it possible to implement changes earlier in the design process for a lower cost – Helps ensure regulatory compliance

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 enables SMEs to:

– Experiment with powerful software capabilities without making a major financial investment – Avoid employing a full‐time IT person to maintain key business applications

Hosted Software Model for Enterprise Software

Enjoy your break!

Welcome back! Information and Decision Support Systems

Decision Making and Problem Solving

• Every organization needs effective decision making
• In most cases, strategic planning and overall goals of

the organization set the course for decision making

• Information systems assist with problem solving,

helping people make better decisions and save lives

Decision Making as a Component of Problem Solving (continued)

Programmed versus Nonprogrammed Decisions

• Programmed decisions:

– Made using a rule, procedure, or quantitative method – Easy to computerize using traditional information systems

• Nonprogrammed decisions:

– Decisions that deal with unusual or exceptional situations – Not easily quantifiable

Optimization, Satisficing, and Heuristic Approaches

• Optimization model:

– Finds the best solution, usually the one that will best help the organization meet its goals

• Satisficing model:

– Finds a good, but not necessarily the best, problem solution

• Heuristics:

– Commonly accepted guidelines or procedures that usually find a good solution

The Benefits of Information and Decision Support Systems

• Decision support systems:

– Performance is typically a function of decision quality and problem complexity

• Problem complexity:

– Depends on how hard the problem is to solve and implement

The Benefits of Information and Decision Support Systems (continued)

An Overview of Management Information Systems

• Management information system (MIS):

– Integrated collection of people, procedures, databases, and devices that provides managers and decision makers with information to help achieve organizations goals – Can give the organization a competitive advantage

Management Information Systems in Perspective

• Purpose of an MIS:

– To help an organization achieve its goals by providing managers with insight into the regular operations of the

• rganization

– Provide the right information to the right person in the right format at the right time

• Business transactions:

– Can enter the organization through traditional methods, or via the Internet, or via an extranet

Inputs to a Management Information System

• Internal data sources:

– TPS and ERP systems and related databases – Data warehouses and data marts – Specific functional areas throughout the firm

• External data sources:

– Customers, suppliers, competitors, and stockholders whose data is not already captured by the TPS and ERP systems – Internet

Outputs of a Management Information System

• Scheduled reports:

– Produced periodically, such as daily, weekly, or monthly – Key‐indicator report summarizes the previous day’s critical activities

• Demand reports:

– Developed to provide certain information upon request

• Exception reports:

– Automatically produced when a situation is unusual or requires management action – Trigger points should be set carefully

• Drill‐down reports:

– Provide increasingly detailed data about a situation

Characteristics of a Management Information System

MISs perform the following functions:

– Provide reports with fixed and standard formats – Produce hard‐copy and soft‐copy reports – Use internal data stored in computer system – Allow users to develop custom reports – Require user requests for reports developed by systems personnel

Functional Aspects of the MIS

• Most organizations are structured along functional

areas

• MIS can be divided along functional lines to produce

reports tailored to individual functions

Financial Management Information Systems

• Financial MIS:

– Provides financial information to executives and others

• Some financial MIS subsystems and outputs:

– Profit/loss and cost systems – Auditing – Uses and management of funds

Manufacturing Management Information Systems

• Manufacturing MIS subsystems and outputs:

– Used to monitor and control the flow of materials, products, and services through the organization

• Common information subsystems and outputs used in

manufacturing: – Design and engineering – Master production scheduling – Inventory control – Process control – Quality control and testing

Marketing Management Information Systems

• Marketing MIS:

– Supports product development, distribution, pricing decisions, promotional effectiveness, and sales forecasting – Marketing functions increasingly being performed on the Internet and mobile devices

• Subsystems:

– Marketing research – Product development and delivery – Promotion and advertising – Product pricing – Sales analysis

Human Resource Management Information Systems

• HR MIS:

Concerned with activities related to previous, current and potential employees

• Subsystems:

– Human resource planning – Personnel selection and recruiting – Training and skills inventory – Scheduling and job placement – Wage and salary administration – Outplacement

Other Management Information Systems

• Accounting MIS:

– Provides aggregate information on accounts payable, accounts receivable, payroll, and many other applications

• Geographic information system (GIS):

– Capable of assembling, storing, manipulating, and displaying geographically referenced information

An Overview of Decision Support Systems

• DSS:

– Organized collection of people, procedures, software, databases, and devices used to help make decisions that solve problems

• Focus of a DSS:

– Is on decision‐making effectiveness regarding unstructured

• r semistructured business problems

Characteristics of a Decision Support System

• Some important characteristics:

– Provide rapid access to information – Handle large amounts of data from different sources – Provide report and presentation flexibility – Offer both textual and graphical orientation – Support drill‐down analysis

Characteristics of a Decision Support System (continued)

• Perform complex, sophisticated analysis and

comparisons using advanced software

• Support optimization, satisficing, and heuristic

approaches

• Perform simulation analysis
• Forecast a future opportunity or problem

Capabilities of a Decision Support System

• Support problem‐solving phases:

– A specific DSS might support only one or a few phases

• Support various decision frequencies:

– Ad hoc DSS is concerned with situations or decisions that come up only a few times – Institutional DSS handles situations or decisions that occur more than once

Capabilities of a Decision Support System (continued)

• Support various problem structures:

– Highly structured problems are straightforward, requiring known facts and relationships – Semi‐structured or unstructured problems are more complex

• Support various decision‐making levels:

– DSSs can provide help for managers at various levels within the organization – operational, tactical, and strategic

A Comparison of DSS and MIS

DSS differs from an MIS in numerous ways, including:

– The type of problems solved – The support given to users – The decision emphasis and approach – The type, speed, output, and development of the system used

Components of a Decision Support System

• At the core of a DSS are a database and a model base
• User interface (dialogue manager):

– Allows decision makers to easily access and manipulate the DSS and to use common business terms and phrases

• Access to the Internet, networks, and other computer‐

based systems

Components of a Decision Support System (continued)

The Database

• Database management system:

– Allows managers and decision makers to perform qualitative analysis on data stored in company’s databases – Can also be used to connect to external databases

• Data‐driven DSS:

– Often employs data mining and business intelligence

The Model Base

• Model base:

– Allows managers and decision makers to perform quantitative analysis on both internal and external data

• Model‐driven DSS:

– Performs mathematical or quantitative analysis

• Model management software (MMS):

– Coordinates the use of models in a DSS

Executive Support Systems

• Executive support system (ESS or EIS):

– Specialized DSS – Includes hardware, software, data, procedures, and people used to assist senior‐level executives – Also called an executive information system (EIS)

Executive Support Systems (continued)

Executive Support Systems in Perspective

• ESS is special type of DSS

– DSS provides variety of modeling and analysis tools to enable users to answer questions – ESS presents structured information about aspects of the

• rganization that executives consider important

Capabilities of Executive Support Systems

• ESS provides support for:

– Defining overall vision – Strategic planning – Strategic organizing and staffing – Strategic control – Crisis management

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