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Transaction Processing & Enterprise

Resource Planning Systems

Chapter 9

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Principles and Learning Objectives

The concept of transaction processing system. The stage of processing a transaction.

Identify the basic activities and businessobjectives common to all transaction processingsystems.

Describe the inputs, processing, and outputs forthe transaction processing systems associatedwith order, purchasing, and accounting businessprocesses.

Define the term enterprise resource planning

system

and discuss the advantages anddisadvantages associated with the implementationof such a system.

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TPS, MIS/DSS, and Special

Information Systems

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Traditional Transaction Processing

Methods & Objectives

Batch processing systems

On-line transaction processing (OLTP)

On-line entry with delayed processing Process data generated by and about transactions

Process data generated for and about transactions

Maintain a high degree of accuracy and integrity

Produce timely documents & reports

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Traditional Transaction Processing

Methods & Objectives

Increase labor efficiency

Help provide improved service

Help build and maintain customer loyalty

Achieve competitive advantage

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Batch versus On-Line Transaction Processing

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Integration of a Firms TPSs

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Examples of Transaction Processing

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Transaction Processing Systems

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Steps of Processing a Transaction

1. Data entry

Data from a source document (documentsgenerated at the point where a transaction

occurs) are entered to the system via input

devices.2. Data validation

This step includes checking the accuracy of

Data by comparing actual data withPredetermined standards. It also includes

error correction.

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3. Processing and revalidation

Processing of data may include organizing,

calculating, classification or summing ofdata.

There are two approaches to process a

transaction:- A- Batch processing

According to this approach, transactions are

accumulated over a certain period of timeand processed periodically (daily, weekly,

And monthly).

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In Batch processing, the outputs orinformation is not up to date and that can

Be risky specially in banking sector.

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B- Onl ine processing

According to this approach, data are processed as

they are created. There is no time lag between datacreation and data processing.

Example: ATM systemThe information that are provided or asked at

any time will be up to date information.

After processing, the outputs should be revalidated

and this includes checking the information in term

of its accuracy, face validity and content validity.

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4. Data storage for future use

To increase the value of TPS and to make it

useful for other system, processed data should

be stored. This enables maximization of

Benefits by using the information more than

once. It also can be a management tool to

ensure effective control.

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5. Output reporting to the decision

makers Output reporting can be made using

documents or reports or using forms and

models.Document -Record of one transaction.

Report - A summary of two or more

transaction

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6. Query support

To allow users to access data and informationwhen needed. This can increase the value of

TPS.

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Document Production and Reports

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Control & Management Issues

Business resumption planning

Disaster recovery

Backups

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Transaction Processing Audit

Does the system meet its business

requirements?

Are there procedures and controls? Are the procedures & controls properly used?

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Order Processing Systems

Order entry

Sales configuration

Shipment planning

Shipment execution

Invoicing

Customer relationship management (CRM)

Routing and scheduling

Scheduling systems

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Document Production Reports

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Traditional Transaction

Processing Applications

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Order Processing Systems

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Order Processing Systems

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Order Entry System

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Shipment Planning

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Inventory Status Report

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Invoicing

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Customer Relationship Management

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Purchasing Systems

Inventory control

Purchase order processing

Receiving

Accounts payable

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Purchasing Systems

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Accounts Payable

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Accounts Payable

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Accounting Systems

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Accounts Receivable

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Typical Paycheck Stub

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Payroll Journal

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General Ledger

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General Ledger

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Enterprise Resource

Planning

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Enterprise Resource Planning

(ERP)

ERPis an organizational-wide informationsystem that serves as a common,integrated information infrastructure for

basic business processes. ERP systemsintegrate the business processes in alldepartments and functions across anorganization into a single computer systemthat can serve all departments specificneeds.

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ERP Model

Management

ERP

Branch

B

Branch

C

Branch

A

Training &Research

HumanResource

Dep.

Productive

Dep.

Finance

Dep.

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ERP System

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ERP Software Vendors

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International Issues

Different languages and cultures

Disparities in information systems infrastructure

Varying laws and custom rules

Multiple currencies

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Summary

Transaction Processing Systems- consist of allcomponents of a CBIS, including databases,

telecommunications, and people

Transaction Processing Systems Methods- batch,on-line, and on-line with delayed processing

Enterprise resource planning (ERP) software- a set

of integrated programs that manage a companys vitalbusiness operations for an entire multisite, global

organization