Chapter 7
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Questions and Answers

What is the primary purpose of transaction processing systems in an organization?

  • To manage a company's vital business operations globally
  • To reduce the need for sales staff
  • To support the various business functions of organizations (correct)
  • To support the implementation of enterprise resource planning systems

    • What is enterprise resource planning (ERP) in the context of business operations?

  • A collection of non-integrated transaction processing systems
  • A mobile commerce platform for customers
  • A set of integrated programs that manage a company's vital business operations (correct)
  • An electronic commerce system for online transactions

    • What is the benefit of electronic and mobile commerce to an organization?

  • It reduces the need for sales staff and opens up new opportunities for conducting business (correct)
  • It creates a highly integrated set of systems
  • It allows for more complex transaction processing systems
  • It only supports the various business functions of organizations

    • What is a result of implementing an enterprise resource planning system in an organization?

    <p>The creation of a highly integrated set of systems, leading to many business benefits</p> Signup and view all the answers

    What is the trend in organizations in terms of transaction processing systems?

    <p>Moving towards highly integrated enterprise resource planning systems</p> Signup and view all the answers

    What is the primary function of an enterprise resource planning system?

    <p>To manage a company's vital business operations for an entire multisite, global organization</p> Signup and view all the answers

    What do transaction processing systems support in an organization?

    <p>The various business functions of organizations</p> Signup and view all the answers

    What is the advantage of having one enterprise-wide system?

    <p>It eliminates the need for separate systems</p> Signup and view all the answers

    What is the result of implementing an enterprise resource planning system in terms of business operations?

    <p>The integration of vital business operations</p> Signup and view all the answers

    What is the benefit of implementing an enterprise resource planning system?

    <p>It creates a highly integrated set of systems, leading to many business benefits</p> Signup and view all the answers

    Which of the following is a disadvantage of ERP?

    <p>Difficulty integrating with other systems</p> Signup and view all the answers

    What is the primary purpose of a Transaction Processing System (TPS)?

    <p>To process detailed data necessary to update records about fundamental business operations</p> Signup and view all the answers

    What is the main goal of data editing in a Transaction Processing System?

    <p>To check data for validity and completeness</p> Signup and view all the answers

    Which of the following is a type of Electronic Commerce?

    <p>B2C - Business to Consumer</p> Signup and view all the answers

    What is the primary function of an Accounting System?

    <p>To maintain the general ledger and perform accounting functions</p> Signup and view all the answers

    What is the purpose of data correction in a Transaction Processing System?

    <p>To re-enter data that was not typed or scanned properly</p> Signup and view all the answers

    What is the primary function of a Purchasing System?

    <p>To manage purchase orders and receiving</p> Signup and view all the answers

    What is the main goal of data collection in a Transaction Processing System?

    <p>To capture and gather all data necessary to complete the processing of transactions</p> Signup and view all the answers

    What is the primary purpose of an Electronic Commerce system?

    <p>To conduct business transactions electronically over computer networks</p> Signup and view all the answers

    What is the main goal of a Transaction Processing System?

    <p>To process detailed data necessary to update records about fundamental business operations</p> Signup and view all the answers

    What type of devices are used in mobile commerce?

    <p>Personal digital assistants, mobile phones, and smartphones</p> Signup and view all the answers

    What was the primary focus of MRP systems that evolved into ERP systems?

    <p>Managing inventory and purchasing</p> Signup and view all the answers

    What is the purpose of demand management in ERP production planning?

    <p>To estimate future customer demand</p> Signup and view all the answers

    What is the primary function of customer relationship management systems?

    <p>To help a company manage all aspects of customer encounters</p> Signup and view all the answers

    What was the main limitation of legacy transaction processing systems that led to the emergence of ERP?

    <p>Lack of integration for information sharing</p> Signup and view all the answers

    What is one of the primary benefits of ERP systems in terms of data management?

    <p>Improved access to data for operational decision making</p> Signup and view all the answers

    What is the purpose of sales ordering systems?

    <p>To set sales prices and record order quantities</p> Signup and view all the answers

    What is one of the advantages of ERP systems over legacy systems?

    <p>Elimination of costly, inflexible legacy systems</p> Signup and view all the answers

    What is a challenge that multinational companies face when implementing operational systems?

    <p>Different languages and cultures</p> Signup and view all the answers

    What is the primary function of enterprise resource planning systems?

    <p>To manage a company's vital business operations for an entire multisite, global organization</p> Signup and view all the answers

    What is a key benefit of ERP systems in terms of workflow improvement?

    <p>Improved work processes based on best practices</p> Signup and view all the answers

    What is the purpose of transaction processing systems?

    <p>To process detailed data necessary to update records about fundamental business operations</p> Signup and view all the answers

    What is a potential opportunity that arises from implementing ERP systems?

    <p>Upgrading technology infrastructure</p> Signup and view all the answers

    What is a primary difference between ERP systems and MRP systems?

    <p>ERP systems operate via an integrated database, while MRP systems use separate databases</p> Signup and view all the answers

    What is the purpose of batch processing systems?

    <p>To accumulate transactions over a period of time and then process them</p> Signup and view all the answers

    What is the purpose of online transaction processing systems?

    <p>To process each transaction immediately</p> Signup and view all the answers

    What is a key benefit of ERP systems in terms of operational decision making?

    <p>Improved access to data for operational decision making</p> Signup and view all the answers

    What is an example of a company that uses mobile commerce?

    <p>eBay</p> Signup and view all the answers

    What is a primary characteristic of ERP systems?

    <p>Integrated set of applications for the enterprise</p> Signup and view all the answers

    What is a key advantage of ERP systems over legacy transaction processing systems?

    <p>Integrated database for all business functions</p> Signup and view all the answers

    Study Notes

    Disadvantages of ERP

    • Expense and time in implementation
    • Difficulty implementing change
    • Difficulty integrating with other systems
    • Risks in using one vendor
    • Risk of implementation failure

    Transaction Processing Systems (TPSs)

    • Process detailed data necessary to update records about fundamental business operations
    • Include order entry, inventory control, payroll, accounts payable, accounts receivable, general ledger, etc.
    • Provide data for other business processes (Management Information System/Decision Support System and Special-purpose information systems)

    Traditional Transaction Processing Methods

    Batch Processing System

    • Accumulate transactions over a period of time and then process them as a single unit or batch

    Online Transaction Processing (OLTP)

    • Process each transaction immediately

    Objectives of Traditional Transaction Processing

    • Process data generated by and about transactions
    • Maintain a high degree of accuracy and integrity
    • Avoid processing fraudulent transactions
    • Produce timely user responses and reports
    • Increase labor efficiency
    • Help improve customer service
    • Help build and maintain customer loyalty
    • Achieve competitive advantage

    Transaction Processing Activities

    • Capture and process data that describes fundamental business transactions
    • Update databases
    • Produce a variety of reports

    Transaction Processing Cycle

    • Data collection
    • Data editing
    • Data correction
    • Data manipulation
    • Data storage
    • Document production

    Data Collection

    • Capturing and gathering all data necessary to complete the processing of transactions
    • Can be manual or automated via special input devices (scanners, point-of-sale devices, terminals)

    Data Editing

    • Checking data for validity and completeness to detect any problems
    • Examples: quantity and cost data must be numeric, names must be alphabetic, verification of codes associated with an individual transaction

    Data Correction

    • Re-entering data that was not typed or scanned properly
    • Error messages must specify the problem so proper corrections can be made
    • Software tools can be used to identify bad data

    Data Manipulation

    • Performing calculations and other data transformations related to business transactions
    • Examples: classifying data, sorting data into categories, performing calculations, summarizing results, storing data in the organization's database for further processing

    Data Storage

    • Updating one or more databases with new transactions
    • Data can be further processed and manipulated by other systems

    Document Production

    • Generating output records, documents, and reports (hard-copy paper reports, displays on computer screens)
    • Results from one TPS can be inputs to another system
    • Typical uses: checks and invoices, management information, decision support, and compliance with local, state, and federal regulations

    TPS Applications

    • Order Processing Systems (order entry, sales configuration, shipment planning, shipment execution, inventory control, and accounts receivable)
    • Purchasing Systems (inventory control, purchase order processing, receiving, and accounts payable)
    • Accounting Systems (budget, accounts receivable, payroll, asset management, and general ledger)

    Electronic Commerce (EC)

    • Conducting business transactions electronically over computer networks (Internet, extranets, and corporate networks)
    • B2C (business-to-consumer), B2B (business-to-business), C2C (consumer-to-consumer)

    Mobile Commerce (M-commerce)

    • Relying on wireless devices (personal digital assistants, mobile phones, smartphones) to transact

    Production and Supply Chain Management

    • ERP production plan process: draws on the information available in the ERP system database
    • Sales forecasting: estimates future customer demand
    • Sales and operations plan: takes demand and current inventory levels to determine production for future demands
    • Demand management: develops master production schedule

    Customer Relationship Management (CRM)

    • Helps a company manage all aspects of customer encounters
    • Includes: marketing and advertising, sales, customer service after the sale, and programs to retain loyal customers

    International Issues Associated with Operational Systems

    • Challenges that must be met by an operational system of a multinational company include:
      • Different languages and cultures
      • Disparities in IS infrastructure
      • Varying laws and customs rules
      • Multiple currencies
      • ERP software vendors help meet these challenges

    Enterprise Resource Planning (ERP) System

    • A set of integrated programs that manage a company's vital business operations for an entire multisite, global organization

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    Description

    This quiz covers the drawbacks of Enterprise Resource Planning systems, including expense and time required for implementation, difficulties in integrating with other systems, and risk of implementation failure. Understand the challenges of using one vendor and the risks involved in ERP implementation.

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