Overview of Transaction Processing & ERP System PDF

9/2/24 OVERVIEW OF TRANSACTION PROCESSING & ERP SYSTEM Dr Zubir Azhar CamEd 1 Learning Objectives u Transaction Processing u Data processing cycle u Its role in organizing bu...

9/2/24 OVERVIEW OF TRANSACTION PROCESSING & ERP SYSTEM Dr Zubir Azhar CamEd 1 Learning Objectives u Transaction Processing u Data processing cycle u Its role in organizing business activities and providing information to users u Enterprise resource planning (ERP) systems u Role of ERP systems in organizations u Advantages & disadvantages 2 1  9/2/24 Transaction Processing What is Transaction? u Transaction is an agreement between two entities u to exchange goods or services (like selling inventory) u in exchange for cash/any other event u that can be measured in economic terms by the organization (business transactions) u Each transaction has some information attached to it, like u Seller & buyer, u Goods being exchanged u Monetary/economic consideration u Information has underlying data (the heart of any transaction is data) 3 Transaction Processing What is Transaction Processing? Transaction processing involves: u taking the underlying data of business transaction u storing it u transforming it u creating meaningful information out of it Main aim is to support business operations In computer-based systems, data are entered into computers & stored in files/databases 4 2  9/2/24 Transaction Processing Data Processing Cycle 5 Transaction Processing Data Processing Cycle – Data Storage Computer based Storage Concepts (Database) 6 3  9/2/24 Transaction Processing Data Processing Cycle – Data Storage Audit Trail u Traceable path of a transaction through a data processing system u From Point of origin to final output Or u From final output to point of origin u Provides historical record of progression/sequence of events u Helps in maintaining accuracy & validity of ledger postings u Facilitates security & compliance with the law 7 Transaction Processing Data Processing Cycle – Data Processing Four Types of Data Processing Activities 8 4  9/2/24 Transaction Processing Traditional Accounting System (AIS) Referred to as transaction processing system u ONLY concerned with financial data and accounting transactions Sales Transaction Other non-financial (record journal entry information, like showing) time of day Date of Sale day of sale Debit to Cash/AR store number Credit to Sales Age of customer …. would be processed outside AIS 9 ERP Systems u ERP is a system that integrates all aspects of an organization’s activities u ERP Integrates activities from the entire organization u Production u Payroll u Sales u Purchasing u Financial Reporting 10 5  9/2/24 Traditional AIS vs. ERP System u Traditional AIS u ERPs u Multiple systems u Single systems u Same data captured & stored u Data captured once – at many places/systems redundancy/integrity issues uLeads to data integrity issues minimized (source of truth?) u Singlewindow visibility of uData redundancy issues supply chain/value chain u Discrepancies/integration u Cost/time to implement/user issues resistance could be the issues 11 Recap u Transaction u Transaction Processing u Data Processing Cycle u Traditional AIS & ERPs – advantages/disadvantages 12 6