Lecture 7 .pdf

Principles of Information Systems, Thirteenth Edition Chapter 8 Enterprise Systems © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in wh...

Principles of Information Systems, Thirteenth Edition Chapter 8 Enterprise Systems © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain 1 product or service or otherwise on a password-protected website for classroom use.  Objectives After completing this chapter, you will be able to: Identify the basic activities and business objectives common to all transaction processing systems Describe the transaction processing systems associated with the order processing, purchasing, and accounting business functions Identify the basic functions performed and benefits derived from implementing an enterprise resource planning system, customer resource management, and product lifecycle management system © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Transaction Processing Systems Transaction processing systems (TPSs): Capture and process detailed data necessary to update the organization’s records about fundamental business operations Include order entry, inventory control, payroll, accounts payable, accounts receivable, general ledger, etc. A TPS provides valuable input to: Management information systems Decision support systems Knowledge management systems © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 3 or otherwise on a password-protected website for classroom use. Transaction Processing Systems © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 4 or otherwise on a password-protected website for classroom use.  Traditional Transaction Processing Methods and Objectives Batch processing system Business transactions are accumulated over a period of time and prepared for processing as a single unit or batch Essential characteristic: the delay between an event and the processing of the related transaction to update the organization’s records 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 enables them to provide faster, more efficient service © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 5 or otherwise on a password-protected website for classroom use. Traditional Transaction Processing Methods and Objectives © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 6 or otherwise on a password-protected website for classroom use.  Traditional Transaction Processing Methods and Objectives Organizations expect their TPSs to: Capture, process, and update databases 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 © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 7 or otherwise on a password-protected website for classroom use.  Traditional Transaction Processing Methods and Objectives A TPS includes: Order processing systems - Processing flow begins with receipt of customer order, then finished product inventory is checked to see if sufficient inventory is on hand to fill the order - Product pick list is printed at the warehouse and inventory is adjusted - Customer invoice is created and copy included in the customer shipment Accounting systems - Must track the flow of data related to all the cash follows that affect the organization Purchasing systems - Systems that support the purchasing business function - Inventory control, purchase order processing, receiving, and accounts payable © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 8 or otherwise on a password-protected website for classroom use. Traditional Transaction Processing Methods and Objectives © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 9 or otherwise on a password-protected website for classroom use.  Transaction Processing Activities The transaction processing cycle 1. Data collection 2. Data editing 3. Data correction 4. Data manipulation 5. Data storage 6. Document production © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 10 or otherwise on a password-protected website for classroom use.  Data Collection Capturing and gathering all data necessary to complete the processing of transactions Data collection can be: Manual Automated via special input devices Source data automation Involves capturing data at its source and recording it accurately in a timely fashion with minimal manual effort and in an electronic or digital form so that it can be directly entered into the computer Example: a scanner reading a UPC code Cloud-based POS systems provide a range of capabilities Including advanced integration with digital loyalty programs, various accounting tools, and the ability to generate gift cards and coupons © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 11 or otherwise on a password-protected website for classroom use. Data Collection © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 12 or otherwise on a password-protected website for classroom use.  Data Editing Data editing Checking data for validity and completeness to detect any problems Examples Quantity and cost data must be numeric Names must be alphabetic Codes associated with an individual transaction are edited against a database containing valid codes © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 13 or otherwise on a password-protected website for classroom use.  Data Correction Systems should provide error messages that alert those responsible for editing the data Error messages should specify the problem so proper corrections can be made Data correction involves reentering data that was not typed or scanned properly © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 14 or otherwise on a password-protected website for classroom use.  Data Processing Performing calculations and other data transformations related to business transactions including: Classifying data Sorting data into categories Performing calculations Summarizing results Storing data in the organization’s database for further processing © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 15 or otherwise on a password-protected website for classroom use.  Data Storage Data Storage Involves updating one or more databases with new transactions After being updated, this data can be further processed and manipulated by other systems © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 16 or otherwise on a password-protected website for classroom use.  Document Production Document Production involves generating output records, documents, and reports Hard-copy paper reports Displays on computer screens (soft copy) Results from one TPS can be input to another system Most TPSs provide other useful management information, such as: Printed or on-screen reports that help managers and employees perform various activities Reports showing current inventory Reports required by local, state, and federal agencies © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 17 or otherwise on a password-protected website for classroom use.  Enterprise Systems An enterprise system is central to individuals and organizations of all sizes Ensures that information can be shared across all business functions and all levels of management to support the running and managing of a business The ultimate goal is to satisfy customers and provide significant benefits by reducing costs and improving service Businesses rely on enterprise systems to perform daily activities in areas such as: Product supply and distribution Sales and marketing Human resources Manufacturing Accounting and taxes © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 18 or otherwise on a password-protected website for classroom use.  Enterprise Resource Planning Enterprise resource planning (ERP) A set of integrated programs that manage a company’s vital business operations for an entire organization. - Large organizations were the first to take on the challenge of implementing ERP Business process A 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 © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 19 or otherwise on a password-protected website for classroom use.  Advantages of ERP Improved access to quality data for operational decision making Elimination of costly, inflexible legacy systems Improvement of work processes Opportunity to upgrade and standardize technology infrastructure © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 20 or otherwise on a password-protected website for classroom use.  Supply Chain Management Supply chain management (SCM) is a system that includes planning, executing, and controlling all activities involved in: Sourcing and procurement of raw materials Converting raw materials to finished products Warehousing and delivering finished product to customers SCM manages materials, information, and finances as they move from: Supplier -> Manufacturer -> Wholesaler -> Retailer -> Consumer © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 21 or otherwise on a password-protected website for classroom use.  Supply Chain Management ERP systems do not work directly with production machines Data must be passed to the ERP accounting modules to keep an accurate count of finished product inventory Retailers as well as manufacturers use demand forecasting to: Match production to consumer demand Allocate products to stores © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 22 or otherwise on a password-protected website for classroom use.  Customer Relationship Management Customer relationship management (CRM) system Helps a company manage all aspects of customer encounters, including marketing, sales, distribution, accounting, and customer service The goal of CRM is to understand and anticipate the needs of current and potential customers CRM is used primarily in 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 © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 23 or otherwise on a password-protected website for classroom use. Customer Relationship Management © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 24 or otherwise on a password-protected website for classroom use.  Customer Relationship Management Due to the popularity of mobile devices Shoppers can easily compare products and prices on their mobile phones Shopper can also tweet their experiences with a brand to dozens of friends Savvy retailers use their CRM systems to stay on top of what these customers are saying on social networks Most CRM systems can now be accessed via smartphones © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 25 or otherwise on a password-protected website for classroom use.  Product Lifecycle Management Product lifecycle management (PLM) An enterprise business strategy that creates a common repository of product information and processes Supports the collaborative creation, management, dissemination, and use of product and packaging definition information Product lifecycle management (PLM) software Provides a means for managing the data and processes associated with the various phases of the lifecycle of a product The scope of PLM software may include computer-aided design, computer-aided engineering, and computer-aided manufacturing © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 26 or otherwise on a password-protected website for classroom use. Product Lifecycle Management © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 27 or otherwise on a password-protected website for classroom use.  Product Lifecycle Management Computer-aided design (CAD): The use of software to assist in the creation, analysis, and modification of the design of a component or product Computer-aided engineering (CAE): The use of software to analyze the robustness and performance of components and assemblies Computer-aided manufacturing (CAM) The use of software to control machine tools and related machinery in the manufacture of components and products © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 28 or otherwise on a password-protected website for classroom use. Product Lifecycle Management © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 29 or otherwise on a password-protected website for classroom use. Product Lifecycle Management © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 30 or otherwise on a password-protected website for classroom use.  Summary An organization must have information systems that support routine, day-to- day activities and that help a company add value to its products and services An organization that implements an enterprise system is creating a highly integrated set of systems, which can lead to many business benefits © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 31 or otherwise on a password-protected website for classroom use.