Week No. 6-Topic 7-Operational Systems .pptx

Chapter 07: Operational Systems Stair, Reynolds and Chesney: Principles of Business Information Systems, Fourth edition (9781473774605) © Cengage Learning 2021 Principles • An organization must have information systems that support the routine, day-to-day activities that occur in the normal cours...

Chapter 07: Operational Systems Stair, Reynolds and Chesney: Principles of Business Information Systems, Fourth edition (9781473774605) © Cengage Learning 2021 Principles • An organization must have information systems that support the routine, day-to-day activities that occur in the normal course of business and help a company add value to its products and services. • Traditional transaction processing systems support the various business functions of organizations that have not yet implemented enterprise resource planning systems. • Electronic and mobile commerce allow transactions to be made by the customer, with less need for sales staff, and open up new opportunities for conducting business. • A company that implements an enterprise resource planning system is creating a highly integrated set of systems, which can lead to many business benefits. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Enterprise resource planning  Enterprise Resource Planning (ERP) is a set of integrated programs that manage a company’s vital business operations for an entire multisite, global organization. • It allowed companies to plan out how much raw material they would need at a certain time in the future, plan their production, control their inventory, and manage their purchasing process. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Advantages of ERP • Improved access to data for operational decision making: Operate via an integrated database, use one set of data to support business functions. • Elimination of costly, inflexible legacy systems: Adoption of an ERP system enables an organization to eliminate dozens or even hundreds of separate systems and replace them with a single, integrated set of applications for the entire enterprise. • Improvement of work processes based on best practices: ERP vendors do considerable research to define the best business processes. • Upgrade of technology infrastructure: When implementing an ERP system, an organization has an opportunity to upgrade the information technology (hardware, operating systems, databases, etc.) that it uses. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Disadvantages of ERP • Expense and time in implementation: Getting the full benefits of ERP takes time and money. • Difficulty implementing change: Sometimes, the best practices simply are not appropriate for the firm and cause great work disruptions. • Difficulty integrating with other systems: Many companies have experienced difficulties making the other systems operate with their ERP system. • Risks in using one vendor: The high cost to switch to another vendor’s ERP system makes it extremely unlikely that a firm will do so. • Risk of implementation failure: Implementing an ERP system for a large organization is extremely challenging and requires tremendous amounts of resources For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Transaction processing systems  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. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Transaction Processing Systems • Batch processing system – Computerized processing in which business transactions are accumulated over a period of time and prepared for processing as a single unit or batch. • Online transaction processing (OLTP) – Computerized processing in which each transaction is processed immediately For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Transaction Processing Cycle • • • • • • Data collection Data editing Data correction Data manipulation Data storage Document production For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Transaction Processing Cycle • Data Collection: • Capturing and gathering all data necessary to complete the processing of transactions. • Data collection can be: • Manual • Automated via special input devices (such as scanners, point-of-sale devices, and 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 For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Transaction Processing Cycle • Data Correction: • Re-entering data that was not typed or scanned properly • If invalid data is detected, system should provide error messages. • Data Manipulation: • Performing calculations and other data transformations related to business transactions. • Data Storage: • Updating one or more databases with new transactions. • After being updated, this data can be further processed and manipulated by other systems For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Transaction Processing Cycle • Document Production and reports: • Generating output records, documents, and reports • Hard-copy paper reports • Displays on computer screens • Results from one TPS can be inputs to another system For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning TPS applications • Order Processing Systems include order entry, sales configuration, shipment planning, shipment execution, inventory control, and accounts receivable. • Purchasing Systems include inventory control, purchase order processing, receiving, and accounts payable. • Accounting Systems include the budget, accounts receivable, payroll, asset management, and general ledger For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Electronic Business and Electronic commerce  E-Business: An e-business is an organization that uses information technologies or systems to support nearly every part of its business.  Electronic commerce: is conducting a business transaction (e.g., distribution, buying, selling, and servicing) electronically over computer networks, primarily the Internet but also extranets, and corporate networks. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Electronic Business and Electronic commerce • Business to Consumer (B2C) e-commerce: A form of e-commerce in which customers deal directly with an organization. • Business to Business (B2B) e-commerce: A form of e-commerce in which all the participants are organizations. • Consumer to Consumer (C2C) e-commerce: A form of e-commerce that involves consumers selling directly to other consumers. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Electronic Government (EGovernment) E-Government: The use of information and communication technology to simplify sharing of information, speed up formal paper-based processes and improve relation between government and citizens. Types: –Government to Consumer (G2C): •Government and citizens, For example, citizens can use G2C applications to submit their tax returns online. –Government to Business (G2B): •G2B applications support the purchase of materials and services from private industry by government procurement offices. –Government to Government (G2G): •G2G applications are designed to improve communications between the various levels of government. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Mobile Commerce • Mobile commerce (m-commerce) relies on the use of wireless devices, such as personal digital assistants, mobile phones, and smartphones, to transact. For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Production and Supply Chain Management • Production and supply chain management systems follow a systematic process: – Sales forecasting: estimates future customer demand. – Sales and operations plan: takes demand and current inventory levels to determine production for future demands. – Materials requirement planning: determines amount and timing of raw material orders with suppliers. – Production: plans details of running and staffing production operation For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Customer relationship management  Customer relationship management (CRM) system: helps a company manage all aspects of customer encounters, including: – – – – Marketing and advertising Sales Customer service after the sale Programs to retain loyal customers For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning For use with Principles of Business Information Systems, 3e by Stair, Reynolds & Chesney © 2018 Cengage Learning Summary • Enterprise system: ensures information can be shared across all business functions and all levels of management to support the running and managing of a business. • Transaction processing systems (TPSs): process detailed data necessary to update records about fundamental business operations. • Batch processing system: accumulate transactions over a period of time and then process them. • Online transaction processing (OLTP): process each transaction immediately For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Summary (cont.) • Transaction processing cycle: data collection, data editing, data correction, data manipulation, data storage, and document production. • Many types of transaction processing systems support order processing, purchasing, and accounting business functions For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning Summary (cont.) • Enterprise resource planning (ERP): set of integrated programs that manage a company’s vital business operations for an entire multisite, global organization. • Customer relationship management (CRM) system: helps a company manage all aspects of customer encounters. • Enterprise system of a multinational company must meet many challenges For use with Principles of Business Information Systems, 4e by Stair, Reynolds & Chesney © 2021 Cengage Learning