Turban and Volonino. Transaction Processing, Functional Applications and Integration

Turban and Volonino Chapter 9 Transaction Processing, Functional Applications and Integration Information Technology for Management Improving Performance in the Digital Economy 7 th edition John Wiley & Sons, Inc. Slides contributed by Dr. Sandra Reid Chair, Graduate School of Business & Professor, Technology Dallas Baptist University Copyright 2010 John Wiley & Sons, Inc. 9-1

Transaction Processing, Functional Applications and Integration How Long, Value Chain Perspective 1. Functional Information Systems and Transaction Processing Systems 2. Production/Operations and Logistics 3. Managing Marketing and Sales Systems 4. Managing Accounting and Finance Systems 5. Managing Human Resources Systems 6. Integrating Functional Information Systems 7. Managerial Issues Copyright 2010 John Wiley & Sons, Inc. 9-2

Value Chain Model The value chain model views activities in organizations as: Primary (reflecting the flow of goods and services) or Secondary (supporting the primary activities). The organizational structure of firms is intended to support both of these types of activities. Chapter 7 5

Functional Areas in a Business Chapter 7 6

Transaction Processing Information Systems Computerization of Routine Transaction Processes Objectives handle high volume, avoid errors, handling of large variations, avoid down time, privacy and security. XTP Chapter 7 7

Transaction Processing Information Systems Chapter 7 8

Transaction Processing Information Systems TPS monitors, collects, stores, processes, & disseminates information for all routine core business transactions. Characteristics of Transaction Processing Systems: Rapid Processing Reliability Standardization Controlled Access Processes transactions virtually instantly Ensures transactions never slip past the net, & systems themselves are operational permanently Acquires identical data for each transaction. Access is restricted to only those employees who require their use. Copyright 2010 John Wiley & Sons, Inc. 9-9

Functional Information Systems & Transaction Processing Systems Major Characteristics of Functional Information Systems Composed of smaller systems Integrated or independent Interfacing Supportive of different levels Copyright 2010 John Wiley & Sons, Inc. 7-12

Functional Information Systems & Transaction Processing Systems Transaction Processing Information Systems Objectives and Examples of TPSs Payroll preparation Traffic control airports Registration at Facebook Activities and Methods of TPS Batch Processing Online Processing Copyright 2010 John Wiley & Sons, Inc. 7-13

Batch vs. Online Processing Benefits of Batch: Allows sharing of computer resources among many users and programs, Shifts the time of job processing to when the computing resources are less busy. Avoids idling the computing resources with minute-by-minute human interaction and supervision. Better amortizes the cost of a computer, especially an expensive one. Benefits of Online: Data are processed as soon as transaction occurs. Allows sharing of computer resources among many users. Shifts the time of job processing to when the computing resources are less busy. Avoids idling the computing resources without minute-by-minute human interaction and supervision. Atomic unit of processing. Copyright 2010 John Wiley & Sons, Inc. 9-14

Functional Information Systems & Transaction Processing Systems Web-based and Online Transaction Processing Systems Typical Tasks in Transaction Processing Order Processing Web Analytics Other TPS Activities What If a TPS Fails? Transaction Processing Software Copyright 2010 John Wiley & Sons, Inc. 7-15

The flow of information in transaction processing. DMT Digital Monetary Trust 9-17

Modernizing TPS Saved Time & Money Behind Microsoft's Tellme Acquisition: Pizza To Go Blaze Advisor drives modernization of legacy systems at the California DMV Copy Services no longer need employees to complete your purchase Copyright 2010 John Wiley & Sons, Inc. 9-18

Taxis in Singapore ORBITAL AWARDED $13 MILLION TRANSIT FLEET MANAGEMENT SYSTEMS CONTRACT IN SINGAPORE Contract Represents Major International Win for Orbital's Transportation Management Systems Division, Already the U.S. Market Leader Copyright 2010 John Wiley & Sons, Inc. 9-19

Web Analytics Tools Web analytics is the measurement, collection, analysis and reporting of internet data for purposes of understanding and optimizing web site usage. [1] There are two categories of web analytics; off-site and on-site web analytics. 5 Great (Free) Analytics Tools You Might Not Know About Yet Copyright 2010 John Wiley & Sons, Inc. 9-20

TPS Managing Production/Operations & Logistics A few of the IT supported POM production and operations management areas are: In-house logistics and materials management Planning production/operations Computer-integrated manufacturing (CIM) Product lifecycle management (PLM) Automating design work and manufacturing Chapter 7 23

TPS Computer-Integrated Manufacturing CIM Computer-Integrated Manufacturing is a concept that promotes the integration of various computerized factory systems. It has three basic goals: 1. The simplification of all manufacturing technologies and techniques, 2. Automation of as many of the manufacturing processes as possible, and 3. Integration and coordination of all aspects of design, manufacturing, and related functions via computer hardware and software. Chapter 7 24

TPS Computer-Integrated Manufacturing Typical integrated technologies are: FMS - Flexible-manufacturing systems JIT Just-in-Time MRP Materials Requirements Planning CAD Computer Aided Design CAE Computer Aided Engineering GT - Group technology Chapter 7 25

Managing Production/Operations & Logistics TPS Computer-Integrated Manufacturing Chapter 7 26

TPS Product Lifecycle Management PLM is a business strategy that enables manufacturers to control and share product-related data as part of a products design and development effort. Web-based supply chains and other technologies are employed to automate this collaborative effort. Chapter 7 27

TPS Product Lifecycle Management This electronic-based collaboration can reduce Product cost Travel expenses Costs associated with product-change management Time it takes to get a product to market Chapter 7 28

Figure 9.3 The production/operations management functions transform inputs into useful outputs. (Source: J.R. Meredith and S. M. Shafer, Operations Management. New York: Wiley, 2002. Reprinted by permission of John Wiley & Sons, Inc.) Copyright 2010 John Wiley & Sons, Inc. 9-29

In-House Logistics & Materials Management Deals with ordering, purchasing, inbound logistics (receiving), & outbound logistics (shipping) activities. Purchasing results in incoming materials & parts. Parts inspected for quality then stored. Activities supported by information systems. Copyright 2010 John Wiley & Sons, Inc. 9-30

e-procurement E-procurement (electronic procurement, sometimes also known as supplier exchange) is the business-to-business or business-to-consumer or Business-to-government purchase and sale of supplies. Information systems that support logistics & materials management: Radio-frequency identification (RFID) is the use of an object (typically referred to as an RFID tag) applied to or incorporated into a product, animal, or person for the purpose of identification and tracking using radio waves. Some tags can be read from several meters away and beyond the line of sight of the reader. Robots perform distribution & materials handling. Copyright 2010 John Wiley & Sons, Inc. 9-31

Quality Control Systems Can be standalone systems. May be part of enterprise-wide total quality management (TQM) effort. Provide information about quality of incoming materials & parts; quality of in-process semi-finished & finished products. May compare results to metrics such as Six Sigma. Per wikipedia.org, Six Sigma is a business management strategy, originally developed by Motorola, that today enjoys widespread application in many sectors of industry. Copyright 2010 John Wiley & Sons, Inc. 9-32

Planning Production / Operations Just-in-time inventory strategy minimizes inventories & continuously improves processes. Project management is enhanced by tools such as PERT (program evaluation & review technique) & CPM (critical path method). Computer-integrated manufacturing promotes integration of various computerized factory systems & has 3 basic goals: simplification, automation, & integration and coordination. Copyright 2010 John Wiley & Sons, Inc. 9-33

TPS Marketing and Sales Systems Channel systems are the TPS involved in the process of getting a product or service to customers and dealing with their needs. These systems link and transform marketing, sales, procurement, logistics, and delivery activities with other corporate functional areas. Chapter 7 35

TPS Marketing and Sales Systems Some of the channel-system activities are: Customer relations Distribution channels and in-store innovations Marketing management Telemarketing Chapter 7 36

Figure 9.4 Marketing channel systems. 9-37

Improving Shopping & Checkout at Retail Stores Macy's expands consumer electronics kiosks program Electronic check scans win retailers' acceptance (WalMart)..Embedded with an RFID device.. Home Depot Employs Self Checkout Copyright 2010 John Wiley & Sons, Inc. 9-38

TPS Customer Relations Customer Profiles and Preference Analysis Prospective Customer Lists and Marketing Databases. Mass Customization. Personalization. Advertising and Promotions. Chapter 7 39

TPS Distribution Channels & In-Store Innovations IT-Supported Distribution Channels Internet Location Based Mapping Self-service convenience stores Chapter 7 40

TPS Distribution Channels & In-Store Innovations Improving Shopping and Checkout at Retail Stores Hand-held wireless devices that scan the bar code UPC Smart card or credit card Information kiosk enable customers to view catalogs in stores Self-checkout machines Check-writers attached to cash registers Computerization of various activities in retail stores Video-based systems count and track shoppers in a physical store Chapter 7 41

TPS Marketing Management Pricing of Products or Services. Salesperson Productivity. Profitability Analysis Sales Analysis And Trends. New Products, Services, and Market Planning. Web-Based Systems Chapter 7 42

Managing Marketing & Sales Systems The Customer is King/Queen Customer Profiles and Preference Analysis Prospective Customer Lists and Marketing Databases Mass Customization Personalization Advertising and Promotions Copyright 2010 John Wiley & Sons, Inc. 9-43

Managing Marketing & Sales Systems Distribution Channels and In-Store Innovations Improving Shopping and Checkout at Retail Stores Marketing Management Pricing of Products or Services Salespersons Productivity Productivity Software Profitability Analysis New Products, Services, and Market Planning Web-Based Systems in marketing Copyright 2010 John Wiley & Sons, Inc. 9-44

Managing Accounting & Finance Systems Financial Planning and Budgeting Financial and Economic Forecasting and Budgeting Budgeting Software Support Capital Budgeting Copyright 2010 John Wiley & Sons, Inc. 9-33

Major Benefits of Using Budgeting Software Reduces time & effort in the budget process. Possible to easily explore & analyze implications of organizational & environmental changes. Can facilitate integration of corporate strategic objectives with operational plans. May make planning an ongoing, continuous process. Automatically monitor exceptions for patterns & trends. Copyright 2010 John Wiley & Sons, Inc. 9-33

Managing Accounting & Finance Systems Managing Financial Transactions XBRL: Extensible Business Reporting Language Investment Management Access to Financial and Economic Reports Financial Analysis Copyright 2010 John Wiley & Sons, Inc. 9-33

Managing Accounting & Finance Systems Control and Auditing Risk Analysis Budgetary Control Auditing Financial Ratio Analysis Profitability Analysis and Cost Control Expense Management Automation Copyright 2010 John Wiley & Sons, Inc. 9-33

Integrated Accounting Software See Top 7 Accounting, Financial & Inventory Software Source: wikipedia.org XBRL is a standards-based way to communicate business and financial information. These communications are defined by metadata set out in taxonomies. Taxonomies capture the definition of individual reporting concepts as well as the relationships between concepts and other semantic meaning. Copyright 2010 John Wiley & Sons, Inc. 9-52

TPS Human Resources Systems Recruitment is finding employees, testing them, and deciding which ones to hire. The Web has enhanced the recruitment process. Position Inventory HRM Portals and Salary Surveys Employee Selection Human Resources Maintenance and Development Performance Evaluation Training and Human Resources Development Chapter 7 55

TPS Human Resources Systems (Continued) Human Resources Planning and Management Personnel Planning Labor Management Negotiations Payroll and Employees Records Benefits Administration Employee Relationship Management Chapter 7 56

HRIS Applications Recruitment Using the Web for Recruitment Using Social Networks and Intelligent Software HRM Portals and Salary Surveys Employee Selection Human Resources Maintenance and Development Performance Evaluation Training and Human Resources Development Human Resources Planning and Management Personnel Planning and HR Strategies Benefits Administration Employee Relationship Management Copyright 2010 John Wiley & Sons, Inc. 9-57

Recruitment Search engines on the Web can help with attracting & repelling appropriate candidates. Internet makes advertising much simpler process, although large numbers may result. Embedded intelligence to help manage entire recruitment process. Social networking sites such as Jobster & LinkedIn have gained widespread popularity. Copyright 2010 John Wiley & Sons, Inc. 9-60

HR Maintenance & Development Performance evaluation supervisor, peer, &/or subordinate. Wage reviews are also related to performance evaluations. Training & HR development planning classes & tailoring specific training programs to meet needs of organization & employees. May include career development plan for each employee. IT supports planning, monitoring & control of these activities. Copyright 2010 John Wiley & Sons, Inc. 9-61

Integrating Functional Information Systems Reasons for Integration Integration of Front-Office with Back-Office Operations Using Enterprise 2.0 and Virtual Worlds Copyright 2010 John Wiley & Sons, Inc. 9-64

Managerial Issues Integration of functional information systems Priority of transaction processing Finding innovative applications Using the Web Systems integration Ethical issues Copyright 2010 John Wiley & Sons, Inc. 9-66

Extreme Transaction Processing In Computer Science, Extreme Transaction Processing (XTP) is an exceptionally demanding form of transaction processing. Transactions of most high-end (more than 10,000 concurrent accesses or 500 transaction per second). Ultra-high-end (more than 100,000 concurrent accesses or 5,000 transaction per second) requirements or more would require this form of processing. Copyright 2010 John Wiley & Sons, Inc. 67

Time for Deprivation to Have Serious Extreme Effect Deprivation of human needs Element Time for serious adverse effect Element Oxygen Few minutes Transaction documents Water Few days Daily or weekly operations reports Food Few weeks Planning and control reports Emotional support Few months or years Long term trend reports Information deprivation Activities affected Operations Operational control Management control Strategic planning Time for serious adverse effect Hours to days Days to weeks Weeks to months Months to years 68