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Prof. Rushen Chahal
Transaction Processing, ElectronicCommerce, and Enterprise
Resource Planning Systems
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TPS, MIS, DSS, and AI/ES
Hierarchy:
AI/ES
DSS
MIS
TPS
Information
Data
Less More Less More
More MoreLess Less
RoutineDecisionsupport
Input &output
Sophistication& complexity of
processing & analysis
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Transactions
Transactions Basic business operations such as customer
orders, purchase orders, receipts, time cards,
invoices, and payroll checks in an organization
Transaction processing systems (TPS) Perform routine operations and serve as a
foundation for other systems
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Batch vs. On-Line Transaction
Processing Two types ofTPS:
Batch processing
A system whereby business transactions are
accumulated over a period of time and prepared
for processing as a single unit or batch
On-line transaction processing (OLTP)
A system whereby each transaction is processed
immediately, without the delay of accumulating
transactions into a batch
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Batch Schematic
Data entry
of accumulated
transactions
Input
(batched)Output
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On-line Schematic
Output
Terminal
Terminal
Terminal
Terminal
Terminal
Terminal
Immediateprocessingof eachtransaction
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Integration ofTPSs
Applications
software
People
Schematic
x n =
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Objectives ofTPS
Process data generated by and about transactions
Maintain a high degree of accuracy
Ensure data and information integrity and accuracy
Produce timely documents and reports
Increase labour efficiency
Help provide increased and enhanced service
Help build and maintain customer loyalty
Achieve competitive advantage
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Simplified Overview of a
Transaction Processing System
Schematic
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Data entry & input
ProcessingDocuments
& reports
Database
Internally generatedtransactions:
shipped orders
purchase orders
employee time cards
Externally generatedtransactions:
customer orders
vendor invoices
customer payments
Internally generatedtransactions:
shipped orders
purchase orders
employee time cards
Externally generatedtransactions:
customer orders
vendor invoices
customer payments
Database update:
customer orders
inventory
purchase orders
customers
suppliers
Database update:
customer orders
inventory
purchase orders
customers
suppliers
Documents:
pick list
cheques to vendors
receiving notices
paycheques
Operational reports:
finished productinventory status
raw materials; packingmaterials; spare parts;inventory status
Documents:
pick list
cheques to vendors
receiving notices
paycheques
Operational reports:
finished productinventory status
raw materials; packingmaterials; spare parts;inventory status
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Data Processing Activities
Common to TPSs
A transaction processing cycle Data collection
Data editing
Data correction
Data manipulation
Data storage
Document production
Schematic
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Data
collection
Data
edit
Data
manipulation
Data
storage
Document
production
Data
correction
Original data
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Source Data Automation
Source data automation The process of capturing data at its source with
minimal manual effort
Data are entered directly into the computer
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Point-of-Sale Transaction
Processing SystemCustomers
receiptInventory
database
Management
information
system
Exception
report
Purchasesdatabase
Scanner
Point-of-sale
transaction
processing
system
Item
database
UPC andquantity
Item, quantity,date, time, price
UPC Price
UPC
Quantity,Date,time
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Control and Management
Issues Business resumption planning The process of anticipating and providing for disasters.
Disaster recovery
The implementation of the business resumption plan.
Transaction processing system audit An examination of the TPS in an attempt to answer three
basic questions
Does the system meet the business need? What procedures and controls have been established?
Are the procedures and controls being properly used?
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Traditional TPS
Order Processing Order processing
Processing an order from entry to delivery,
including traditional accounting transactions
Schematic
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Customer
Order entry/
sales configuration
Shipmentplanning
Routing
Scheduling
Shipment
execution
Invoicing
Finishedproduct
inventory
Customer order in person or viamail, phone, EDI, internet
OrdersPlanned
shipments
Planned
shipments
& routes
Pick list
Shipped orders
Inventory status
Products
Invoice
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Data Flow Diagram of an
Order Entry System
Schematic
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D1 Products/prices D2 Customer payment history
D3 New orders
D4 Back orders
D5 Rejected orders
3. Authorize
credit
2. Verify
product
numbers
& stock
on hand
1. Collect
order
info
4. Notify
customer
Customer
Back
ordersBack orders
Customer notification
Orders
Product numbers,
inventory levels
D6 Inventory
Products, price
information
Orders
Credit status
Open
orders
Rejected,partly filled
orders
Rejected
orders
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Order Processing Support Systems -
Sales Configuration
Sales configuration Ensures that products and services ordered are
sufficient to accomplish customers objectives and
will work well together
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Order Processing Support Systems -
Shipment Planning
Shipment planning A system that determines which open orders will
be filled and from which location they will be
shipped E.g., (from Figure 8.9)
LOC LINK ITEM NUMBER DESCRIPTION ORDERED SHIPPED BO
8 105 10 L1L1602820 S8276
30 S8279
40
FASENTING TOOLSTAPLE INCH
STAPLE 1 INCH
SHIPPING CHARGE
315
15
EACHCASE
CASE
315
12 3
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Order Processing Support Systems -
Shipment Execution
Shipment execution A system that coordinates the outflow of all
products and goods from the organization, with the
objective of delivering quality products on time tocustomers
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Order Processing Support Systems -
Inventory Control
Inventory control A system that updates the computerized inventory
records to reflect the exact quantity on hand of
each stock keeping unit Status reports
Summarize all inventory items in stock, or shipped over a
specified period of time
E.g., see Figure 8.10
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Order Processing Support Systems -
Invoicing
Invoicing Generates customer invoices based on records
received from the shipment execution TPS
E.g., see Figure 8.11
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Order Processing Support Systems -
Customer Interaction System
Customer interaction A system that monitors and tracks each customer
interaction with the company
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Request
for
proposal
Sale
Problem, idea,
request for
information
Other
contacts
Market
research
Sales
Marketing
Quality
control
Product
development
Customer
interaction
system
Customer
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Order Processing Support Systems -
Routing and Scheduling
Routing A system that determines the best way to get
goods and products from one location to another
Scheduling A system that determines the best time to deliver
goods and services
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Purchasing System
Schematic
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Raw materials
Packing materials
Spare parts
Inventory control
Purchase order
processing
Receiving
Accounts
payable
Employees
Supplier
Inventory controlstatus report
Purchase
order
Material
Cheque
InvoiceReceiving
notice
Purchaseorder
Purchase
order
request
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Purchasing System
Inventory control Maintains stock of items such as raw materials, packing
materials, spare parts, and supplies
Purchase order (P.O.) processing A system that helps purchasing department complete
transactions quickly and efficiently
Receiving A system that creates a record of expected and actual
receipts
Reconciles purchase ordersw
ithw
hat is actuallyreceived
Accounts payable A system that increases an organizations control over
purchasing, improves cash flow
increases profitability, and provides more effective
management of current liabilities
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P.O. Example
(Click to view)
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Accounting System
Accounting systems
Consist of
Budget
Accounts receivable
Accounts payable
Payroll
Asset management
General ledger
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Accounts Payable Example
(Click to view)
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Financial Systems
Schematic
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Customer
Accounts
receivable
Asset
management
Accounts
payable
Payroll
BudgetCustomer
General
ledger
Timecards
Paycheques
Labour costs
Expense
transactions
Asset depreciation
Amounts owed by company
Amounts paid by company
Cost of assets
Payments
Amounts owed by customers
Amounts paid by customers
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Financial Systems -
Accounts Receivable
Accounts receivable A system that manages the cash flow of the
company by keeping track of the money owed the
company on charges for goods sold and servicesperformed
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Statement of Account Example
(Click to view)
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Financial Systems
Accounts Receivable
Accounts receivable aging report Tells managers what bills are overdue, either
customer by customer or in a summary format
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Financial Systems - Payroll
Payroll Generates payroll checks and stubs, as well as W-
2 statements at the end of the year for tax
purposes
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Financial Systems - Payroll
Payroll journal Helps managers monitor total payroll costs for an
organization and the impact of those costs on cash
flow
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Financial Systems -
Asset Management
Asset management transaction processing
system A system that controls investments in capital
equipment and manages depreciation formaximum tax benefits
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Financial Systems - General Ledger
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Electronic Commerce
(E-commerce)
Business-to-business problems Inadequate models
Integrating with existing systems
Improving relationshipsw
ith suppliers, customers,distributors.
Consumer problems Wait for images to download
Security of credit information
Figuring out the ordering process
Currently a small part of all commerce
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Five Stage Model of
E-Commerce
The stages consumers experience in the
sales life cycle
Schematic
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Buyer
1. Search and
Identify5. After sales
service
4. Product &
service
delivery
2. Selection
& negotiation
3. Purchasing
Traditional
delivery
Electronicdistribution
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Buying Over the Internet
Prepare list of
items needed
Log on to
internet
Access
suppliers
homepage
Browse
supplierscatalog
Pick items
Fill outrequest
forquotation
form
Reviewresponse torequest for
quotation
Place order
Input sent to
suppliers
order entry
system
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Forecasted Volume of
E-Commerce
Mode 1997 2000
Consumer $0.5 billion $7 billion
Business $8.0 billion $66 billion
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Purchasing Products and Services
Electronically
Establish credit with suppliers
Secure E-commerce transactions
Secure financial transaction (SFT
) SET = secure electronic transaction
CyberCash
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SETDiscussion (1)
Short for Secure Electronic Transaction, a new standard that will
enable secure credit card transactions on the Internet. SET has
been endorsed by virtually all the major players in the electronic
commerce arena, including Microsoft, Netscape, Visa, and
Mastercard.
By employing digital signatures, SETwill enable merchants to
verifythat buyers are who they claim to be. And it will protect buyers by
providing a mechanism for their credit card number to betransferred
directly to the credit card issuer for verification and billingw
ithout
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SETDiscussion (2)
the merchant being able to see the number.
The first applications based on SE
Tare expected appeared in1998.
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Enterprise Resource Planning
(ERP)
ERP Real-time monitoring of business functions
Advantages Eliminate costly, inflexible legacy systems
Provide improved work processes
Provide access to data for operational decision making
Upgrading technology infrastrucutre
Disadvantages
Time consuming, difficult, expensive to implement Make radical changes in how a company operates
Lack of vendor responsiveness in light of high demand
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ERP Examples
Software Vendor Name of Product
Avalon Software Avalon CIM
qad.inc MRG/PROOracle Oracle Manufacturing
SAP America SAP R/3
Baan TritonPeopleSoft PeopleSoft
J.D. Edwards World
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Example of an ERP System - SAP/R3
Clients in the SAP system
Application servers in the SAP system
Business application programming interfaces
(BAPIs)
Database server in the SAP systems
Objects in the SAP system
Repository Tables
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SAP Three-Tier Client/Server
Architecture
Client
desktop
computers
Application
servers
Database
server
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Business Application Programming
Interface (BAPI)
Business
processes
BAPI
(public interface)
SAP
software
Standardresults
Results consistent with current
version of SAP software
Standard request
for data or processing
Request for data or processing consistent
with current version of SAP software
![Enterprise Porta1 Transaction Iview[1]](https://static.documents.pub/doc/80x56/563dba8f550346aa9aa6ae23/enterprise-porta1-transaction-iview1.jpg)
