CHAPTER 10
Information Systems within the
Organization
CHAPTER OUTLINE
10.1 Transaction Processing Systems
10.2 Functional Area Information Systems
10.3 Enterprise Resource Planning Systems
10.4 Reports
LEARNING OBJECTIVES
1. Explain the purposes of transaction
processing systems, and provide at least one
example of how businesses use these systems.
2. Define functional area information systems,
and provide an example of the support they
provide for each functional area of the
organization.
LEARNING OBJECTIVES (continued)
3. Explain the purpose of enterprise resource
planning systems, and identify four advantages
and four drawbacks to implementing an ERP
system.
4. Discuss the three major types of reports
generated by the functional area information
systems and enterprise resource planning
systems, and provide an example of each type.
10.1 Transaction Processing Systems
(TPS)
This grocery store clerk is
using a bar code scanner
that produces data captured
by a transaction processing
system
Note: the barcode
scanner is an example of
source data automation
© Stockbroker/Age Fotostock America, Inc.
Batch Processing
Online Transaction Processing (OLTP)
How Transaction Processing Systems
Manage Data
Transactions should be
 Capable of collecting information at the
source as well as related data that could be
on other computers
 Reversible, such as voiding a sale of an item
within a sale
 Auditable
10.2 Functional Area Information Systems
Functional Area Information Systems are
designed to support a functional area by
increasing its internal effectiveness and
efficiency in the following areas:
Accounting
Finance
Marketing
Operations (POM)
Human Resources Management
Examples of Information Systems
Supporting the Functional Areas
What to do
How to do it
Get it done
10.3 Enterprise Resource Planning
Systems (ERP)
© Toh Kheng Ho/Age Fotostock America, Inc.
ERP systems integrate the functional areas of the organization
by enabling seamless information flows across them.
Early Information Systems
 Were run of much slower computers so the
information systems acted upon specific
areas (functions)
 Interaction between functions by information
systems were hampered


Databases were not invented
Interaction required more computer
processing power than a company could
afford
 Thanks to Moore’s Law, that has changed
SAP Modules (SAP is one of the most recognizable
names in ERP)
SAP Solutions:
 Financials
 Human Resources
 Customer Relationship Management
 Supplier Relationship Management
 Product Lifecycle Management
 Supply Chain Management
 Business Intelligence
ERP Systems (continued)
A business process is a set of related steps or
procedures designed to produce a specific outcome.
© Toh Kheng Ho/Age Fotostock America, Inc.
ERP Systems (continued)
Benefits of ERP Systems
They can make organizations more flexible,
agile, and adaptive.
They can improve managers’ ability to make
better, more timely decisions.
They can improve customer service,
production, and distribution.
Standardization of transaction processing, especially across consolidated companies.
How does this support an organization’s international operations?
Limitations of ERP Systems
May require organizations to change
existing business processes to fit the
predefined business processes of the ERP
software.
Can be complex, expensive, and time
consuming to implement.
10.4 Functional Area Information
Systems Reports
Routine reports
Ad hoc (on demand) reports
Drill-down reports
Key-indicator reports
Comparative reports
Exception reports – may be ‘good’ or ‘bad’,
simply a report of items that did not go as
planned
Types of Reports
•Summary Report
•Detailed report
• Drill-down report
•Key-indicator report
•Comparative report
•Exception Report
Monthly sales report.
Chapter Closing Case
• The Problem
• The Solution
• The Results