Turban and Volonino
Chapter 9
Transaction Processing, Functional
Applications and Integration
Information Technology for Management
Improving Performance in the Digital Economy
7th 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.
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Chapter Outline
• 9.1 Functional Information Systems and
Transaction Processing Systems
• 9.2 Managing Production/Operations and
Logistics
• 9.3 Managing Marketing and Sales Systems
• 9.4 Managing Accounting and Finance
Systems
• 9.5 Managing Human Resources Systems
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Chapter Outline (cont’d)
• 9.6 Integrating Functional Information
Systems
• 9.7 Managerial Issues
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Learning Objectives
1. Relate functional areas and business processes to the
value chain model.
2. Define a functional management information system,
and list its characteristics.
3. Understand the transaction processing system and
demonstrate how it is supported by IT.
4. Analyze the support provided by IT and the Web to
production/operations management, including logistics.
5. Describe the support provided by IT and the Web to
marketing and sales.
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Learning Objectives – cont’d
6. Understand the support provided by IT and
the Web to accounting and finance.
7. Analyze the support provided by IT and the
Web to human resources management.
8. Describe the benefits and issues of
integrating functional information systems.
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Figure IT7eU
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• Problem – Medical supplies inventory shortages,
overstock of unneeded items, costly rush
ordering, & nurses not appropriate personnel to
manage process.
• Solution – Connect wireless handheld devices
with purchasing & inventory management
information systems.
• Results – Inventory levels reduced 50%; IT
solution cost repaid in months. Consistent
materials available for improved patient care.
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Figure 9.1
The functional areas, TPS, and integration connection. Note the flow of information
from the TPS to the functional systems. Flow of information between and among
functional systems is done via the integration component.
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9.1 Functional Information Systems &
Transaction Processing Systems
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Transaction Processing Information Systems
TPS monitors, collects, stores, processes, &
disseminates information for all routine core business
transactions.
Characteristics of Transaction Processing Systems:
Rapid Processing
Processes transactions virtually instantly
Reliability
Ensures transactions never slip past the
net, & systems themselves are
operational permanently
Standardization
Acquires identical data for each
transaction.
Controlled Access
Access is restricted to only those
employees who require their use.
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Table 9.1
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TPS – Traffic Control at Airports
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TPS – In-flight Card Payments
Many airlines now accepting plastic for
in-flight purchases
Many airlines go cashless for
in-flight purchases
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Batch vs. Online Processing
Benefits of Batch:
Benefits of Online:
Allows sharing of computer resources
among many users and programs,
Data are processed as soon as
transaction occurs.
Shifts the time of job processing to when
the computing resources are less busy.
Allows sharing of computer resources
among many users.
Avoids idling the computing resources
with minute-by-minute human
interaction and supervision.
Shifts the time of job processing to when
the computing resources are less busy.
Better amortizes the cost of a computer,
especially an expensive one.
Avoids idling the computing resources
without minute-by-minute human
interaction and supervision.
Atomic unit of processing.
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Figure 9.2
The flow of information in transaction processing.
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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…
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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
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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
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Table 9.2
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9.2 Managing Production/Operations &
Logistics
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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.)
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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.
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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.
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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.
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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.
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9.3 Managing Marketing & Sales
Systems
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Figure 9.4
Marketing channel systems.
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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
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Internet Market Research & Proctor & Gamble
• Whitestrips introduced & offered for sale on
the Internet.
• Spent months identifying target market.
• Collected data via online questionnaires rather
than mail-outs.
• Data mining revealed most enthusiastic
groups.
• Buzz created a huge demand for product by
the time it hit the shelves.
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9.4 Managing Accounting & Finance
Systems
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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.
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Figure 9.5
Integrated accounting business software.
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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.
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Figure 9.6
How XBRL works.
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9.5 Managing Human Resources
Systems
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HRIS Applications
•
•
•
•
•
•
Payroll
Work Time
Benefits Administration
Recruiting
Training
Performance Records
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Figure 9.7
HRM activities.
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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.
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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.
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Training Devices
•
•
•
•
Web-based video clips.
Mobile devices.
Virtual reality.
Interactive simulations.
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9.6 Integrating Functional Information
Systems
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Software Helps Cirque du Soleil
Cirque du Soleil - Saltimbanco Arena Show 2008
Issues such as:
•Logistics
•Applications such as finance, accounting, marketing
•Unable to share data
•Ineffective employee productivity
Company implemented IBM WebSphere
Business Integration software to connect all
systems & applications:
*Replaced manual work
*Data sharing resulted in fewer missing items
*Cut development time for new applications
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9.7 Managerial Issues
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Managerial Issues
•
•
•
•
•
•
Integration of functional information systems
Priority of transaction processing
Finding innovative applications
Using the Web
Systems integration
Ethical issues
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Copyright 2010 John Wiley & Sons, Inc.
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