• An organization’s TPS must support the routine, day-today activities that occur in the normal course of business
and help a company add value to its products and
services
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• TPSs help multinational corporations form business links
with their business partners, customers, and subsidiaries
• Walmart’s suppliers
• Identify the challenges that multinational corporations must
face in planning, building, and operating their TPSs
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• Implementation of an enterprise resource planning system
enables a company to achieve numerous business benefits
through the creation of a highly integrated set of systems
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An Overview of Transaction Processing
Systems
• A transaction processing system (TPS) provides data for
other business processes
• Management information system/decision support system
(MIS/DSS)
• Special-purpose information systems
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Figure 9.1: TPS, MIS/DSS, and Special
Information Systems in Perspective
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An Overview of Transaction Processing
Systems (continued)
• TPSs
• Process the detailed data necessary to update records about
the fundamental business operations
• Include order entry, inventory control, payroll, accounts
payable, accounts receivable, the general ledger, and more
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Traditional Transaction Processing
Methods and Objectives
• Batch processing system: method of 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, without the delay of accumulating
transactions into a batch
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Figure 9.2: Batch Versus Online
Transaction Processing
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Traditional Transaction Processing
Methods and Objectives (continued)
• Online entry with delayed processing: transactions are
entered into the computer system when they occur, but
they are not processed immediately
• Organizations expect their TPSs to:
• Process data generated for and about transactions
• Maintain a high degree of accuracy and integrity
• Produce timely documents and reports
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Traditional Transaction Processing
Methods and Objectives (continued)
• Organizations expect their TPSs to (continued):
• Increase labor efficiency
• Help provide increased service
• Help build and maintain customer loyalty
• Achieve competitive advantage
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Transaction Processing Activities
• TPSs
• Capture and process data that describes fundamental
business transactions
• Update databases
• Produce a variety of reports
• Transaction processing cycle: the process of data
collection, data editing, data correction, data
manipulation, data storage, and document production
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Figure 9.4: A Simplified Overview of a
Transaction Processing System
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Control and Management Issues
• Business continuity planning: identification of the
business processes that must be restored first in the event
of a disaster and specification of what actions should be
taken and who should take them to restore operations
• Disaster recovery: actions that must be taken to restore
computer operations and services in event of disaster
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Transaction Processing System Audit
• Does the system meet the business need for which it was
implemented?
• What procedures and controls have been established?
• Are these procedures and controls being used properly?
• Are the information systems and procedures producing
accurate and honest reports?
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Accounting Systems
• Budget
• Accounts receivable
• Payroll
• Asset management
• General ledger
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Figure 9.16: Financial Systems
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Accounting Systems (continued)
• Budget transaction processing system: automates many
of the tasks required to amass budget data, distribute it to
users, and consolidate the prepared budgets
• Accounts receivable system: manages the cash flow of
the company by keeping track of the money owed the
company on charges for goods sold and services
performed
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Accounting Systems (continued)
• Payroll system prepares:
• Payroll check and stub
• Payroll register
• W-2 statements
• Asset management transaction processing system:
controls investments in capital equipment and manages
depreciation for maximum tax benefits
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Accounting Systems (continued)
• General ledger system: designed to automate financial
reporting and data entry
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International Issues
• Issues that multinational corporations face in planning,
building, and operating their TPSs
• Different languages and cultures
• Disparities in information system infrastructure
• Varying laws and customs rules
• Multiple currencies
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Enterprise Resource Planning: An
Overview
• Enterprise resource planning (ERP) systems are used in
large, midsized, and small companies
• Real-time monitoring of business functions
• Timely analysis of key issues such as quality, availability,
customer satisfaction, performance, and profitability
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An Overview of Enterprise Resource
Planning (continued)
• Steps in running a manufacturing organization using an
ERP system
• Develop demand forecast
• Deduct demand forecast from inventory
• Determine what is needed for production
• Check inventory for needed raw materials
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An Overview of Enterprise Resource
Planning (continued)
• Steps in running a manufacturing organization using an
ERP system (continued)
• Schedule production
• Assess need for additional production resources
• Financial forecasting
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Advantages and Disadvantages of ERP
• Elimination of costly, inflexible legacy systems
• Improvement of work processes
• Increase in access to data for operational decision making
• Upgrade of technology infrastructure
• Expense and time in implementation
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Advantages and Disadvantages of ERP
(continued)
• Difficulty implementing change
• Difficulty integrating with other systems
• Risks in using one vendor
• Risk of implementation failure
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