1. Chapter 71 Introduction to Information Technology Turban, Rainer and Potter John Wiley & Sons, Inc. Copyright 2005

2. Chapter 72 Transaction Processing, Functional Application, and Integration “ Copyright 2005 John Wiley & Sons Inc.”

3. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 73 7.1 Functional Information Systems

4. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 74 Functional Information Systems cont… Functional information Systems can be divided into two general categories: function- specific and function- general. The most common type of function-general system, is management information systems (MISs)

5. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 75 Management Information System (MIS) A system that provides information to managers in the functional areas, in order to support managerial tasks of planning, organizing, and controlling operations.

6. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 76 An MIS produces routine, ad-hoc (on- demand) and exception report: Ad-hoc ( on- demand) reports: Nonroutine reports. Drill- down report: Reports that show a greater level of detail than is included in routine reports. Key- indicator reports. Reports that summarize the performance of critical activities. Comparative reports. Reports that compare performance of different business units or time periods. Exception report. Report that include only information that exceeds certain threshold standard

7. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 77 Information systems can also be function-specific Typical function- specific system are accounting, finance, marketing, operations (POM), and human resources management

8. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 78 Major characteristic of functional information systems Frequently composed of smaller systems Integrated or independent Interfacing Supportive of different organizational levels

9. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 79 7.2 Transaction Processing Information Systems (TPS) Information system that supports routine, core business transactions.

10. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 710 Objectives of a TPS To provide all the information needed by law, by management and / or by organizational policies to keep the business running properly and efficiently to efficiently handle high volume of data, to avoid errors due to concurrent operations to handle large variations in volume To avoid downtime, never lose results, and maintain privacy and security To interface with many IT applications, including e- payment, e-procurement and e-marketing.

11. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 711 Activities and Methods of TPSs First, data are collected by people or sensors and entered into the computer via any input device. Next the system processes data in one of two basic ways: batch or online processing. Batch processing: processes data in batches at fixed periodic intervals. Online processing: processes data as soon as a transaction occurs.

12. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 712 The Major Characteristics of a TPS  Typically. Large amounts of data are processed.  The source of data are mostly internal, and the outputs is intended mainly for an internal audience. This characteristic is changing somewhat, since trading partners may contribute data and may be permitted to use TPS output directly.  The TPS processes information on a regular basis: daily, weekly, biweekly and so on.  Large storage (database) capacitv is required.  High processing speed is needed due to the high volume.  The TPS monitors and collects past data  Input and output data are structured. Since the processed data are fairly stable, they are formatted in a standard fashion.  A high level of detail (raw data, not summarized) is usually observable, especially in input data but often in output as well.  Low computation complexity (simple mathematical and statistical operations) is usuallv evident in a TPS.  A high level of accuracy, data integrity, and security is needed. Sensitive issues such as privacy of personal data are strongly related to TPSs.  High reliability is required. The TPS can be viewed as the lifeblood of the organization. Interruption in the flow of TPS data can be fatal to the organization.  Inquiry processing is a must. The TPS enables users to query files and databases ( even online and in real time)

13. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 713 The flow of information in TPS

14. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 714 Web–Based and Online TPS In online transaction processing (OLTP) business transaction are processed online as soon as they occur.

15. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 715 Typical TPS Activities ActivitiesDescription The ledgerThe entire financial accounts: all of the assets, liabilities, and owner’s (stockholders') equity accounts Accounts payable and receivableRecord of all account to be paid and those owed by customers. Receiving and shipping recordsTransaction records of all item send or received and returns Inventory-on-hand recordsRecord of inventory levels. Use of barcodes improves ability to count inventory periodically Fixed-assets managementRecord of the value of an organization’s fixed assets ( e.g. buildings, cars, machine ), including depreciation rate and major improvements made in assets, for taxation purposes PayrollAll raw and summery payroll records. Personnel files and skills inventory Files of employee’s history, evaluations, and record of training and performance. Reports to governmentReport on compliance with government regulations, taxes, etc Other periodic reports and statements Financial, tax, production, sales and routine reports

16. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 716 7.3 Managing The Accounting and Finance Systems

17. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 717 Financial planning and budgeting Financial and economic forecasting Budgeting Capital budgeting

18. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 718 Managing financial transactions E-commerce applications of financial transactions (global stock exchange, multiple currencies, E-bonds, etc.) Virtual close. The ability of a company to close its accounting records quickly and on short notice Expense Management Automation (EMA). Systems that automate data entry and processing of travel and entertainment expenses.

19. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 719 Investment Management Access to financial and economic reports Financial analysis

20. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 720 Control and auditing Budgetary control Auditing Financial ratio analysis. Product pricing Contract management Profitability analysis and cost control

21. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 721 7.4 Managing marketing and sales systems Channel systems. The systems involved in the process of getting a product or services to customers and dealing with all customers’ needs.

22. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 722 Marketing Channel Systems

23. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 723 Customer relations “The Customer is King /Queen” Customer profile and preference analysis Prospective customer lists and marketing Databases Mass customization Personalization Advertising and promotions

24. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 724 Distribution channels and In-store innovations New IT-support distribution channel

25. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 725 Marketing Management Pricing of products or services Salesperson productivity (sales force automation, sales productivity software) Profitability analysis Sales Analysis and trends New products, services and marketing planning Web-based systems in marketing

26. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 726 7.5 Managing production/ operations and logistics In-house logistics and materials management Inventory management Quality control

27. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 727 Planning production and operations Material requirement planning: A planning process that integrates production, purchasing and inventory management of interdependent items. Manufacturing resource planning: A planning process that integrates an enterprise’s production, inventory management, purchasing, financing and labor activities. Just- in- time systems: An inventory scheduling system in which materials and parts arrive at a workplace just when needed. Other areas.

28. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 728 Computer-integrated manufacturing Computer-integrated manufacturing (CIM). Manufacturing approach that integrates several computerized systems such as CAD, CAM, MRP and JIT into a whole, in a factory.

29. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 729 The CIM model

30. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 730 Product lifecycle management (PLM) A business strategy that enables manufacturers to collaborate on product design and development efforts, using web- based strategies.

31. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 731 How product life cycle management works?

32. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 732 7.6 Managing Human Resources Systems: Recruitment Using he web for recruitment, HRM portals and salary surveys.

33. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 733 Human Resources Maintenance and Development Performance evaluation Training and HR development

34. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 734 Human Resources Planning and Management Payroll and employees’ records Benefit administration Employee relationship management

35. “ Copyright 2005 John Wiley & Sons Inc.”` Chapter 735 7.7 Integrating Functional Information Systems Approaches to integration Integrating front- office and back-office operations Process-centric integration: System integrating solutions designed, developed and managed from a business- process perspective