Chapter Lead Black Slide © 2001 Business & Information Systems 2/e

Chapter Business Operations © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Our Agenda Increasing Business Operations Efficiency Chapter Our Agenda Increasing Business Operations Efficiency Transaction Processing Systems Basic Business Information Systems Other Business Information Systems Enterprise Resource Planning Systems © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Learning Objectives Give an example of a computer information system that increases the efficiency of business operations. Explain the purpose and structure of transaction processing systems. Describe the functions of transaction processing systems. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Learning Objectives (cont’d.) Chapter Learning Objectives (cont’d.) Describe several ways of controlling transaction processing systems. Explain the difference between batch processing and on-line transaction processing. Summarize the characteristics of basic business information systems. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Learning Objectives (cont’d) Chapter Learning Objectives (cont’d) List several examples of accounting, financial, marketing, manufacturing, and human resource information systems. Explain what an enterprise resource planning system is. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Increasing Business Operations Efficiency Chapter Increasing Business Operations Efficiency Business Operations © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Increasing Business Operations Efficiency Chapter Increasing Business Operations Efficiency Efficiency has to do with how much a system produces relative to the resources, such as people and money, used by the system. To be competitive today, most businesses require some form of computer information system for their basic operations. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Transaction Processing Systems Chapter Transaction Processing Systems Business Operations © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Transaction Processing Systems Chapter Transaction Processing Systems The main type of information system used for operational support in a business is the transaction processing system (TPS). © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Transaction Processing System Structure Chapter Transaction Processing System Structure Three elements of a transaction processing system: Keep records about the state of the organization. Process transactions that affect these records. Produce outputs that report on transactions that have occurred, that report on the state of the organization, and that cause other transactions to occur. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Transaction Processing System Functions Chapter Transaction Processing System Functions Transaction processing systems consist of four main functions to accomplish their purposes. They are: Input function Storage function Processing function Output function © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Input Function Before transaction data can be brought into a transaction processing system, it must be acquired from its source – a step called data capture. Data is often captured from a source document. Data once captured, it is put into the system – a step called data entry. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Input Function (cont’d.) Chapter Input Function (cont’d.) As data is entered into the system, a program must check it for errors, a step called data validation. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Storage Function Data in a transaction processing system is stored in data files and databases. Two types of data commonly found in transaction processing systems: Master data – is the main data used by the system. Transaction data – is data about the transactions that have occurred. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Processing Function Processing involves manipulating data within the system. Two operations in the processing function: Computation – doing calculations with data. Decision making – checking a condition that causes processing to continue in different ways depending on the result of the decision. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Output Function Output from a transaction processing system can be displayed on a screen or printed on paper. Three types of reports Detail report – lists detailed information Summary report – contains summarized information Exception report – lists exceptions to norm © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Controlling Transaction Processing Systems Chapter Controlling Transaction Processing Systems Procedures to ensure the completeness of the data processing and to minimize the chance of error are called controls. They include: Control Totals Audit Trails Backup and Recovery Procedures Processing Data in Transaction Processing Systems © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Control Totals A control total is a number that is computed when data enters a system and then computed again after the system has processed the data. Sometimes several control totals are calculated and checked in the system to be sure all data has been processed accurately. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Audit Trails An audit trail is a way of tracing the effect of data through a system. A good audit trail is one in which someone can start with the output and go back through the system to the source document, or vice versa. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Backup and Recovery Procedures Chapter Backup and Recovery Procedures Backing up means that the data is copied periodically to another storage media. Recovery means that the backup copy of the data can be used to re-create the original data stored on the system. Without adequate backup and recovery procedures, there is a great risk of losing data permanently. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Processing Data in Transaction Processing Systems Chapter Processing Data in Transaction Processing Systems Two basic approaches to processing data in a transaction processing system: Batch processing – transactions to be processed are prepared in a form understandable by the computer before actual processing begins. On-Line Transaction Processing (OLTP) – permits a person to use a keyboard and screen at the time the processing is done. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Basic Business Information Systems Chapter Basic Business Information Systems Business Operations © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Basic Business Information Systems Chapter Basic Business Information Systems Eight basic information processing activities: Entering customer orders Billing customers Collecting customer payments Keeping track of inventory Purchasing stock and materials Paying bills Paying employees Reporting financial information © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Entering Customer Orders Chapter Entering Customer Orders An order entry system permits entry of customer orders for goods and services and prepares the orders in a form that can be used by the business. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Entering Customer Orders (cont’d.) Chapter Entering Customer Orders (cont’d.) Once orders are entered, the following questions must be answered: Does the business have sufficient inventory to fill the order? Should the business extend credit to this customer or require that the customer pay in advance? © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Billing Customers The purpose of a billing system is to prepare the customer’s bill or invoice. To prepare the invoice from the sales order data, two types of master data are required: Customer master data Inventory master data © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Collecting Customer Payments Chapter Collecting Customer Payments The accounts receivable system is used to keep track of money owed to the business by its customers and to record customer payments for invoices. To produce the outputs, two types of stored data are used: Accounts receivable data Customer master data © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Keeping Track of Inventory Chapter Keeping Track of Inventory The inventory control system is used to keep track of the business’s inventory, to indicate when inventory should be reordered, and to compute the value of the inventory. The stored data needed in this system is the inventory master data. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Purchasing Stock and Materials Chapter Purchasing Stock and Materials The purchasing system is used to Determine the best suppliers (also called vendors) from which to purchase items. Prepare documents, called purchase orders, which indicate to the supplier what items are wanted. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Purchasing Stock and Materials (cont’d.) Chapter Purchasing Stock and Materials (cont’d.) To prepare the purchase order, two types of information are required: Inventory master data Supplier master data © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Paying Bills The accounts payable system is used to keep track of money owed by the business for purchases, to pay suppliers for items purchased, and to provide reports of accounts payable to other functions of the business. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Paying Bills (cont’d.) To produce the outputs, two types of stored data are used: Accounts payable data Supplier master data © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Paying Employees The payroll system is used to prepare paychecks for employees and to provide reports of payroll. To produce the outputs two types of data are required: Employee work data Employee master data © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Reporting Financial Information Chapter Reporting Financial Information The general ledger system is used to maintain the business’s financial accounts and to prepare financial statements. To produce the financial statements, the general ledger system uses stored general ledger data. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Other Business Information Systems Chapter Other Business Information Systems Business Operations © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Accounting Information Systems Chapter Accounting Information Systems Accounting Information Systems (AIS) support the accounting function. Several commonly used AIS systems are: Fixed asset accounting Budgeting Tax accounting © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Financial Information Systems Chapter Financial Information Systems Financial information systems provide necessary support for the finance function. Some common financial information systems include: Cash management Capital expenditure analysis Financial forecasting Portfolio management Credit analysis © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Marketing Information Systems Chapter Marketing Information Systems Marketing information systems assist in the marketing function. Common marketing information systems include: Sales analysis Sales forecasting Marketing research Direct mail advertising Electronic commerce Sales force automation © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Manufacturing Information Systems Chapter Manufacturing Information Systems Manufacturing information systems provide services to support the manufacturing function. Some common manufacturing information systems include: Production scheduling Materials Requirements Planning (MRP) Manufacturing Resource Planning (MRPII) © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Manufacturing Information Systems (cont’d.) Chapter Manufacturing Information Systems (cont’d.) Just-In-Time (JIT) Computer-Aided Design (CAD) Computer-Aided Manufacturing (CAM) Robotics Computer-Integrated Manufacturing (CIM) Supply-chain management © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Human Resource Information Systems Chapter Human Resource Information Systems Human Resource Information Systems (HRIS) support the human resource function. Common HRIS include: Performance appraisal Skills inventory Benefits administration Job applicant tracking © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Enterprise Resource Planning Systems Chapter Enterprise Resource Planning Systems Business Operations © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Enterprise Resource Planning Chapter Enterprise Resource Planning An information system that supports several areas of a business by combining a number of applications with a single database that stores all the data used by the applications. ERP systems are designed for applications that encompass a large portion of a business. © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Business Operations Key Terms Chapter © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Key Terms Accessing Accounting Information System Chapter Key Terms Accessing Accounting Information System Accounts Payable System Accounts Receivable System Audit Trail Backup Procedure Batch Processing Billing System Control Control Total Data Validation Detail Report Enterprise Resource Planning (ERP) Exception Report © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Key Terms (cont’d.) Financial Information System General Ledger System Chapter Key Terms (cont’d.) Financial Information System General Ledger System Human Resource Information System (HRIS) Interactive Processing Inventory Control System Manufacturing Information System © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Summary Increasing Business Operations Efficiency Chapter Summary Increasing Business Operations Efficiency Transaction Processing Systems Basic Business Information Systems Other Business Information Systems Enterprise Resource Planning Systems © 2001 Business & Information Systems 2/e © 2001 Business & Information Systems 2/e

Chapter Final Black Slide © 2001 Business & Information Systems 2/e