1. Lecture Outline 4 Transaction Systems and Beyond
Text, p. 235+

2. Online vs Batch Processing
Source documents (e.g., dr. lic. application on paper) can be entered into a TPS as they are handed-in OR
Can be collected in a batch and later entered as a batch
Use online when customer needs immediate notification of success or failure of a transaction

3. Ways of entering data into TPS
Manual: typed-in by hand
Semi-automated: grocery checkout scan OR ordering book on amazon.com (person is still involved)
Fully-automated: computer of the buyer “talks” directly to computer of the seller (EDI)

4. Transaction Processing Activities
TPSs capture and process data that describes fundamental business transactions
Data collection, data editing, data correction, data storage, data manipulation, document production
Make brief notes

5. Point-of-Sale Systems
e.g., electronic cash registers
for a retailing business [transaction level]
Can decrease inventory at check-out
Data entered in various ways
e.g. bar code scanning
Quicker check-out procedures
Decreased clerical costs

6. An Overview Of Transaction processing systems (operational)
and
Management reporting systems (tactical)

7. Transaction Processing Sys.
TPSs are a special class of information system designed to process business events and transactions
Architecture Components
Source Documents – these contain the event or transaction information to be processed by system
Data Entry Methods
Manual – a person entering a source document by hand
Semiautomated – using a capture device to enter the source document (e.g. a barcode scanner)
Fully Automated – no human intervention, one computer talks or feeds another computer (e.g. automatic orders from inventory systems)
Processing – transactions can be either:
Online – processed individually in real-time
Batch – grouped and processed together at a later time

8. Management Information System
Usually tactical and sometimes also strategic
Provides managers and decision makers with information to help achieve organizational goals

9. System Architecture: Management Information System

10. Functional Area Info Systems
Functional Area Information Systems
designed to support a specific functional area
Supported Activities
The following functional organizations have systems to support their operational and managerial activities
Accounting
Finance
Human Resources
Marketing
Operations

11. Functional Area Systems
- refer to specific areas of business: finance, manufacturing, marketing, human resources
Can be operational, tactical and strategic
Systems for each area are likely to have their own database

12. System Examples: Functional Area Info Systems

13. Finance Information Systems
*Finance area: acquires and manages cash for a business
Acquire thru shares or loans
Invest cash wisely
Co must maintain liquidity
Meet short term obligations
Need to analyze considerable financial info;

14. Tactical systems in Finance
A OPERATIONAL BUDGETING SYSTEMS *L
- plan revenues and expenses line-by-line
Can summarize in various ways
Can compare this year’s budget to last year’s
Can compare actual expenses vs budgeted (get actuals from General ledger System)

15. Tactical systems in Finance
BUDGETING* (cont’d)
Comparing budgeted to actuals allows for variances analysis
Eg. Current budgeted expenses, actual expenses and variances by line item
Eg. Projected expenses for each budget line item for entire year based on expenses incurred to date

16. Tactical systems in Finance
BUDGETING* (cont’d)
Spreadsheet-type systems are useful for budgeting (ie. formulas)
Can use last year’s budget as a base for next year and maybe 5 years
How are such system tactical? explain

17. Tactical systems in Finance
B. CAPITAL BUDGETING SYSTEMS *MC
Provide help with planning acquisition (disposal) of major plant assets that will be used by the business during many years
Provide outgoing and incoming cash for the life of the asset
Use assumptions
Consider the time value of money (net present value)

18. Tactical systems in Finance
B. CAPITAL BUDGETING SYSTEMS
Eg. Can help to decide whether to lease or buy a new printer
What computing is useful here?

19. Tactical systems in Finance
C CASH MANAGEMENT SYSTEMS *X
Ensure that business has sufficient cash to meet its needs
For day-to-day operations
For acquisition of long-term assets
Important output is the cash flow report
Can forecast cash flows for , say 6 months
Flow= tl cash receipts – tl cash payments

20. Tactical systems in Finance
D. INVESTMENT MANAGEMENT SYSTEMS *MC
- oversee organization’s investment in stocks, bonds, and other securities
- Online databases provide immediate updates for stock and bond prices

21. Tactical systems in Finance
INVESTMENT MANAGEMENT SYSTEMS
e.g. Value Screen inputs the current price of each stock and calculates the gain or loss the company’s investment portfolio would generate if sold now
what computing is needed here?

22. Strategic systems in Finance
Support very high-level managers
Strategic systems relate to organizational goals
Often, such systems use internal data (which may have originated in organizational AIS) and external data (eg. From online databases that contain economic, social, demographic, etc, info)

23. Strategic systems in Finance
A FINANCIAL CONDITION ANALYSIS SYSTEMS *MC
Provide insightful analyses of financial statements and data (e.g., ratios: current ratio, debt:equity ratio)
Online databases can allow for financial analysis of competitors, suppliers, buyers and other organizations)

24. Strategic systems in Finance
B. LONG RANGE FORECASTING SYSTEMS *MC
May use both internal and external data
Apply statistical techniques
May use graphics
Analyze trends

25. Strategic systems in Finance
C. CORPORATE PLANNING SYSTEMS *X
Use data from past, like forecasting systems
More elaborate; contain simulation models of various aspects of business
Models must have valid assumptions