1. Chapter 8 Transaction Processing, Electronic Commerce, and Enterprise Resource Planning Systems

2. Transactions Transactions… Basic business operations such as customer orders, purchase orders, receipts, time cards, invoices, and payroll checks in an organization Transaction processing systems (TPS) Perform routine operations and serve as a foundation for other systems

3. Batch vs. On-Line Transaction Processing Two types of TPS: Batch processing A system whereby business transactions are accumulated over a period of time and prepared for processing as a single unit or batch On-line transaction processing (OLTP) A system whereby each transaction is processed immediately, without the delay of accumulating transactions into a batch

4. Batch Schematic Data entry of accumulated transactions Input (batched) Output

5. On-line Schematic Output Terminal Immediate processing of each transaction

7. Objectives of TPS Process data generated by and about transactions Maintain a high degree of accuracy Ensure data and information integrity and accuracy Produce timely documents and reports Increase labour efficiency Help provide increased and enhanced service Help build and maintain customer loyalty Achieve competitive advantage

8. Simplified Overview of a Transaction Processing System Schematic

9. Data entry & input Processing Documents & reports Database Internally generated transactions: shipped orders purchase orders employee time cards Externally generated transactions: customer orders vendor invoices customer payments Internally generated transactions: shipped orders purchase orders employee time cards Externally generated transactions: customer orders vendor invoices customer payments Database update: customer orders inventory purchase orders customers suppliers Database update: customer orders inventory purchase orders customers suppliers Documents: pick list cheques to vendors receiving notices paycheques Operational reports: finished product inventory status raw materials; packing materials; spare parts; inventory status Documents: pick list cheques to vendors receiving notices paycheques Operational reports: finished product inventory status raw materials; packing materials; spare parts; inventory status

10. Data Processing Activities Common to TPSs A transaction processing cycle Data collection Data editing Data correction Data manipulation Data storage Document production Schematic

11. Data collection Data edit Data manipulation Data storage Document production Data correction Original data

12. Source Data Automation Source data automation The process of capturing data at its source with minimal manual effort Data are entered directly into the computer

13. Traditional TPS – Order Processing Order processing Processing an order from entry to delivery, including traditional accounting transactions Schematic

14. Customer Order entry/ sales configuration Shipment planning Routing Scheduling Shipment execution Invoicing Finished product inventory Customer order in person or via mail, phone, EDI, internet Orders Planned shipments & routes Pick list Shipped orders Inventory status Products Invoice

15. Data Flow Diagram of an Order Entry System Schematic

16. D1 Products/prices D2 Customer payment history D3 New orders D4 Back orders D5 Rejected orders 3. Authorize credit 2. Verify product numbers & stock on hand 1. Collect order info 4. Notify customer Customer Back orders Customer notification Orders Product numbers, inventory levels D6 Inventory Products, price information Orders Credit status Open orders Rejected, partly filled orders Rejected orders

17. Order Processing Support Systems - Sales Configuration Sales configuration Ensures that products and services ordered are sufficient to accomplish customer’s objectives and will work well together

18. Order Processing Support Systems - Shipment Planning Shipment planning A system that determines which open orders will be filled and from which location they will be shipped E.g., (from Figure 8.9) LOCLINKITEM NUMBERDESCRIPTIONORDEREDSHIPPEDBO 810510 L1L16028 20 S8276 30 S8279 40 FASENTING TOOL STAPLE ¾ INCH STAPLE 1 INCH SHIPPING CHARGE 3 15 EACH CASE 3 15 123

19. Order Processing Support Systems - Shipment Execution Shipment execution A system that coordinates the outflow of all products and goods from the organization, with the objective of delivering quality products on time to customers

20. Order Processing Support Systems - Inventory Control Inventory control A system that updates the computerized inventory records to reflect the exact quantity on hand of each stock keeping unit Status reports Summarize all inventory items in stock, or shipped over a specified period of time E.g., see Figure 8.10

21. Order Processing Support Systems - Invoicing Invoicing Generates customer invoices based on records received from the shipment execution TPS E.g., see Figure 8.11

22. Order Processing Support Systems - Customer Interaction System Customer interaction A system that monitors and tracks each customer interaction with the company

23. Request for proposal Sale Problem, idea, request for information Other contacts Market research Sales Marketing Quality control Product development Customer interaction system Customer

24. Order Processing Support Systems - Routing and Scheduling Routing A system that determines the best way to get goods and products from one location to another Scheduling A system that determines the best time to deliver goods and services