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Chapter 9


Transaction Processing, Functional

Applications and Integration



Information Technology for Management

Improving Performance in the Digital Economy


7
th

edition

John Wiley & Sons, Inc.


Slides contributed by Dr. Sandra Reid

Chair, Graduate School of Business & Professor, Technology

Dallas Baptist University

Turban and Volonino

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Copyright 2010 John Wiley & Sons, Inc.

Chapter Outline


9.1 Functional Information Systems and
Transaction Processing Systems


9.2 Managing Production/Operations and
Logistics


9.3 Managing Marketing and Sales Systems


9.4 Managing Accounting and Finance
Systems


9.5 Managing Human Resources Systems

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Copyright 2010 John Wiley & Sons, Inc.

Chapter Outline (cont’d)


9.6 Integrating Functional Information
Systems


9.7 Managerial Issues

Copyright 2010 John Wiley & Sons, Inc.

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Learning Objectives

1.
Relate functional areas and business processes to the
value chain model.

2.
Define a functional management information system,
and list its characteristics.

3.
Understand the transaction processing system and
demonstrate how it is supported by IT.

4.
Analyze the support provided by IT and the Web to
production/operations management, including logistics.

5.
Describe the support provided by IT and the Web to
marketing and sales.



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Copyright 2010 John Wiley & Sons, Inc.

Learning Objectives


cont’d

6.
Understand the support provided by IT and
the Web to accounting and finance.

7.
Analyze the support provided by IT and the
Web to human resources management.

8.
Describe the benefits and issues of
integrating functional information systems.

Copyright 2010 John Wiley & Sons, Inc.

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Copyright 2010 John Wiley & Sons, Inc.

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Figure IT7eU



Problem



Medical supplies inventory shortages,
overstock of unneeded items, costly rush
ordering, & nurses not appropriate personnel to
manage process.


Solution



Connect wireless handheld devices
with purchasing & inventory management
information systems.


Results



Inventory levels reduced 50%; IT
solution cost repaid in months. Consistent
materials available for improved patient care.


Copyright 2010 John Wiley & Sons, Inc.

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Figure 9.1

Copyright 2010 John Wiley & Sons, Inc.

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The functional areas, TPS, and integration connection. Note the flow of information
from the TPS to the functional systems. Flow of information between and among
functional systems is done via the integration component.

Copyright 2010 John Wiley & Sons, Inc.

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9.1 Functional Information Systems &
Transaction Processing Systems

Transaction Processing Information Systems

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TPS

monitors, collects, stores, processes, &
disseminates information for all routine core business
transactions.

Rapid Processing

Processes transactions virtually instantly

Reliability

Ensures transactions never slip past the
net, & systems themselves are
operational permanently

Standardization

Acquires identical data for each
transaction.

Controlled Access

Access is restricted to only those
employees who require their use.

Characteristics of Transaction Processing Systems:

Table 9.1

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TPS


Traffic Control at Airports

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TPS


In
-
flight Card Payments

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Many airlines now accepting plastic for
in
-
flight purchases

Many airlines go cashless for
in
-
flight purchases

Batch vs. Online Processing

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Allows sharing of computer resources
among many users and programs,

Data are processed as soon as
transaction occurs.

Shifts the time of job processing to when
the computing resources are less busy.

Allows sharing of computer resources
among many users.

Avoids idling the computing resources
with minute
-
by
-
minute human
interaction and supervision.

Shifts the time of job processing to when
the computing resources are less busy.

Better amortizes the cost of a computer,
especially an expensive one.

Avoids idling the computing resources
without minute
-
by
-
minute human
interaction and supervision.

Atomic unit of processing.

Benefits of Batch:

Benefits of Online:

Figure 9.2

Copyright 2010 John Wiley & Sons, Inc.

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The flow of information in transaction processing.

Modernizing TPS Saved Time & Money

Copyright 2010 John Wiley & Sons, Inc.

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Behind Microsoft's Tellme Acquisition:
Pizza To Go


Blaze Advisor drives
modernization of legacy
systems at the California
DMV

Copy Services no longer need employees to
complete your purchase…

Taxis in Singapore

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ORBITAL AWARDED $13 MILLION TRANSIT FLEET
MANAGEMENT SYSTEMS CONTRACT IN SINGAPORE

Contract Represents Major International Win for
Orbital's Transportation Management Systems
Division, Already the U.S. Market Leader


Web Analytics Tools

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Web analytics

is the measurement, collection, analysis and
reporting of
internet data

for purposes of understanding and
optimizing web site usage.
[1]

There are two categories of web analytics;
off
-
site

and
on
-
site

web
analytics.


5 Great (Free) Analytics Tools You Might
Not Know About Yet

Table 9.2

Copyright 2010 John Wiley & Sons, Inc.

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Copyright 2010 John Wiley & Sons, Inc.

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9.2 Managing Production/Operations &
Logistics

Figure 9.3

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The production/operations management functions transform inputs into useful
outputs. (Source: J.R. Meredith and S. M. Shafer, Operations Management. New
York: Wiley, 2002. Reprinted by permission of John Wiley & Sons, Inc.)

In
-
House Logistics & Materials Management


Deals with ordering, purchasing, inbound
logistics (receiving), & outbound logistics
(shipping) activities.


Purchasing results in incoming materials &
parts.


Parts inspected for quality then stored.


Activities supported by information systems.

Copyright 2010 John Wiley & Sons, Inc.

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e
-
Procurement

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E
-
procurement

(
electronic
procurement
, sometimes also
known as supplier exchange) is the
business
-
to
-
business

or
business
-
to
-
consumer

or
Business
-
to
-
government

purchase
and sale of
supplies
.

Information systems that support logistics & materials management:

Radio
-
frequency identification

(
RFID
)

is the use of an object (typically referred to as
an RFID tag) applied to or incorporated into a product, animal, or person for the
purpose of identification and tracking using radio waves. Some tags can be read from
several meters away and beyond the line of sight of the reader.


Robots perform distribution & materials handling.

Quality Control Systems


Can be standalone systems.


May be part of enterprise
-
wide total quality
management (TQM) effort.


Provide information about quality of incoming
materials & parts; quality of in
-
process semi
-
finished &
finished products.


May compare results to metrics such as Six Sigma.


Per
wikipedia.org
,
Six Sigma

is a
business management
strategy
, originally developed by
Motorola
, that today
enjoys widespread application in many sectors of
industry.


Copyright 2010 John Wiley & Sons, Inc.

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Planning Production / Operations


Just
-
in
-
time


inventory strategy minimizes
inventories & continuously improves processes.


Project management is enhanced by tools such as
PERT (program evaluation & review technique) &
CPM (critical path method).


Computer
-
integrated manufacturing promotes
integration of various computerized factory
systems & has 3 basic goals: simplification,
automation, & integration and coordination.

Copyright 2010 John Wiley & Sons, Inc.

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Copyright 2010 John Wiley & Sons, Inc.

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9.3 Managing Marketing & Sales
Systems

Figure 9.4

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Marketing channel systems.

Improving Shopping & Checkout at Retail
Stores

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Macy's expands consumer electronics kiosks program

Electronic check scans win retailers' acceptance

(WalMart)


……..Embedded with an RFID device……..

Home Depot Employs Self Checkout


Internet Market Research & Proctor & Gamble


Whitestrips introduced & offered for sale on
the Internet.


Spent months identifying target market.


Collected data via online questionnaires rather
than mail
-
outs.


Data mining revealed most enthusiastic
groups.


Buzz created a huge demand for product by
the time it hit the shelves.

Copyright 2010 John Wiley & Sons, Inc.

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Copyright 2010 John Wiley & Sons, Inc.

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9.4 Managing Accounting & Finance
Systems

Major Benefits of Using Budgeting Software


Reduces time & effort in the budget process.


Possible to easily explore & analyze implications
of organizational & environmental changes.


Can facilitate integration of corporate strategic
objectives with operational plans.


May make planning an ongoing, continuous
process.


Automatically monitor exceptions for patterns &
trends.


Copyright 2010 John Wiley & Sons, Inc.

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Figure 9.5

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Integrated accounting business software.

Integrated Accounting Software

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See Top 7 Accounting,
Financial & Inventory Software

XBRL

is a standards
-
based way to communicate business and
financial information. These communications are defined by
metadata set out in taxonomies. Taxonomies capture the
definition of individual reporting concepts as well as the
relationships between concepts and other semantic meaning.

Source: wikipedia.org

Figure 9.6

Copyright 2010 John Wiley & Sons, Inc.

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How XBRL works.

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9.5 Managing Human Resources
Systems

HRIS Applications


Payroll


Work Time


Benefits Administration


Recruiting


Training


Performance Records

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Figure 9.7

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HRM activities.

Recruitment


Search engines on the Web can help with
attracting & repelling appropriate candidates.


Internet makes advertising much simpler
process, although large numbers may result.


Embedded intelligence to help manage entire
recruitment process.


Social networking sites such as Jobster &
LinkedIn have gained widespread popularity.

Copyright 2010 John Wiley & Sons, Inc.

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HR Maintenance & Development


Performance evaluation


supervisor, peer, &/or
subordinate. Wage reviews are also related to
performance evaluations.


Training & HR development


planning classes &
tailoring specific training programs to meet needs
of organization & employees. May include career
development plan for each employee.


IT supports planning, monitoring & control of
these activities.

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Training Devices


Web
-
based video clips.


Mobile devices.


Virtual reality.


Interactive simulations.


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9.6 Integrating Functional Information
Systems

Software Helps Cirque du Soleil

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Cirque du Soleil
-

Saltimbanco Arena Show 2008

Issues such as:


Logistics


Applications such as finance, accounting, marketing


Unable to share data


Ineffective employee productivity

Company implemented IBM WebSphere
Business Integration software to connect all
systems & applications:


*Replaced manual work

*Data sharing resulted in fewer missing items

*Cut development time for new applications

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9.7 Managerial Issues

Managerial Issues


Integration of functional information systems


Priority of transaction processing


Finding innovative applications


Using the Web


Systems integration


Ethical issues

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Copyright 2010 John Wiley & Sons, Inc.

All rights reserved. Reproduction or translation of
this work beyond that permitted in section 117 of
the 1976 United States Copyright Act without
express permission of the copyright owner is
unlawful. Request for further information should
be addressed to the Permission Department,
John Wiley & Sons, Inc. The purchaser may make
back
-
up copies for his/her own use only and not
for distribution or resale. The Publisher assumes
no responsibility for errors, omissions, or
damages caused by the use of these programs or
from the use of the Information herein.

Copyright 2010 John Wiley & Sons, Inc.

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