MD240 Transaction Processing Systems, Functional Systems, and Systems Integration

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MD240Transaction Processing Systems, Functional
Systems, and Systems Integration
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Overview

• Background
• Integration of Systems
• Transaction Processing Systems
• Innovative Functional Information Systems

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BackgroundFunctions in Porters Value Chain
Typical functional areas mapped on the value
chain of a manufacturing company
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BackgroundHistorical Functional Systems
3 weeks later Okay, here it is! All 500
pages on crisp white
paper!
Accounting info. systems
Finance info. systems
TPS
TPS
Manufacturing info. systems
Hey, could you generate a report for
me detailing how much this part typically costs?
TPS
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Integration of Systems
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Integration of SystemsModern Integrated
Functional Systems
To Suppliers
Finance
Accounting
TPS
SCM
TPS
To Customer Touchpoints
Operations
data
TPS
HR
data
ERP
Marketing
CRM
TPS
TPS
Executive IS
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Integration of SystemsReasons for Integration

• Helps to reduce cost
• Helps to increase employees productivity
• Helps to facilitate faster information sharing
• Helps to facilitate collaboration between
  functional areas

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Integration of SystemsIntegration Approaches

• Various Integration Approaches
• Buy (or build) a fully integrated set of software
  components
• Link together two applications via software that
  sends data between the two
• EDI
• TCP/IP
• Application Connectors that connect specific
  applications (e.g. Oracle to Peoplesoft)
• Middleware
• Web Services (XMLSOAP)

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Transaction Processing Systems
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Computerization ofRoutine Transaction Processes

• Transaction Processing System (TPS)
• supports transaction processes
• monitors, collects, stores, processes, and
  disseminates information for all routine core
  business transactions
• includes accounting and finance transactions and
  some sales, personnel, and production activities

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Transaction Processing SystemsObjectives of TPS

• Primary Objectives
• To quickly store data
• To quickly retrieve data
• To provide the necessary data for tactical and
  strategic systems such as DSS applications
• To assure accuracy and integrity of data and
  information

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Transaction Processing SystemsTypical Tasks
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Transaction Processing SystemsObjectives of TPS

• Organizational Objectives Fulfilled by TPS
• To provide all the information needed by law
  and/or by organizational policies to keep the
  business running properly and efficiently
• To allow for efficient and effective operation of
  the organization
• To provide timely documents and reports
• To increase the competitive advantage of the
  corporation
• To safeguard assets and security of information

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Transaction Processing SystemsMajor
Characteristics of TPS

• Large amount of data are processed
• The sources of data are mostly internal, and the
  output is intended mainly for an internal
  audience
• The TPS processes information on a regular basis
• Large storage (database) capacity is required
• High processing speed is needed due to the high
  volume
• TPS basically monitors and collects past data
• Input and output data are structured
• High level of detail is usually observed
• Low computation complexity
• High level of accuracy, data integrity, and
  security is needed
• High reliability is required
• Inquiry processing is a must

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Transaction Processing SystemsVarious TPS
Technologies

• Some TPS Technologies
• Online Transaction Processing (OLTP)
• Allows managers to run client-server transactions
  to obtain some information of interest
• Web-based Transaction Processing
• Similar to OLTP
• Allows managers to run transactions via the web
• Object-Oriented Transaction Monitors (OTM)
• Objects that monitor transactions in web-based
  applications
• When an activity happens within a web site, the
  object sends a query to the data warehouse to
  record information about what happened (e.g.,
  customer checked out)

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Transaction Processing SystemsBenefits of
Internet-based OLTP

• Flexibility to accommodate unpredictable growth
  in processing demands
• Cost effectiveness even for small dollar amounts
• Interactive, automatic billing, enabling
  companies to offer services to anyone, not just
  subscribers
• Timely search and analysis of large databases
• Multimedia data such as pictures and sound are
  handled effectively and efficiently
• High data throughput to support inquiries
  requiring massive file size
• Fast response time
• Effective storage of huge graphics and video
  databases

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Transaction Processing SystemsTPS Hardware

• Traditional TPSs were centralized and run on a
  mainframe
• Today
• mainframes
• client/server systems
• clusters of servers, each server running multiple
  processors

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Management Decision MakingHow to Choose a TPS?

• Transaction Processing Performance Council
  (tpc.org)
• Industry forum for fighting over who is fastest
• Provides benchmarking results for different TPS
  computer systems, based on bundle of
• Hardware
• Operating system
• Database
• Several performance metrics
• TPC-C OLTP performance
• TPC-H decision support for ad hoc queries
  performance
• TPC-R decision support for business reporting
  performance
• TPC-W web based transaction performance

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Management Decision MakingHow to Choose a TPS?

• ECperf (ecperf.theserverside.com)
• Industry benchmark for fighting over who has the
  fastest Java-based TPSs
• Provides benchmarking results for different TPS
  computer systems, based on bundle of
• Hardware J2EE Server DBMS
• ECperf takes into account several transaction
  processing scenarios
• Customer
• Manufacturing
• Supplier
• Corporate

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Functional Information Systems
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Functional Information Systems Major
Characteristics

• A functional information system comprises several
  smaller information systems that support specific
  activities performed by each functional area
• The specific IS applications in any functional
  area can be integrated to form a coherent
  functional system, or they can be completely
  independent
• Functional information systems interface with
  each other to form the organization-wide
  information system
• Some organizational information systems interface
  with the business environment
• Information systems applications support the
  three levels of an organizations activities
  operational, managerial, and strategic

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Innovative Functional Applications of IT
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Innovative IT in Operations
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Innovative IT Applicationsin Operations

• Managing Production/Operations and Logistics
• transform inputs into useful outputs
• very diversified, and so its supporting
  information systems
• related to finance and sales, engineering and
  design, and purchasing and logistics

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OperationsTypical TPS of a Manufacturer
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Operations

• Supply-Chain Management
• objective is to support the flow of goods and
  materials from the original supplier through
  multiple production and logistic operations to
  the ultimate consumer
• extensive integrated software is available for
  managing portions of the supply chain as well as
  the entire process

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OperationsSupply-Chain Management
Supply Chain Organization
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OperationsIn-House Logistics and Material
Management

• Inventory Management
• Used to estimate inventory levels
• Now try to keep an accurate count through
  barcodes, scanners, GPS systems to locate
  specific inventory
• Quality Control
• Used to sample quality of items at fixed
  intervals
• Now, can examine quality of every single item

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OperationsPlanning Production/Operations

• Material Requirements Planning (MRP)
• Manufacturing Resource Planning (MRP II)
• Just-in-Time Systems
• Project Management
• Short-Term Schedules

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OperationsAutomated Design and Manufacturing

• Computer-aided Design (CAD)
• Computer-aided Engineering (CAE)
• Computer-aided Manufacturing (CAM)

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OperationsComputer-Integrated Manufacturing (CIM)

• Factory of the Future
• Three basic goals
• simplification
• automation
• integration and coordination
• The CIM model
• made up by general business management, product
  and process definition, manufacturing planning
  and control, factory automation, and information
  resource management

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Innovative IT in Marketing
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MarketingChannel Systems/Customer Touchpoints

• The customer is king (queen)
• Customer profiles and preference analysis
• Prospective customer lists and marketing
  databases
• Mass customization
• Targeted Advertisement on the Web
• Customer inquiry systems and Automated Help Desk
  (EC application)

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MarketingChannel Systems/Customer Touchpoints

• Telemarketing
• Capabilities
• personalized contact with the customers
• allows customers to buy at their convenience
• effective in informing customers about a
  companys products and services
• Limitations
• cost can be high
• difficult to find good telemarketers
• may be seen by many as a nuisance
• challenges in reaching people

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MarketingDistribution Channels

• Distribution channels management
• DSS models are frequently used to support the
  decision of accomplishing by a company, or by a
  subcontractor
• Improving sales at retail stores
• using IT, it is possible to improve the situation
  by reengineering the checkout process

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MarketingMarketing Management

• Pricing of products or services
• Salesperson productivity
• Productivity software
• Products and customers profitability analysis
• Sales analysis and trends
• New products, services, and market planning

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Innovative IT in Finance Accounting
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Accounting Finance Systems
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Managing the Accounting and Finance Systems
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Accounting FinanceFinancial Planning and
Budgeting

• Financial and economic forecasting
• Planning for incoming funds
• Budgeting preparation and operation
• Capital budgeting decision

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Accounting Finance Investment Management

• Access to financial and economical reports
• Internet meta-search engines for finding
  financial data
• Internet directories and yellow pages
• Software for monitoring, interpreting, analyzing
  financial data, and alerting management
• Financial analysis
• Treasury risk management systems (TRMS)

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Accounting Finance Control and Auditing

• Budgetary control
• Auditing
• Financial health analysis
• Profitability analysis and cost control
• Product pricing

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Innovative IT in HR
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Human ResourcesRecruitment

• Position inventory
• Employee selection
• Using the Internet

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Human ResourcesMaintenance and Development

• Performance evaluation
• Training and human resources development
• Turnover, tardiness, and absenteeism analyses

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Human ResourcesPlanning and Management

• Personnel planning
• Succession planning
• Labor-management negotiations
• Benefits administration