MD240 Transaction Processing Systems, Functional Systems, and Systems Integration

1. MD240Transaction Processing Systems, Functional Systems, and Systems Integration

2. Overview Background Integration of Systems Transaction Processing Systems Innovative Functional Information Systems

3. BackgroundFunctions in Porter’s Value Chain

4. BackgroundHistorical Functional Systems

5. Integration of Systems

6. Integration of SystemsModern Integrated Functional Systems

7. 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

8. 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 (XML+SOAP)

9. Transaction Processing Systems

10. 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

11. 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

12. Transaction Processing SystemsTypical Tasks

13. Transaction Processing SystemsObjectives of TPS

14. 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

15. 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)

16. 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

17. 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

18. 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

19. 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

20. Functional Information Systems

21. 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 organization’s activities: operational, managerial, and strategic

22. Innovative Functional Applications of IT

23. Innovative IT in Operations

24. 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

25. OperationsTypical TPS of a Manufacturer

26. 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

28. 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

29. OperationsPlanning Production/Operations Material Requirements Planning (MRP) Manufacturing Resource Planning (MRP II) Just-in-Time Systems Project Management Short-Term Schedules

30. OperationsAutomated Design and Manufacturing Computer-aided Design (CAD) Computer-aided Engineering (CAE) Computer-aided Manufacturing (CAM)

31. 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

32. Innovative IT in Marketing

33. 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)

34. MarketingChannel Systems/Customer Touchpoints Telemarketing Capabilities personalized contact with the customers allows customers to buy at their convenience effective in informing customers about a company’s 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

35. 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

36. 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

37. Innovative IT in Finance & Accounting

39. Managing the Accounting and Finance Systems

40. Accounting & FinanceFinancial Planning and Budgeting Financial and economic forecasting Planning for incoming funds Budgeting preparation and operation Capital budgeting decision

41. 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)

42. Accounting & Finance Control and Auditing Budgetary control Auditing Financial health analysis Profitability analysis and cost control Product pricing

43. Innovative IT in HR

44. Human ResourcesRecruitment Position inventory Employee selection Using the Internet

45. Human ResourcesMaintenance and Development Performance evaluation Training and human resources development Turnover, tardiness, and absenteeism analyses

46. Human ResourcesPlanning and Management Personnel planning Succession planning Labor-management negotiations Benefits administration