C H A P T E RS

Transaction
8-9 Processing, Electronic
Commerce, and
Enterprise Resource
Planning Systems
Transaction Processing

Bel Air McDonalds

 TPS, MIS, DSS, and AI/ES

Transaction Processing Systems (TPS)

Performs routine operations and serve as a
foundation for other systems.
AI/ES

Transactions DSS
The basic business operations such as
customer orders, purchase orders,
receipts, time cards, invoices, and MIS
payroll checks in an organization.

TPS
Sales/Inventory/Order Transactions
UPC from scanner
Record sale/date/time.
Update inventory.
Price/description of item

EDI Electronic Data Interchange (Order)

Shipping
 TPS, MIS, DSS, and AI/ES

Information Less More Less More

AI/ES

DSS Decision Complex

Routine support I/O processing/
MIS analysis

TPS
Data More Less More Less
 Batch vs On-line Processing

Batch processing
All transactions are accumulated over a
period of time and processed as a single
unit.
Typical periods: daily, weekly,
biweekly, monthly, etc.
Examples
Payroll
Billing

Transactions
 Batch vs On-line Processing
On-Line Transaction Processing (OLTP))
All transactions are processed immediately, without
delay.
Also called Real-time transaction processing.

Airline Hotel Car

Reservations Reservations Rentals
 On-line Delayed Transaction Processing
On-Line Delayed Transaction Processing
All transactions are entered into the computer when
they occur, but are processed at a later time.

Catalog Orders Deposits

 Simplified View of a TPS
Data Input Processing
Document
and
Reports

Documents
Internal Transactions Pick list
Shipped Orders Checks to vendors
Purchase Orders Databases Receiving notices
Employee Time Cards Paychecks

External Transactions Operational Reports

Customer Orders Database Update Finished goods status
Vender Invoices Customer orders Raw Materials
Customer payments Inventory Inventory status
Purchase Orders Packing materials
Suppliers Spare parts
 Source Data Automation

Source Data Automation

Capturing data at its source in a form that can be directly entered into the computer. It
does NOT require keyboard input.
Barcode RFID Magnetic Strip Reader
Mark Sense Reader
Time Clock Reader

POS Register POS Register POS Register

 Transaction Processing Cycle
Corrected Data
Original Data
Data Collection

Data Editing

Data Correction Data Manipulation

Data Storage

Document
Production
 Order Processing System
Customer

Invoice

Internet
Product

Mail
EDI
Order Entry Scheduling

Shipment
Execution
Orders

Shipment Planning Routing

Picking List Planned
Shipments
 Order-Processing System
Order Entry System
Captures data needed to process
the customers order.
Sources of data:
Telephone
EDI
E-mail
Internet
Salesperson
Sales Configuration System
Ensures that products/services ordered will accomplish customers
objectives and will work well together.
Customer orders a five-station network. Does the customer
have all they need?
Continued
 Order-Processing System
Shipment Planning System
A system that determines which
open orders will be filled and
from which location they will
be shipped.

Shipment Execution System

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.
Uses a picking list from Shipment Planning.
Continued
 Order-Processing System
Inventory Control System
For each item picked during Shipment
Execution, inventory is updated.

Invoicing System
Customer invoices are generated and sent based on records
received from the Shipment Execution System.

Continued
 Order-Processing System
Customer Interaction System
Monitors and tracks Customer
each customers
interaction with the
company.

Problems,
Request for Other
Sale Ideas,
Proposal contacts
Information

Customer
Market Interaction Sys. R&D
Research
Sales QC Continued
Marketing
 Order-Processing System
Routing System
Determines the best way to get goods from one location to another.

Scheduling System
Determines the best time to deliver goods and services.
 TPS Summary

TPS SUMMARY
A TPS records and processes detailed data necessary to
update records about the business operations of an
organization.
Types of Systems:
Order entry
Inventory control
Payroll
Account payable and receivable
General ledger
Etc, etc
Electronic Commerce
Spare some change??
I use to be a sales clerk
at Egghead Software
before they became
www.egghead.com.
 Electronic Commerce

IBMs Shopping Assistant (Intelligent Agent)

Helps you find items you want.
Reminds you when items go on sale, or birthdays etc.
Learns your preferences:
Rearranges merchandise at shopping malls so
that you see the items you like most, first.
Can correlate buying patterns of whole groups of
shoppers: Shirts and ties, shoes and socks.
 E-Commerce
Visit Sites
PriceWatch.com
TigerDirect.com
www.amazon.com
www.dell.com
www.pennlaurelrealty.com
www.ebay.com
www.pricewatch.com
http://www.google-watch.org/bigbro.html
www.scroogle.org
http://www.google-watch.org/jobad.html
http://www.spychips.com/index.html
DrudgeReport.com (News somewhat out of the cave.)
http://www.wnd.com (News somewhat out of the cave.)
 E-Commerce
THE FUTURE

RFID Card
Intelligent card with embedded computer.
Holds a great deal of information that identifies the bearer.
Operates as an electronic purse.
Applications:
Telecommunications
Banking
Airlines
Transportation
Medical industries
E-Commerce: Five-Stage Model

Buyer

1. Search for
Sources

5. After-sales
service
2. Selection
and Negotiation
4. Product and
Service Delivery
3. Purchasing
 E-Commerce: Five-Stage Model
1. Search for Sources
Search for the desired items and identify the best source.
2. Selection and Negotiation
Selects the desired item/s and gets a price.

3. Purchasing
Fills in an electronic purchase form and arranges payment by
corporate account, credit card, check, or CyberCash.
4. Product and Service Delivery
Product is delivered electronically or by conventional means.

5. After-sales service
Capture demographic data about customer and data about
after-sales interaction with customer.
Enterprise Resource Planning
(ERP)
FAST, REALTIME ACCESS OF INFORMATION
ACROSS ALL FUNCTIONAL AREAS
OF A COMPANY
 Enterprise Resource Planning (ERP)
FAST, REALTIME ACCESS OF INFORMATION
ACROSS ALL FUNCTIONAL AREAS
OF A COMPANY

R&D Information
Systems Purchasing

Accounting Finance

Distribution Marketing
Database

HR Sales
Manufacturing
 Enterprise Resource Planning (ERP)
Enterprise Resource Planning Characteristics:
Major Goal: Fast, real-time monitoring of business
functions.
ERP permits real-time analysis of key issues:
Quality
Availability
Customer satisfaction
Performance
Profitability
Automatically sends exception
reports to affected functional
areas.
Only purchase application
modules you need.
 Enterprise Resource Planning (ERP)
Advantages of ERP
Enterprise-wide access to real-time information for decision
making.
Eliminates costly, inflexible legacy systems.
ERP venders use very good work process procedures in
their application modules.
Uses a highly integrated database and uses essentially one
set of data to support all business functions.
Only need to purchase the application modules you need.
Upgrade technology infrastructure:
Eliminates the hodgepodge of multiple hardware
platforms, operating systems, and databases it is using
from multiple vendors.
 Enterprise Resource Planning (ERP)
Disadvantages of ERP
High cost
Consultants often get $2,000 per day.
Kodak $500 million
Chevron $160 million
CSUS $700 million-plus (PeopleSoft ERP by Oracle)
Typically takes one or more years to implement.
Difficult to implement because companies often need to
make radical changes to conform to he best practice
model.
High Cost Time Radical Change
 Enterprise Resource Planning (ERP)
SAP R/3
SAP is the most widely used ERP system in the world.
SAP - Systems Analysis and Program Development
Developed from the perspective of the corporation as a
whole, rather than any business department.
Top-down development.
Runs on a wide variety of hardware servers from small
Windows NT to massively parallel systems.
Only purchase the application modules you need.
Support 1,000s of users on a single database server with
satisfactory response times.
Uses a three-tier client/server architecture.
 Enterprise Resource Planning (ERP)
SAP R/3 Three-Tier Client/Server Architecture
SAP - Systems Analysis and Program Development
R/3 - Third Revision of a Relational
system. R/3 version is client/server. Database
The company is based in Walldorf, Server
Germany.
Many consider it THE software
for the 21 century.
20,000 employees worldwide. Application
Data is kept only once in the Servers
system; thus, very little data
redundancy.

Client
Computers
 Topic: TPS

1. This system helps eliminate costly,

inflexible legacy systems and uses a
best-practices model.
a. ABC
b. ERP (Enterprise Resource Planning)
c. SAP
d. DBMS
e. b and c
2. A system that monitors and tracks each
customers interaction with a company is
called.
a. Customer satisfaction system.
b. Customer interaction system.
c. Customer tracking system.
d. Customer goodwill system.
e. None of the above.
3. When computers communicate from
different companies so that the output from
one system is processed by another without
human intervention, the system is called:
a. Coupling
b. Electronic Data Interchange
c. EDI
d. b and c
4. Which system below would be more
likely to use batch processing?
a. payroll
b. airline reservations
c. hotel reservations
d. auto rental
e. college course registration
5. In a three-tier client/server ERP
architecture, where would the programs
for accounting, sales, R&D, purchasing,
etc. be located?
a. database server
b. client
c. application servers
d. function servers
e. business functions servers
6. Any information system must
involve the organizations strategic
plan?
a. True
b. False
7. In this form of processing, transactions
are accumulated over a period of time and
processed as a single unit.
a. Batch processing
b. On-line transaction processing
c. Real-time processing
d. On-line delayed processing
e. a and d
8. In this form of processing, transactions
are entered into the computer and stored on
a disk or tape and processed at a later time.
a. On-line transaction processing
b. Real-time processing
c. On-line delayed processing
9. In this form of processing, transactions
are entered into the computer and are
immediately processed.
a. On-line transaction processing
b. Real-time processing
c. On-line delayed processing
d. a, b, and c
e. a and b
10. In this type of data input into the
computer, the data are captured at the
source by a device, such as a barcode
reader, and entered directly into the
computer. It is called Source Data
Automation.
a. True
b. False
11. After collecting data for processing it
must pass through a filter called Data
Editing or Data Validation. This filter helps
eliminate:
a. GIFO
b. GIGO
c. GGIO
d. GFIO
12. This system is very important for
recording and monitoring the interaction
the customer has with a company.
a. Customer tracking system
b. Customer satisfaction system
c. Customer interaction system
d. Customer goodwill system
13. Examples of a TPS:
a. Order entry
b. Inventory control
c. Payroll
d. Sales at a cash register
e. All of the above
14. The CSUS university system uses what
ERP?
a. SAP
b. PeopleSoft
c. None of the above