Transcript 5 Networks and Collaboration As Business Solutions

Turban and Volonino
Chapter 9
Transaction Processing, Functional
Applications and Integration
Information Technology for Management
Improving Performance in the Digital Economy
7th edition
John Wiley & Sons, Inc.
Slides contributed by Dr. Sandra Reid
Chair, Graduate School of Business & Professor, Technology
Dallas Baptist University
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Chapter Outline
• Functional Information Systems and
Transaction Processing Systems
• Managing Production/Operations and
Logistics
• Managing Marketing and Sales Systems
• Managing Accounting and Finance Systems
• Managing Human Resources Systems
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Chapter Outline (cont’d)
• Integrating Functional Information Systems
• Managerial Issues
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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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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.
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• 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.
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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.
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Functional Information Systems
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Composed of smaller systems
Integrated or independent
Interfaces
Support all levels (operational, managerial,
strategic)
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Transaction Processing Information Systems
TPS monitors, collects, stores, processes, &
disseminates information for all routine core
business transactions.
Characteristics of Transaction Processing Systems:
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.
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Online Transaction Processing
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TPS – Online Transaction Processing
Systems
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With OLTP and Web technologies such as an extranet, suppliers
can look at the firm’s inventory level or production schedule in
real time. The suppliers themselves, in partnership with their
customers, can then assume responsibility for inventory
management and ordering.
•
Interactive Internet TPS expands OLTP to provide enhanced real
time transaction processing over the Internet or intranets. Multistore chains can access a centralized computer system no longer
requiring in-store processors.
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TPS – Examples
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Traffic Control at Airports
In-flight Card Payments in American Airlines
Tax filing
Organizational payroll
Cruise ships operators
Order processing
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Example: Taxis in Singapore
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Modernizing TPS Saved Time & Money
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…
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Transaction Processing on the Web
Web analytics is the measurement, collection, analysis and
reporting of internet data for purposes of understanding and
optimizing web site usage.
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
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9.2 Managing Production/Operations &
Logistics
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Managing Production/Operations & Logistics
The production and operations management (POM) function in an
organization is responsible for the processes that transform inputs
into useful outputs. In comparison to the other functional areas,
POM is very diversified as are the supporting TPS. It also differs
considerably among organizations.
•
A few of the IT supported POM areas are:
– In-house logistics and materials management
– Planning production/operations
– Computer-integrated manufacturing (CIM)
– Product lifecycle management (PLM)
– Automating design work and manufacturing
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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.)
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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.
• Inventory management
– Goal is to minimize costs of keeping inventory,
ordering and shortage.
.
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e-Procurement
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.
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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.
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Managing Production/Operations & Logistics
POM planning is a major component of operational systems
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Material Requirements Planning (MRP) is software that facilitates the plan for purchasing or
producing parts, subassemblies, or materials in the case of interdependent items. It integrates
Master Production Schedules, BOM’s, and Inventory levels.
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Manufacturing Resource Planning (MRP II) adds functionalities to a regular MRP system by
determining the costs of parts and the associated cash flow. It also estimates costs of labor, tools,
equipment repair, and energy while generating a requirements report.
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Just-in-Time Systems is an approach that attempts to minimize waste of all kinds (space, labor,
materials, energy, etc.) and to continuously improve processes and systems. The JIT concept is
used in mass customization and build-to-order environments.
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Project Management. A project is usually a one-time effort composed of many interrelated
activities, costing a substantial amount of money, and lasting for weeks or years. Software tools
such as: program evaluation and review technique (PERT) and the critical path method (CPM) are
used to manage milestones, resources, costs, etc.
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Work Management Systems (WMS) automatically manages the prioritization and distribution of
work. These systems deal with resource allocation and reallocation.
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Managing Production/Operations & Logistics
Computer-Integrated Manufacturing
CIM is a concept that promotes the integration of various computerized
factory systems. It has three basic goals: (1) the simplification of all
manufacturing technologies and techniques, (2) automation of as many
of the manufacturing processes as possible, and (3) integration and
coordination of all aspects of design, manufacturing, and related
functions via computer hardware and software.
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Typical integrated technologies are:
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FMS - Flexible-manufacturing systems
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JIT – Just-in-Time
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MRP – Materials Requirements Planning
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CAD – Computer Aided Design
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CAE – Computer Aided Engineering
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GT - Group technology
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9.3 Managing Marketing & Sales
Systems
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Marketing channel systems.
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Marketing and Sales Systems
Customer Relations
It is essential for companies to know who their customers are and to
treat them properly. Innovative products and services, successful
promotions, customization, and customer service are a necessity for
most organization.
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Customer Profiles and Preference Analysis. Sophisticated information systems are being developed
to collect data on existing and potential customers, their demographics (age, gender, income level),
and preferences.
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Prospective Customer Lists and Marketing Databases. All firms need to know and track who their
existing and potential customers are. These prospective-customer lists can be analyzed and sorted
by classification for direct mailing, e-mailing, or telemarketing.
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Mass Customization. Today’s customers prefer customized products. Through mass customization,
the practice of maintaining WIP inventory, manufacturers can offer different product configurations
at reasonable prices.
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Personalization. Special product offers are made, based on where the customer spent their time
and on what they may have purchased.
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Advertising and Promotions. Special promotions or coupons are presented to the customer via
mails, email, wireless and pervasive computing applications.
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Marketing and Sales Systems
Distribution Channels & In-Store Innovations
Organizations can distribute their products and services through a variety
of delivery channels. A company may use its own outlets, representatives,
or distributors.
• IT-Supported Distribution Channels
– Internet
– Location Based Mapping
– Self-service convenience stores
• Improving Shopping and Checkout at Retail Stores
– Hand-held wireless devices that scan the bar code
– Smart card or credit card
– Information kiosk enable customers to view catalogs in stores
– Self-checkout machines
– Check-writers attached to cash registers
– Computerization of various activities in retail stores
– Video-based systems count and track shoppers in a physical store
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Marketing and Sales Systems
Marketing Management
Many marketing management decision applications are supported by
computerized information systems.
• Pricing of Products or Services. Sales volumes are largely determined by the prices of
products or services as is profit.
• Salesperson Productivity. Salespeople differ from each other in selling skill. Sales-force
automation increases salesperson productivity by providing them with mobile devices,
access to information, etc.
• Profitability Analysis profit contribution of certain products and services can be derived
from cost-accounting systems
• Sales Analysis And Trends. Marketing. TPS collect sales figures that can be searched for
trends and relationships.
• New Products, Services, and Market Planning. New products and services can be an
expensive risk. “Will it sell?” Requires careful analysis, planning, forecasting, and market
research.
• Web-Based Systems support marketing and sales through data capture
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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.
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9.4 Managing Accounting & Finance
Systems
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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.
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Accounting and Finance Systems
Accounting and finance functional areas manage the inflow and
outflow of organizational assets. This involves all functions of an
organization including payroll, billing, cash management, etc.
• Financial Planning and Budgeting
– Financial and Economic Forecasting
– Planning for Incoming Funds
– Budgeting
– Capital Budgeting
• Buy vs. lease
• Standard financial model used (e.g. IRR, NPV, payback period)
• Managing Financial Transactions
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Integrated accounting business software.
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Accounting and Finance Systems (Continued)
• E-Commerce Applications of Financial Transactions
– Global stock exchanges and multiple currencies
– E-Bonds
– Factoring online
– Electronic re-presentment of checks
– Electronic bill presentment and payments
• Investment Management
– Financial Analysis
– Access to Financial and Economic Reports
• Control and Auditing
– Risk analysis
– Budgetary Control and Auditing
– Financial Ratio Analysis
– Profitability Analysis and Cost Control
– Product Pricing
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9.5 Managing Human Resources
Systems
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HRIS Applications
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Payroll
Work Time
Benefits Administration
Recruiting
Training
Performance Records
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HRM activities
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Human Resources Systems
• Recruitment is finding employees, testing them, and deciding
which ones to hire. The Web has enhanced the recruitment
process.
– Position Inventory
– HRM Portals and Salary Surveys
– Employee Selection
• Human Resources Maintenance and Development
– Performance Evaluation
– Training and Human Resources Development
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Web-based video clips.
Mobile devices.
Virtual reality.
Interactive simulations.
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Human Resources Systems (Continued)
• Human Resources Planning and Management
–Personnel Planning
–Labor –Management Negotiations
–Payroll and Employees’ Records
–Benefits Administration
–Employee Relationship Management (ERM)
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Integrating Functional Information
Systems
• Functional information systems are mainly
independent, often custom- or in-house made
• Information Systems that serve business
processes need to be integrated
– Using middleware
– ERP software
– Web 2.0 tools, web services, etc.
– Front-office back-office integration
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Managerial Issues
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Integration of functional information systems
Priority of transaction processing
Finding innovative applications
Using the Web
Ethical issues
– HRM
– CRM
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