Chapter 8 Transaction Processing, Electronic Commerce, & Enterprise Resource Planning Systems

TPS, MIS, DSS, and AI/ES (Figure 8.1) Transaction Processing Systems (TPS) Perform routine operations & serve as a foundation for other systems Transactions Basic business operations such as customer orders, purchase orders, receipts, time cards, invoices, & payroll checks in an organization Chapter 8 IS for Management

Batch vs. On-Line Transaction Processing (Figure 8.2) Batch Processing A system in which business transactions are accumulated over a period of time & prepared for processing as a single unit or batch On-Line Transaction Processing (OLTP) A system whereby each transaction is processed immediately, without the delay of accumulating transactions into a batch Chapter 8 IS for Management

Integration and Objectives of TPS Integration of TPS (Figure 8.3) Objectives of TPS Process data generated by & about transactions Maintain a high degree of accuracy Ensure data & information integrity and accuracy Produce timely documents & reports Increase labor efficiency Help provide increased & enhanced service Help build & maintain customer loyalty Chapter 8 IS for Management

Simplified Overview of TPS (Figure 8.4) Chapter 8 IS for Management

DP Activities Common to TPS (Figure 8.5) A Transaction Processing Cycle Data Collection Data Editing Data Correction Data Manipulation Data Storage Document Production Source Data Automation: Process of capturing data at its source with minimal manual effort, entered directly into the computer without human intervention Chapter 8 IS for Management

Control and Management Issues Business Resumption Planning: Process of anticipating & providing for disasters Disaster Recovery: Implementation of the business resumption plan TPS Audit: Examination of the TPS in an attempt to answer 3 basic questions Does the system meet the business need? What procedures & controls have been established? Are the procedures & controls being properly used? Chapter 8 IS for Management

Traditional TPS Order Processing (Figure 8.7) Processing an order from entry to delivery, including traditional accounting transactions Chapter 8 IS for Management

Enterprise Resource Planning (ERP) (Table 8.5) ERP: Real-time monitoring of business functions across the enterprise Avalon Software Avalon CIM qad.inc MRG/PRO Oracle Oracle Manufacturing SAP America SAP R/3 Baan Triton PeopleSoft PeopleSoft J.D. Edwards World Software Vendor Name of Software Chapter 8 IS for Management

Enterprise Resource Planning Advantages Eliminate costly, inflexible legacy systems Provide improved work processes Provide access to data for operational decision making Upgrading technology infrastructure Disadvantages Time consuming, difficult, expensive to implement Make radical changes in how a company operates Lack of vendor responsiveness in light of high demand Chapter 8 IS for Management

Example of an ERP System - SAP/R3 Clients in the SAP system Application servers in the SAP system Business application programming interfaces (BAPIs) Database server in the SAP system Objects in the SAP system Repository Tables Chapter 8 IS for Management

SAP Three-Tier Client/Server Architecture (Figure 8.24) Database servers hold data that are accessed & updated in real-time Applications servers are used to execute client requests & to update master files Client desktop computers: The R/3 system is able to support hundreds or thousands of clients (e.g., Pentium PCs) Chapter 8 IS for Management

Business Application Programming Interface (BAPI) (Figure 8.25) Chapter 8 IS for Management

Chapter 8 Case Case 3: FedEx and SAP team up (pp. 385-86) Chapter 8 IS for Management

Electronic Commerce (E-Commerce) Business-to-business problems Inadequate models Integrating with existing systems Improving relationships with suppliers, customers, & distributors Consumer problems Waiting for images to download Security of credit information Figuring out the ordering process Currently a small part of all commerce Chapter 8 IS for Management

5 Stage Model of E-Commerce (Figure 8.22) Stages consumers experience in the sales life cycle: Search for & identify supplier(s) Selection & negotiation Purchasing Product & service delivery traditional delivery electronic distribution After-sales service Chapter 8 IS for Management

Forecasted Volume of E-Commerce 1997 2000 Consumer E-Commerce $0.5 billion $ 7 billion Business-to-business E-Commerce $8.0 billion $66 billion Chapter 8 IS for Management

Purchasing Products & Services Electronically Establish credit with suppliers Secure E-Commerce transactions Secure credit transactions Secure Financial Transaction (SET) Secure Sockets Layer (SSL) Others CyberCash Electronic wallets, purses, etc. Digicash options Chapter 8 IS for Management

E-Commerce Everything you know about e-commerce is WRONG! CEOs still have control Online revenues do matter for justifying infrastructure Profitability is good It isn’t just clicks versus mortar Business models may be different Indirect channels are crucial partners Going global includes importance of local image Speed, speed & more speed Chapter 8 IS for Management

E-C Components & Principles (1) Search engines Portals Virtual community Topical sites Site design Ease of use (linking structure, intuitiveness) Robustness Push vs. Pull Push: Web sites can push customized information to consumer/business Pull: Consumers/businesses have to search for information/product/service Chapter 8 IS for Management

E-C Components & Principles (2) Security Firewalls Encryption Cookies Privacy considerations Collecting data Changing data (includes merging data) Notification of potential uses of data Permission to use data for purposes not originally intended Chapter 8 IS for Management

E-C Components & Principles (3) E-Markets Consumer auctions B2B auctions & brokers Travel services One-click process patented E-Payments Cybercash Credit cards Chapter 8 IS for Management

E-C Components & Principles (4) Applications Bill paying Education Elections Entertainment Extranets Intranets Productivity tools Purchasing Research Chapter 8 IS for Management

EC & Customer Service Customer service 4 out of 5 online purchasers have experienced a failed purchase 25% of those frustrated say they will never go back 8% rate of abandonment Chapter 8 IS for Management

EC: Where To Now??? What are trends? What are technological advances? Push vs. Pull Push: Advances in technology push applications for the technology to be used Pull: Business/consumer needs pull the technology to be developed to meet the needs Permanence of the Web as “information space” (Tim Berners-Lee, 1999) Chapter 8 IS for Management