MIS 175 Spring 2002 Chapter 9MIS Transaction Processing Systems Manual or automatic – all businesses systematically process transactions Function: process routine, day-to-day business activities Computerized TPS: –Batch –Online (real-time, OLTP) The foundation of business systems

MIS 175 Spring 2002 Chapter 9MIS Batch TPS Originally, the only available option Transactions accumulated over period of time Time period – day, week, month Transaction records accumulated in files When batches are processed, what happens? –Update databases –Generate reports –Generate transactions for other systems

MIS 175 Spring 2002 Chapter 9MIS Batch Processing Pros and Cons Pros –Relatively easy to program, install and maintain –Batches can be processed during low-activity periods Cons –Information is delayed

MIS 175 Spring 2002 Chapter 9MIS Online TPS (OLTP) Transactions are processed in real time Required for any “modern” application where time is critical Well supported by client/server computing model

MIS 175 Spring 2002 Chapter 9MIS Hybrid TPS OLTP applications can feed transactions to batch systems –Examine: GL only updated once per day Real time order capture with delayed processing

MIS 175 Spring 2002 Chapter 9MIS TPS Requirements Capture, process and store transactions Produce reports and information about transactions Produce transactions for other TPS Be accurate and timely Be efficient – require less labor Increase customer service Increase competitive advantage

MIS 175 Spring 2002 Chapter 9MIS TPS Activity Model Data capture –From online entry or “external” system Data validation –Should be done as close to source as possible Processing –Data manipulation –Database updating –Generation of transactions for other systems Archive Transaction Create documents and reports

MIS 175 Spring 2002 Chapter 9MIS Management Issues Uptime –How long can the system be “down” before significant costs are incurred? Processing Delays / Response Times –How quickly must a transaction be processed? –What is the worst online response time that is acceptable

MIS 175 Spring 2002 Chapter 9MIS Management Issues (2) Disaster Recovery –What plans are in place to recover lost business data? –What plans are in place to resume business processing in case of disaster? Audit –Can you verify the integrity of the system? –How will you know if transactions are not processed or are processed incorrectly?

MIS 175 Spring 2002 Chapter 9MIS TPS By Function Order Processing Procurement & Inventory Control Accounting

MIS 175 Spring 2002 Chapter 9MIS Order Processing TPS Order capture –Variety of means Configuration Shipment planning and inventory allocation –Prioritize orders, select shipment locations, allocate inventory to orders Shipping and warehousing –Picking, packing, invoicing, reporting

MIS 175 Spring 2002 Chapter 9MIS Procurement Inventory Control –Raw materials, WIP, FGI, etc Purchase Order Processing –Generating, transmitting, maintaining purchase orders Receiving Accounts Payable –Boundary between procurement and accounting

MIS 175 Spring 2002 Chapter 9MIS Accounting Accounts Payable Accounts Receivable Budget Payroll General Ledger Asset Management

MIS 175 Spring 2002 Chapter 9MIS Disadvantages of Functionally Organized TPS Processing inefficiency Data redundancy –Causes integrity problems –Inefficient Temporal integrity problems –Caused by different times at which processing occurs Lack of information coherence

MIS 175 Spring 2002 Chapter 9MIS Enterprise Resource Planning Systems Key word is Enterprise: solution designed for entire enterprise All processes organized around one enterprise-wide data model

MIS 175 Spring 2002 Chapter 9MIS Advantages of ERP Elimination of costly legacy systems –Old systems are expensive to maintain and reduce business agility Improvement of processes –ERP may have implemented best-in-class processes Improve data access and data integrity –Provide complete, consistent view of enterprise data

MIS 175 Spring 2002 Chapter 9MIS Disadvantages of ERP Implementation cost –Software and hardware –Expertise –Opportunity costs Time to implementation –Lengthy and difficult process MOC (management of change) challenges System integration difficulties Vendor dependence

MIS 175 Spring 2002 Chapter 9MIS Current ERP Vendors SAP Baan PeopleSoft Oracle J. D. Edwards Manugistics

MIS 175 Spring 2002 Chapter 9MIS R/3 Architecture Functionally rich –More functional options than a business will ever need Logical –Built around information model –10,000 tables Control tables Application data tables –Heavily parameterized

MIS 175 Spring 2002 Chapter 9MIS R/3 Architecture (con’t) Hardware –PC Clients –Application server –Database server Public interfaces –BAPI Customization –ABAP Development System