1. Chapter
Lead Black Slide
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2. Chapter Business Operations
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© 2001 Business & Information Systems 2/e

3. Our Agenda Increasing Business Operations Efficiency
Chapter
Our Agenda
Increasing Business Operations Efficiency
Transaction Processing Systems
Basic Business Information Systems
Other Business Information Systems
Enterprise Resource Planning Systems
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© 2001 Business & Information Systems 2/e

4. Chapter
Learning Objectives
Give an example of a computer information system that increases the efficiency of business operations.
Explain the purpose and structure of transaction processing systems.
Describe the functions of transaction processing systems.
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© 2001 Business & Information Systems 2/e

5. Learning Objectives (cont’d.)
Chapter
Learning Objectives (cont’d.)
Describe several ways of controlling transaction processing systems.
Explain the difference between batch processing and on-line transaction processing.
Summarize the characteristics of basic business information systems.
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© 2001 Business & Information Systems 2/e

6. Learning Objectives (cont’d)
Chapter
Learning Objectives (cont’d)
List several examples of accounting, financial, marketing, manufacturing, and human resource information systems.
Explain what an enterprise resource planning system is.
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© 2001 Business & Information Systems 2/e

7. Increasing Business Operations Efficiency
Chapter
Increasing Business Operations Efficiency
Business Operations
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© 2001 Business & Information Systems 2/e

8. Increasing Business Operations Efficiency
Chapter
Increasing Business Operations Efficiency
Efficiency has to do with how much a system produces relative to the resources, such as people and money, used by the system.
To be competitive today, most businesses require some form of computer information system for their basic operations.
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© 2001 Business & Information Systems 2/e

9. Transaction Processing Systems
Chapter
Transaction Processing Systems
Business Operations
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© 2001 Business & Information Systems 2/e

10. Transaction Processing Systems
Chapter
Transaction Processing Systems
The main type of information system used for operational support in a business is the transaction processing system (TPS).
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© 2001 Business & Information Systems 2/e

11. Transaction Processing System Structure
Chapter
Transaction Processing System Structure
Three elements of a transaction processing system:
Keep records about the state of the organization.
Process transactions that affect these records.
Produce outputs that report on transactions that have occurred, that report on the state of the organization, and that cause other transactions to occur.
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© 2001 Business & Information Systems 2/e

12. Transaction Processing System Functions
Chapter
Transaction Processing System Functions
Transaction processing systems consist of four main functions to accomplish their purposes. They are:
Input function
Storage function
Processing function
Output function
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© 2001 Business & Information Systems 2/e

13. Chapter
Input Function
Before transaction data can be brought into a transaction processing system, it must be acquired from its source – a step called data capture.
Data is often captured from a source document.
Data once captured, it is put into the system – a step called data entry.
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© 2001 Business & Information Systems 2/e

14. Input Function (cont’d.)
Chapter
Input Function (cont’d.)
As data is entered into the system, a program must check it for errors, a step called data validation.
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© 2001 Business & Information Systems 2/e

15. Chapter
Storage Function
Data in a transaction processing system is stored in data files and databases.
Two types of data commonly found in transaction processing systems:
Master data – is the main data used by the system.
Transaction data – is data about the transactions that have occurred.
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© 2001 Business & Information Systems 2/e

16. Chapter
Processing Function
Processing involves manipulating data within the system.
Two operations in the processing function:
Computation – doing calculations with data.
Decision making – checking a condition that causes processing to continue in different ways depending on the result of the decision.
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© 2001 Business & Information Systems 2/e

17. Chapter
Output Function
Output from a transaction processing system can be displayed on a screen or printed on paper.
Three types of reports
Detail report – lists detailed information
Summary report – contains summarized information
Exception report – lists exceptions to norm
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© 2001 Business & Information Systems 2/e

18. Controlling Transaction Processing Systems
Chapter
Controlling Transaction Processing Systems
Procedures to ensure the completeness of the data processing and to minimize the chance of error are called controls. They include:
Control Totals
Audit Trails
Backup and Recovery Procedures
Processing Data in Transaction Processing Systems
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© 2001 Business & Information Systems 2/e

19. Chapter
Control Totals
A control total is a number that is computed when data enters a system and then computed again after the system has processed the data.
Sometimes several control totals are calculated and checked in the system to be sure all data has been processed accurately.
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© 2001 Business & Information Systems 2/e

20. Chapter
Audit Trails
An audit trail is a way of tracing the effect of data through a system.
A good audit trail is one in which someone can start with the output and go back through the system to the source document, or vice versa.
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© 2001 Business & Information Systems 2/e

21. Backup and Recovery Procedures
Chapter
Backup and Recovery Procedures
Backing up means that the data is copied periodically to another storage media.
Recovery means that the backup copy of the data can be used to re-create the original data stored on the system.
Without adequate backup and recovery procedures, there is a great risk of losing data permanently.
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© 2001 Business & Information Systems 2/e

22. Processing Data in Transaction Processing Systems
Chapter
Processing Data in Transaction Processing Systems
Two basic approaches to processing data in a transaction processing system:
Batch processing – transactions to be processed are prepared in a form understandable by the computer before actual processing begins.
On-Line Transaction Processing (OLTP) – permits a person to use a keyboard and screen at the time the processing is done.
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© 2001 Business & Information Systems 2/e

23. Basic Business Information Systems
Chapter
Basic Business Information Systems
Business Operations
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© 2001 Business & Information Systems 2/e

24. Basic Business Information Systems
Chapter
Basic Business Information Systems
Eight basic information processing activities:
Entering customer orders
Billing customers
Collecting customer payments
Keeping track of inventory
Purchasing stock and materials
Paying bills
Paying employees
Reporting financial information
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© 2001 Business & Information Systems 2/e

25. Entering Customer Orders
Chapter
Entering Customer Orders
An order entry system permits entry of customer orders for goods and services and prepares the orders in a form that can be used by the business.
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© 2001 Business & Information Systems 2/e

26. Entering Customer Orders (cont’d.)
Chapter
Entering Customer Orders (cont’d.)
Once orders are entered, the following questions must be answered:
Does the business have sufficient inventory to fill the order?
Should the business extend credit to this customer or require that the customer pay in advance?
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© 2001 Business & Information Systems 2/e

27. Chapter
Billing Customers
The purpose of a billing system is to prepare the customer’s bill or invoice.
To prepare the invoice from the sales order data, two types of master data are required:
Customer master data
Inventory master data
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© 2001 Business & Information Systems 2/e

28. Collecting Customer Payments
Chapter
Collecting Customer Payments
The accounts receivable system is used to keep track of money owed to the business by its customers and to record customer payments for invoices.
To produce the outputs, two types of stored data are used:
Accounts receivable data
Customer master data
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© 2001 Business & Information Systems 2/e

29. Keeping Track of Inventory
Chapter
Keeping Track of Inventory
The inventory control system is used to keep track of the business’s inventory, to indicate when inventory should be reordered, and to compute the value of the inventory.
The stored data needed in this system is the inventory master data.
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© 2001 Business & Information Systems 2/e

30. Purchasing Stock and Materials
Chapter
Purchasing Stock and Materials
The purchasing system is used to
Determine the best suppliers (also called vendors) from which to purchase items.
Prepare documents, called purchase orders, which indicate to the supplier what items are wanted.
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© 2001 Business & Information Systems 2/e

31. Purchasing Stock and Materials (cont’d.)
Chapter
Purchasing Stock and Materials (cont’d.)
To prepare the purchase order, two types of information are required:
Inventory master data
Supplier master data
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© 2001 Business & Information Systems 2/e

32. Chapter
Paying Bills
The accounts payable system is used to keep track of money owed by the business for purchases, to pay suppliers for items purchased, and to provide reports of accounts payable to other functions of the business.
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© 2001 Business & Information Systems 2/e

33. Chapter
Paying Bills (cont’d.)
To produce the outputs, two types of stored data are used:
Accounts payable data
Supplier master data
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© 2001 Business & Information Systems 2/e

34. Chapter
Paying Employees
The payroll system is used to prepare paychecks for employees and to provide reports of payroll.
To produce the outputs two types of data are required:
Employee work data
Employee master data
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© 2001 Business & Information Systems 2/e

35. Reporting Financial Information
Chapter
Reporting Financial Information
The general ledger system is used to maintain the business’s financial accounts and to prepare financial statements.
To produce the financial statements, the general ledger system uses stored general ledger data.
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© 2001 Business & Information Systems 2/e

36. Other Business Information Systems
Chapter
Other Business Information Systems
Business Operations
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© 2001 Business & Information Systems 2/e

37. Accounting Information Systems
Chapter
Accounting Information Systems
Accounting Information Systems (AIS) support the accounting function. Several commonly used AIS systems are:
Fixed asset accounting
Budgeting
Tax accounting
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© 2001 Business & Information Systems 2/e

38. Financial Information Systems
Chapter
Financial Information Systems
Financial information systems provide necessary support for the finance function. Some common financial information systems include:
Cash management
Capital expenditure analysis
Financial forecasting
Portfolio management
Credit analysis
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© 2001 Business & Information Systems 2/e

39. Marketing Information Systems
Chapter
Marketing Information Systems
Marketing information systems assist in the marketing function. Common marketing information systems include:
Sales analysis
Sales forecasting
Marketing research
Direct mail advertising
Electronic commerce
Sales force automation
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© 2001 Business & Information Systems 2/e

40. Manufacturing Information Systems
Chapter
Manufacturing Information Systems
Manufacturing information systems provide services to support the manufacturing function. Some common manufacturing information systems include:
Production scheduling
Materials Requirements Planning (MRP)
Manufacturing Resource Planning (MRPII)
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© 2001 Business & Information Systems 2/e

41. Manufacturing Information Systems (cont’d.)
Chapter
Manufacturing Information Systems (cont’d.)
Just-In-Time (JIT)
Computer-Aided Design (CAD)
Computer-Aided Manufacturing (CAM)
Robotics
Computer-Integrated Manufacturing (CIM)
Supply-chain management
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© 2001 Business & Information Systems 2/e

42. Human Resource Information Systems
Chapter
Human Resource Information Systems
Human Resource Information Systems (HRIS) support the human resource function. Common HRIS include:
Performance appraisal
Skills inventory
Benefits administration
Job applicant tracking
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© 2001 Business & Information Systems 2/e

43. Enterprise Resource Planning Systems
Chapter
Enterprise Resource Planning Systems
Business Operations
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© 2001 Business & Information Systems 2/e

44. Enterprise Resource Planning
Chapter
Enterprise Resource Planning
An information system that supports several areas of a business by combining a number of applications with a single database that stores all the data used by the applications.
ERP systems are designed for applications that encompass a large portion of a business.
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© 2001 Business & Information Systems 2/e

45. Business Operations Key Terms Chapter
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© 2001 Business & Information Systems 2/e

46. Key Terms Accessing Accounting Information System
Chapter
Key Terms
Accessing
Accounting Information System
Accounts Payable System
Accounts Receivable System
Audit Trail
Backup Procedure
Batch Processing
Billing System
Control
Control Total
Data Validation
Detail Report
Enterprise Resource Planning (ERP)
Exception Report
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© 2001 Business & Information Systems 2/e

47. Key Terms (cont’d.) Financial Information System General Ledger System
Chapter
Key Terms (cont’d.)
Financial Information System
General Ledger System
Human Resource Information System (HRIS)
Interactive Processing
Inventory Control System
Manufacturing Information System
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© 2001 Business & Information Systems 2/e

48. Summary Increasing Business Operations Efficiency
Chapter
Summary
Increasing Business Operations Efficiency
Transaction Processing Systems
Basic Business Information Systems
Other Business Information Systems
Enterprise Resource Planning Systems
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© 2001 Business & Information Systems 2/e

49. Chapter
Final Black Slide
© 2001 Business & Information Systems 2/e