1. Management Information Systems MBA(II) 4 th Semester Transaction Processing Systems & Management Reporting Systems Lectures 16,17,18 By: Farhan Mir

2. Lecture Administration Presentation on “NADRA” Transaction Processing Environment Transaction Systems Management Reporting Case Studies (Where are you?)

3. Presentation on “NADRA” Overview of the Information System and subsystems Presented by one of the Assistant Directors: Syed Asad Hussain Bukhari Need to develop your questions for the presentation Most probably on Wednesday 12 th Nov at 10.15 am This is an important presentation in the context of “Information systems facilitating critical operations in the Government Sector

4. Transaction Processing Overview What are these Systems? –Support business transactions –Huge amount of Accounting Data Sales and Purchase Transactions –Student Enrollment (Another example) Important Features Regarding Transaction processing –Huge amount of transactional data to be handled –Accurate Recording a key necessity –Issuance of important documents –Sensitivity of data (Errors could be heart-breaking) –EDIs could be seen as an extended TPS option –Management knows that it can’t compromise on a faulty/ inefficient TPS (so you will find management providing enough resources to improve in this context)

5. Transaction Processing… The Evolution –The Early Computer Applications were in Operational/Transactional areas of business –Most of the organizations still believe that computers only can help at this level of organizations (no need for DSS or other applications) –Almost every modern organization (good ones) have the TPS, so maintenance and updation the two major activities for organizations already having TPS –But linking your partner entities with your systems have given new life to TPSs Transaction Processing, what exactly it is? – Transaction is basically exchange of goods/services for money –Three Major Functions –Bookkeeping, Issuance & Control Reports

6. TP Functions Bookkeeping –Records of Business Transactions –Day-to-day transactions with customers and suppliers –Airline Reservations Systems keep record of airline tickets issued –Student Registration & Fees –General Accounting Principals used for the purpose Issuance –Documents Necessary for transaction processing –Invoices, pay-checks, bills, & Reminders etc. –These documents are not buy-products but are essential part of a TPS Control Reports –By-product reports for operational control –Non-scheduled reports & Error Reports etc.

7. Transaction Processing… Transaction Processing Cycle –Data Entry Transactional Data collected, recorded by data operators New way of “source data automation”(key-less data entry) –Transaction Processing & Updation Batch Vs. Real-Time Processing –Document & Report Generation Informational Documents (Confirmation docs like Sales Receipts, Customer invoices) Action Documents (purchase order indicates that items mentioned should be supplied by suppliers to organizations) Accounting Statements (Balance sheets, cash flow statements) Listings (provide lists of transactions in a specific time period) –Inquiry Processing Order Status checked by customers (most online travel agencies offer this facility) Customer satisfaction notices (in reply to customer concerns)

8. Transaction Processing Systems Payroll Order Entry Inventory Invoicing Shipping Accounts Receivable Purchasing Receiving Accounts Payable General ledger

9. Payroll Systems Payroll are the most common Transaction Systems in organizations Basic purpose is to produce “paychecks” for organizational employees By-products for this system could be tax statements, social security notices, insurance documents Usually seen as an independent and straightforward system in most organizations Employees Work Information is the key: –Hrs (Time period calculated, that may be in days) –Rate per Hour (depend upon the type of employee I.e. permanent Vs. contractual) –Tax deductions (if applicable) –Net or Total Income (Eventually Transferred to General Ledger)

10. Employees Payroll Banks Organization/ Management General Ledger Rate Hours Taxes Accruals Payroll System

13. Order Entry Systems Another crucial system working in manufacturing as well as service organizations Customers placing orders for goods/services offered by your organization –Demand Orders Vs. Scheduled Orders The order processed in the organization –Authentication (Accuracy Checks) –Product/service availability check (Stock Level check) –Full Vs. Partial Orders Notification to Customers in case of partial filling of orders Rejection Notice Notification to Accounts as well New & Credit Customers –Authentication of Credit Customer accounts –Identification of New Customers

14. Customers Info about Order Collected Verification & Authentication Stock Product/ Service Credit Authorization New Orders To Inventory System Account Customers Customer Notification Order Entry System

15. Order Entry System… Other Factors –Security Checks Specially in the case of a website receiving orders online –Control Factors Size and Capacity (Operational constraints) –Supporting documentation Slips given to customer in case of awaiting orders –Customer Relation activities Display Notices –Telecommunication playing crucial role in Order Entry Laptops and Notebooks used by Salesperson to collect order and that are transmitted to companies electronically

16. Inventory System Inventory refers to the number of products/services a company have to sell and also the materials (usually refers as “Raw Material”) in stocks Inventory not necessarily refer to physical merchandize but it could be –Seats available in airline ticketing systems –No of seats available in certain department of a university Crucial information generated by Inventory Systems –Inventory levels –Products Performance –Information related to Backorders

17. Order Filling Stock New Orders Backorders Account Receivable Info. From order entry system Invoice Filled orders Shipments Inventory Levels Material Purchase Request Information to purchase system Not sufficient inventory

18. Inventory Subsystems ( Invoice & Shipment ) Invoice System Filled orders Invoice Acc. Receivable Shipment System Shipments Customers Shipping Instructions Invoice Slips

19. Account Receivable System Credit Customers –Organizations are often dealing with customers who have maintained their accounts with organization throughout the years Account Receivable System –Manages customer purchase record –Customer payments –Account Balances Features of Acc. Rec. System –Usually customers are billed monthly –Updation is done on the credit record of customers when they made partial or full payments, and they are also notified about that

20. InvoicesAccounts Editing Receivable Records Account Receivable Statements & Reminders Preparation Customers GL Payments Account Receivable System

21. Purchasing Many organizations have a purchase department (also known as procurement department) Many other departments are (at times inconveniently) dependent upon this department for required items The Process –Starting with a purchase request from stock –The process is followed by vendor-selection process –Formal Purchase Order is usually derived –Vendor selection is mostly done informally but usually a formal procedure is often carried out –Once the purchase order is filled the initiated order is closed out for further procedures Most of the organizations carry this process electronically

22. Purchase Request Products Suppliers/ Vendors Purchase Order Vendor Selection Informal & Formal Communication Goods Received Closing Out Orders Inventory System Purchasing System Receipts

23. Purchasing Subsystem..( Receiving ) The Basic Function –Receive Goods Receive goods from suppliers –Inspect Checking of contents against the purchase order –Accept or Reject Checking the goods either as damaged or satisfactory Goods Received Vendors Purchase Orders Receipts

24. Account Payable Most of the Large Organization maintain accounts with suppliers (usually seen as partners) The system handles payments to suppliers Crucial Information Handled by the System –Invoices from suppliers –Time allocation for payment –Checks to pay invoices –Cash Management (An Additional/ support system) System has to initiate as soon as goods are received from suppliers Goods slips and invoices validated Account Payable then eventually transferred to General Ledger

25. Vendors Validation Process Payments Statements & Notification Payments Account Payable Accounts Payable