transaction: any business event that generates data worthy of being captured and stored in a database
transaction processing system: supports the monitoring, collection, storage, and processing of data from the organization's basic business transactions, each of which generates data
batch processing: the firm collects data from transactions as they occur, placing them in groups
online transaction processing: business transactions are processd online as soon as they occur
functional area information system: support a particular functional area in the organization by increasing area's internal efficiency and effectiveness
common forms of financial control:
budgetary control
internal auditing
financial ratio analysis
production/operations management: responsible for the process that transform inputs into useful outputs as well as for the overall operation of the business
production/operations management functions:
in-house logistics and materials management
planning production and operation
computer-integrated manufacturing
product life cycle management
computer-integrated manufacturing: an approach that integrates various automated factory systems.
computer-integrated manufacturing goals:
simplify all manufacturing technologies and techniques
automate as many of the manufacturing processes as possible
integrate and coordinate all aspects of design, manufacturing, and related functions through computer systems
product life cycle management: a business strategy that enables manufacturers to share product-related data that support product design and development and supply chain operations
human resource information system: deal primarily with transaction processing systems such as managing benefits and keeping records of vacation days
IT support in human resource planning and management:
payroll and employees' records
benefits administration
employee relationship management
routine reports: reports produced as scheduled intervals
ad hoc (on-demand) reports: reports that are created on demand by users
drill-down reports: reports that show a greater level of details than is included in routine reports
key indicator reports: summarize the performance of critical activities
comparative reports: compare the performances of different business units or of a single unit during different times
exception reports: include only information that falls outside certain threshold standards
enterprise resource planning systems: designed to correct a lack of communication among the functional area IS. ERP systems resolve this problem by tightly integrating the functional area IS through a common database
ERP II systems: inter-organizational ERP systems that provide web-enabled links among a company's key business systems and its customers, suppliers, distributors, and other relevant parties
benefits of ERP systems:
organizational flexibility and agility
decision support
quality and efficiency
ERP limitations:
companies need to change their current business processes to fit the predefined business processes incorporated into ERP
complex
expensive
time consuming
major causes of ERP implementation failure:
failure to involve affected employees in the planning and development phases and in change management processes
trying to accomplish too much too fast in the conversion process
insufficient training in the new work tasks required by the system
failure to perform proper data conversion and testing for the new system
approaches to implementing an on-premise ERP system:
vanilla approach
custom approach
best-of-breed approach
vanilla approach:
implements standard ERP package
enable the company to perform the implementation more quickly
extent to which the software is adapted is limited
custom approach:
develop new ERP functions specifically for that firm
organization must carefully analyze business processes
expensive and risky
difficult to use if not perfectly matched to organization's needs
best-of-breed approach:
mix and match core ERP modules as well as other extended ERP modules from different software providers to best fit their unique internal processes and value chains
benefits of cloud-based ERP system:
can be used from anywhere with internet access
avoid initial hardware and software expenses of on-premise implementation
scalable, can extend ERP to support new business processes by purchasing new ERP modules
disadvantages of cloud-based ERP:
less secure
sacrifice control over a strategic IT resource
if the system experiences problems it can take longer to fix
enterprise application integration system: integrates existing systems by providing software that connects multiple applications
cross-departmental process:
originates in one department and ends in a different department
originates and ends in the same department but involves other departments
cross-departmental processes:
procurement process
fulfillment process
production process
procurement process: originates when a company needs to acquire goods or services from external sources, and it concludes when the company receives and pays for them.
order fulfillment process: a cross-functional business process that originates when the company receives a custom order, and it concludes when it receives payment
purpose of transaction processing systems: to monitor, store, collect, and process data generated from all business transactions