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• Information systems


  • Support the routine, day-to-day activities that occur in the normal course of business
  • Help a company add value to its products and services
• Traditional transaction processing systems

  Support the various business functions of organizations that have not yet implemented enterprise resource planning systems
• Electronic and mobile commerce

  • Allow transactions to be made by the customer, with less need for sales staff
  • Open up new opportunities for conducting business
• Enterprise resource planning (ERP)


  A set of integrated programs that manage a company's vital business operations for an entire multisite, global organization
• ERP implementation


  1. Organizations are moving from a collection of non-integrated transaction processing systems

  2. To highly integrated enterprise resource planning (ERP) to perform routine business operations
• ERP systems


  Evolved from materials requirement planning (MRP) systems that allowed companies to plan out how much raw material they would need at a certain time in the future, plan their production, control their inventory and manage their purchasing process
• Organizations realized that their systems lack the integration needed to coordinate these activities and share information. This led firm to create new systems which came to be known as ERP.
• ERP emerged from the recognition that legacy transaction processing systems lacked necessary integration for information sharing.
• Advantages of ERP


  • Improved access to data for operational decision making
  • Elimination of costly, inflexible legacy systems
  • Improvement of work processes based on best practices
  • Upgrade of technology infrastructure
• Disadvantages of ERP


  • Expense and time in implementation
  • Difficulty implementing change
  • Difficulty integrating with other systems
  • Risks in using one vendor
  • Risk of implementation failure
• Transaction processing systems (TPSs)

  Process detailed data necessary to update records about fundamental business operations
• TPS include


  • Order entry
  • Inventory control
  • Payroll
  • Accounts payable
  • Accounts receivable
  • General ledger
• TPS


  Provide data for other business processes such as management information system/decision support system (MIS/DSS)
• Traditional transaction processing methods

  • Batch processing system
  • Online transaction processing (OLTP)
• Organizations expect their TPS to

  • Process data generated by and about transactions
  • Maintain a high degree of accuracy and integrity
  • Avoid processing fraudulent transactions
  • Produce timely user responses and reports
  • Increase labour efficiency
  • Help improve customer service
  • Help build and maintain customer loyalty
  • Achieve competitive advantage
• Transaction processing cycle


  1. Data collection

  2. Data editing

  3. Data correction

  4. Data manipulation

  5. Data storage

  6. Document production
• Data collection


  Capturing and gathering all data necessary to complete the processing of transactions
• Data collection methods


  • Manual
  • Automated via special input devices (such as scanners, point-of-sale devices, and terminals)
• Data collection


  • Collected at source
  • Recorded accurately, in a timely fashion
• Data editing


  Checking data for validity and completeness to detect any problems
• Data editing


  • Quantity and cost data must be numeric
  • Names must be alphabetic
  • Verification that codes associated with an individual transaction are present in a database containing valid codes
• Data correction


  Re-entering data that was not typed or scanned properly
• If invalid data is detected, system should provide error messages that specify the problem so proper corrections can be made. Software tools can be used to identify bad data.
• Data manipulation


  Performing calculations and other data transformations related to business transactions
• Data manipulation activities


  • Classifying data
  • Sorting data into categories
  • Performing calculations
  • Summarizing results
  • Storing data in the organization's database for further processing
• Data storage


  Updating one or more databases with new transactions
• Document production and reports


  Generating output records, documents, and reports
• Document production and report formats

  • Hard-copy paper reports
  • Displays on computer screens
• Results from one TPS can be inputs to another system
• Typical uses of TPS outputs

  • Checks and invoices
  • Management information
  • Decision support
  • Compliance with local, state, and federal regulations
• TPS applications


  • Order Processing Systems
  • Purchasing Systems
  • Accounting Systems
• Electronic commerce


  Conducting a business transaction (e.g., distribution, buying, selling, and servicing) electronically over computer networks, primarily the Internet but also extranets, and corporate networks
• Types of electronic commerce

  • B2C – business to consumer, allows customers to place orders, with their order processing system
  • B2B – business to business, where the customer is another business
  • C2C – allowing consumers to sell to other consumers. eBay is an example
• Mobile commerce (m-commerce)


  Relies on the use of wireless devices, such as personal digital assistants, mobile phones, and smartphones, to transact
• ERP production plan process

  1. Sales forecasting: estimates future customer demand

  2. Sales and operations plan: takes demand and current inventory levels to determine production for future demands

  3. Demand management: develops master production schedule

  4. Detailed scheduling: schedules production run for each product and from one product to the next

  5. Materials requirement planning: determines amount and timing of raw material orders with suppliers

  6. Purchasing: purchases raw materials and transmits to qualified suppliers

  7. Production: plans details of running and staffing production operation
• Customer relationship management (CRM) system


  Helps a company manage all aspects of customer encounters, including marketing and advertising, sales, and customer service after the sale
• Sales ordering


  1. Recording items to be purchased

  2. Setting sales price

  3. Recording order quantity

  4. Determining total cost of the order including delivery costs

  5. Confirming customer's available credit
• Challenges that must be met by an operational system of a multinational company

  • Different languages and cultures
  • Disparities in IS infrastructure
  • Varying laws and customs rules
  • Multiple currencies
• ERP software vendors help meet the challenges of operating a multinational company.
• Enterprise system


  Ensures information can be shared across all business functions and all levels of management to support the running and managing of a business