lead black slide powered by desiamore1. 2 chapter 10 business operations

Lead Black Slide

Powered by DeSiaMore 2

Chapter 10

Business Operations

Powered by DeSiaMore 3

Our Agenda Increasing Business Operations

Efficiency Transaction Processing Systems Basic Business Information

Systems Other Business Information

Systems Enterprise Resource Planning

Systems

Powered by DeSiaMore 4

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.

Powered by DeSiaMore 5

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.

Powered by DeSiaMore 6

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.

Powered by DeSiaMore 7

Increasing Business Operations Efficiency

Business Operations

Powered by DeSiaMore 8

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.

Powered by DeSiaMore 9

Transaction Processing Systems

Business Operations

Powered by DeSiaMore 10

Transaction Processing Systems The main type of information

system used for operational support in a business is the transaction processing system (TPS).

Powered by DeSiaMore 11

Transaction Processing System Structure

Three elements of a transaction processing system:

1. Keep records about the state of the organization.

2. Process transactions that affect these records.

3. Produce outputs that report on transactions that have occurred, that report on the state of the organization, and that cause other transactions to occur.

Powered by DeSiaMore 12

Transaction Processing System Functions Transaction processing systems

consist of four main functions to accomplish their purposes. They are:

1. Input function2. Storage function3. Processing function4. Output function

Powered by DeSiaMore 13

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.

Powered by DeSiaMore 14

Input Function (cont’d.) As data is entered into the system,

a program must check it for errors, a step called data validation.

Powered by DeSiaMore 15

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:

1. Master data – is the main data used by the system.

2. Transaction data – is data about the transactions that have occurred.

Powered by DeSiaMore 16

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.

Powered by DeSiaMore 17

Output Function Output from a transaction

processing system can be displayed on a screen or printed on paper.

Three types of reports1. Detail report – lists detailed

information2. Summary report – contains

summarized information3. Exception report – lists exceptions to

norm

Powered by DeSiaMore 18

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

Powered by DeSiaMore 19

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.

Powered by DeSiaMore 20

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.

Powered by DeSiaMore 21

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.

Powered by DeSiaMore 22

Processing Data in Transaction Processing Systems Two basic approaches to

processing data in a transaction processing system:

1. Batch processing – transactions to be processed are prepared in a form understandable by the computer before actual processing begins.

2. On-Line Transaction Processing (OLTP) – permits a person to use a keyboard and screen at the time the processing is done.

Powered by DeSiaMore 23

Basic Business Information Systems

Business Operations

Powered by DeSiaMore 24

Basic Business Information Systems Eight basic information processing

activities:1. Entering customer orders2. Billing customers3. Collecting customer payments4. Keeping track of inventory5. Purchasing stock and materials6. Paying bills7. Paying employees8. Reporting financial information

Powered by DeSiaMore 25

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.

Powered by DeSiaMore 26

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?

Powered by DeSiaMore 27

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:

1. Customer master data2. Inventory master data

Powered by DeSiaMore 28

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:

1. Accounts receivable data2. Customer master data

Powered by DeSiaMore 29

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.

Powered by DeSiaMore 30

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.

Powered by DeSiaMore 31

Purchasing Stock and Materials (cont’d.) To prepare the purchase order,

two types of information are required:1. Inventory master data2. Supplier master data

Powered by DeSiaMore 32

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.

Powered by DeSiaMore 33

Paying Bills (cont’d.) To produce the outputs, two types

of stored data are used:1. Accounts payable data2. Supplier master data

Powered by DeSiaMore 34

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:

1. Employee work data2. Employee master data

Powered by DeSiaMore 35

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.

Powered by DeSiaMore 36

Other Business Information Systems

Business Operations

Powered by DeSiaMore 37

Accounting Information Systems Accounting Information Systems

(AIS) support the accounting function. Several commonly used AIS systems are: Fixed asset accounting Budgeting Tax accounting

Powered by DeSiaMore 38

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

Powered by DeSiaMore 39

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

Powered by DeSiaMore 40

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)

Powered by DeSiaMore 41

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

Powered by DeSiaMore 42

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

Powered by DeSiaMore 43

Enterprise Resource Planning Systems

Business Operations

Powered by DeSiaMore 44

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.

Powered by DeSiaMore 45

Business Operations

Key Terms

Powered by DeSiaMore 46

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

Powered by DeSiaMore 47

Key Terms (cont’d.) Financial Information System General Ledger System Human Resource Information System (HRIS) Interactive Processing Inventory Control System

Manufacturing Information System

Powered by DeSiaMore 48

Summary Increasing Business Operations

Efficiency Transaction Processing Systems Basic Business Information

Systems Other Business Information

Systems Enterprise Resource Planning

Systems

Final Black Slide