chapter 8 information systems within the organization 1 copyright john wiley & sons canada

CHAPTER 8Information

Systems within the Organization

1Copyright John Wiley & Sons Canada

Copyright John Wiley & Sons Canada 2

8.1 Transaction Processing Systems

8.2 Functional Area Information Systems

8.3 Enterprise Resource Planning Systems

8.4 Reports

Chapter 8:

Information Systems within the Organization

LEARNING OBJECTIVES

1. Explain the purposes of transaction processing systems. Provide at least one example of how businesses use these systems.

2. Define functional area information systems. Provide an example of the support they provide for each functional area of the organization.


LEARNING OBJECTIVES (CONTINUED)

3. Explain the purpose of enterprise resource planning systems. Identify four advantages and four drawbacks to implementing an ERP system.

4. Discuss the three major types of reports generated by the functional area information systems and enterprise resource planning systems. Provide an example of each type.


8.1 OPENING CASE: IS BASEBALL A SCIENCE?

The Problem– John Dewan, the owner of Baseball Info Solutions (BIS;

www2.baseballinfosolutions.com), has made collecting data on fielding statistics his latest mission. The BIS data, however, are not perfect. For example, they do not indicate where a fielder was standing when the ball was hit. In addition, the data are susceptible to human error, and could be off by 15 to 20 feet (4.5 to 6 m) on some plays. Dewan estimated that BIS and its video scouts could measure only 60 percent of a fielder’s ability.


http://www2.baseballinfosolutions.com/


• The Solution– Sportvision created Fieldf/x, a motion-capture, or optical tracking

system that helps eliminate human error and the need to be in the right place at the right time. Fieldf/x uses four cameras placed high above the field to track players and the ball, and to log their movements. The system generates more than 2.5 million records per game, or 2 terabytes of data.



• The Results– Ultimately, Fieldf/x will generate new baseball metrics, such as

degree-of-difficulty fielding ratings. Fieldf/x also will make coaching more precise; for example, coaches will be able to better position their fielders, depending on the hitter and the pitch being thrown (e.g., fast ball versus slow curve ball). Finally, the system will enhance the process by which clubs evaluate—and pay—their players.



• Discussion– What is the major attribute of Fieldf/x?– What was the significant difference between the 2 systems that

mitigated human error?


8.1 IT’S ABOUT [SMALL AND BIG] BUSINESS

• Pizza Pizza’s Customer App– created an iPhone app for ordering customized pizza– app is free and fun– won several design awards– brings in more sales– convenient for customers– reduces costs and saves the potential for error


http://www.pizzapizza.ca/

8.1 TRANSACTION PROCESSING SYSTEMS (TPS)

• Grocery store clerks use a bar code scanner that produces data captured by a transaction processing system

• The TPS collects data continuously, in real time, as soon as the data are generated, and it provides the input data for the corporate databases.


FIGURE 8.1 HOW TPS MANAGE DATA


8.2 FUNCTIONAL AREA INFORMATION SYSTEMS

• Functional Area Information Systems (FAIS) provide support for the various functional areas (below) in an organization by increasing each area’s internal efficiency and effectiveness– Accounting– Finance– Marketing– Operations (POM)– Human Resources Management


INFORMATION SYSTEMS FOR ACCOUNTING AND FINANCE

• Financial Planning and Budgeting– Financial and economic forecasting– Planning and Budgeting

• Managing Financial Transactions– Global stock exchanges– Multiple currency management– Virtual close– Expense management automation


http://na.sage.com/

INFORMATION SYSTEMS FOR ACCOUNTING AND FINANCE (CONTINUED)

• Investment Management• Control and Auditing

– Budgetary control– Internal auditing– Financial ratio analysis


https://na.theiia.org/Pages/IIAHome.aspx

INFORMATION SYSTEMS FOR MARKETING

• Customer relations• Customer profiles and preferences• Sales force automation


INFORMATION SYSTEMS FOR PRODUCTION AND OPERATIONS MANAGEMENT

• In-House Logistics and Materials Management– Inventory Management– Quality Control

• Planning Production and Operations• Computer-Integrated Manufacturing• Product Life Cycle Management


INFORMATION SYSTEMS FOR HUMAN RESOURCES

• Recruitment• HR Maintenance and Development• HR Planning and Management

– Payroll and employees’ records– Benefits administration– Employee relationship management


FIGURE 8.2 EXAMPLES OF INFORMATION SYSTEMS SUPPORTING THE FUNCTIONAL AREAS


8.3 ENTERPRISE RESOURCE PLANNING SYSTEMS (ERP)

• Enterprise Resource Planning (ERP) system adopts a business process view of the overall organization to integrate the planning, management, and use of all of an organization’s resources, employing a common software platform and database.


ERP SOFTWARE VENDORS

• Most organizations use commercially available ERP software from major vendors including:– SAP – Oracle – PeopleSoft

• Click here for up-to-date information on ERP software


http://www.sap.com/canada/index.epx

http://www.oracle.com/ca-en/index.html

http://erp.ittoolbox.com/

8.2 IT’S ABOUT BUSINESS

• Airgas switched over its hard-goods supply chain operation to SAP in July 2010:– affects nearly every area of Airgas– 70 percent of its information systems functional on SAP as of

March 2013– expected to have saved up to $125 million by the end of 2013– improved sales, better price management, and leaner operating

costs


http://www.airgas.com/

ERP II SYSTEMS


ERP MODULES

• Core ERP Modules– Financial Management– Operations Management– Human resource management

• Extended ERP Modules– Customer relationship

management– Supply Chain

Management– Business intelligence– E-business


BENEFITS OF ERP SYSTEMS

• Organizational flexibility and agility• Decision support• Quality and efficiency


LIMITATIONS OF ERP SYSTEMS

• Companies may need to change existing business processes to fit the predefined business processes of the software (best practices)

• Complex, expensive, and time consuming to implement• Underestimating the complexity of the planning,

development, and training required to prepare for a new ERP system


8.4 REPORTS

• Routine reports are produced at scheduled intervals (hourly quality control report, daily reports on absenteeism rates)

• Non-routine or Ad hoc (on demand) reports:– Drill-down reports– Key-indicator reports– Comparative reports

• Exception reports include only information that falls outside certain threshold standards


TYPES OF REPORTS

• Summary Report • Detailed report• Drill-down report• Key-indicator report• Comparative report• Exception Report


CHAPTER CLOSING

• TPSs monitor, store, collect, and process data generated from all business transactions.

• Major business functional areas are production/operations management, marketing, accounting/finance, and human resources management.

• Enterprise resource planning (ERP) systems integrate the planning, management, and use of all of the organization’s resources.

• Three major types of reports generated by FAIS and ERP systems are: Routine, Nonroutine or ad hoc (on-demand) and Exception.


CopyrightCopyright © 2014 John Wiley & Sons Canada, Ltd. All rights reserved. Reproduction or translation of this work beyond that permitted by Access Copyright (the Canadian copyright licensing agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these files or programs or from the use of the information contained herein.

chapter 8 information systems within the organization 1 copyright john wiley & sons canada

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