Isys6295 - Mis - W7 - R0

ISYS6295 - Management
Information System
Week 7
Information Systems within the
Organization
Acknowledgement
• These slides have been adapted from
Rainer, R. K., Prince, B., & Cegielski, C.
(2014). Introduction to Information
Systems (5th ed.). NJ: John Wiley & Sons
Singapore Pte. Ltd. Chapter 10
Learning Objectives
• Explain the purpose of transaction processing systems.

• Explain the types of support information systems can
provide for each functional area of the organization.
• Identify advantages and drawbacks to businesses
implementing an enterprise resource planning system.
• Describe the three main business processes supported by
ERP systems.
• Discuss the three major types of reports generated by the
functional area information systems and enterprise
resource planning systems, providing examples of each
type.
Chapter Outline
• Transaction Processing Systems
• Functional Area Information Systems
• Enterprise Resource Planning (ERP)
Systems
• ERP Support for Business Processes
• Reports
Transaction Processing
7.1 Systems (TPS)
• Transaction : any business event that

generates data worthy of being captured
and stored in a database.
• Transaction Processing System (TPS) :

supports the monitoring, collection,
storage, and processing of data from the
organization’s basic business transaction,
each of which generates data.
How transaction processing
systems manage data
Systems (TPS)
• Transaction Processing System (TPS)
• Continuous ‘real-time’ data collection
• Efficiently handle high volumes of data and
large variations in those volumes
• Avoid errors and downtime
• Record results accurately and securely
• Maintain privacy and security
• Source data automation
Systems (TPS)
• The system processes data in one of
two basic ways:
– Batch Processing
– Online transaction processing
(OLTP)
Functional Area
Information Systems
• Functional Area Information Systems are
designed to support a functional area by
increasing its internal effectiveness and
efficiency in the following areas:
– Accounting
– Finance
– Marketing
– Operations (POM)
– Human Resources Management
Functional Area
Information Systems
• Functional area information systems
provide information mainly to lower- and
middle-level managers in the functional
areas via a variety of reports.
Functional Area
Information Systems
• Information Systems for Accounting
and Finance
• Information Systems for Marketing
• Information Systems for
Production/Operations Management
• Information Systems for Human
Resource Management
Activities supported
by FAIS
by FAIS
by FAIS
by FAIS
ERP System
• ERP systems adopt 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.
• That is, ERP systems are designed to break
down the information silos of an
organization.
The objective of ERP
System
• The major objective of ERP systems are to
tightly integrate the functional areas of
the organization and to enable
information to flow seamlessly across
them.
www.jpctechnologies.net
ERP II Systems
• ERP II systems are inter-organizational ERP

systems that provide Web-enabled links
among a company’s key business systems –
such as inventory and production – and its
customers, suppliers, distributors, and other
relevant parties.
Core ERP Modules
Core ERP Modules
ERP II Systems
Benefits and Limitations
of ERP Systems
• Major Benefits of ERP Systems
• Major limitations of ERP implementations
• Major causes of ERP implementation failure
Major Benefits of ERP
Systems
• Organizational flexibility and agility
• Decision support
• Quality and efficiency
Major Limitations of ERP
7.2 Implementations
• Since ERP’s are based on best practices

companies may need to change their
methods of achieving business objectives
• ERP systems can be complex, expensive,
and time-consuming to implement.
Major Causes of ERP
Implementation Failure
• Failure to involve affected employees in the
planning and development phases and in change
management processes
• Trying to do too much too fast in the conversion
process
• Insufficient training in the new work tasks
required by the ERP system
• The failure to perform proper data conversion and
testing for the new system
Implementing ERP
Systems
• On-Premise ERP Implementation
– Vanilla approach : company implements a standard ERP
package, using the package’s built-in configuration options.
– Custom approach : company implements a more
customized ERP system by developing new ERP functions
designed specifically for that firm.
– Best of breed approach : combines the benefits of the
vanilla and customized systems while avoiding the
extensive costs and risks associated with complete
customization
Software-as-a-Service
ERP Implementation
• Three major advantages of using a cloud-
based ERP system are:
• Three major disadvantages of using cloud-
based ERP systems
Three major advantages of
7.3 using a cloud-based ERP
system are:
• The system can be used from any location that

provides Internet access
• Companies using cloud-based ERP avoid the initial
hardware and software expenses that are typical of
on-premise implementations
• Cloud-based ERP solutions are scalable, meaning it is
possible to extend ERP support to new business
processes and new business partners (e.g., suppliers)
by purchasing new ERP modules.
Three major disadvantages
7.3 of using cloud-based ERP
systems are:
• It is not clear whether cloud-based ERP

systems are more secure than on-premise
systems
• Companies that adopt cloud-based ERP
systems sacrifice their control over a strategic
IT resource
• Lack of control over IT resources when the
ERP system experiences problems
ERP Support for
7.4 Business Processes
• The Procurement, Fulfillment, and Production

Processes
– The Procurement Process
– The Fulfillment Process
– The Production Process
• Interorganizational Processes: ERP with SCM and
CRM
– SCM and CRM
– ERP SCM
– ERP CRM
Departments and
documents flow in the
procurement process
Departments and
fulfillment process
Departments and
production process
Integrated processed
with ERP systems
Reports
• Routine Reports
• Ad-hoc (on-demand) Reports
• Drill-down reports
• Key-indicator reports
• Comparative reports
• Exception Reports
Reports
Types of Reports :
• Summary reports provide summarized
information, with less detail.
• Detailed reports provide high levels of detailed
data, often in support of summary reports.
• A drill-down report allows users to click on an
item in a report and be able to access
underlying details about that item.
Reports
Types of Reports :
• A key indicator report summarizes the
performance of critical activities.
• Comparative report
• Exception reports include only information
that falls outside certain threshold standards.
Thank You

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ISYS6295 - Management

• Explain the purpose of transaction processing systems.

• Transaction : any business event that

• Transaction Processing System (TPS) :

• ERP systems adopt a business process view

• ERP II systems are inter-organizational ERP

• Since ERP’s are based on best practices

• The system can be used from any location that

• It is not clear whether cloud-based ERP

• The Procurement, Fulfillment, and Production

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