Notes for Chapter 9 Transaction Processing, Functional Applications, CRM and Integration Transaction Processing Information Systems The transaction processing system monitors, collects, stores, processes, and disseminates information for all routine core business transactions. These data are input to functional information systems applications, as well as to decision support systems (DSS), customer relationship management (CRM), and knowledge management (KM). The TPS also provides critical data to e-commerce, especially data on customers and their purchasing history. Objectives of TPS The primary goal of TPS is to provide all the information needed by law and/or by organizational policies to keep the business running properly and efficiently. Specifically, a TPS has to efficiently handle high volume, avoid errors due to concurrent operations, be able to handle large variations in volume (e.g., during peak times), avoid downtime, never lose results, and maintain privacy and security. Specific objectives of a TPS may include one or more of the following: to allow for efficient and effective operation of the organization, to provide timely documents and reports, to increase the competitive advantage of the corporation, to provide the necessary data for tactical and strategic systems such as Web based applications, to ensure accuracy and integrity of data and information, and to safeguard assets and security of information. It also is important to remember that TPSs must closely interface with many IT initiatives, especially with e-payment, e-procurement, and e-marketing. Managing Production / Operations & Logistics The production and operations management (POM) function in an organization is responsible for the processes that transform inputs into useful outputs. In-House Logistics and Materials Management: Logistics management deals with ordering, purchasing, inbound logistics (receiving), and outbound logistics (shipping) activities. Inhouse logistics activities are a good example of processes that cross several primary and support activities in the value chain. Inventory Management: Inventory management determines how much inventory to keep. Overstocking can be expensive; so is keeping insufficient inventory. Three types of costs play important roles in inventory decisions: the cost of maintaining inventories, the cost of ordering (a fixed cost per order), and the cost of not having inventory when needed (the shortage or opportunity cost). The objective is to minimize the total of these costs. Many large companies (such as Wal-Mart) allow their suppliers to monitor the inventory level and ship when needed, eliminating the need for sending purchasing orders. Such a strategy, in which the supplier monitors inventory levels and replenishes when needed, is called vendor-managed inventory (VMI).
Planning Production/ Operations: The software that facilitates the plan for acquiring (or producing) parts, subassemblies, or materials in the case of interdependent items is called material requirements planning (MRP). A POM system called manufacturing resource planning (MRP II) adds functionalities to a regular MRP. It also estimates costs of labor, tools, equipment repair, and energy. Finally, it provides a detailed, computerized budget for the parts involved. Just-in-time (JIT) is an approach that attempts to minimize waste of all kinds (of space, labor, materials, energy, and so on) and to continuously improve processes and systems. Project Management: A project is usually a one-time effort composed of many interrelated activities, costing a substantial amount of money, and lasting for weeks or years. The management of a project is complicated by the following characteristics. ● Most projects are unique undertakings, and participants have little prior experience in the area. ● Uncertainty exists due to the generally long completion times. ● There can be significant participation of outsiders, which is difficult to control. ● Extensive interaction may occur among participants. ● The many interrelated activities make changes in planning and scheduling difficult. ● Projects often carry high risk but also high profit potential. Work management systems (WMS) automatically manage the prioritization and distribution of work. Computer-integrated manufacturing (CIM) is a concept or philosophy that promotes the integration of various computerized factory systems. CIM has three basic goals: (1) the simplification of all manufacturing technologies and techniques, (2) automation of as many of the manufacturing processes as possible, and (3) integration and coordination of all aspects of design, manufacturing, and related functions via computer hardware and software. Product Lifecycle Management is a business strategy that enables manufacturers to control and share product-related data as part of product design and development efforts and in support of supply chain operations. Managing Marketing & Sales Systems Channel systems are all the systems involved in the process of getting a product or service to customers and dealing with all customers’ needs. Customer Profiles & Preference Analysis: Consumer behaviour online can be tracked by cookies (small data files placed on a user’s hard drive by a Web server). Then the consumer’s online behaviour can be analysed and used for marketing purposes. Prospective Customer Lists and Marketing Databases: It is possible today to purchase computerized lists from several sources and then merge them electronically. These prospective-customer lists then can be analyzed and sorted by any desired classification for direct mailing, e-mailing, or telemarketing.
Mass Customization: Increasingly, today’s customers want customized products. Some manufacturers offer different product configurations, and in some products dozens of options are available. The result is mass customization. Advertising & Promotion: Online advertising, mainly via e-mail and banners, is growing rapidly. Innovative methods such as viral marketing are possible only on the Internet. Distribution Channels & In-store Innovations: New IT Supported Distribution Improving Shopping & Checkout at Retail Channels Stores Distribution Channels Management Marketing Management: Pricing of goods Sales personnel productivity Profitability analysis
Sales Analysis & trends New products, services & market planning Web-based systems in marketing
Managing the Accounting & Finance Systems
Fig: Major activities of Accounting/ Finance System Managing Human Resources System Developments in Web-based systems increased the popularity of human resources information systems (HRISs) as of the late 1990s. Recruitment is finding employees, assessing them, and deciding which ones to hire. Companies are trying to find appropriate candidates on the Web, usually with the help of specialized search engines. Also, hundreds of thousands of jobs are advertised on the Web.
Reference for further study: http://en.wikipedia.org/wiki/Customer_relationship_management http://www.umsl.edu/~joshik/msis480/chapt09.htm http://en.wikipedia.org/wiki/Transaction_processing_system
