Chapter 2: Overview of Transaction Processing and ERP Systems

Chapter 2Overview of Transaction Processing and ERP SystemsCopyright © 2012 Pearson Education2-*Learning ObjectivesDescribe the four major steps in the data processing cycle.Describe the major activities in each cycle.Describe documents and procedures used to collected and process data.Describe the ways information is stored in computer-based information systems.Discuss the types of information that an AIS can provide.Discuss how organizations use ERP systems to process transactions and provide information.Copyright © 2012 Pearson Education2-*Data Processing CycleCopyright © 2012 Pearson Education2-*The Data Processing Cycle DeterminesWhat data is stored?Who has access to the data?How is the data organized?How can unanticipated information needs be met?Copyright © 2012 Pearson Education2-*Data Input—CaptureAs a business activity occurs data is collected about:Each activity of interestThe resources affectedThe people who are participatingCopyright © 2012 Pearson Education2-*Paper-Based Source DocumentsData are collected on source documentsE.g., a sales-order formThe data from paper-based will eventually need to be transferred to the AISTurnaroundUsually paper-basedAre sent from organization to customerSame document is returned by customer to organizationCopyright © 2012 Pearson Education2-*Turnaround DocumentSource Data AutomatonSource data is capturedIn machine-readable formAt the time of the business activityE.g., ATM’s; POSCopyright © 2012 Pearson Education2-*Data Input—Accuracy and ControlWell-designed source documents can ensure that data captured isAccurateProvide instructions and promptsCheck boxesDrop-down boxesCompleteInternal control supportPrenumbered documentsCopyright © 2012 Pearson Education2-*Data StorageTypes of AIS storage:Paper-basedLedgersJournalsComputer-basedCopyright © 2012 Pearson Education2-*LedgersGeneralSummary level data for each:Asset, liability, equity, revenue, and expenseSubsidiaryDetailed data for a General Ledger (Control) Account that has individual sub-accountsAccounts ReceivableAccounts PayableCopyright © 2012 Pearson Education2-*JournalsGeneralInfrequent or specialized transactionsSpecializedRepetitive transactionsE.g., sales transactionsCopyright © 2012 Pearson Education2-*Coding TechniquesSequenceItems numbered consecutivelyBlockSpecific range of numbers are associated with a category10000–199999 = Electric RangeGroupPositioning of digits in code provide meaningMnemonicLetters and numbersEasy to memorizeCode derived from description of itemChart of accountsType of block codingCopyright © 2012 Pearson Education2-*Digit PositionMeaning1–2Product Line, size, and so on3Color4–5Year of Manufacture6–7Optional Features124100012 = Dishwasher4 = White10 = 201000 = No Options Computer Based StorageEntityPerson, place, or thing (Noun)Something an organization wishes to store data aboutAttributesFacts about the entityFieldsWhere attributes are storedRecordsGroup of related attributes about an entityFileGroup of related RecordsCopyright © 2012 Pearson Education2-*File TypesTransactionContains records of a business from a specific period of timeMasterPermanent recordsUpdated by transaction with the transaction fileDatabaseSet of interrelated filesCopyright © 2012 Pearson Education2-14Data ProcessingFour Main ActivitiesCreate new recordsRead existing recordsUpdate existing recordsDelete records or data from recordsCopyright © 2012 Pearson Education2-*Data Output TypesSoft copyDisplayed on a screenHard copyPrinted on paperCopyright © 2012 Pearson Education2-*ERP SystemsCopyright © 2012 Pearson Education2-*Enterprise Resource Planning (ERP)Integrate an organization’s information into one overall AISERP modules:FinancialHuman resources and payrollOrder to cashPurchase to payManufacturingProject managementCustomer relationship managementSystem toolsCopyright © 2012 Pearson Education2-*ERP AdvantagesIntegration of an organization’s data and financial informationData is captured onceGreater management visibility, increased monitoringBetter access controlsStandardizes business operating proceduresImproved customer serviceMore efficient manufacturingCopyright © 2012 Pearson Education2-*ERP DisadvantagesCostTime-consuming to implementChanges to an organization’s existing business processes can be disruptiveComplexResistance to changeCopyright © 2012 Pearson Education2-*