Chapter_4_Enterprise Systems

Kingdom of Saudi Arabia Education

• Information about the Ministry of Higher Education in Saudi Arabia and Al-Imam Muhammad Ibn Saud Islamic University.

• Focus on the College of Computer and Information Sciences, particularly the Foundations of Information Systems course (IS201).

Course Overview

• Course Name: Foundations of Information Systems (IS201)

• Instructor: Dr. Nujud Aloshban

• Related Material: Principles of Information Systems, Thirteenth Edition, Chapter 8: Enterprise Systems.

Learning Objectives

• After completing this chapter, students will be able to:

  • Identify basic activities and business objectives common to all transaction processing systems (TPS).

  • Describe TPS related to order processing, purchasing, and accounting functions.

  • Identify functions and benefits of implementing enterprise resource planning (ERP), customer relationship management (CRM), and product lifecycle management (PLM) systems.

  • Explain the hosted software model for enterprise systems and its appeal to small and medium enterprises (SMEs).

  • Recognize challenges faced in the planning, building, and operating of enterprise systems.

  • Identify tips to avoid common causes for failed enterprise system implementations.

Transaction Processing Systems (TPS)

• Definition: TPS captures and processes detailed data to update an organization’s records about fundamental business operations.

• Examples of TPS include:

  • Order entry, inventory control, payroll, accounts payable, accounts receivable, general ledger.

• A TPS is critical for input to:

  • Management information systems (MIS)

  • Decision support systems (DSS)

  • Knowledge management (KM) systems.

Traditional Transaction Processing Methods

• Batch Processing System:

  • Transactions are accumulated over time and processed as a batch.

  • Characterized by a delay between the event and transaction processing.

• Online Transaction Processing (OLTP):

  • Processes each transaction immediately.

  • Reflects the current status at all times.

  • Offers faster, more efficient service compared to batch processing.

Integration of TPS with Other Systems

• TPS data initiates transactions in other systems, like order entry, inventory management, and accounts payable/receivable.

• Integrated systems flow together in a process, from order requests and inventory checks to shipment and invoicing.

Benefits of TPS

• Expected to:

  • Capture, process, and update databases accurately.

  • Prevent fraudulent transactions.

  • Produce timely reports and responses.

  • Reduce clerical work and improve customer service.

  • Create a competitive advantage.

Specific Types of TPS

• Order Processing Systems:

  • Handle customer orders, verify inventory, create invoices, and manage accounting workflows.

• Accounting Systems:

  • Track data related to cash flow impacting the organization.

• Purchasing Systems:

  • Manage inventory control, purchase orders, receiving, and accounts payable.

Benefits of TPS Implementation

• Competitive Advantage:

  • Online marketplaces for purchases.

  • Warehouse management systems using RFID.

  • Customer interaction systems for tracking engagements.

Transaction Processing for SMEs

• Integrated transaction processing systems are available at a low cost and are easy to install and operate for SMEs.

Transaction Processing Activities

• Cycle Activities:

  • Data collection, editing, correction, manipulation, storage, and document production.

Data Collection Methods

• Manual or automated methods for data capture.

• Source data automation involves minimal manual intervention for recording.

Data Editing and Correction

• Validity checks for transaction data to ensure integrity.

• Systems should provide clear error messages for misentered data.

Data Processing Tasks

• Includes classifying, sorting, and summarizing data.

Data Storage

• Involves updating databases with new transaction data that can be processed further.

Document Production

• Creating output records, both hard and soft copies, relevant to business activities and compliance requirements.

Enterprise Systems Overview

• Central to organizations of all sizes for sharing information across all business functions.

• Goals include customer satisfaction, cost reduction, and service improvement.

Enterprise Resource Planning (ERP)

• Integrates programs to manage vital business operations across an organization.

• Evolves from early materials requirement planning (MRP) systems.

Advantages of ERP Systems

• Improved data access for decision-making.

• Reduction of legacy systems and better work processes.

Leading ERP Systems

• Classified by vendor size:

  • Tier I for large firms over $1 billion.

  • Tier II for medium-sized firms between $50 million and $1 billion.

  • Tier III for small firms between $10 million and $50 million.

Supply Chain Management (SCM)

• System managing the flow from sourcing raw materials to delivering finished products.

SCM Processes

• Include sales forecasting, MRP, production schedules, and purchasing.

Customer Relationship Management (CRM)

• Manages customer interactions across various business functions.

• Focuses on understanding and improving customer engagement.

Key Features of CRM Systems

• Contact management, sales and customer support, marketing automation, and mobile access.

Product Lifecycle Management (PLM)

• Strategy supporting product information management across its lifecycle covering design, production, and support.

Benefits of PLM Systems

• Shorter time to market, reduced costs, and ensured regulatory compliance.

Implementing Enterprise Systems Challenges

• Costs, integration complexity, management of change, and user adaptation.

Tips for Successful Implementation

• Assign dedicated leadership, define metrics for progress, and limit project scope to essential processes.

Hosted Software Model

• Reduces complexity and start-up costs associated with enterprise systems, allowing access to powerful applications without hefty investments.