Fundamentals chapter 7 Flashcards
Operational systems
How is data stored?
Typically data is stored in silos, so removing the silos is central to integrating the organization
A mind-set present in some companies when certain departments or sectors do not wish to share information with others in the same company. This type of mentality will reduce the efficiency of the overall operation, reduce morale, and may contribute to the demise of a productive company culture
Competitive advantage
Ability to earn more than your competitors
Enterprise resource planning
is a system that manages an entire company’s vital business information
Ensures information can be shared across the four common functional business areas found in organisations
Marketing & Sales
Human Resources
Accounting & Finance
Production & materials management
Employs a database of key operational and planning data that can be shared by all
Materials requirement planning systems (MRP)
MRP used to help the company plan what materials (raw materials) they are going to need for the production process
Advantages of ERP systems
Improved access to data for operational decision making
Elimination of costly, inflexible legacy systems
Improvement of work processes
Upgrade of technology infrastructure
Disadvantages of ERP systems
Expense and time in implementation
Difficulty implementing change
Difficulty integrating with other systems
Difficulty in loading data into new ERP system
Risks in using one vendor
Risk of ERP implementation failure is a possibility
Risk of ERP implementation failure
How to avoid ERP implementation failure?
Assign a full-time executive to manage the project
Appoint an experienced, independent resource to provide project oversight and to verify and validate system performance
Allow sufficient time for transition from the old to the new system and processes
Plan to spend a lot of time and money training people
Define metrics to assess project progress and to identify project-related risks
Keep the scope of the project well defined and contained to essential business processes
Be wary of modifying the ERP software to conform to your firm’s business practices
Transactions processing systems
Capture and process detailed data necessary to update records about fundamental business operations
Includes: order entry, inventory control, payroll, accounts payable, accounts receivable, general ledger, etc.
Provide employees with data to help them achieve their goals
Traditional Transaction Processing Methods and Objectives
Batch processing system:
Data processing in which business transactions are:
Accumulated over a period of time
Prepared for processing as a single unit or batch
Online transaction processing (OLTP):
Data processing in which each transaction is processed immediately
Objectives of a transaction processing system
1.Process data generated by and about transactions
2.Maintain a high-degree of accuracy and integrity
3.Avoid processing fraudulent transactions
4.Produce timely user responses and reports
5.Increase labour efficiency
6.Help improve customer service
7.Help build and maintain customer loyalty
8.Achieve competitive advantage
Core activities of a TPS:
Data collection
Data editing and correction
Data manipulation
Data storage
Document production and reports
Done in the transaction processing cycle:
The process of data collection, data editing, data correction, data manipulation, data storage, and document production
Data should be:
Collected at source, i.e. source data automation (e.g. barcode reader at the till)
Recorded accurately, in a timely fashion
Data editing
Checking data for validity and completeness to detect any problems
Data correction
Reentering data that was not typed or scanned properly
Error messages must specify the problem so that proper corrections can be made
