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Chapter 2

ITM 102 Chapter Notes - Chapter 2: Transaction Processing System, Decision Support System, User Interface


Department
Information Technology Management
Course Code
ITM 102
Professor
Vikraman Baskaran
Chapter
2

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ITM – Chapter 2 Notes
Business Processes examples
Functional Area Business Process
Manufacturing and production - Assembling the product
- Checking for quality
- Producing bills of material
Sales and marketing - Identifying customers
- Making customers aware of the product
- Selling the product
Finance and accounting - Paying creditors
- Creating financial statements
- Managing cash accounting
Human resources - Hiring employees
- Evaluating employees’ job performance
- Enrolling employees in benefits plans
How Information Technology Enhances business Processes
-Automate many steps in business processes (Example: check clients credit,
or generating an invoice and shipping order)
-New technology can change the flow of information, making it possible for
more people to access and share information.
-Change business to make it more efficient or effective
-Collection of business activities
-How work is organized, coordinated and focused to deliver a produce to
service
Transaction Processing Systems (TPS)
-Operational manager need a system that keeps track of the elementary
activities and transactions of the organization, such as sales, receipts, cash
deposit, payroll, credit decisions and the flow of materials in a factory.
-Computerized system that performs and records the daily routine
transactions necessary to conduct business, such as sales order entry, hotel
reservations, payroll, employee record keeping, and shipping
-Managers need TPS to monitor the status of internal operational and the
firm’s relations with the external environment
-Major producers of information for other types of systems (Example: payroll
system, accounting, general ledger system and etc)
-TPS is often the central point of a business, since it failure it can lead to a
firm’s demise and perhaps linked to other firms.
-
Management Information System and Decision-Support Systems (MIS)
-Middle management needs systems to help with monitoring, controlling,
decision-making and administrative activities.
-Designates a specific category of information systems serving middle
management
-Provides middle managers with reports on the organization’s current
performance
-Summarize and report on the company’s basic operations using data supplied
by transaction processing system

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Decision-Support system (DSS)
-Supports non-routine decision making for middle management
-Focus on problems that are unique and rapidly changing in which the
procedure for arriving at the solution may not be fully predefined in advance
-Use internal information from TPS and MIS
-Bring in information from external sources (Example: current stock prices,
product process of competitors)
-Designed so that users can work with them directly; these systems include
user friendly software
-Model driven DSS
-Data driven DSS
Executive Support Systems (ESS)
-Senior managers need systems that address strategic issues and long-term
trends, in both the firm and external environment
-Address non-routine decisions requiring judgement, evaluation and insight
because there is no agreed-on procedure for arriving at the solution
-Present graphs and data from many different sources through an interface or
information delivered through a portal
-Designed to incorporate data about external events (example: new tax or
competitors)
Enterprise Applications
-Systems that span functional areas, focus on executing business processes
across the business firm and all levels of management and may extend
outside the organization
-Help business become more flexible and productive by coordinating their
business processes more closely and integrating groups of processes so they
focus on efficient management of resources and customer service
Enterprise System (Enterprise resource planning)(ERP)
-Large organization typically has many different kinds of information systems
built around different functions, organizational levels and business processes
that can’t be automatically exchange information
-Collect data from various key business processes in manufacturing and
production, finance, account, sales, marketing and human resources and
storing the data in a single central data repository
-
Supply Chain Management Systems (SCM)
-Help business manage relationships with their suppliers
-Help suppliers purchase firms, distributors and logistics companies share
information about orders, production, inventory levels, and delivery of
products and services so they can make better decisions about organize and
schedule sourcing, production, and distribution
-Ultimate objective is to get correct amount of products to the point of
consumption with the least amount of time and lowest cost
-One type of interorganizational system since they automate the flow of
information across organizational boundaries
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