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Chapter 2 Overview of Transaction Processing and ERP Systems Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-1 Learning Objectives Describe 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 Education, Inc. publishing as Prentice Hall 2-2 Data Processing Cycle Feedback Copyright 2012 Pearson Education, Inc. publishing as Prentice Hall 3 The Data Processing Cycle Determines What data is stored? Who has access to the data? How is the data organized? How can unanticipated information needs be met? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-4 Data Input—Capture As a business activity occurs data is collected about: 1. Each activity of interest 2. The resources affected 3. The people who are participating Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-5 Paper-Based Source Documents Data are collected on source documents e.g., a sales-order form The data from paperbased will eventually need to be transferred to the AIS Turnaround Usually paper-based Are sent from organization to customer Same document is returned by customer to organization Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Turnaround Document 2-6 Source Data Automaton Source data is captured In machine-readable form At the time of the business activity e.g., ATM’s; POS Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-7 Data Input—Accuracy and Control Well-designed source documents can ensure that data captured is Accurate Provide instructions and prompts Check boxes Drop-down boxes Complete Internal control support Prenumbered documents Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-8 Data Storage Types of AIS storage: Paper-based Ledgers Journals Computer-based Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-9 Ledgers General Summary level data for each: Asset, liability, equity, revenue, and expense • Joe Smith $250 • Patti Jones $750 Subsidiary Detailed data for a General Ledger (Control) Account that has individual sub-accounts Accounts Receivable Accounts Payable Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall • ACME Inc.$150 • Jones, Inc $350 2-10 Journals General Infrequent or specialized transactions Specialized Repetitive transactions e.g., sales transactions Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-11 Coding Techniques Sequence Items numbered consecutively Block Specific range of numbers are associated with a category 10000–199999 = Electric Range Group Positioning of digits in code provide meaning Mnemonic Letters and numbers Easy to memorize Code derived from description of item Digit Position Meaning 1–2 Product Line, size, and so on 3 Color 4–5 Year of Manufacture 6–7 Optional Features 1241000 12 = Dishwasher 4 = White 10 = 2010 00 = No Options Chart of accounts Type of block coding Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-12 Computer Based Storage Entity Person, place, or thing (Noun) Something an organization wishes to store data about Attributes Facts about the entity Fields Where attributes are stored Records Group of related attributes about an entity File Group of related records Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-13 File Types Transaction Contains records of a business from a specific period of time Master Permanent records Updated by transaction with the transaction file Database Set of interrelated files Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-14 Data Processing Four Main Activities 1. 2. 3. 4. Create new records Read existing records Update existing records Delete records or data from records Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-15 Data Output Types Soft copy Displayed on a screen Hard copy Printed on paper Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-16 ERP Systems Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-17 Enterprise Resource Planning (ERP) Integrate an organization’s information into one overall AIS ERP modules: Financial Human resources and payroll Order to cash Purchase to pay Manufacturing Project management Customer relationship management System tools Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-18 ERP Advantages Integration of an organization’s data and financial information Data is captured once Greater management visibility, increased monitoring Better access controls Standardizes business operating procedures Improved customer service More efficient manufacturing Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-19 ERP Disadvantages Cost Time-consuming to implement Changes to an organization’s existing business processes can be disruptive Complex Resistance to change Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-20
