Transaction Processing Systems

Manual or automatic all businesses systematically process transactions Function: process routine, day-to-day business activities Computerized TPS:
Batch Online (real-time, OLTP)

The foundation of business systems

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Batch TPS
Originally, the only available option Transactions accumulated over period of time Time period day, week, month Transaction records accumulated in files When batches are processed, what happens?
Update databases Generate reports Generate transactions for other systems

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Batch Processing Pros and Cons

Pros
Relatively easy to program, install and maintain Batches can be processed during low-activity periods

Cons
Information is delayed

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Online TPS (OLTP)

Transactions are processed in real time Required for any modern application where time is critical Well supported by client/server computing model

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Hybrid TPS
OLTP applications can feed transactions to batch systems
Examine: GL only updated once per day

Real time order capture with delayed processing

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TPS Requirements
Capture, process and store transactions Produce reports and information about transactions Produce transactions for other TPS Be accurate and timely Be efficient require less labor Increase customer service Increase competitive advantage
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TPS Activity Model

Data capture
From online entry or external system

Data validation
Should be done as close to source as possible

Processing
Data manipulation Database updating Generation of transactions for other systems

Archive Transaction Create documents and reports

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Management Issues
Uptime
How long can the system be down before significant costs are incurred?

Processing Delays / Response Times

How quickly must a transaction be processed? What is the worst online response time that is acceptable
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Management Issues (2)

Disaster Recovery
What plans are in place to recover lost business data? What plans are in place to resume business processing in case of disaster?

Audit
Can you verify the integrity of the system? How will you know if transactions are not processed or are processed incorrectly?
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TPS By Function
Order Processing Procurement & Inventory Control Accounting

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Order Processing TPS

Order capture
Variety of means

Configuration Shipment planning and inventory allocation

Prioritize orders, select shipment locations, allocate inventory to orders

Shipping and warehousing

Picking, packing, invoicing, reporting
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Procurement
Inventory Control
Raw materials, WIP, FGI, etc

Purchase Order Processing

Generating, transmitting, maintaining purchase orders

Receiving Accounts Payable

Boundary between procurement and accounting
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Accounting
Accounts Payable Accounts Receivable Budget Payroll General Ledger Asset Management

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Disadvantages of Functionally Organized TPS

Processing inefficiency Data redundancy
Causes integrity problems Inefficient

Temporal integrity problems

Caused by different times at which processing occurs

Lack of information coherence

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Enterprise Resource Planning Systems

Key word is Enterprise: solution designed for entire enterprise All processes organized around one enterprise-wide data model

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Advantages of ERP
Elimination of costly legacy systems
Old systems are expensive to maintain and reduce business agility

Improvement of processes
ERP may have implemented best-in-class processes

Improve data access and data integrity

Provide complete, consistent view of enterprise data
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Disadvantages of ERP
Implementation cost
Software and hardware Expertise Opportunity costs

Time to implementation
Lengthy and difficult process

MOC (management of change) challenges System integration difficulties Vendor dependence

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Current ERP Vendors

SAP Baan PeopleSoft Oracle J. D. Edwards Manugistics

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R/3 Architecture
Functionally rich
More functional options than a business will ever need

Logical
Built around information model 10,000 tables
Control tables Application data tables

Heavily parameterized
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R/3 Architecture (cont)

Hardware
PC Clients Application server Database server

Public interfaces
BAPI

Customization
ABAP Development System
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