AIS Chap 2.docx

Chapter 2Overview of Transaction Processing and ERP Systems

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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.

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Data Processing Cycle


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The Data Processing CycleDetermines

  What data is stored?

  Who has access to the data?

  How is the data organized?

  How can unanticipated information needs be met?


Data Input—Capture

  As a business activity occurs data is collected about:1.  Each activity of interest2.  The resources affected

3.  The people who are participating

Paper-Based Source Documents

  Data are collected on source documents  E.g., a sales-order form  The data from paper-

based 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 Turnaround Document



Source Data Automaton

  Source data is captured  In machine-readable form  At the time of the business activity

  E.g., ATM’s; POS


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

Data


  Types of AIS storage:

  Paper-based  Ledgers

  Journals  Computer-based

Ledger

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  General  Summary level data for each:

  Asset, liability, equity, revenue, and expense

  Subsidiary  Detailed data for a General

Ledger (Control) Account that has individual sub- accounts  Accounts Receivable  Accounts Payable

•  Joe Smith$250

•  Patti Jones$750

•  ACME Inc.$150

•  Jones, Inc$350

Jo


  General  Infrequent or specialized transactions

  Specialized  Repetitive transactions

  E.g., sales transactions

Digit Position Meaning

1–2 Product Line, size, and so on

3 Color

4–5 Year ofManufacture

6–7 Optional Features

1241000 12 = Dishwasher4 = White10 = 201000 = No Options

Coding


  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

  Chart of accounts  Type of block coding

Computer Based


  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

File


  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

Data


  Four Main Activities1.  Create new records2.  Read existing records

3.  Update existing records4.  Delete records or data from records

Data Output


  Soft copy  Displayed on a screen

  Hard copy  Printed on paper


ERP Systems


Enterprise Resource Planning (ERP)

  Integrate an organization’s information into one overallAIS

  ERP modules:  Financial  Human resources and payroll

  Order to cash  Purchase to pay

  Manufacturing

  Project management  Customer relationship management

  System tools

ERP


  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

ERP


  Cost

  Time-consuming to implement

  Changes to an organization’s existing business processes can be disruptive

  Complex

  Resistance to change