Information Systems

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					Management Information
      Systems
     MBA(II) 4th Semester
 Transaction Processing Systems &
  Management Reporting Systems
       Lectures 16,17,18
                        By: Farhan Mir
        Lecture Administration
•   Presentation on “NADRA”
•   Transaction Processing Environment
•   Transaction Systems
•   Management Reporting
•   Case Studies (Where are you?)
     Presentation on “NADRA”
• Overview of the Information System and
  subsystems
• Presented by one of the Assistant Directors: Syed
  Asad Hussain Bukhari
• Need to develop your questions for the
  presentation
• Most probably on Wednesday 12th Nov at 10.15
  am
• This is an important presentation in the context of
  “Information systems facilitating critical
  operations in the Government Sector
Transaction Processing Overview
• What are these Systems?
   – Support business transactions
   – Huge amount of Accounting Data
        • Sales and Purchase Transactions
   – Student Enrollment (Another example)
• Important Features Regarding Transaction
  processing
   –   Huge amount of transactional data to be handled
   –   Accurate Recording a key necessity
   –   Issuance of important documents
   –   Sensitivity of data (Errors could be heart-breaking)
   –   EDIs could be seen as an extended TPS option
   –   Management knows that it can’t compromise on a
       faulty/ inefficient TPS (so you will find management
       providing enough resources to improve in this context)
       Transaction Processing…
• The Evolution
   – The Early Computer Applications were in
     Operational/Transactional areas of business
   – Most of the organizations still believe that computers
     only can help at this level of organizations (no need for
     DSS or other applications)
   – Almost every modern organization (good ones) have
     the TPS, so maintenance and updation the two major
     activities for organizations already having TPS
   – But linking your partner entities with your systems
     have given new life to TPSs
• Transaction Processing, what exactly it is?
   – Transaction is basically exchange of goods/services for
     money
   – Three Major Functions
   – Bookkeeping, Issuance & Control Reports
                  TP Functions
• Bookkeeping
  – Records of Business Transactions
  – Day-to-day transactions with customers and suppliers
  – Airline Reservations Systems keep record of airline
    tickets issued
  – Student Registration & Fees
  – General Accounting Principals used for the purpose
• Issuance
  – Documents Necessary for transaction processing
  – Invoices, pay-checks, bills, & Reminders etc.
  – These documents are not buy-products but are essential
    part of a TPS
• Control Reports
  – By-product reports for operational control
  – Non-scheduled reports & Error Reports etc.
     Transaction Processing…
• Transaction Processing Cycle
   – Data Entry
      • Transactional Data collected, recorded by data operators
      • New way of “source data automation”(key-less data entry)
   – Transaction Processing & Updation
      • Batch Vs. Real-Time Processing
   – Document & Report Generation
      • Informational Documents (Confirmation docs like Sales
        Receipts, Customer invoices)
      • Action Documents (purchase order indicates that items
        mentioned should be supplied by suppliers to organizations)
      • Accounting Statements (Balance sheets, cash flow statements)
      • Listings (provide lists of transactions in a specific time period)
   – Inquiry Processing
      • Order Status checked by customers (most online travel
        agencies offer this facility)
      • Customer satisfaction notices (in reply to customer concerns)
    Transaction Processing Systems
•   Payroll
•   Order Entry
•   Inventory
•   Invoicing
•   Shipping
•   Accounts Receivable
•   Purchasing
•   Receiving
•   Accounts Payable
•   General ledger
               Payroll Systems
• Payroll are the most common Transaction Systems in
  organizations
• Basic purpose is to produce “paychecks” for
  organizational employees
• By-products for this system could be tax statements,
  social security notices, insurance documents
• Usually seen as an independent and straightforward
  system in most organizations
• Employees Work Information is the key:
   – Hrs (Time period calculated, that may be in days)
   – Rate per Hour (depend upon the type of employee I.e.
     permanent Vs. contractual)
   – Tax deductions (if applicable)
   – Net or Total Income (Eventually Transferred to General
     Ledger)
                Payroll System

Employees                        General Ledger
                     Payroll


    •Rate
   •Hours
   •Taxes
  •Accruals


Organization/
Management            Banks
             Order Entry Systems
• Another crucial system working in manufacturing
  as well as service organizations
• Customers placing orders for goods/services
  offered by your organization
   – Demand Orders Vs. Scheduled Orders
• The order processed in the organization
   – Authentication (Accuracy Checks)
   – Product/service availability check (Stock Level check)
   – Full Vs. Partial Orders
      • Notification to Customers in case of partial filling of orders
      • Rejection Notice
      • Notification to Accounts as well
• New & Credit Customers
   – Authentication of Credit Customer accounts
   – Identification of New Customers
                   Product/           Stock
                   Service




Info about     Verification
                                      Credit         New
  Order             &
                                   Authorization     Orders
 Collected    Authentication
                                                              To
                                                              Inventory
                                                              System




                     Customer
Customers
                    Notification               Account
                                               Customers
             Order Entry System
          Order Entry System…
• Other Factors
   – Security Checks
      • Specially in the case of a website receiving orders online
   – Control Factors
      • Size and Capacity (Operational constraints)
   – Supporting documentation
      • Slips given to customer in case of awaiting orders
   – Customer Relation activities
      • Display Notices
   – Telecommunication playing crucial role in Order Entry
      • Laptops and Notebooks used by Salesperson to collect order
        and that are transmitted to companies electronically
             Inventory System
• Inventory refers to the number of
  products/services a company have to sell and also
  the materials (usually refers as “Raw Material”) in
  stocks
• Inventory not necessarily refer to physical
  merchandize but it could be
   – Seats available in airline ticketing systems
   – No of seats available in certain department of a
     university
• Crucial information generated by Inventory
  Systems
   – Inventory levels
   – Products Performance
   – Information related to Backorders
Info. From order   Account Receivable
entry system

  New Orders                       Filled orders
                                                          Invoice
                         Order
                         Filling
   Backorders                                           Shipments


                       Inventory
                         Levels
                                    Not sufficient   Material Purchase
                                    inventory            Request

                                                       Information to
                         Stock                         purchase system
Inventory Subsystems (Invoice & Shipment)
Filled orders                   Invoice                     Acc.
                                System                    Receivable



                                Invoice




                                          Invoice Slips
 Shipments
                               Shipment
                                                          Customers
                Shipping        System
                Instructions
   Account Receivable System
• Credit Customers
   – Organizations are often dealing with customers who
     have maintained their accounts with organization
     throughout the years
• Account Receivable System
   – Manages customer purchase record
   – Customer payments
   – Account Balances
• Features of Acc. Rec. System
   – Usually customers are billed monthly
   – Updation is done on the credit record of customers
     when they made partial or full payments, and they are
     also notified about that
     Invoices                    Accounts                 GL



                     Editing                 Account
                    Receivable              Receivable
                     Records

                Payments



                                            Statements
                     Customers                   &
                                            Reminders
                                            Preparation
Account Receivable System
                      Purchasing
• Many organizations have a purchase department (also
  known as procurement department)
• Many other departments are (at times inconveniently)
  dependent upon this department for required items
• The Process
   – Starting with a purchase request from stock
   – The process is followed by vendor-selection process
   – Formal Purchase Order is usually derived
   – Vendor selection is mostly done informally but usually a
     formal procedure is often carried out
   – Once the purchase order is filled the initiated order is closed
     out for further procedures
• Most of the organizations carry this process
  electronically
                   Purchasing System
Purchase Request
                                                   Informal &
                               Vendor
                                                     Formal
                              Selection          Communication
    Products



                   Purchase                      Suppliers/
                    Order                         Vendors


                    Closing                        Goods
                      Out             Receipts
                    Orders                        Received

                                                              Inventory
                                                               System
Purchasing Subsystem..(Receiving)
• The Basic Function
  – Receive Goods             Purchase
                                            Vendors
     • Receive goods from      Orders
       suppliers
  – Inspect
     • Checking of contents
       against the purchase
       order
                                      Goods
  – Accept or Reject
     • Checking the goods
                                     Received
       either as damaged or
       satisfactory
                                     Receipts
                Account Payable
• Most of the Large Organization maintain accounts
  with suppliers (usually seen as partners)
• The system handles payments to suppliers
• Crucial Information Handled by the System
   –   Invoices from suppliers
   –   Time allocation for payment
   –   Checks to pay invoices
   –   Cash Management (An Additional/ support system)
• System has to initiate as soon as goods are
  received from suppliers
• Goods slips and invoices validated
• Account Payable then eventually transferred to
  General Ledger
          Accounts Payable
                         Statements &
                         Notification

            Validation
                                        Vendors
             Process


                                         Payments

Account
Payable                  Payments

				
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