Chap. 10: Information Systems within the Organization

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Transaction processing system (TPS)
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Monitors, collects, stores and processes data generated from all business transactions.
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Batch Processing
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When the firm collects data from transactions as they occur, placing them in groups or batches, then prepares and processes the batches periodically (say, every night).
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Online Transaction Processing (OLTP)
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When business transactions are processed online as soon as they occur.
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Source data automation
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involves collecting data from sensors (e.g., barcode scanners) and entering the data directly into a computer without human intervention.
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Organization’s Database
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MIS: Mmgt Info system DSS: Decision Support System BI: Business Intelligence EIS: Exec. Info system ES: Expert system
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Functional area information systems (FAISs)
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provide information mainly to lower- and middle-level managers in the functional areas via a variety of reports. IOW… support a functional area by increasing its internal effectiveness and efficiency in the following areas: -Accounting -Finance -Marketing -Operations (POM) -Human Resources Management
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FAIS – Accounting and Finance
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-Financial Planning and Budgeting -Managing Financial Transactions Multiple currencies Multiple stock exchanges Travel expense management Virtual Close capability -Investment Management -Control and Auditing -Capital Budgeting/Asset Acquisition
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FAIS – Sales and Marketing
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Customer Relationship Management Sales Force Automation Advertising Loyalty Program Management (key chains; frequent flyer program…etc)
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FAIS – Production/Operations Management
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-Supply Chain Management -In-house Logistics and Materials Management: Inventory control Quality control -Production Planning and Operation: Materials Requirements Planning (MRP) Manufacturing Resource Planning (MRP II) -Computer-Integrated Manufacturing (CIM) -Product Life Cycle Management
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FAIS – Human Resources
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*Recruitment *Human Resources Development (training) *Human Resources Planning and Management: Employee Records Payroll Benefits Administration Performance Evaluation Employee Relationship Management
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Enterprise Resource Planning (ERP) systems
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Integrate the planning, management and use of all resources of the organization. That is, ___ systems are designed to break down the information silos of an organization. IOW… integrate the functional areas of the organization by enabling seamless information flows across them. Integrates existing systems by providing software, called middleware, that connects applications together.
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information silos
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information systems that were developed for specific functional areas and did not communicate with systems in other functional areas.
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The major objective of ERP systems
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integrate the functional areas of the organization by enabling seamless information flows across them.
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Core ERP modules
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Financial Management Operations Management Human Resources Management
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Extended ERP modules
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Customer Relationship Management (Chapter 11) Supply Chain Management (Chapter 11) Business Intelligence (Chapter 12) E-Business (Chapter 7)
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ERP Vendors
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*SAP (24%) *Oracle (18%) *Microsoft Dynamics (11%) *The following have a combined (11%) Epicor Sage Infor IFS QAD Lawson Ross
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Benefits of ERP Systems
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Organizational flexibility and agility – They can make organizations more flexible, agile, and adaptive. Decision support – They can improve managers’ ability to make better, more timely decisions. Quality and efficiency – They can improve customer service, production, and distribution.
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Limitations of ERP Systems
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-May require organizations to change existing business processes to fit the predefined business processes of the ERP software. -Can be complex, expensive, and time consuming to implement. -Business managers and IT professional tend to underestimate the complexity of the planning, implementation and training required to implement an ERP system
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ERP II Systems
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Interorganizational ERP systems that provide web-enabled links btw a company’s key business systems (such as inventory and production) and its customers, suppliers, distributors, and others.
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SAP Solutions (Modules)
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*Financials *Human Resources *Customer Relationship Management *Supplier Relationship Management *Product Lifecycle Management *Supply Chain Management *Business Intelligence ____ is moving away from describing their system as a set of modules, and now is using the term “solutions.”
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SAP modules: FI Financial Accounting
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essentially your regulatory ‘books of record’: General ledger Book close Tax Accounts receivable Accounts payable Consolidation Special ledgers
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SAP modules: CO Controlling
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Basically your internal cost/management accounting: Cost elements Cost centers Profit centers Internal orders Activity based costing Product costing
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SAP modules: AM Asset Management
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tracks, values, and depreciates your assets: Purchase Sale Depreciation Tracking
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SAP modules: PS Project Systems
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manages your projects, large and small: Make to order Plant shut downs (as a project) Third party billing (on the back of a project)
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SAP modules: HR Human Resources
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people: Employment history Payroll Training Career management Succession planning
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SAP modules: PM Plant Maintenance
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maintains your equipment: Labor Material Down time and outages
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SAP modules: MM Materials Management
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underpins the supply chain: Requisitions Purchase orders Goods receipts Accounts payable Inventory management Bills of Material Master raw materials, finished goods etc.
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SAP modules: QM Quality Management
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improves the quality of your goods: Planning Execution Inspections Certificates
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SAP modules: PP Production Planning
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manages your production process: Capacity planning Master production scheduling Material requirements planning Shop floor
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SAP modules: SD Sales and Distribution
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from order to delivery: RFQ Sales orders Pricing Picking (and other warehouse processes) Packing Shipping
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SAP modules: CA Cross Application
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These lie on top of the individual modules WF – workflow BW – business information warehouse Office – for email Workplace Industry solutions New Dimension products such as CRM, PLM, SRM, APO etc.
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Summary report
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provide summarized information, with less detail.
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Detailed reports
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provide high levels of detailed data, often in support of summary reports.
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drill-down report
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allows users to click on an item in a report and be able to access underlying details about that item.
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key indicator report
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summarizes the performance of critical activities.
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Comparative report
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provides a comparison, such as expenses to budget or this reporting period to last reporting period.
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Exception reports
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include only information that falls outside certain threshold standards.
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Ad hoc (on demand) report
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Non-routine reports that often contain special information that is not included in routine reports.

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