Transaction Processing, Functional Applications, and IntegrationGoals of the Chapter
This chapter describes the facts and issues related to transaction processing systems, innovative systems, andfunctional systems in an organization. It discusses how IT supports customer relationship management, as well ashow the various support systems are integrated in an organization. Functional areas and business processes arerelated to the value chain and the close linkage between functional areas and IT are explored. The benefits and issuesof integrating functional information systems are covered.
Section 6.1 -
Functional Information Systems
– This section defines functional information systems that are designedto handle traditional functional areas, as well as the major characteristics of the systems.Section 6.2 -
Transaction Processing Information Systems
– This section covers the definition, objectives, activities,and methods of transaction processing systems (TPS). Client/server and Web-based TPS are discussed, includingOLAP, object oriented transaction processing, and Web-based transaction processing. Some typical tasks areexplained, and transaction processing software is introduced.Section 6.3 –
Managing Production/Operations and Logistics
– Systems to handle production and operationsmanagement (POM), logistics, inventory management, MRP, and project management activities are explored,including the decisions that must be made by each functional area.Section 6.4 –
Managing Marketing and Sales Systems
– This section explores channel systems, allowing for marketing and distribution improvements, and the tracking and analysis of sales trends and profitability.Section 6.5 –
Managing the Accounting and Finance Systems
– These systems handle the money that flows into,through, and out from the organization. This section also looks at financial and economic forecasting, budgeting, ande-commerce in terms of management and software applications. Control and auditing are explored.Section 6.6 –
Managing Human Resources Systems
- Systems developed to handle recruiting, training, performanceevaluation, payroll, and benefits are examined. Personnel planning and labor-management relations are visited.Section 6.7 -
Integrating Functional Information Systems
– Reasons for integration of functional information systemsare proposed, and front- and back-office integration are discussed. Managerial and ethical issues are presented.
Questions for Review1.
What is a functional information system?A functional information system is a system that supports a functional area in an organization. Functional areas likeaccounting, finance, general management, human resources, etc. are associated with support activities that includethe firm's infrastructure, human resource management, technology development, and procurement. Other functionalareas like material management, operations, marketing, and services are associated with primary activities such as:inbound logistics, operations, outbound logistics, marketing and sales, and service. The hierarchical organizationalstructure is built on such functional areas.
List the major characteristics of a functional information system.