Slide 1Slide 2Slide 3Slide 4Examples of Key Information System (IS) FunctionsInformationSlide 7Slide 8Slide 9Slide 10Slide 11Systems evolution has been influenced by “new” ideasSlide 13Slide 14Information System Evolution CategoriesBefore integration: Stand-alone (Legacy) SystemsSlide 17System EvolutionSlide 19Enterprise Resource Planning (ERP): An Integrated SolutionEnterprise Resource Planning (ERP)Interorganizational Systems – Across Org.Customer Relationship Management (CRM)Supply Chain Management (SCM)Slide 25Slide 26Slide 27Slide 28Slide 29Slide 30Slide 31Slide 32Slide 33Slide 34Slide 35Slide 36Slide 37Slide 38Slide 39Slide 40Slide 41Slide 42Slide 43Slide 44Slide 45Slide 46Slide 47Slide 48Slide 49Slide 50Slide 51Slide 52Slide 53Slide 54Slide 55Slide 56Slide 571IM341 Spring 2014Module 2: Transaction Processing Example 1 – Order to Cash (aka Order to Payment, Revenue Cycle, Sales Cycle)REQUIRED READING FOR THIS MODULE:IM341sp14OrdertoCash.pdfIM341sp14Procurement.pdfThe content presented in the required readingis not summarized in its entirety in these slides.Other assessment material sources:Slides and class discussionOBJECTIVESTo Learn •Basic information processing terms and concepts•Typical business events associate with Order to Cash process•Transaction processing steps (and sub steps) typically associated with these business events (I,P,O)•Business Risks and Controls•Transaction Processing Risks and Controls•Terminology associated with the process•Typical Source Documents/Data flows•Typical data stores (files)3Two distinct “worlds”:Reality – the strategically significant events we studied in module 1 Information systems – where and how we represent (often in digital form) realityOur goal: To understand how organizations strive to create information systems that accurately represent reality.Now that you understand basic business processes (and have analyzed them independent of technology or information systems design), think about how technology is (and can be) used to support these business processes.Examples of Key Information System (IS) Functions1. Collect and store data about business activities and different types of transactions (while enabling business activities to be performed efficiently and effectively). (Modules 2 and 4)2. Process data into information that is useful for making decisions and executing business activities. (Modules 2 and 4)3. Help ensure that the organization is in compliance with all applicable laws and regulations. (Module 5)4. Provide adequate controls to reduce risks and safeguard the organization’s assets. (Module 5)6Information ArchitectureFunctionalSilosTechnology InfrastructureFitStrategicManagementKnowledgeOperationalNotice hyperlink use on this slide.7Types Of Information SystemsSALES & MANUFACTURING FINANCE ACCOUNTING HUMAN STRATEGIC LEVEL SENIOR MANAGERSMANAGEMENT LEVEL MIDDLE MANAGERSOPERATIONAL OPERATIONAL LEVEL MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & DATA WORKERSRESOURCESMARKETING8Note about use of the term Transaction in this class-In IM341, the term transaction is used as an information systems (database) term rather than as an accounting term. In systems, we use the term transaction to denote an information processing event that generates or modifies data we store in our information systems. So transaction processing is a unit of information processing work performed within a database management system (or similar system). A transaction processing system (TPS) refers to an information system that collects, stores, modifies and retrieves the information processing transactions of an organization.9Basic (TPS) Transaction Processing Subsystems•Procurement processing (also called expenditure processing): Orders, Receipts/Purchasing and Cash Disbursements •Conversion processing (also called Production processing): Convert Raw Materials/Labor  Finished Goods•Human resources/payroll processing (a special case of procurement processing)•Order to Cash process (also called Sale or Revenue processing): Orders, Fulfill, Sales and Cash Collection•Finance Activities processing (including acquisition of financing, which is a special case of procurement processing)10Required Reading ReviewCompare and Contrast the 3 Types of Information Processing (TPS) Activities•Recording•Maintaining•ReportingGive examples of each of the following types of Information Processing Risks•Recording•Maintaining•Reporting11Required Reading ReviewWhat is different about a system designed using manual resources versus one designed using computer based resources?Compare and contrast the nature and purpose of master files, transaction files, history files, reference files, and suspense files.What is meant by batch, online, and real time information processing?Thought Discussion– How are mobile apps and handheld devices changing when and how we collect, process and report data?12Systems evolution has been influenced by “new” ideas•Business Process Reengineering is a term coined by Hammer and Champy in “Reengineering the Corporation”. The authors promoted the idea that organizations needed to rethink and streamline their work processes if they wanted to improve time management, lower costs and increase quality of service. They proposed that information technology was a key enabler of radically redesigning and reorganizing business processes and the work performed to support business processes.Systems evolution has been influenced by the proposed relationship between the Value Chain and Information Technology (IT)•Because each value chain activity involves the creation, processing, and communication of information, information technology has a pervasive influence on the value chain. •Value chain analysis can help identify specific, critical leverage points where a firm can use IT most effectively to enhance its competitive position. For example, using IT for new product creation, using IT to