Integration of a Firm’s TPSs

Order Processing Systems

Order Processing Systems
Order Entry System
Shipment Planning
Inventory Status Report
Invoicing
Purchasing Systems
 Inventory control
 Purchase order processing
 Receiving
 Accounts payable
Purchasing Systems
Accounts Payable
Accounts Payable
Accounting Systems
Accounts Receivable
Accounts Receivable Aging Report
Typical Paycheck Stub
Payroll Journal
General Ledger
General Ledger
Enterprise Resource
Planning (ERP)
ERP
 Enterprise resource planning (ERP) makes
timely information easily available for analysis
and decision-making in companies of all sizes.
 ERP systems monitor business functions in real-
time to provide timely information in
manufacturing, finance, distribution, sales or
human resources. A strength of ERP systems is
that they integrate data across all functions.
 For example, a manufacturing supervisor would
be notified when raw material inventory falls
below a set floor.
ERP Software Vendors
Enterprise Resource Planning
 Real-time monitoring of business functions
 Supports human resources, sales, and
distribution
 Accommodates the different ways each
company runs business
 Advantages of ERP
 Eliminates costly, inflexible legacy systems
 Improved technology infrastructure
 Improved work processes
 Increased data access for decision making

Current business conditions make enterprise-wide accessibility of information a key to success. ERP software offers that possibility.
Deploying an ERP system allows a firm to replace numerous separate, sometimes isolated, inefficient legacy applications with a single
set of integrated products. This improves the efficiency of systems and decreases the cost of maintaining old systems. This improves an
organization’s ability to adapt to changing conditions. Implementing an ERP system also gives an enterprise the chance to upgrade and
standardize hardware, software and databases, reducing support and operations costs.
ERP systems are designed around the most effective and customer-oriented business practices found. Thus, deploying an ERP system
will help an organization follow the industry’s best practices. Although the adoption of improved work processes can be beneficial, as
noted on the next slide, this can also be a disadvantage. Often established processes must be re-engineered, possibly causing
dissatisfaction or turnover among experienced employees.
Since ERP systems maintain an integrated database, decisions can be made based on enterprise-wide data. This is far more efficient than
trying to coordinate decisions across units.
 Disadvantages of ERP
 Expense & time
 Radical change
 Integrating with other systems
 One vendor risks

However, ERP systems are time-consuming, expensive, and difficult to implement.

Some companies have spent millions of dollars and many years implementing ERP systems
– not always with successful outcomes.
Many companies have also had problems making ERP systems work with existing systems, adding to the expense and difficulty of deploying ERP
After investing so many resources in implementing ERP, switching costs are very high,
so an ERP vendor essentially holds a business that uses its system hostage.
Even with these problems, however, many organizations are successfully using ERP systems.
Example of ERP
SAP
Refer text book page 399
ERP System- SAP Three Tier Client Server
Architecture
 Summary
 Transaction Processing Systems - consist of all
components of a CBIS, including databases,
telecommunications, and people

 Transaction Processing Systems Methods - batch,

on-line, and on-line with delayed processing

 Enterprise resource planning (ERP) software - a

set of integrated programs that manage a company’s
vital business operations for an entire multisite, global
organization