Management 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

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Lecture Administration

• Presentation on NADRA
• Transaction Processing Environment
• Transaction Systems
• Management Reporting
• Case Studies (Where are you?)

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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

4
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 cant compromise on a
  faulty/ inefficient TPS (so you will find
  management providing enough resources to improve
  in this context)

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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

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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.

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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)

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Transaction Processing Systems

• Payroll
• Order Entry
• Inventory
• Invoicing
• Shipping
• Accounts Receivable
• Purchasing
• Receiving
• Accounts Payable
• General ledger

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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)

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Payroll System
Employees
Payroll
General Ledger

• Rate
• Hours
• Taxes
• Accruals

Organization/ Management
Banks
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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

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Order Entry System
Product/ Service
Stock
Verification Authentication
Info about Order Collected
Credit Authorization
New Orders
To Inventory System
Customers
Customer Notification
Account Customers
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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

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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

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Account Receivable
Info. From order entry system
New Orders
Filled orders
Invoice
Order Filling
Backorders
Shipments
Inventory Levels
Material Purchase Request
Not sufficient inventory
Stock
Information to purchase system
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Inventory Subsystems (Invoice Shipment)
Invoice System
Filled orders
Acc. Receivable
Invoice
Invoice Slips
Shipment System
Shipments
Customers
Shipping Instructions
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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

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Account Receivable System
Invoices
Accounts
GL
Editing Receivable Records
Account Receivable
Payments
Statements Reminders Preparation
Customers
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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

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Purchasing System
Purchase Request
Informal Formal Communication
Vendor Selection
Products
Purchase Order
Suppliers/ Vendors
Goods Received
Closing Out Orders
Receipts
Inventory System
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Purchasing Subsystem..(Receiving)

• The Basic Function
• Receive Goods
• Receive goods from suppliers
• Inspect
• Checking of contents against the purchase order
• Accept or Reject
• Checking the goods either as damaged or
  satisfactory

Vendors
Purchase Orders
Goods Received
Receipts
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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

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Accounts Payable
Statements Notification
Validation Process
Vendors
Payments
Payments
Account Payable