This document discusses transaction processing systems (TPS), including batch processing, online transaction processing (OLTP), and hybrid systems. It covers the requirements, activity models, and management issues of TPS. It also describes how TPS are used for key functions like order processing, procurement/inventory control, and accounting. The document introduces enterprise resource planning (ERP) systems and their advantages and disadvantages compared to functional TPS. It provides examples of major ERP vendors and describes the architecture of SAP R/3.

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Transaction Processing
Systems
• Manual or automatic – all businesses
systematically process transactions
• Function: process routine, day-to-day
business activities
• Computerized TPS:
– Batch
– Online (real-time, OLTP)
• The foundation of business systems

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Batch TPS
• Originally, the only available option
• Transactions accumulated over period of time
• Time period – day, week, month
• Transaction records accumulated in files
• When batches are processed, what happens?
– Update databases
– Generate reports
– Generate transactions for other systems

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Batch Processing Pros and
Cons
• Pros
– Relatively easy to program, install and
maintain
– Batches can be processed during low-activity
periods
• Cons
– Information is delayed

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Online TPS (OLTP)
• Transactions are processed in real time
• Required for any “modern” application
where time is critical
• Well supported by client/server computing
model

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Hybrid TPS
• OLTP applications can feed transactions to
batch systems
– Examine: GL only updated once per day
• Real time order capture with delayed
processing

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TPS Requirements
• Capture, process and store transactions
• Produce reports and information about
transactions
• Produce transactions for other TPS
• Be accurate and timely
• Be efficient – require less labor
• Increase customer service
• Increase competitive advantage

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TPS Activity Model
• Data capture
– From online entry or “external” system
• Data validation
– Should be done as close to source as possible
• Processing
– Data manipulation
– Database updating
– Generation of transactions for other systems
• Archive Transaction
• Create documents and reports

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Management Issues
• Uptime
– How long can the system be “down” before
significant costs are incurred?
• Processing Delays / Response Times
– How quickly must a transaction be
processed?
– What is the worst online response time that is
acceptable

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Management Issues (2)
• Disaster Recovery
– What plans are in place to recover lost
business data?
– What plans are in place to resume business
processing in case of disaster?
• Audit
– Can you verify the integrity of the system?
– How will you know if transactions are not
processed or are processed incorrectly?

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TPS By Function
• Order Processing
• Procurement & Inventory Control
• Accounting

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Order Processing TPS
• Order capture
– Variety of means
• Configuration
• Shipment planning and inventory
allocation
– Prioritize orders, select shipment locations,
allocate inventory to orders
• Shipping and warehousing
– Picking, packing, invoicing, reporting

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Procurement
• Inventory Control
– Raw materials, WIP, FGI, etc
• Purchase Order Processing
– Generating, transmitting, maintaining
purchase orders
• Receiving
• Accounts Payable
– Boundary between procurement and
accounting

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Accounting
• Accounts Payable
• Accounts Receivable
• Budget
• Payroll
• General Ledger
• Asset Management

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Disadvantages of Functionally
Organized TPS
• Processing inefficiency
• Data redundancy
– Causes integrity problems
– Inefficient
• Temporal integrity problems
– Caused by different times at which processing
occurs
• Lack of information coherence

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Enterprise Resource Planning
Systems
• Key word is Enterprise: solution
designed for entire enterprise
• All processes organized around one
enterprise-wide data model

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Advantages of ERP
• Elimination of costly legacy systems
– Old systems are expensive to maintain and
reduce business agility
• Improvement of processes
– ERP may have implemented best-in-class
processes
• Improve data access and data integrity
– Provide complete, consistent view of
enterprise data

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Disadvantages of ERP
• Implementation cost
– Software and hardware
– Expertise
– Opportunity costs
• Time to implementation
– Lengthy and difficult process
• MOC (management of change) challenges
• System integration difficulties
• Vendor dependence

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Current ERP Vendors
• SAP
• Baan
• PeopleSoft
• Oracle
• J. D. Edwards
• Manugistics

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R/3 Architecture
• Functionally rich
– More functional options than a business will
ever need
• Logical
– Built around information model
– 10,000 tables
• Control tables
• Application data tables
– Heavily parameterized

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R/3 Architecture (con’t)
• Hardware
– PC Clients
– Application server
– Database server
• Public interfaces
– BAPI
• Customization
– ABAP Development System