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Chapter 2

Overview of Transaction Processing and ERP Systems

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Data Processing Cycle

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The Data Processing Cycle Determines

What data is stored?
Who has access to the data?
How is the data organized?
How can unanticipated information needs be met?

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Data Input—Capture

As a business activity occurs data is collected about:

Each activity of interest

The resources affected

The people who are participating

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Paper-Based Source Documents

Data are collected on source documents
E.g., a sales-order form
The data from paper-based will eventually need to be transferred to the AIS
Turnaround
Usually paper-based
Are sent from organization to customer
Same document is returned by customer to organization

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Turnaround Document

Source Data Automaton

Source data is captured
In machine-readable form
At the time of the business activity
E.g., ATM’s; POS

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Data Input—Accuracy and Control

Well-designed source documents can ensure that data captured is
Accurate
Provide instructions and prompts
Check boxes
Drop-down boxes
Complete
Internal control support
Prenumbered documents

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Data Storage

Types of AIS storage:
Paper-based
Ledgers
Journals
Computer-based

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Ledgers

General
Summary level data for each:
Asset, liability, equity, revenue, and expense
Subsidiary
Detailed data for a General Ledger (Control) Account that has individual sub-accounts
Accounts Receivable
Accounts Payable

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Journals

General
Infrequent or specialized transactions
Specialized
Repetitive transactions
E.g., sales transactions

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Computer Based Storage

Entity
Person, place, or thing (Noun)
Something an organization wishes to store data about
Attributes
Facts about the entity
Fields
Where attributes are stored
Records
Group of related attributes about an entity
File
Group of related Records

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File Types

Transaction
Contains records of a business from a specific period of time
Master
Permanent records
Updated by transaction with the transaction file
Database
Set of interrelated files

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Data Processing

Four Main Activities

Create new records

Read existing records

Update existing records

Delete records or data from records

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Data Output Types

Soft copy
Displayed on a screen
Hard copy
Printed on paper

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ERP Systems

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ERP Advantages

Integration of an organization’s data and financial information
Data is captured once
Greater management visibility, increased monitoring
Better access controls
Standardizes business operating procedures
Improved customer service
More efficient manufacturing

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ERP Disadvantages

Cost
Time-consuming to implement
Changes to an organization’s existing business processes can be disruptive
Complex
Resistance to change

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