Transaction Processing Systems
Capture/store routine transactions (order processing, billing, reservations).
Knowledge Work Systems
Data mining tools or decision support systems that analyze sales trends and customer preferences.
Support professionals (engineers, lawyers, analysts) with design tools, spreadsheets, email.
Office Systems (OS):
Used by data workers (clerks, bookkeepers) for word processing, spreadsheets, document imaging.
Management Information Systems (MIS):
Summarize TPS data into reports (weekly/monthly sales, production, headcount).
Decision Support Systems (DSS):
Help managers with semi-structured decisions (pricing, production scheduling).
Executive Support Systems (ESS)
Executive dashboards showing long-term performance, profitability, and market share for strategic planning. Combine internal MIS + external data (market trends, legislation, confidence).
Point-of Sale
is an operational‑level Transaction Processing System (TPS) that records daily sales, updates inventory, and processes payments.
The Supply Chain (aka the Industry Value Chain)
is network of organizations and business processes for procuring raw materials, transforming raw materials into finished products
and distributing these products to customers.
Islands of automation.”
Ideally, systems should share data, but integration is often difficult, systems don’t communicate → duplicate/outdated data.
Middleware
(e.g., APIs, ETL processes) Software that connects different applications/systems, enabling communication and data exchange
Enterprise Resource Planning system
Unified data repository, standardized processes, shared data with partners.
Complementary investments
Non-IT resources (training, organizational change, new processes) needed to realize IT benefits.
Business intelligence
automates reporting and analyze trends (e.g., peak hours, top sellers)
Scenario: CFO upset that income statements take 3 months; systems are incompatible.
What’s going on: The organization likely has disparate legacy systems that don’t integrate well. Data may be stored in different formats, across multiple platforms, requiring manual reconciliation. This causes delays.
Standardize data formats and adopt a centralized database for financial reporting.
Automate reporting with Business Intelligence (BI) tools to reduce manual work.
POS Data → Trends & Patterns
Systems Required:
Data Warehouse: Stores large volumes of historical POS data
Business Intelligence (BI): Dashboards, visualizations
Data Mining Tools: Identify patterns, correlations, and product relationships
How It Works:
POS (TPS) captures daily transactions
Data is extracted, transformed, and loaded into a data warehouse
BI tools analyze trends (e.g., peak hours, top sellers)
Data mining identifies relationships (e.g., items bought together)
Why eCal Failed (10 marks)
The eCal project failed due to:
Lack of planning: No clear goals, objectives, or implementation strategy.
Poor implementation choice: No pilot testing or phased rollout.
Lack of complementary investments: Teachers were not trained, schools lacked WiFi, charging stations, and support resources.
Technology without organizational change: Devices alone cannot improve learning outcomes.
Improvements:
Conduct pilot testing
Provide teacher training
Ensure infrastructure (WiFi, support staff)
Set measurable goals and monitoring system
The specific choice (Make or Buy) depends on factors
The specific choice (Make or Buy) depends on factors like resources, capabilities, corporate strategy, time pressure, prices, culture, politics, and the business environment
- Developing In-house (Make)
Organizations can develop systems internally using several methodologies:
* Traditional Development (SDLC): This is a phased, step-by-step approach used since the 1960s. It involves Identifying Problem/Opportunity, Conduct Investigation, Create Conceptual Design, Development, Testing, Implementation, and Maintenance. It is well understood but criticized as being too slow and costly.
* Agile Methods: Proposed as a solution to SDLC’s length, Agile focuses on speed not perfection. It uses small teams in an iterative process (e.g., Prototyping or Extreme programming). Many organizations use Agile for noncore systems and SDLC for critical systems, or use a hybrid methodology.
* End User Development: Users develop small, noncritical systems using simple tools like Microsoft Excel or Access.
* Open Source: Software that is shared, often free of charge, where any changes must be shared with the community (e.g., Moodle).
- Acquiring Systems (Buy)
Alternatives to internal development include:
* Licensing: Acquiring the right to use “off the shelf” software (e.g., SAP ERP systems). This is often considerably faster and much less costly than in-house development because costs are amortized. A drawback is that the system may not be an “exact” match. Licensed systems often run on the organization’s own hardware.
* Outsourcing: Transferring systems and processes entirely to an external vendor (e.g., outsourcing registration to IBM).
* Software as a Service (SaaS): A relatively new form of outsourcing reliant on high-speed networks (usually the Internet). The entire application runs on the provider’s servers (e.g., Salesforce.com), and the customer connects via a web browser. SaaS removes much of the burden of funding, running, and maintaining the IS from the client organization.
Scenario: Organization replacing its financial system
Custom-built system (tailored but costly, longer implementation).
Commercial off-the-shelf (COTS) software (e.g., SAP, Oracle Financials).
Open-source solutions (lower cost, flexible, but requires in-house expertise).
Cloud-based SaaS financial systems (scalable, subscription-based).
Factors to consider:
Cost (initial + maintenance).
Scalability and future growth.
Integration with existing systems.
Vendor support and reliability.
Security and compliance requirements.
User training and change management.
(b) Alternatives to SDLC
Alternatives: Agile, Rapid Application Development (RAD), Prototyping, End-user development.
Advantages: Faster delivery, flexibility, user involvement, adaptability to change.
Disadvantages: Less documentation, harder to manage large projects, risk of scope creep, potential lack of structure
Agile methods
Iterative, flexible software development approaches emphasizing collaboration, adaptability, and rapid delivery.
SDLC
Structured process for developing information systems: planning, analysis, design, implementation, maintenance.
ERP Implementation Method (SAP system)
Options: Big Bang, Phased, Parallel, Pilot.
Recommended: Phased implementation.
Reason: Lower risk, easier troubleshooting, gradual user adaptation.
Example: Start with accounting, then HR, then manufacturing.
Avoid the Big Bang unless resources and training are very strong.
