CHAPTER 10: Information Systems that Support

Organizations
Chapter Outline
10.1 Transaction Processing Systems
10.2 Functional Area Information Systems
10.3 nterprise !esource Planning Systems
"earning O#$ecti%es
1. &plain the purposes of transaction processing systems' an( pro%i(e at least one e&ample of
ho) #usinesses use these systems.
2. *efine functional area information systems' an( pro%i(e an e&ample of the support they
pro%i(e for each functional area of the organi+ation.
3. &plain the purpose of enterprise resource planning systems' an( i(entify four a(%antages
an( four (ra)#ac,s to implementing an !P system.
*iscuss the three ma$or types of reports generate( #y the functional area information systems
an( enterprise resource planning systems' an( pro%i(e an e&ample of each type.
Teaching Tips an( Strategies
The focus of this chapter is organi+ational information systems. -ou might start this chapter #y
(iscussing )hy ISs can #ecome .uite complicate( from #oth a technical an( a managerial
perspecti%e. Significant performance an( uptime re.uirements impose technical challenges'
)hile coor(ination an( usa#ility for a large' (i%erse group of users pose managerial challenges.
/o)' )ith the a(%ent of e0commerce' online e0tailers are in the costly #usiness of sen(ing one or
t)o items to millions of househol(s. To illustrate ho) this changes the supply chain' you can use
the follo)ing e&ample. "et1s preten( for a moment that )e )or, for eToys' an( )e get a
thousan( or(ers for 2ar#ie in one (ay. 2rea, the class up into groups' an( as, them )hat )ill #e
in%ol%e( in (eli%ering those 2ar#ies. The stu(ents )ill usually ans)er that someone )ill ha%e to
pic, the (olls in the )arehouse' create an a((ress la#el for each customer' an( then #o& an( ship
the or(er.
3ith the a(%ancement of technology' companies no) ha%e more tools than e%er #efore to
successfully (eploy information systems that can integrate their operations an( re(uce
processing time. 4o) (o companies #etter manage their processes5
2y integrating their systems so that all (epartments can communicate )ith one another
6inclu(ing outsi(e %en(ors7.
2y #eing a#le to trac, rele%ant (ata in real0time from #usiness processes (isperse( across
the organi+ation. This )ill help management to ma,e crucial (ecisions regar(ing
resources.
!e%ie) 8uestions
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Section 10.1 - Before You Go On

1. Define TPS.
TPS stan(s for transaction processing system. Transaction processing in%ol%es the capture'
storage' an( monitoring of (ata generate( from all #usiness transactions. These (ata are
input to the organi+ation1s (ata#ase. TPSs must han(le high %olumes of (ata' a%oi( errors'
an( pro%i(e a highly secure an( sta#le en%ironment.
2. List the key objectives of a TPS.
O#$ecti%es of a TPS are9
4an(le large %olumes of (ata
A%oi( errors
4an(le large %ariations in %olume 6pea, times7
A%oi( (o)ntime
/e%er lose results
;aintain pri%acy an( security
Section 10.2 - Before You Go On
1. What is a functional area information system? List its major characteristics.
A functional area information system is one in )hich the functionality supports one particular
area or (epartment such as 4! systems' accounting systems' mar,eting systems' an(
pro(uction systems. These systems )ere (esigne( to increase internal effecti%eness an(
efficiency. They typically (e%elope( in(epen(ently of one another' resulting in <information
silos.=.
2. Ho !o information systems benefit the finance an! accountin" functional area?
Accounting an( finance in%ol%es managing ho) money flo)s into' )ithin' an( out of
organi+ations. This mission is %ery #roa( #ecause money is in%ol%e( in all functions of an
organi+ation. Planning acti%ities in%ol%e analy+ing operational (ata to help forecast an(
pro$ect #usiness acti%ities as )ell as the #u(geting to support these acti%ities. These (ata
i(entify the amount of money that is nee(e( to finance the firm1s operations. They also
specify ho) that money can #e raise( from the financial mar,ets an( at )hat cost. These
calculations in%ol%e many transactions an( (ata points. Information systems are essential to
achie%e a le%el of automation in these acti%ities.
3. #$%lain ho P&' %ersonnel use information systems to %erform their jobs more effectively
an! efficiently.
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The pro(uction an( operations management 6PO;7 function in an organi+ation is responsi#le
for the processes that transform inputs into useful outputs an( for the operation of the
#usiness. 2ecause of the #rea(th an( %ariety of PO; functions' the chapter (iscusses only
four9 in0house logistics an( materials management' planning pro(uction an( operation'
computer0integrate( manufacturing 6CI;7' an( pro(uct life cycle management 6P";7. The
PO; function is also responsi#le for managing the organi+ation1s supply chain..
:. What are the most im%ortant H()S a%%lications?
The most important 4!IS functions are personnel a(ministration 6inclu(ing )or,force
planning' employee recruitment' assignment trac,ing' personnel planning an( (e%elopment'
an( performance management an( re%ie)s7' time accounting' payroll' compensation' #enefits
accounting' an( regulatory re.uirements.
>. Ho !oes an *+)S su%%ort mana"ement by e$ce%tion? Ho !oes it su%%ort on,!eman!
re%orts?
&ception reports inclu(e only information that falls outsi(e certain threshol( stan(ar(s. To
implement management #y e&ception' management first creates performance stan(ar(s. The
company then configures the FAIS to monitor performance 6%ia the incoming (ata a#out
#usiness transactions such as e&pen(itures7' compare actual performance to the stan(ar(s'
an( i(entify e&ceptions to the stan(ar(s. The FAIS alerts managers to the e&ceptions %ia
e&ception reports.
An FAIS system can generate on0(eman( reports #y using its fle&i#le interacti%e reporting
capa#ilities' )hich ena#le managers to .uery #y timeframes' (epartments' pro(uct lines' an(
other appropriate criteria.
Section 10.3 - Before You Go On
1. Define #(P an! !escribe its functionalities.
nterprise resource planning 6!P7 )as create( to control all ma$or #usiness processes )ith
a single soft)are architecture in real time. !P integrates all (epartment an( functional
information flo)s across a company onto a single computer system that can ser%e all of the
enterprise1s nee(s.
2. What are #(P )) systems?
!P II systems are interorgani+ational !P systems that pro%i(e 3e#0ena#le( lin,s #et)een
a company1s ,ey #usiness systems 6such as in%entory an( pro(uction7 an( its customers'
suppliers' (istri#utors' an( others. These lin,s integrate internal0facing !P applications
)ith the e&ternal0focuse( applications of supply chain management an( customer
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relationship management. Figure 10.3 illustrates the organi+ation an( functions of an !P II
system
3. Differentiate beteen core #(P mo!ules an! e$ten!e! #(P mo!ules.
!P II systems inclu(e a %ariety of mo(ules' )hich are (i%i(e( into core !P mo(ules
6financial management' operations management' an( human resource management7 an(
e&ten(e( !P mo(ules 6customer relationship management' supply chain management'
#usiness intelligence' an( e0#usiness7. As the name suggests' the core mo(els must #e
inclu(e( in all !P systems. In contrast' the e&ten(e( mo(ules are optional. Ta#le 10.2
(escri#es each of these mo(ules.
:. List some !rabacks of #(P softare.
!P systems can #e e&tremely comple&' e&pensi%e' an( time0consuming to implement.
Also' companies may nee( to change e&isting #usiness process to fit the pre(efine( #usiness
process of the soft)are. In a((ition' companies must purchase the entire soft)are pac,age
e%en if they only )ant to use a fe) of the mo(ules.
Section 10! "efore #ou $o On%
1. -om%are an! contrast the three major ty%es of re%orts.
Routine reports are pro(uce( at sche(ule( inter%als. They range from hourly .uality
control reports to (aily reports on a#senteeism rates. Although routine reports are
e&tremely %alua#le to an organi+ation' managers fre.uently nee( special information that
is not inclu(e( in these reports.
Out0of0the routine reports are calle( a&'hoc 6on0(eman(7 reports. They are create( #ase(
on )hat users nee(' )hen they nee( it.
E(ception reports inclu(e only information that falls outsi(e certain threshol( stan(ar(s.
To implement mana"ement by e$ce%tion' management first creates performance
stan(ar(s. The company then sets up systems to monitor performance 6%ia the incoming
(ata a#out #usiness transactions such as e&pen(itures7' compare actual performance to
the stan(ar(s' an( i(entify e&ceptions to the stan(ar(s.
2. -om%are an! contrast the three ty%es of on,!eman! re%orts.
)ri**'&o+n reports (isplay a greater le%el of (etail. For e&ample' a manager might
e&amine sales #y region an( (eci(e to <(rill (o)n to more (etail= to loo, at sales #y store
an( then #y salesperson.
,ey'in&icator reports summari+e the performance of critical acti%ities. For e&ample' a
chief financial officer might )ant to monitor cash flo) an( cash on han(.
Comparati-e reports compare' for e&ample' the performances of (ifferent #usiness units
or of a single unit (uring (ifferent time perio(s.
IT1s A#out 2usiness 8uestions
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IT.s A/out "usiness 101
.S+ -yclin"
1. Why !i! .S+ -yclin" nee! an inventory system?
As teams tra%ele( aroun( the )orl(' they too, supplies )ith them. 3hen teams nee(e( to
restoc, tires' seats' chains' parts' an( other items' they ha( to ta,e time to gather in%entory
information from %arious locations to (etermine )hich items they nee( to reor(er. This lac,
of information resulte( in poor planning.
2. What a!vanta"es !i! the SmartTurn system %rovi!e for .S+ -yclin"?
SmartTurn pro%i(e( an on0(eman( in%entory an( )arehouse management system that
allo)e( ?SA Cycling teams in (ifferent locations manage in%entory information in a
single system.
The system is (eli%ere( as soft)are0as0a0ser%ice 6SaaS7.
SmartTurn allo)e( cycling teams aroun( the )orl( to up(ate their in%entory so that the
home office coul( instantly see )hich supplies their %arious teams ha%e an( )hich
supplies they nee(.
IT.s A/out "usiness 100
SAP at Airgas
1. What actions !i! +ir"as take to hel% insure the successful im%lementation of S+P?
Airgas chose appro&imately 300 su#$ect0matter <e&perts= from the %arious functional
areas to i(entify )hich ne) functionalities )ere re.uire( in the SAP system.
The <e&perts= )or,e( si(e0#y0si(e )ith a 1200mem#er' full0time pro$ect team compose(
of *eloitte consultants an( Airgas e&ecuti%es.
2. What benefits !oes +ir"as e$%ect to receive from its !e%loyment of S+P?
The SAP (eployment is e&pecte( to generate #et)een @A> an( @12> million in a((itional
operating income each year' than,s to increase( sales' #etter price management' an( leaner
operating costs. Airgas e&pects to fin( a((itional #enefits as the pro$ect mo%es for)ar(.
*iscussion 8uestions
1. -onsi!er the,cha%ter o%enin" case. What are the a!vanta"es that *iel!f/$ %rovi!es for the
oners of %rofessional baseball teams? What are the a!vanta"es that *iel!f/$ %rovi!es for
%rofessional baseball %layers? +re there !isa!vanta"es for the %layers? Su%%ort your
ansers.
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Fiel(fC& is a motion0capture' or optical trac,ing system' that is (esigne( to ri( sports of the
#iases of the human eye an( .uantify the formerly un.uantifia#le art of #eing in the right
place at the right time. Sport%ision claime( that Fiel(fC& is accurate to )ithin one foot.
The system collects player mo%ement (ata an( pro(uces %alua#le information such as a
fiel(er1s reaction time' his path to the #all' the #aserunner1s spee(' an( the arc of a fly #all.
The system generates more than 2.> million recor(s per game' or 2 tera#ytes of (ata. 3hen
Fie(lfC& is installe( at all ma$or league #ase#all par,s' it )ill create a (igital catalog of
%irtually e%ery mo%ement of e%ery fiel(er at e%ery ;a$or "eague 2ase#all game.
Fiel(fC& )ill generate ne) #ase#all metrics' such as (egree0of0(ifficulty fiel(ing ratings.
Fiel(fC& )ill also ma,e coaching more precise. For e&ample' coaches )ill #e a#le to #etter
position their fiel(ers' (epen(ing on the hitter an( the pitch #eing thro)n 6e.g.' fast #all
%ersus slo) cur%e #all7. Finally' the system )ill enhance the process #y )hich clu#s e%aluate
D an( pay D their players.
Stu(ents )ill ha%e their o)n opinions on a(%antagesC(isa(%antages to players.
2. Why is it lo"ical to or"ani0e )T a%%lications by functional areas?
*ata are collecte( an( flo) through an organi+ation #ase( on the functions of the %arious
(epartments. IT systems that mirror those functions in (epartments support a smooth
operation.
1. Describe the role of a TPS in a service or"ani0ation.
Customer or(ersCre.uests are entere( into the TPS an( are then a%aila#le for the (epartment
)hich )ill han(le the or(er. *ata is passe( to other systems such as C!;' *SS' ,no)le(ge
management an( e0commerce as nee(e(.
2. Describe the relationshi% beteen TPS an! *+)S.
FAIS pro%i(es information primarily to lo)er0 an( mi((le0le%el managers in the %arious
functional areas. ;anagers use this information to help plan' organi+e' an( control
operations. The information is pro%i(e( in a %ariety of reports. Of course the reports nee( to
#e #ase( on (ata' an( that is the role of the TPS to generate the (ata from the #usiness
operations.
3. Discuss ho )T facilitates the bu!"etin" %rocess.
The #u(get allo)s management to (istri#ute resources in the )ay that #est supports the
organi+ation1s mission an( goals. 2u(geting soft)are supports #u(get preparation an(
control an( facilitates communication' re%ie) an( appro%al among participants in the #u(get
process. These pac,ages can re(uce the time in%ol%e( in the #u(get process. Further' they
can automatically monitor e&ceptions for patterns an( tren(s as )ell.
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4. Ho can the )nternet su%%ort investment !ecisions?
The internet is a massi%e repository of company an( financial information. There are se%eral
)e# sites that pro%i(e financial information an( these can #e use( #y an in%estor to ma,e
in%estment (ecisions.
5. Describe the benefits of inte"rate! accountin" softare %acka"es.
Integrate( accounting pac,ages allo) the automation of se%eral #usiness processes E e&pense
management' in%estment management' control an( au(iting' managing multiple currencies'
an( %irtual close. 2y integrating accounting )ith financial management' many %en(ors ha%e
allo)e( this automation to #e supporte(.
6. Discuss the role that )T %lays in su%%ort of au!itin".
One ma$or reason that organi+ations go out of #usiness is their ina#ility to forecast an(Cor
secure a sufficient cash flo). ?n(erestimating e&penses' o%erspen(ing' engaging in frau('
an( mismanaging financial statements can lea( to (isaster. Conse.uently' it is essential that
organi+ations effecti%ely control their finances an( financial statements. 3e (iscuss se%eral
forms of financial control ne&t. Au(iting has t)o #asic purposes9 617 to monitor ho) the
organi+ation1s monies are #eing spent' an( 627 to assess the organi+ation1s financial health.
Internal au(iting is performe( #y the organi+ation1s accountingCfinance personnel. These
employees also prepare for perio(ic e&ternal au(its #y outsi(e CPA firms.
7. )nvesti"ate the role of the Web in human resources mana"ement.
;any 4!IS applications are (eli%ere( %ia an 4! portal. Fey 4! functions are9 recruitment'
4! maintenance an( (e%elopment' an( 4! planning an( management.
!ecruitment in%ol%es fin(ing potential employees' e%aluating them' an( (eci(ing )hich ones
to hire. Companies are trying to fin( appropriate can(i(ates on the 3e#' usually )ith the
help of speciali+e( search engines. Companies also a(%ertise hun(re(s of thousan(s of $o#s
on the 3e#. Online recruiting can reach more can(i(ates' )hich may #ring in #etter
applicants. In a((ition' the costs of online recruitment are usually lo)er than tra(itional
recruiting metho(s such as a(%ertising in ne)spapers or in tra(e $ournals. After employees
are recruite(' they #ecome part of the corporate human resources pool' )hich means they
must #e e%aluate(' maintaine(' an( (e%elope(. IT pro%i(es support for these acti%ities. IT
also plays an important role in training an( retraining. Some of the most inno%ati%e
(e%elopments are ta,ing place in the areas of intelligent' computer0ai(e( instruction an( the
application of multime(ia support for instructional acti%ities. For e&ample' much corporate
training is (eli%ere( o%er the company1s intranet or %ia the 3e#. IT can also pro%i(e support
for payroll an( employees1 recor(s' #enefits a(ministration as )ell. This is ,no)n as !; E
mployee resource management.
18. What is the relationshi% beteen information silos an! enter%rise resource %lannin"?
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!P allo)s for integration of #usiness operations an( can #rea, silos #y sharing (ata from
(ifferent parts of the #usiness an( integrating #usiness processes.
Pro#lem0Sol%ing Acti%ities
1. *in!in" a job on the )nternet is challen"in" as there are almost too many %laces to look.
9isit the folloin" sites: .careerbuil!er.com; .crai"slist.or"; .linke!in.com;
.careerma".com; htt%://hotjobs.yahoo.com; .jobcentral.com; an! .monster.com.
What !oes each of these sites %rovi!e you as a job seeker?
Stu(ents prepare a list of capa#ilities for each of the sites. 2uil(ing profiles' searching for
$o#s' respon(ing to $o# a(s' e%aluate the $o# mar,et' etc.
2. #nter .sas.com an! access revenue o%timi0ation there. #$%lain ho the softare hel%s
in o%timi0in" %rices.
SAS is a statistical (ata analysis pac,age an( allo)s for a(%ance mining of (ata to help in
#usiness planning.
1. #nter .elea%softare.com an! revie the %ro!uct that hel%s ith online trainin"
<trainin" systems=. What are the most attractive features of this %ro!uct?
3hile (ifferent features may appeal to (ifferent stu(ents' trac,ing progress an( completion
an( multi format (eli%ery of the content are %ery attracti%e capa#ilities.
2. #nter .microsoft.com/!ynamics/sl/%ro!uct/!emos.ms%$. 9ie three of the !emos in
!ifferent functional areas of your choice. Pre%are a re%ort on each %ro!uct>s ca%abilities.
Stu(ent ans)ers )ill %ary #ase( on the (emo they %ie).
3e# Acti%ities
Stu(ents )ill follo) the (irections for these acti%ities an( su#mit a thoughtful report on each
1. #$amine the ca%abilities of the folloin" <an! similar financial softare %acka"es:
*inancial +naly0er <from &racle= an! -*& 9ision <from S+S )nstitute=. Pre%are a re%ort
com%arin" the ca%abilities of the softare %acka"es.
Stu(ents )ill (e%elop a report on their fin(ings
2. Surf the ?et an! fin! free accountin" softare <try .shareare.com; .rkom.com;
.tucos.com; .%asstheshareare.com; an! .freeare,"ui!e.com=. Donloa!
the softare an! try it. -om%are the ease of use an! usefulness of each softare %acka"e.
ncourage stu(ents to (o)nloa( soft)are' #ut remin( them of the security issues.
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1. #$amine the ca%abilities of the folloin" financial softare %acka"es: TekPortal <from
.teknole!"e.com=; *inancial +naly0er <from .oracle.com=; an! *inancial
'ana"ement <from .sas.com=. Pre%are a re%ort com%arin" the ca%abilities of the
softare %acka"es.
Stu(ents )ill (e%elop a report on their fin(ings
2. *in! Sim%ly +ccountin" @asic from Sa"e Softare
<.sim%lyaccountin".com/%ro!ucts/basic=. Why is this %ro!uct recommen!e! for small
businesses?
Stu(ents )ill (e%elop a report on their fin(ings
3. #nter .halo"ensoftare.com an! .successfactors.com. #$amine their softare
%ro!ucts an! com%are them.
Stu(ents )ill (e%elop a report on their fin(ings
4. #nter .iem%loyee.com an! fin! the su%%ort it %rovi!es to human resources mana"ement
activities. 9ie the !emos an! %re%are a re%ort on the ca%abilities of the %ro!ucts.
Stu(ents )ill (e%elop a report on their fin(ings
Team Assignments
Iroups )ill follo) (irections on these acti%ities an( su#mit a thoughtful report on each
1. The class is !ivi!e! into "rou%s. #ach "rou% member re%resents a major functional area:
accountin"/finance; sales/marketin"; %ro!uction/o%erations mana"ement; an! human
resources. *in! an! !escribe several e$am%les of %rocesses that reAuire the inte"ration of
functional information systems in a com%any of your choice. #ach "rou% ill also sho the
interfaces to the other functional areas.
Stu(ents )ill follo) the (irections for the group pro$ect. /ote that stu(ents might
ha%e to search the Internet to locate information systems use( in their functional area
in or(er to #etter (escri#e the interfaces to other relate( areas.
2. #ach "rou% is to investi"ate an H(' softare ven!or <&racle; Peo%lesoft <no one! by
&racle=; S+P; Lason Softare; an! others=. The "rou% shoul! %re%are a list of all H('
functionalities su%%orte! by the softare. Then each of the "rou%s makes a %resentation to
convince the class that its ven!or is the best.
To help stu(ents prepare for the presentation' set up a scenario in%ol%ing a company loo,ing to
a(opt 4!; soft)are. Suggest that each pro$ect team is )or,ing for a consultingCsoft)are
Chapter 109 Information Systems that Support Organi+ations 6:
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company. Stage the presentation as if they )ere presenting their soft)are to the company1s
e&ecuti%es as a part of the #i((ing process for the pro$ect.
1. #ach "rou% in the class ill be assi"ne! to a major #(P/S-' ven!or such as S+P; &racle;
Lason Softare; an! others. 'embers of the "rou%s ill investi"ate to%ics such as: <a= Web
connections; <b= use of business intelli"ence tools; <c= relationshi% to -(' an! to #-; an!
<!= major ca%abilities by the s%ecific ven!or. #ach "rou% ill %re%are a %resentation for the
class; tryin" to convince the class hy the "rou%>s softare is best for a local com%any
knon to the stu!ents <for e$am%le; a su%ermarket chain=.
To help stu(ents prepare for the presentation' set up a scenario )here the city has
fun(ing to promote local #usiness (e%elopment. ach pro$ect team is )or,ing for a
local company. Stage the presentation as if they )ere presenting the selecte(
technology 6i.e.' topic7 to the city1s 2oar( of Commerce as a part of the city
grantCfun(ing application process.
Closing Case
The 1o'2*y 3one
The Pro/*em
Americans loo,e( to their go%ernment to respon( .uic,ly an( forcefully. Accor(ingly' the 3hite
4ouse an( Congress sought )ays to increase the amount of intelligence (ata accessi#le to all
agents an( ,ey agencies in the form of meaningful reports. For e&ample' in a no)0famous memo
from an F2I fiel( office in Phoeni&' Ari+ona' an agent reporte( suspicions a#out ;i((le astern
men training in Ari+ona flight schools prior to Septem#er 2001. ?nfortunately' the agent1s
superiors ne%er acte( on this information. These men turne( out to #e among the HC11 hi$ac,ers.
The go%ernment1s o#$ecti%es )ere to pre%ent such lapses in the future an( to foresee future
attac,s #y consoli(ating an( sharing (ata among intelligence an( la)0enforcement agencies'
inclu(ing the CIA' the F2I' the State *epartment' the *efense *epartment' the /ational Security
Agency 6/SA7' the Transportation Security Agency 6TSA7' the *epartment of 4omelan(
Security 6*4S7' ?.S. Customs an( 2or(er Protection' the Secret Ser%ice' the ?.S. ;arshals
Ser%ice' an( the 3hite 4ouse.
The IT So*ution
The 2ush a(ministration esta#lishe( the /ational Counterterrorism Center 6/CTC7 to organi+e
an( stan(ar(i+e information a#out suspecte( terrorists from multiple go%ernment agencies into a
single (ata#ase. As a result' the /CTC face( one of the most comple& (ata#ase challenges e%er
encountere(.
The /CTC fee(s (ata to the F2I1s Terrorist Screening Center 6TSC7' )hich is responsi#le for
maintaining a (ata#ase of suspecte( terrorists. The /CTC (ata contain information on
in(i%i(uals suspecte( of ha%ing ties to international terrorism. Such in(i%i(uals appear on a
report calle( the )atch list. In turn' the F2I pro%i(es the )atch list to the TSC concerning
in(i%i(uals )ith ties to (omestic terrorism. As of mi(0200H' the )atch list containe( more than 1
million names' an( it )as gro)ing at the rate of 20'000 names per month.
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Information from the )atch list is (istri#ute( to many go%ernment agencies' among them the
TSA. Airlines use (ata supplie( #y the TSA system in their /oFly an( Selectee lists for
prescreening passengers. /oFly passengers are not allo)e( on the plane. Selectee passengers can
fl y' #ut they are su#$ect to e&tra searches an( possi#le a((itional .uestioning.
The Resu*t
James !o#inson is a retire( Air /ational Iuar( #riga(ier general an( a commercial pilot for a
ma$or airline. 4e has e%en #een certifie( #y the TSA to carry a )eapon into the coc,pit as part of
the go%ernment1s (efense program shoul( a terrorist try to comman(eer a plane. 4o)e%er' he has
trou#le e%en getting to his plane #ecause his name is on the go%ernment1s terrorist )atch list.
This means that he cannot use an airport ,ios, to chec, in' he cannot chec, in online' an( he
cannot chec, in cur#si(e. Instea(' li,e thousan(s of Americans )hose names match a name or an
alias use( #y a suspecte( terrorist on the list' he must go to the tic,et counter an( ha%e an agent
%erify that he is James !o#inson' the pilot' an( not James !o#inson' the terrorist. Prominent
la)ma,ers' inclu(ing ;assachusetts Senator ()ar( Fenne(y an( Ieorgia !epresentati%e John
"e)is' ha%e also encountere( (ifficulties )ith the )atch list.
Congress has (eman(e( that the TSC an( the TSA fi& the pro#lems )ith the list that are ma,ing
tra%el so (ifficult for so many Americans. People are consi(ere( <misi(entifie(= if they are
matche( in the TSC (ata#ase an( then' upon further e&amination' are foun( not to match. They
are usually misi(entifie( #ecause they ha%e the same name as someone in the (ata#ase.
;isi(entifications typically lea( to (elays' intensi%e .uestioning an( searches' an( misse(
flights.
;ore than 30'000 airline passengers )ho ha%e #een misi(entifie( ha%e as,e( the TSA to ha%e
their names cleare( from the )atch list. The pro#lem has #ecome so se%ere that the *4S
(e%elope( the Tra%eler !e(ress In.uiry Program' or T!IP. The purpose of this program is to
clear people )ho are routinely su#$ecte( to e&tra airport security screening an( e%en (etention
simply #ecause their names are confuse( )ith those on the )atch list.
?nfortunately' the num#er of re.uests to T!IP is more than 2'000 names per month. That
num#er is so high that the *4S has #een una#le to meet its goal of resol%ing cases in 30 (ays.
4uestions
1. )s the atch list %ro"ram a success or a failure? Su%%ort your anser.
Something nee(e( to #e (one after the attac,s. This is a solution an( can pre%ent attac,s.
4o)e%er as )ith any system' it can ha%e pro#lems an( they nee( to #e )or,e( out.
2. +re the %roblems ith the atch list the result of technolo"y? )f so; ho? )f not; hat is the
cause of the %roblems ith the atch list? Su%%ort your anser.
Partially' as names are not the )ay to uni.uely i(entify a person. People are consi(ere(
<misi(entifie(= if they are matche( in the TSC (ata#ase an( then' upon further e&amination'
are foun( not to match. They are usually misi(entifie( #ecause they ha%e the same name as
Chapter 109 Information Systems that Support Organi+ations 6:
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someone in the (ata#ase. ;isi(entifications typically lea( to (elays' intensi%e .uestioning
an( searches' an( misse( flights. ;ore than 30'000 airline passengers )ho ha%e #een
misi(entifie( ha%e as,e( the TSA to ha%e their names cleare( from the )atch list. The
pro#lem has #ecome so se%ere that the *4S (e%elope( the Tra%eler !e(ress In.uiry
Program' or T!IP to clear people.
Ilossary
a&'hoc 5on'&eman&6 reports /onroutine reports that often contain special information
that is not inclu(e( in routine reports.
/atch processing TPS that processes (ata in #atches at fi&e( perio(ic inter%als.
comparati-e reports !eports that compare performances of (ifferent #usiness units or time
perio(s.
computer'integrate& manufacturing 5CI76 An information system that integrates
%arious automate( factory systems.
&ri**'&o+n reports !eports that sho) a greater le%el of (etail than is inclu(e( in routine
reports.
enterprise app*ication integration 5EAI6 system A system that integrates e&isting systems #y
pro%i(ing layers of soft)are that connect applications together.
enterprise resource p*anning 5ERP6 system Information system that ta,es a #usiness
process %ie) of the o%erall organi+ation to integrate the planning'
management' an( use of all of an organi+ation1s resources' employing a
common soft)are platform an( (ata#ase.
ERP II systems Interorgani+ational !P systems that pro%i(e that pro%i(e 3e#0ena#le(
lin,s #et)een ,ey #usiness systems 6such as in%entory an( pro(uction7 of
a company an( its customers' suppliers' (istri#utors' an( others.
e(ception reports !eports that inclu(e only information that e&cee(s certain threshol(
stan(ar(s.
functiona* area information systems 52AISs6 A system that pro%i(es information to
managers 6usually mi(0le%el7 in the functional areas' in or(er to support
managerial tas,s of planning' organi+ing' an( controlling operations.
8ey'in&icator reports !eports that summari+e the performance of critical acti%ities.
on*ine transaction processing 5O9TP6 TPS that processes (ata after transactions occur'
fre.uently in real time.
Chapter 109 Information Systems that Support Organi+ations 6:
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routine reports !eports pro(uce( at sche(ule( inter%als.
trans'/or&er &ata f*o+ The flo) of corporate (ata across nations1 #or(ers.
transaction Any #usiness e%ent that generates (ata )orth capturing an( storing in a
(ata#ase.
transaction processing systems 5TPSs6 Information system that supports routine' core
#usiness transactions.