TRANSACTION PROCESSING SYSTEMS 1

TRANSACTION PROCESSING SYSTEMS

Name

Institution

Date
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Executive Summary
Osaka Flower Coffee shop with an aim to deal with the money loss, employee slacking and other
causes which are making the company to experience a decline, there is a need to dig deeper on
the type of transaction processing system to put in place in order to deal with these problems.
The report presents the analysis of the problem in the company showing that despite flocking
with customers, the company is still making losses. Although the installation of these systems
requires huge investment, the benefits accrued with it cannot be overlooked and therefore there is
need to implement and bring in the system which will help in controlling every transaction
taking place. For the effectiveness of TPS, there is a need to integrate it with existing systems.
This includes punching every order made by the customers, integration of accounting systems
and also using front end user systems in tracking transactions. Several risks have been identified
including security threats, program failure, lack of skilled personnel, theft among others. Vendor
involvement, as well as the collaboration of TPS with other processes in solving the issues in the
shop, has been analyzed. The study recommended that

Table of Contents
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Executive Summary.........................................................................................................................2

Contents...........................................................................................................................................3

Introduction......................................................................................................................................4

Problem analysis..............................................................................................................................4

Available options for Duy...............................................................................................................4

Mini business case of transaction processing system......................................................................5

Making Transaction Processing System (TPS) Work with the Existing Structure.........................6

Order Punching............................................................................................................................6

Integration of Accounting Systems..............................................................................................7

Front end program........................................................................................................................7

Involvement of vendors...................................................................................................................7

Risk to consider...............................................................................................................................8

Transaction Processing Systems in solving problems.....................................................................8

Conclusion/ recommendations.........................................................................................................9

References......................................................................................................................................10

Introduction
Many coffee shops in today’s world are facing the problem of decline in the profit margin due to
the acts done by their staffs or increase in competition. Some business usually faces a situation
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where there is no decline in the number of customers who come to buy products from the shop
but the accounting shows that the business is suffering losses, this is usually caused by the
infidelity of the staffs employed to work in the coffee shops where they are able to steal money
without being noted due to the weak systems that are used (Liebman and Liebman Todd, 2013).
For this reason, the coffee shops are adopting the use of transaction processing system (TPS)
which is capable of recording all transactions and keep them in the database and this usually
helps in tracking all the transactions which have taken place thus reducing theft and staff
slacking. TPS has both the benefits and risks associated.

Problem analysis
In our case study, the problem that is facing the Osaka Flowers Coffee shop is that regardless of
the business showing no decline in the number of the customers attending the shop this business
is making losses which are escalating per every month. Even though new staffs are employed it
seems the condition is still worsening, also staffs are training but no signs of improvement. After
an analysis of the situation, Duy believed that the problem must be caused by theft mainly from
the shop cashiers and slacking of the employees and thus he must decide on the implementation
of a transaction processing system that will cater to this problem in order to lessen the cases of
this coffee shop being closed in future. If the system is installed, then the business may benefit
and the cases of theft maybe are reduced but also Duy is not sure whether it is only theft or also
other factors that are leading to this decline.

Available options for Duy

Duy has to make a decision on whether to implement the transaction processing system or
continue with the existing system. If he decides to continue with the existing system, the
business will be in a risk of failing hence closing down in future and thus the best option to take
is implementing the TPS system though he will be faced by some cost that is associated with the
system ((Coutts et al, 2017). If he decides to implement the system, he will gain the benefit of
tracking the thousand and thousand transactions that will be registered by the system thus
reducing the theft cases as Duy will be able to know who was responsible at that time and to
whom the money was paid and how much was paid to that staff. The system will also provide
adequate storage that will aid to store a large amount of data that will be fed thus providing a
good database.
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The information can be retrieved when the need arises or during the auditing to ensure that the
business knows where the money may be leaking. The system will be able to process and
printing receipts that can be used as evidence, this system also aids in shipping out an order to
the customer and thus automating all the transactions. The customers can be able to order coffee
online thus increasing the profit margin via the online business. The cost of buying this software
is much high and thus this makes the use of this software in coffee shops not to be able to utilize
the system fully due to its extensive capabilities. This software like any other is prone to security
threats and breaches where it can be hacked or be infected by the viruses leading to loss of more
valuable information (Bodnar and Hopwood, 2014).

Mini business case of transaction processing system

Cost Analysis

Category Item Quantity Price Total

labor direct labor 8 $50 $400
indirect labor 5 $30 $150
hardware computer 5 $100 $500
user workstations 3 $20 $60
server system 1 $20 $20
anti-virus software 2 $10 $20
installation cable 10 $13 $130
software license 1 $3 $3
secure network printers 2 $6 $12
system training system overview 5 $7 $35
software 1 $3,965 $3,965
tool 5 $15 $75
Total cost $5,370
Benefits Analysis
processing $1,000
cost saving $2,000
storage $1,000
workflow efficiency $1,500
good quality database $1,000
better customer retention $500
reducing theft $2,000
time saving $1,500
accountability $2,000
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Total benefits $12,500

Making Transaction Processing System (TPS) Work with the Existing Structure
Osaka Flowers coffee shop in an attempt to solve the existing problem have to ensure that their
structure gets in line with the TPS to be implemented and this includes the integration of several
processes within the firm. This will begin from the transactions taking place in the acquisition of
materials up to the cash received from customers and this will be divided into several
transactions where every transaction will be processed by the implemented TPS (Krouse et al,
2016). TPS, when integrated with other processes in the company, will ensure efficient and
effective processes while conducting day to day operations and thus will help Duy to deal with
the challenges he thinks are the reasons for the poor performances in the shop (Rable, Osaka
Flowers Inc, 2018).

Order Punching
With TPS collaborating with other infrastructure, it will ensure that order punching is done with
every order being punched for proper referencing and tracking. The system works by punching
orders requested by customers. This will also involve contact details of customers such as
telephone number and addresses which will be stored in the system. This will be useful as it will
provide necessary information about the customer and their history with the shop and this will
necessitate the company in making arrangements of offering loyal customers with discounts,
promotions and other offers which will make customers repeat business with the shop (Coutts et
al, 2017).

Integration of Accounting Systems

The transactions taking place in the accounting processes will be recorded in the transaction
processing system for easier follow up and traceability. These processes include profits
computation, costs of goods sold, details relating to sales, wastage among others. Integrating the
processes with the TPS will be crucial as it will ensure that every process is tracked and every
transaction is accounted for (Coutts et al, 2016). The recording with this system is made in
relation to the real sales in the store. Several TPS such as high jump and point of sales can be
integrated to ensure that the company tractions are properly documented and in controlling the
general cost of supplies made which will consequently raise the profit of the organization. point
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of sale, for example, will enable the integration of several management accounting processes
including the cash collected and management of inventories thus improving organizational
profitability (Gray and Reuter, 2015).

Front end program

The program entails an application code which allows for the interaction of the customer's device
with the company the customer is intending to receive services from. The system is designed in
such a way that the customer through their devices can send and receive menus and forms from
which they can select the type of services they want. There are available options in the system
which including the company offerings including the type of services and products from where
the customers can select the best-suited services they require. Through validation of the request
made, the shop attendants can then access the requested order and deliver. The transactions made
through TPS are useful in ensuring that the right order is delivered and transactions as well are
recorded (Bodnar and Hopwood, 2014).

Involvement of vendors
Business must consider the vendors of the Transaction processing system to ensure that they
have alternatives from where they can source the system. They should consult the employees to
make sure that they come up with many alternatives from which they can choose to source from.
The transaction process system software’s system chosen must be able to match the business
needs (O'brien and Marakas, 2015). It must be able to solve the problem for which it was
intended. the business is responsible for evaluating a vendor who will be able to supply the
required system with the minimum cost possible. the price of the system should not be too much.
the type of the operating system that the software will be installed upon must be user-friendly to
enhance the operations. the supplier should be having a good reputation and have an experience
in such software. the best vendor should be selected after a thorough examination of the
capabilities (Rable, Osaka Flowers Inc, 2018).

Risk to consider
Risk must be considered by any business before the implementation of any system, this is
because a system may incur more cost that a business may fail to recover. some systems are too
much expensive for small businesses due to their extensive capabilities. the risk associated with
the transaction processing system (TPS) includes the risk of security ((Gray and Reuter, 2015).
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Many systems are prone to attacks viruses and other malware. due to the system being handled
by many users it is prone to data alteration or deletion and thus it may fail to offer the purpose
for which it was installed to offer. some system errors are also risk associated and also the
problem of network. another risk to consider is the attitude the system will create to the staff or
the employees' program failure is another risk to consider where the program may fail to execute
the assignment as it was intended. this may increase the cost rather than lowering the cost
(Coutts et al, 2017).

Transaction Processing Systems in solving problems

Considering the issues in the Osaka flowers coffee shop, TPS with the help of other factors will
manage to handle the issues in the company but alone, TPS would not manage to handle the
issues. TPS hold large amounts of private information which is critical to both the business and
their stakeholders. With this information in the systems, TPS may face security threats from
hackers who might access confidential information about the company and this might affect the
company negatively (Haigh, Executone Information Systems Inc, 2018). For this reason, there is
a need to employ experts with extensive knowledge in the information technology to install
antiviruses, firewalls, and other mechanisms to prevent data from unauthorized access. In
collaboration with security guards who will prevent theft of the systems, TPS will operate
effectively and thus enhance the organization to track down all the transactions taking place in a
cost-effective manner (O'brien and Marakas, 2015).

The competition is very stiff in the market environment where Osaka Flowers coffee is operating
in. There exist over 30 coffee shops in the market and there are two key competitors of Osaka
Flowers company. TPS alone cannot help deal with the rising competition in the market place
(Pitta et al, 2016). Since there is a need to increase the market share and outdo the competitors,
Osaka have to ensure their employees are well rewarded so that they can deliver superior
services to the customers. Also, there is need to recruit qualified personnel and train the existing
one in order to gain skills and competencies required to drive the organization in realizing its
objectives as this will consequently lead to improved performance and profitability. TPS will be
useful in enabling tracking of every transaction made in the company and this will help in
reducing the loopholes of money loss (George and Haritsa, 2017).
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Conclusion/ recommendations
In conclusion, Osaka flowers coffee shop should install transaction processing system to deal
with the problem of theft and slacking. If Duy uses the TPS, he will be able to manage the coffee
shop more effectively thus he will be able to prevent the Osaka flowers coffee shop cashiers
from stealing money and will reduce slacking through the use of biometrics to clock in which
will reduce the cases of absenteeism which will aid in curbing unnecessary costs which are
leading to increasing in losses. if they fail to implement this system the business may continue
suffering losses and can cause it to close in the future as it will not be able to survive in the
market. it should be recommended that Duy should use the system to ensure accountability in the
business (Krouse et al, 2016). TPS will ensure that all these problems are prevented as Duy will
be able to track the transactions hence he will be able to control the cashiers from stealing money
from the business.

TPS leads to expansion of the online business thus increasing profits of the coffee shop. if they
use the software, they will be able to record the many transactions in the database and thus they
will be able to retrieve the information as per the need arises. this system once installed they will
be processing and recording receipts that are much helpful and much used to trace transactions
and also which act as an evidence that the transaction took place (Bodnar and Hopwood, 2014).
The business should also focus on the other factors such as the competition from other
businesses in the area such as the Truing Nguyen. this is to ensure that they solve all the
problems but not solving one and leaving another problem. TPS will automate the process thus
will hinder the cases of infidelity and thus may improve the condition if truly the problem was
caused by infidelity from the cashiers.
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REFERENCES
Bodnar, G.H. and Hopwood, W.S., 2014. Accounting lnformation Systems.

Coutts, M.G. and Dove, L.G., NCR Corp, 2016. Transaction processing systems. U.S. Patent
7,912,914.

Coutts, M.G. and Dove, L.G., NCR Corp, 2017. Transaction processing systems. U.S. Patent
6,311,165.

George, B. and Haritsa, J., 2017, June. Secure transaction processing in firm real-time database
systems. In ACM SIGMOD Record (Vol. 26, No. 2, pp. 462-473). ACM.

Gray, J. and Reuter, A., 2015. Transaction processing: concepts and techniques. Elsevier.

Haigh, S.P., Executone Information Systems Inc, 2018. Transaction processing system and
method. U.S. Patent 5,793,861.
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Krouse, L.J. and Strovink, E.F., PayStation America Inc, 2016. Financial transaction processing
systems and methods. U.S. Patent 6,097,834.

Liebman, T., Liebman Todd S., 2013. Automated self-service ordering system and method of use.
U.S. Patent Application 09/883,043.

O'brien, J.A. and Marakas, G.M., 2015. Introduction to information systems (Vol. 13). New York
City, USA: McGraw-Hill/Irwin.

Pitta, D., Franzak, F. and Fowler, D., 2016. A strategic approach to building online customer
loyalty: integrating customer profitability tiers. Journal of consumer marketing, 23(7),
pp.421-429.

Rable, G., Osaka Flowers Inc, 2018. Transaction processing systems and methods. U.S. Patent
7,331,518.