Transaction Processing System (TPS) Selection Report, ICT100, 2019

This report analyzes a case study for XYZ Company, which requires a new Transaction Processing System (TPS) to gain a competitive advantage. The report evaluates four TPS options (TPS1, TPS2, TPS3, and TPS4) based on data analysis, including transaction counts, system errors, and profit calculations. The report discusses the importance of information systems for competitive advantage, the process of TPS selection, and the significance of data presentation. The analysis uses data provided in an Excel sheet, and the report recommends TPS 2 as the optimal choice due to its high accuracy and low error rate, despite having fewer transactions than TPS 3 and TPS 4. The report concludes that TPS 2 is the best choice for the company to achieve higher accuracy, quality of services, and a competitive advantage.

FOUNDATIONS OF INFORMATION SYSTEM
ASSESSMENT 2
STUDENT ID:
[Pick the date]
1

Table of Contents
Introduction......................................................................................................................................2
Transaction Processing System Selection.......................................................................................2
TPS 1...............................................................................................................................................2
TPS 2...............................................................................................................................................2
TPS 3...............................................................................................................................................2
TPS 4...............................................................................................................................................3
Importance of data presentation.......................................................................................................3
Conclusion.......................................................................................................................................4

Introduction
The modern world has witnessed a information technology revolution owing to which
there has been a sea change in the business practices in the recent years. There has been
displacement of capital by information as the most vital resource which requires prudent
management through the use of information systems. The usage of these information systems is
necessitated by the vast amount of data that is being generated by organizations that require
processing on a regular basis. Infact, it is no longer an option for businesses but a necessity since
it has emerged as a significant source of competitive advantage for organizations globally.
The use of information systems in the modern context is quite varied considering that it enables
delivery of products and services as a lower cost based on automation which tends to produce
significant cost savings as economies of scale are realized. Also, these systems are quite useful in
customer relationship management with the existing clients through prompt two way feedback
which helps in bringing constant improvements in the product or service based on dynamic
consumer needs. Also, considering the scale of operations of modern organizations which are
essentially global in reach, prudent management of product diversification and system
integration is required for effective business operations. Further, information systems play a
crucial role in management of partners coupled with creating prospective leads through data
analytics of data collected with regards to consumer behavior (Flick, 2015). In the near future, it
is likely that the trend would become more common owing to which the capabilities and uses of
information systems would rise. In wake of the above background, the objective of the current
report Is to enable the XYZ company into choosing the relevant transaction processing system.
Transaction Processing System Selection
A crucial role is played by transaction processing system with regards to provide security
to the transaction along with ensuring that peer to peer connectivity is effective. It also serves
other purposes ranging from customer locking, partner trust, enhanced connectivity to suppliers
and availability of a vast product variety under a single roof. This is particularly useful for
managing relationships in a seamless manner with various stakeholders by using internet as an
enabling tool (Eriksson and Kovalainen, 2015).

TPS 1
Taking into consideration the data provided, it can be witnessed that for TPS 1, total
transaction count is 1,000. Also, the number of reentries that are required on account of various
system errors amount to 89. As a result, the total effective transactions that actually took place
without the need of system reentry amount to (1000—89) = 911. For computation of the total
blocks, this number of effective transactions is divided by 50. Assuming that a given day has 8
hours of transaction, per day blocks has been computed which has been calculated as 2.78. The
profit therefore works out to be $227.75.
TPS 2
Taking into consideration the data provided, it can be witnessed that for TPS 2, total
transaction count is 1,200. Also, the number of reentries that are required on account of various
system errors amount to 4. As a result, the total effective transactions that actually took place
without the need of system reentry amount to (1200—4) = 1196. For computation of the total
blocks, this number of effective transactions is divided by 50. Assuming that a given day has 8
hours of transaction, per day blocks has been computed which has been calculated as 2.99. The
profit therefore works out to be $358.83 (Flick, 2015).
TPS 3
Taking into consideration the data provided, it can be witnessed that for TPS 3, total
transaction count is 1,400. Also, the number of reentries that are required on account of various
system errors amount to 195. As a result, the total effective transactions that actually took place
without the need of system reentry amount to (1400—195) = 1205. For computation of the total
blocks, this number of effective transactions is divided by 50. Assuming that a given day has 8

hours of transaction, per day blocks has been computed which has been calculated as 3.01. The
profit therefore works out to be $406.69 (Eriksson and Kovalainen, 2015).
TPS 4
Taking into consideration the data provided, it can be witnessed that for TPS 4, total
transaction count is 1,800. Also, the number of reentries that are required on account of various
system errors amount to 37. As a result, the total effective transactions that actually took place
without the need of system reentry amount to (1800—37) = 1763. For computation of the total
blocks, this number of effective transactions is divided by 50. Assuming that a given day has 8
hours of transaction, per day blocks has been computed which has been calculated as 4.41. The
profit therefore works out to be $661.13.
Importance of data presentation
The importance of data presentation is crucial for prudent decision making by the
management of the businesses which can be illustrated through the given problem of choosing
the best transaction processing system from the choices present. The relevant table and chart are
presented below (Hillier, 2016).

TPS1
27%
TPS2
1%
TPS3
60%
TPS4
11%
System Errors
It is known that the TPS selection needs to be based on total transactions and system errors
which are the two determining factors. With regards to the total transactions, it is apparent that
TPS 4 has the maximum number of transactions at 1800. With regards to the system error, the
pie chart clearly indicates that only 1% of the errors are contributed by TPS 2. Even if the
difference in number of transactions is considered, it is apparent that the error rate is only 0.33%.
As a result, this would prove to be an optimum choice for the company going forward (Taylor
and Cihon, 2017). Through this example it is evident that a vital role can be played by accurate
data representation in the context of making key decisions.

Conclusion
Based on the above discussion using the relevant computations in relation to the four
alternative TPS choices, it has come to light that TPS 2 would be the ideal selection for the XYZ
company. This is despite the fact that the total transactions handled by this TPS are lesser than
TPS 3 and TPS 4. But considering the high accuracy with less than 0.5% error rate, it augers well
for the future of the company since it would result in higher accuracy and quality of services.
This would also lead to competitive advantage for the company in the medium to long term.

References
Eriksson, P. and Kovalainen, A. (2015) Quantitative methods in business research. 3rd ed.
London: Sage Publications.
Flick, U. (2015) Introducing research methodology: A beginner's guide to doing a research
project. 4th ed. New York: Sage Publications.
Hillier, F. (2016) Introduction to Operations Research. 6th ed. New York: McGraw Hill
Publications.
Taylor, K. J. and Cihon, C. (2017) Statistical Techniques for Data Analysis. 2nd ed. Melbourne:
CRC Press.