Analyzing Value of an IS

Transaction Processing Systems (TPS) are used by all companies because it’s used to record business transactions.  Its value to a company is that it performs major tasks in the areas of payroll, inventory, invoices, and supplies.  These types of transactions used to be done by a person but now they are done by a TPS.  The payroll systems was one of the earlier systems brought into the business world.  At first the system dealt with very routine and easy tasks then the system was adapted to do more with the information it was provided.  The main components of the payroll system are the input, the processing, and the output.  In the beginning the input was the hourly pay rate of the employee and the number of hours the employee worked that week.  They system would process the information and the output would be the employees paycheck.  Over time the system was upgraded and it was now able to take the information it was given about the employee and produced reports that were needed by agencies such as the IRS.  But the TPS is also of great value to a company in its inventory management, they need to see what the customer is demanding.  The inventory management system starts off with the amount of each product that has been made and has been shipped to your store or stores.  When a customer purchases a product that information is sent to the inventory system and the output is how many the company now has left in stores.  The system will also provided feedback as too what is still on the shelves and what is selling fast so the company can either choose to slow production or increase production of a product.  Both of these TPSs are vital to a company and its success.