information systems and management in business chapter 4 using information systems in business...
TRANSCRIPT
Information systems and management in business
Chapter 4Using Information Systems in Business Operations
4.1 Business Fundamental Concepts Overview
What is a business Basically an organization which is
engaged in commercial, industrial or professional activities
For-profit Non- profit
Generally, a business orientated organization is engaged in either making physical products or delivering services
4.1 Business Fundamental Concepts Overview
Business Revenue, Expenses and Profit Revenue : money generated through
the selling of products or services Expenses: The cost incurred as a result
of making products or delivering services
Profit : The variance between revenue and expenses
4.1 Business Fundamental Concepts Overview
Business Types manufacturing business
Wholesale Retail Distribution
Service business or service industry
4.1 Business Fundamental Concepts Overview
Business Organization The process of organizing the various activities
surrounding producing and selling products and delivering services into individual functional business areas
Individual functions have sets of goals and responsibilities associated with it
The sales and marketing function handles promotional and sales activities of the
finished manufactured products Collectively these functions results in what is
known as an organizational chart
4.2 Increasing business operation’s efficiencies
Business efficiency In one sense, when talking about
business efficiency, we are primarily comparing the speed in which the activities are carried out relative to the resources available to it
In another sense the comparison involves the cost of the transaction
4.2 Increasing business operation’s efficiencies
A typical business transaction An order entry process
At least four business functions are involved in the completion of the process
Marketing, Finance, Warehouse and manufacturing
The process is likely to be automated through functional specific information systems
Fragmenting process completion in this way creates an efficiency, cost effectiveness and accuracy challenges
Effective deployment of information systems can help to manage such challenges in a very beneficial way
Automating the entire order entry business process
4.3 Information Systems Approaches to Supporting Business Operations
Three widely deployed approaches Automating individual functional business
areas Functional specific information systems Marketing or HR systems
Automating an entire business transaction Transaction processing systems (TPSs)
Automating an entire business processes Enterprise resources planning (ERP)
4.4 Transaction Processing Systems (TPSs)
Business Transaction Overview In a business setting, transactions are
repetitive events (activities) that take place as a result of doing business
Processing a customer order Paying employees
Business transaction tends to generate a wealth of business data
The manual processing of such information is time challenging
Accuracy, efficiency, cost, etc..
4.4 Transaction Processing Systems (TPSs)
Transaction Processing Systems Definition A special type of information systems which
are most suited to dealing with repetitive business activities - processes
The system is geared for the collection, storage, modification and retrieval of business data which is associated or required to complete a business transaction or process
4.4 Transaction Processing Systems (TPSs)
Transaction Processing System Architecture The architecture involves three basic
functions Input function, the processing function
and the output function
4.4 Transaction Processing Systems (TPSs)
Input function Facilitates data entry, capturing and validation Typically when a business transaction occurs, a
document describing the nature of the transaction is generated and it is usually called the source document
Source document forms the foundation for the data submitted to the input function
Source document submission approaches Manual Semi-automated Fully automated
4.4 Transaction Processing Systems (TPSs)
The Processing Function (PF) Generally, the end-of-data entry (source
document presentation) activates the processing function
The PF would typically involve a complicated piece of computer programming which is used in order to accomplish a number of programming tasks
Computation Decision making Database communication, data storage, and
data retrieval
4.4 Transaction Processing Systems (TPSs)
The Output Function Transaction processing systems
presents their output to the system’s user or operator in either a printed or screen display format
The output data is usually delivered in a style which user friendly and easily comprehendible
4.5 Transaction Processing Systems Examples
Examples of widely implemented transaction processing systems
Inventory Management Sales Order Entry systems Payroll Account Receivable and Account
Payable General Ledger Purchasing
4.5 Transaction Processing Systems (PIS) Examples
A Purchasing Information System Material requisition is a very common and frequent
activity in many organizations This kind of activity typically involves the participation and
co-operation of many business functions in order to complete the purchasing transaction
A purchasing system is typically used to keep track of suppliers, identify and select the appropriate supplier and prepare purchase orders
The purchasing information system key activities Facilitating and capturing the order data as entered by the
system operator Processing the order
Checking funds availability and committing it to the order Updating account payable Logging order details
4.5 Transaction Processing Systems Examples
PIS Advantages Significantly reduces the transaction
processing time and paper work Helps to enforce business rules
Permitting purchasing from only approved suppliers
Managing and controlling the purchasing budget
Ensures that the requesting department has enough funds to be committed to the transaction prior to issuing the order
4.6 Functional Information Systems (FISs)
FISs Overview Cross functional information systems are not
designed to serve the overall and specific functional requirement of a business
A cross functional information system such as an order entry would serve the accounting function requirement
Examples of business functional areas in which information systems are widely implemented
Finance Marketing Information services Manufacturing Human resources Accounting
4.6 Functional Information Systems (FISs)
Marketing Information Systems Marketing definition
Institute of Marketing (CIM) defines it as “Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably”
Marketing Information Systems key activities Collection, analysis and making available relevant marketing
information that aids the marketing decision making process In general there are a number of individual information
systems that are specifically designed to assist companies to significantly increase the overall efficiency of the marketing function
The current trend is to develop a more integrated system approach to supporting the marketing needs that is centered on the customer
Customer relationship management (CRM) and SFA are cases in point
4.6 Functional Information Systems (FISs)
Accounting Information Systems (AIS) Basically accounting information
systems employ information technology in conjunction with traditional accounting controls and methods in order to deliver financial information necessary to help users manage their organization [7]
4.6 Functional Information Systems (FISs)
Manufacturing Information Systems The primary objectives of a manufacturing
function are the planning, designing and the production of new products
a manufacturing process involves a number of complicated steps
Product planning and designing, planning the parts required by the manufacturing process, scheduling the use of manufacturing machinery, managing production inventories, automating the use and operation of manufacturing machinery and so on
4.6 Functional Information Systems (FISs)
Manufacturing Information Systems examples Computer aided manufacturing - CAM Computer aided design - CAD Material requirements planning - MRP Just in time inventory management
4.6 Functional Information Systems (FISs)
Human Resources Information - HRI Systems Key objectives are
Help organizations manage their HR function’s activities in an effective and efficient manner
HRI typical usage examples Manage employee’s recruitment process and
keep track of applicant’s applications Analyze employee on the job performance Keep track of employee skills Manage employment termination Manage employee’s benefits and
compensation
4.6 Functional Information Systems (FISs)
Financial Information Systems Definition – defined by the Investor
dictionary.com as “An information system, comprised of one
or more applications, that is used for any of the following: collecting, processing, maintaining, transmitting, and reporting data about financial events; supporting financial planning or budgeting activities; accumulating and reporting cost information; or supporting the preparation of financial statements”
4.6 Functional Information Systems (FISs)
Financial Information Systems examples Capitol budgeting Cash management Credit management Investment management Financial planning and forecasting
Chapter 3 Knowledge Enhancement and Consolidation Tools and Exercises
Visit the book’s Web site www.halaeducation.com & select module 4
Perform Chapter 4 associated demo and case study through their respective demo and case Studies Links
Chapter 3 Problems Solving Skills Development
Visit the book’s Web site www.halaeducation.com & select module 4
Perform Chapter 4 associated skills development through their respective skills development exercises link
Chapter 3 Balancing Knowledge to Practice
Visit the book’s Web site www.halaeducation.com & select module 4
Perform Chapter 4 associated Balancing Knowledge to Practice project through its respective Hands on Project Link