unit 8 financial information systems; manufacturing information systems; marketing information...
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Unit 8Financial Information Systems;Financial Information Systems;
Manufacturing Information Systems;Manufacturing Information Systems;Marketing Information Systems;Marketing Information Systems;
&&Human Resources Information SystemsHuman Resources Information Systems
MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell
1-1
Appendix DFinancial Information Systems
MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell
D-2
Users of Financial Users of Financial InformationInformation
Internal usersInternal users– ManagersManagers– NonmanagersNonmanagers
Environmental usersEnvironmental users– Those with direct business relationshipsThose with direct business relationships– Those with no direct relationshipsThose with no direct relationships
D-3
Financial Information Financial Information SystemsSystems
CBIS subsystem that provides information to CBIS subsystem that provides information to persons and groups both inside and outside the persons and groups both inside and outside the firm concerning the firm’s financial mattersfirm concerning the firm’s financial matters
Information typeInformation type– Periodic and special reportsPeriodic and special reports– Results of mathematical simulationsResults of mathematical simulations– Electronic communications Electronic communications – Advice of expert systemsAdvice of expert systems
D-4
Database
Accountinginformation
system
Internal audit
subsystem
Financialintelligencesubsystem
Forecastingsubsystem
Fundsmanagementsubsystem
Controlsubsystem
Internal sources
Environmentalsources
Inputsubsystems
Outputsubsystems
Users
Data Information
A Model of a Financial Information SystemA Model of a Financial Information System
D-5
Prewritten Financial SoftwarePrewritten Financial Software
More prewritten software exists for the More prewritten software exists for the financial area than any otherfinancial area than any other
Most is accounting in natureMost is accounting in nature Both general business and personal Both general business and personal
productivity softwareproductivity software
D-6
Accounting Information Accounting Information SubsystemSubsystem
The foundation upon which all information-The foundation upon which all information-oriented CBIS are built oriented CBIS are built – Who did what?Who did what?– When?When?– Where?Where?– How much?How much?
D-7
Internal Audit SubsystemInternal Audit Subsystem
InternalInternal– Audit committee Audit committee
» Probably includes the CFOProbably includes the CFO
» Director of internal auditingDirector of internal auditing
External auditorsExternal auditors Importance of objectivityImportance of objectivity
D-8
ChiefExecutive
Officer
Director ofInternalAuditing
Internal Auditing
Department
Audit Committee
Board of Directors
Position of Internal Auditing
in a Firm
D-9
Types of Auditing ActivityTypes of Auditing Activity
Financial auditingFinancial auditing Operational auditingOperational auditing
– Adequacy of controlsAdequacy of controls– EfficiencyEfficiency– Compliance with company policyCompliance with company policy
Concurrent auditingConcurrent auditing Internal control systems designInternal control systems design
D-10
Internal Auditor as a Internal Auditor as a Member of the CBIS TeamMember of the CBIS Team
Required knowledge and skills of auditorsRequired knowledge and skills of auditors– Not always accounting-relatedNot always accounting-related
Senior management attitude makes a Senior management attitude makes a differencedifference
D-11
1%1%
10%10%
40%40%
100%100%
500%500%
1200%1200%
4000%4000%
RequirementsRequirements
DesignDesign
DevelopmentDevelopment
Module testingModule testing
Integrated testingIntegrated testing
ImplementationImplementation
Operation/maintenanceOperation/maintenance
ConceptualizationConceptualization
Rel
ativ
e C
ost
of
Rel
ativ
e C
ost
of
Fix
ing
a D
efec
tF
ixin
g a
Def
ect
Escalating Cost of Correcting Design Errors Escalating Cost of Correcting Design Errors as the SDLC Progressesas the SDLC Progresses
D-12
Financial Intelligence Financial Intelligence SubsystemSubsystem
Represents the firm in establishing two-way Represents the firm in establishing two-way links with:links with:
Stockholders or ownersStockholders or owners Stockholder relations departmentStockholder relations department
– Annual meetingsAnnual meetings– Annual reportsAnnual reports– Quarterly reportsQuarterly reports
D-13
Financial Intelligence Financial Intelligence Subsystem [cont.]Subsystem [cont.]
Financial community-Financial community-
Indirect influence from the Indirect influence from the government government
Sources of financial intelligence:Sources of financial intelligence:– Word of mouthWord of mouth– PeriodicalsPeriodicals– Computer databasesComputer databases
Environmental influence on the money flowEnvironmental influence on the money flow
D-14
Forecasting SubsystemForecasting Subsystem
One of the oldest mathematical activities in businessOne of the oldest mathematical activities in business– Rely on past dataRely on past data
– Make semistructured decisionsMake semistructured decisions
– Cannot be perfectCannot be perfect
Short-term forecasts Short-term forecasts – One to three yearsOne to three years
– May be done by marketingMay be done by marketing
Long-term forecasts Long-term forecasts – Usually done by finance, or special planning groupUsually done by finance, or special planning group
D-15
Forecasting MethodsForecasting Methods
Nonquantitative (qualitative)Nonquantitative (qualitative)– Panel consensusPanel consensus– Delphi methodDelphi method
Electronic meeting system (EMS) help Electronic meeting system (EMS) help combine nonquantitative and quantitative combine nonquantitative and quantitative methodsmethods
D-16
Forecasting Methods Forecasting Methods [cont.][cont.]
Quantitative forecasting methodsQuantitative forecasting methods– Regression analysis is dominantRegression analysis is dominant– Related methods are availableRelated methods are available– Many software packages usedMany software packages used
» MinitabMinitab
» IDAIDA
» SASSAS
» SPSSSPSS
D-17
Sales Forecast Using SAS
D-18
Using the Number of Using the Number of Salespersons to Project Salespersons to Project
SalesSales
0
1
2
3
4
5 10 15 20 25 30 35
.. .
.
Sales prediction
Sale
s in
th
ou
san
ds o
f u
nit
s
Number of salespersons
Regress
ion line
D-19
Sales Forecast Produced by SAS
D-20
Sales Forecast DataSales Forecast Data
1 24 4 80 2 27 4 80 3 31 5 90 4 29 5 100 5 33 6 100 6 38 7 110 7 37 8 120 8 40 8 100 9 45 9 9010 49 10 100
Sales Advertising Price RatioSales Advertising Price RatioYear (Y) (X2) (X3)Year (Y) (X2) (X3)
Historical DataHistorical Data
D-21
Funds Management Funds Management SubsystemSubsystem
Manage to achieveManage to achieve– Revenue flow inflow exceeds expense outflowRevenue flow inflow exceeds expense outflow– Maintain stabilityMaintain stability
Cash flow modelsCash flow models– Performs cash flow analysisPerforms cash flow analysis
D-22
Unbalanced Cash Flow Unbalanced Cash Flow ExampleExample
Dol
lars
(m
illio
ns)
Sales Manufacturing expensesMarketing and administration expenses
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
1.1
1.2
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMonths
D-23
Delaying Supplier Payments Delaying Supplier Payments Eliminates Months of Negative Sales Eliminates Months of Negative Sales
RevenueRevenue
Dol
lars
(m
illio
ns)
Sales Manufacturing expenses Marketing and administration expenses
00.1
0.20.3
0.4
0.5
0.6
0.7
0.8
0.9
1
1.11.2
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Months
D-24
Control SubsystemControl Subsystem Operating budget for the fiscal yearOperating budget for the fiscal year Three approachesThree approaches
1.1.Top-downTop-down
2.2.Bottom-upBottom-up
3.3.ParticipativeParticipative
D-25
1.
2.
3.
4.
Final organizationalbudget
5.
The Budgeting Process
Forecasting model
Sales forecast
Topmanagement
Resource planningmodel
Human resourcerequirements
Financerequirements
Manufacturingrequirements
Marketingrequirements
Financemanager
Human resourcemanager
Informationservicesmanager
Manufacturingmanager
Marketingmanager
Requestedfinancebudget
Requestedhumanresourcesbudget
Requested informationservices budget
Requestedmanufacturingbudget
Requestedmarketingbudget
Approved sales forecast
Topmanagement
Information servicesrequirements
D-26
BUDGET REPORTAS OF JANUARY 31 MIDWEST REGION
CURRENT MONTH YEAR-TO-DATE
ITEM BUDGET ACTUAL DOLLARS BUDGET ACTUAL DOLLARS
SALARIES $23,500 $22,000 $1,500- $59,000 $54,250 $4,750-TRAVEL 8,250 9,000 750+ 23,500 28,100 4,600+ ENTERTAINMENT 1,400 1,635 235+ 4,200 5,100 900+ TELEPHONE 200 85 115+ 600 225 375+RENT 535 535 0 1,605 1,605 0FURNITURE 0 0 0 420 505 85+SUPPLIES 625 410 215- 1,875 1,320 555- MISC. 400 620 220+ 1,200 1,963 765+
TOTAL $34,910 $34,285 625- $92,400 $93,070 670+
Example Budget Report
D-27
Performance RatiosPerformance Ratios
current assetsCurrent ratio = current liabilities
cost of goods soldInventory turnover ratio = average inventory value
D-28
Users of Financial Information SystemUsers of Financial Information System
Vice-president of finance X X XOther executives X X XController X X XManager of accounting XManager of financial planning X XDirector of budgets XOther functional managers X X X
Subsystem Funds User Forecasting Management Control
D-29
SummarySummary Financial information systems provide a wide range of Financial information systems provide a wide range of
information for both managers and interested external peopleinformation for both managers and interested external people Uses include:Uses include:
– AuditingAuditing– Financial intelligenceFinancial intelligence– ForecastingForecasting– Funds managementFunds management– BudgetingBudgeting
Financial modeling is one of the oldest uses of mathematical Financial modeling is one of the oldest uses of mathematical simulations in businesssimulations in business
D-30
Appendix CManufacturing Information Systems
MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell
Copyright 2001 Prentice-Hall, Inc.C-31
Manufacturing Information Manufacturing Information SystemSystem
Used to support efforts to produce productsUsed to support efforts to produce products Evolution of computer use in manufacturingEvolution of computer use in manufacturing
– Systems keyed on reorder pointsSystems keyed on reorder points– MRP MRP – JITJIT
Consists of three input and four output Consists of three input and four output subsystemssubsystems
C-32
The Computer as Part The Computer as Part of the Physical Systemof the Physical System
Focuses on computer-controlled machines Focuses on computer-controlled machines in the production areain the production area– CAD (computer-aided engineering)CAD (computer-aided engineering)– Design databaseDesign database– CAM (computer-aided manufacturing)CAM (computer-aided manufacturing)– RoboticsRobotics
C-33
The Computer As an The Computer As an Information SystemInformation System
Term “manufacturing information system” Term “manufacturing information system” used to describe the CBIS subsystem that used to describe the CBIS subsystem that provides information concerning the provides information concerning the production operationsproduction operations
Goes by many other namesGoes by many other names– ROP, MRP, MRP IIROP, MRP, MRP II– JIT, CIMJIT, CIM
C-34
Reorder Point (ROP) Reorder Point (ROP) SystemsSystems
Key TermsKey Terms– Reorder point, stockout, lead time, safety stockReorder point, stockout, lead time, safety stock
ROP formula: R = LU+SROP formula: R = LU+S Still used by many firmsStill used by many firms
– Well suited to retail inventoriesWell suited to retail inventories
C-35
Reorder Point With No Safety StockReorder Point With No Safety Stockand With a Safety Stockand With a Safety Stock
Reorder point
Lead time Time
Safety stock
Balanceon hand
Balanceon hand
A. No safety stock
B. Safety stock C-36
Material Requirements Material Requirements Planning (MRP)Planning (MRP)
Looks to the future and identifies the Looks to the future and identifies the materials neededmaterials needed
Components:Components:1. Production scheduling system -- produces a master 1. Production scheduling system -- produces a master
production schedule that encompasses the longest lead production schedule that encompasses the longest lead time plus the longest production time.time plus the longest production time.
2. MRP system -- explodes the bill of materials. Converts 2. MRP system -- explodes the bill of materials. Converts the gross requirements into the net requirements.the gross requirements into the net requirements.
C-37
Material Requirements Material Requirements Planning (MRP)Planning (MRP)
Components (cont.):Components (cont.):
3. Capacity requirements planning system works with 3. Capacity requirements planning system works with MRP system to keep production within plant capacity. MRP system to keep production within plant capacity. Produces outputs: reports and planned order schedule.Produces outputs: reports and planned order schedule.
4. Order release system produces reports for shop floor 4. Order release system produces reports for shop floor and purchasing.and purchasing.
C-38
Customerorder file
Sales forecast
file
Finished-goods
inventory file
Produc-tion
capacityfile
Bill ofmaterial
file
Plannedorder
schedule
Rawmaterialsinventory
file
1.Productionscheduling
system
2. Materialrequirements
planning system
3. Capacityrequirements
planning
Purchasingsystem
Order releasereport
4.Order releasesystem
Order releasereport
Shop floorcontrolsystem
Performance reports
Planning reports
Exception reports
Changes to planned orders
An MRP SystemAn MRP System
Masterproduc-
tionschedule
C-39
Manufacturing Resource Manufacturing Resource Planning (MRP-II)Planning (MRP-II)
The purpose is to integrate MRP with all The purpose is to integrate MRP with all systems that affect materials managementsystems that affect materials management– Organizational systemsOrganizational systems– Accounting information systemAccounting information system
C-40
Materialrequirements
planning
Executive information
system
Orderentry
Accounts payable
Accountsreceivable General
ledger
An MRP II SystemAn MRP II SystemOther functional information systems
Purchasing
ReceivingBilling
C-41
MRP-II BenefitsMRP-II Benefits
More efficient use of resourcesMore efficient use of resources– Reduced inventoriesReduced inventories– Less idle timeLess idle time– Fewer bottlenecksFewer bottlenecks
Better priority planningBetter priority planning– Quicker production startsQuicker production starts– Schedule flexibilitySchedule flexibility
C-42
MRP-II Benefits [cont.]MRP-II Benefits [cont.]
Improved customer serviceImproved customer service– Meet delivery datesMeet delivery dates– Improved qualityImproved quality– Lower price possibilityLower price possibility
Improved employee moralImproved employee moral Better management informationBetter management information
C-43
Just-In-Time (JIT)Just-In-Time (JIT) Faster material flowFaster material flow Small lot sizeSmall lot size TimingTiming Compare JIT to online processing and MRP Compare JIT to online processing and MRP
to batchto batch Kanban pulls material as opposed to MRP Kanban pulls material as opposed to MRP
pushpush Computer not emphasizedComputer not emphasized
C-44
Manufacturing Information Manufacturing Information SystemSystem
DefinitionDefinition– A computer-based system that works in A computer-based system that works in
conjunction with other functional information conjunction with other functional information systems to support the firm's management in systems to support the firm's management in solving problems that relate to manufacturing solving problems that relate to manufacturing the firm's productsthe firm's products
C-45
DATABASE
Accountinginformation
system
Industrialengineering
system
Manufacturingintelligencesubsystem
Productionsubsystem
Inventorysubsystem
Qualitysubsystem
Costsubsystem
Internalsources
Environmentalsources
InputInputsubsystemssubsystems
OutputOutputsubsystemssubsystems
Users
Data Information
A Model of a Manufacturing SystemA Model of a Manufacturing System
C-46
Accounting Information Accounting Information System [AIS]System [AIS]
Data collection terminalsData collection terminals– Track material flowTrack material flow– Gather job data (job reporting)Gather job data (job reporting)– Gather attendance data (attendance reporting)Gather attendance data (attendance reporting)
C-47
TerminalTerminal
Receiving areaReceiving area
Raw-materialsRaw-materialsstoreroomstoreroom
ReceivingReceivinginspectioninspection
Shop floor areaShop floor area
Finished-goodsFinished-goodsstoreroomstoreroom
Shipping areaShipping area
1
2
3 4 5
6
7
8
9
10
11
12
Location of Location of Data Collection TerminalsData Collection Terminals
C-48
Industrial Engineering Industrial Engineering SubsystemSubsystem
The industrial engineer (IE)The industrial engineer (IE) Studies physical and conceptual systemsStudies physical and conceptual systems Sets production standardsSets production standards
C-49
Manufacturing Intelligence Manufacturing Intelligence SubsystemSubsystem
Can be viewed in terms of environmental Can be viewed in terms of environmental contactscontacts
Labor unions (personnel flow)Labor unions (personnel flow)– Formal and informal systemsFormal and informal systems– Personnel informationPersonnel information– Union contract complianceUnion contract compliance
Suppliers (material and machine flow)Suppliers (material and machine flow)
C-50
Labor Unions
•Suppliers•Employment agencies •College &universities•Trade schools
Government
Global community
Competitors
Industrial relationsdepartment
Strategic levelmanagement
Human resourcesdepartment
Employees
Manufacturing management
Personnel Personnel requestsrequests
ApplicantApplicant datadata
Union contractUnion contractperformanceperformance
Formal flowFormal flowInformal flowInformal flow
Flow of Labor InformationFlow of Labor Information
C-51
Units replaced or repaired becauseof defective parts, supplier spareparts availability, and so on
Units rejected upon receipt, unitsrejected during production, reasons for rejection, and so on
Customerservice input
Qualitycontrol input
Supplierinput
Financial strength, quality controlemphasis, past quality and deliveryperformance, and so on
Supplierfile
Input to Supplier RecordsInput to Supplier Records
C-52
Production SubsystemProduction Subsystem
Used to:Used to:1. Build production facilities1. Build production facilities
2. Operate production facilities2. Operate production facilities Production schedule determines when the Production schedule determines when the
production steps are performedproduction steps are performed Track expected and actual completion timesTrack expected and actual completion times
C-53
Job Flow Through the PlantJob Flow Through the Plant
Rawmaterialsinventory
Plastic top
Plasticcylinder
Step 1
Step 5
Step 6
Step 7
Step 8
Step 2
Step 3 Step 4Step 9
Finishedgoods
inventory
Flashlight
Attach springAttach spring
Install bulbInstall bulb
Install reflectorInstall reflector
Install red lensInstall red lens
Install clear lensInstall clear lens
Attach switchAttach switch
Attach strapAttach strap Add batteriesAdd batteriesPut top onPut top oncylindercylinder
PRODUCTION AREAPRODUCTION AREA
C-54
Inventory SubsystemInventory Subsystem
Importance of determining the inventory Importance of determining the inventory levellevel
Maintenance cost (carrying costs)Maintenance cost (carrying costs) Purchasing costsPurchasing costs Economic Order Quantity (EOQ)Economic Order Quantity (EOQ) Economic manufacturing quantity (EMQ)Economic manufacturing quantity (EMQ)
C-55
---------------------------------------------------
Safety stock
Average inventory level
Safety stock
Average inventory level ------------------------------------------------------
A. Order quantity of 20; average level is 15.
0
5
15
25
0
13
5
21
B. Order quantity of 16; average level is 13.
Bal
ance
on
h
and
Bal
ance
on
han
d
Time
Time
The Effect of Order Quantity on Average The Effect of Order Quantity on Average Inventory LevelInventory Level
C-56
Quality SubsystemQuality Subsystem
Deming’s fourteen points; maintained that it Deming’s fourteen points; maintained that it is not workers but management that is not workers but management that determines qualitydetermines quality
Total quality management (TQM)Total quality management (TQM) Elements of TQMElements of TQM
– Zero defectsZero defects– Quality at the sourceQuality at the source
C-57
TQM Philosophy
*Customer-driven quality standards*Customer-supplierlinks*Preventionorientation*Quality at the source*Continuous improvement
TotalQuality
Management
Graphical Tools
*Process flowcharts*Check sheets*Pareto analysisand histograms*Cause and effect (fishbone) diagrams*Run charts*Scatter diagrams*Control charts
Statistical Tools
*Sampling plans*Process capability*Taguchi methods
C-58
Cost SubsystemCost Subsystem
Periodic reportsPeriodic reports Required ingredientsRequired ingredients
1. Standards1. Standards
2. Information2. Information
C-59
SubsystemSubsystem
User Inventory Quality Production CostUser Inventory Quality Production Cost
Vice president of manufacturingVice president of manufacturing
Other executivesOther executives
Plant SuperintendentPlant Superintendent
Manager of planning and control Manager of planning and control
Manager of EngineeringManager of Engineering
Manager of quality controlManager of quality control
Director of purchasing Director of purchasing
Manager of inventory controlManager of inventory control
Other managers Other managers
How Managers Use the How Managers Use the Manufacturing Information SystemManufacturing Information System
XX XX XX
XX
XX
XX
XX
XX
XXXX XX
XX XX
XXXXXX XX
XXXX XX
XX XX XX XX
C-60
SummarySummary Manufacturing managers have applied computers Manufacturing managers have applied computers
– Physical Physical
– ConceptualConceptual
Inventory Inventory MRP IIMRP II JITJIT CIM is management philosophy aimed at CIM is management philosophy aimed at
integrating all CBIS plus factory automationintegrating all CBIS plus factory automation
C-61
Chapter 17Marketing Information SystemsMarketing Information Systems
MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell
Copyright 2001 Prentice-Hall, Inc.17-62
IntroductionIntroduction
Marketing was the first functional area to exhibit Marketing was the first functional area to exhibit an interest in MISan interest in MIS
The marketing information system has three The marketing information system has three subsystems; the accounting information system subsystems; the accounting information system (AIS), marketing research, and marketing (AIS), marketing research, and marketing intelligenceintelligence
Functional information systems: the conceptual Functional information systems: the conceptual systems should be "mirror images" of the physical systems should be "mirror images" of the physical systemssystems
17-63
Functional information systemsFunctional information systems
Marketinginformation
system
Manufacturinginformation
system
Financeinformation
system
Human resourceinformation
system
Marketingfunction
Manufacturingfunction
Financefunction
Humanresourcesfunction
Physical system of the firmPhysical system of the firm
Functional Information Systems Functional Information Systems RepresentRepresent
Functional Physical SystemsFunctional Physical SystemsInformation
resourceinformation
system
Information Servicesfunction
17-64
Marketing PrinciplesMarketing Principles
Marketing mixMarketing mix– ProductProduct– PromotionPromotion– PlacePlace– PricePrice
17-65
The Marketing Information The Marketing Information System (MKIS)System (MKIS)
Kotler's marketing nerve centerKotler's marketing nerve center 3 information flows3 information flows
– InternalInternal» Gathered in firmGathered in firm
– Intelligence Intelligence » From environmentFrom environment
– Communications Communications » To environmentTo environment
17-66
FirmEnviron-ment
Marketing intelligence
Marketing communications
Internalmarketinginformation
Kotler’s Information FlowsKotler’s Information Flows
17-67
Marketing Information Marketing Information System (MKIS) DefinitionSystem (MKIS) Definition
A computer-based system that works in conjunction with other functional information systems to support the firm's management in solving problems that relate to marketing the firm's products.
17-68
An MKIS ModelAn MKIS Model OutputOutput
– ProductProduct– PlacePlace– PromotionPromotion– PricePrice– Integrated mixIntegrated mix
DatabaseDatabase InputInput
– AISAIS– Marketing researchMarketing research– Marketing intelligenceMarketing intelligence
17-69
Input subsystems
Output subsystems
DD
AA
TT
AA
BB
AA
SS
EE
Accounting information
system
Marketing research
subsystem
Marketing intelligence subsystem
Internal sources
Environmental sources
Product subsystem
Place subsystem
Promotion subsystem
Price subsystem
Integrated-mix
subsystem
Users
DataData InformationInformationMKIS ModelMKIS Model
17-70
Accounting Information Accounting Information SystemSystem
Sales order data is input.Sales order data is input. AIS provides data for AIS provides data for
– Periodic reportsPeriodic reports– Special reportsSpecial reports– Mathematical models and knowledge-based Mathematical models and knowledge-based
modelsmodels
17-71
Marketing Research Marketing Research SubsystemSubsystem
Managers use marketing research to gather Managers use marketing research to gather informationinformation– Gathered from customers and prospectsGathered from customers and prospects– Purchased or procured from other organizationsPurchased or procured from other organizations
Processed using marketing research Processed using marketing research subsystemsubsystem
17-72
Primary and Secondary DataPrimary and Secondary Data
Used by marketing research subsystem Used by marketing research subsystem Primary data are collected by the firmPrimary data are collected by the firm Examples of primary dataExamples of primary data
– SurveySurvey
– In-depth interviewIn-depth interview
– ObservationObservation
– Controlled experimentControlled experiment
17-73
Primary and Secondary Primary and Secondary Data Data [cont.][cont.]
Secondary dataSecondary data– Mailing listsMailing lists– Retail sales statisticsRetail sales statistics– Video retrieval systemsVideo retrieval systems
Some secondary must be bought and some Some secondary must be bought and some is freeis free
17-74
Marketing Research SoftwareMarketing Research Software
Graphics packages (print maps)Graphics packages (print maps) Makes market research a reality for all Makes market research a reality for all
firmsfirms Statistical analysisStatistical analysis Expertise to interpret software outputs is Expertise to interpret software outputs is
the key to successful use of these toolsthe key to successful use of these tools
17-75
Marketing Intelligence Marketing Intelligence SubsystemSubsystem
Ethical activities aimed at gathering Ethical activities aimed at gathering information about competitorsinformation about competitors
Not to be confused with industrial Not to be confused with industrial espionageespionage
Each functional information system has an Each functional information system has an intelligence responsibilityintelligence responsibility
17-76
Product SubsystemProduct Subsystem Product life cycle supported through:Product life cycle supported through:
1) Introduction1) Introduction
2) Growth2) Growth
3) Maturity3) Maturity
4) Decline4) Decline
Information answers 3 key questions:Information answers 3 key questions:1) Introduce?1) Introduce?
2) Change strategy?2) Change strategy?
3) Delete?3) Delete?
17-77
SalesSalesVolumeVolume
STAGES
Introduction Growth Maturity Decline
Should theproduct beintroduced
Should the product strategy be changed
Should theproduct be
deleted
The Product Life Cycle and Related The Product Life Cycle and Related DecisionsDecisions
17-78
New Product Evaluation New Product Evaluation ModelModel
Another part of the product subsystemAnother part of the product subsystem New product committeeNew product committee Explicitly considers production as well as Explicitly considers production as well as
marketingmarketing Lists decision criteria and their weightLists decision criteria and their weight
17-79
Place SubsystemPlace Subsystem
Channel of distribution may be short or longChannel of distribution may be short or long Material, money, and information flow through Material, money, and information flow through
the distribution channelthe distribution channel– Resource flowsResource flows
– FeedbackFeedback» Flows in direction opposite to the material flowFlows in direction opposite to the material flow
– Feedforward informationFeedforward information» Flow of information to customerFlow of information to customer
– EDIEDI
17-80
Material, Money, and Material, Money, and Information FlowInformation Flow
Two-way information flow
SupplierSupplierManu-Manu-
facturerfacturerWhole-Whole-salersaler RetailerRetailer ConsumerConsumerMaterial MaterialMaterialMaterial
MoneyMoney MoneyMoneyMoneyMoneyMoneyMoney
17-81
Promotion Subsystem Promotion Subsystem Includes:Includes:
(1) advertising(1) advertising
(2) personal selling(2) personal selling
(3) sales promotion(3) sales promotion
17-82
Difficult Area to Difficult Area to ComputerizeComputerize
Successful examplesSuccessful examples1. Sales promotion --OCR scanning of barcodes 1. Sales promotion --OCR scanning of barcodes
on couponson coupons
2. Personal selling --laptops2. Personal selling --laptopsA. Order entryA. Order entry
B. Customer call reportsB. Customer call reports
17-83
Pricing Subsystem Pricing Subsystem Two Basic ApproachesTwo Basic Approaches
1. Cost based (AIS provides the basis)1. Cost based (AIS provides the basis)
2. Demand-based (use what-if model)2. Demand-based (use what-if model)
17-84
Integrated-Mix SubsystemIntegrated-Mix Subsystem
BRANDAID ModelBRANDAID Model– Solid arrows: influencesSolid arrows: influences– Dashed arrows: responsesDashed arrows: responses
Environmental and retailer influence on the Environmental and retailer influence on the consumerconsumer– Individual influencesIndividual influences– Combined influencesCombined influences
Unexpected influencesUnexpected influences
17-85
ProductProduct PricePrice AdvertisingAdvertising PromotionPromotion Price-off coupons Price-off coupons
PremiumsPremiums SamplingsSamplings Package:Package: Graphics & Graphics &
functionfunction AssortmentAssortment
SalesSales
AvailabilityAvailability Price Price PromotionPromotion AdvertisingAdvertising
ProductProduct PricePrice AdvertisingAdvertising PromotionPromotion Price-off couponsPrice-off coupons
PremiumsPremiums SamplingSampling Package:Package: Graphics &Graphics &
functionfunction Assortment Assortment
SeasonalSeasonaltrendtrend
ManufacturerManufacturer
RetailerRetailer
CompetitorCompetitor EnvironmentEnvironment
ConsumerConsumer
BRANDAID BRANDAID
Sales Sales DistributionDistribution
PricePriceTrade promotionTrade promotion
SalespersonsSalespersonsPackage assortmentPackage assortment
PricePriceTrade promotionTrade promotion
SalespersonsSalespersonsPackage assortmentPackage assortment
Sales Sales DistributionDistribution
17-86
-20
-15
-10
-5
0
5
10
15
20
25
30
Actual Model
0 12 24
Months
Months
SSAALLEESS
Influence of Four Variables, Taken Influence of Four Variables, Taken TogetherTogether
17-87
SalesSales
MonthsMonths
New PackageNew Package
Model
Actual
A Model Cannot Cope with Unexpected EventsA Model Cannot Cope with Unexpected Events
17-88
The MKIS in Fortune 500 The MKIS in Fortune 500 FirmsFirms
Preprocessed information 71% of 1990 Preprocessed information 71% of 1990 firmsfirms
Mathematical modelingMathematical modeling– Generally downGenerally down– Reason is unknownReason is unknown– Except for production deletion and advertising Except for production deletion and advertising
media selectionmedia selection Model use is becoming more balancedModel use is becoming more balanced
Studies conducted by Li, McLeod, and Rogers17-89
The MKIS in Fortune The MKIS in Fortune 500 Firms 500 Firms [cont.][cont.]
Support for management levelsSupport for management levels– ModelsModels– OverallOverall
Support for management functionsSupport for management functions Support for the marketing mixSupport for the marketing mix
17-90
75 75
6156
51
40
92
54
77
64
30
14
57
4841
0
20
40
60
80
100P
erc
en
t o
f co
mp
ute
r u
sers
1980
1990
N.A. N.A. N.A.
Purposes of Computer UsagePurposes of Computer Usage
19801980
19901990
Retrieving DataRetrieving Data Storing DataStoring Data Processing DataProcessing Data
17-91
1980 1990
Strategic planninglevel .17
Strategic planninglevel .30
Management control
level.70
Management control
level.54
Operational controllevel .13
Operational controllevel .16
Note: The percentages are based on the number of respondentsranking the particular management levels first.
Model Use Is Becoming More BalancedModel Use Is Becoming More Balanced
17-92
Overall Support from the Marketing Overall Support from the Marketing Information System Is Becoming More Information System Is Becoming More
BalancedBalanced
Strategic planninglevel.25
Management controllevel.57
Operational controllevel .17
Strategic planninglevel.28
Management controllevel.40
Operational Controllevel .31
Note: The percentages are based on the number of respondents ranking the particular management levels first.
1980 1990
17-93
The 1990 Managers Placed More Emphasis The 1990 Managers Placed More Emphasis on Planning and Less on Directing Than on Planning and Less on Directing Than
Did Did Their 1980 CounterpartsTheir 1980 Counterparts
19801980 19901990
Planning .37
Organizing .03
Directing .25
Controlling .34
Planning .51
Organizing .06
Directing .07
Controlling .36
Staffing .01
17-94
Note: The percentages are based on the number of Note: The percentages are based on the number of respondents ranking the particular mix functions first.respondents ranking the particular mix functions first.
Marketing Managers Are Using the Computer Marketing Managers Are Using the Computer MoreMore
for Making the Difficult Price and Promotion for Making the Difficult Price and Promotion DecisionsDecisions
19801980 19901990
Product .49
Price .27
Place .16
Promotion .08
Product .32
Price .39
Place .15
Promotion .13
17-95
How Managers Use the MKISHow Managers Use the MKIS
IntegratedProduct Place Promotion Price Mix
VP of marketing X X X X XOther executives X X X X XBrand managers X X X X XSales manager X XAdvertising manager X XManager mktg resrch X X X X XManager of product planning XManager of physical distribution XOther managers X X X X X
Subsystem
Subsystem
17-96
MKIS Use by ManagersMKIS Use by Managers
Industry giants are using the computer as a Industry giants are using the computer as a marketing toolmarketing tool– To learn about consumer needs and wantsTo learn about consumer needs and wants– To formulate the marketing mixTo formulate the marketing mix– To follow-up on how well mix is received by To follow-up on how well mix is received by
the consumersthe consumers MKIS information output used across the MKIS information output used across the
firmfirm
17-97
SummarySummary
MKIS MKIS – Input subsystemsInput subsystems
» AIS, Marketing Research, Marketing IntelligenceAIS, Marketing Research, Marketing Intelligence
– Output subsystemsOutput subsystems» Product, Place, Promotion, Price, Integrated MixProduct, Place, Promotion, Price, Integrated Mix
Operational MKISs consider management Operational MKISs consider management and marketing conceptsand marketing concepts– Planning is the keyPlanning is the key
17-98
Appendix EHuman Resources
Information Systems
MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell
Copyright 2001 Prentice-Hall, Inc.E-99
Human Resources Human Resources Information System (HRIS)Information System (HRIS) Handles specialized processing concerning Handles specialized processing concerning
firm’s personnelfirm’s personnel HR Computerized processing done using HR Computerized processing done using
human resources information system human resources information system (HRIS)(HRIS)
Has become as valuable as other CBIS Has become as valuable as other CBIS subsystemssubsystems
E-100
HR FunctionHR Function
Originally called personnelOriginally called personnel Can be a department or functional areaCan be a department or functional area HR director is often used to describe the HR director is often used to describe the
person in chargeperson in charge
E-101
Recruiting Hiring Education& Training
Terminat-ion
BenefitAdministration
PotentialEmployees Employees Retired
Employees
Data Management
The Firm
Primary HR ActivitiesPrimary HR Activities
E-102
The HRISThe HRIS
The name HRMS (Human Resource The name HRMS (Human Resource Management System) is also catching on in Management System) is also catching on in industryindustry
May not always be computer-basedMay not always be computer-based Manages HR data and informationManages HR data and information
E-103
The Evolution of the HRISThe Evolution of the HRIS
First, paper files were located in the Personnel First, paper files were located in the Personnel department.department.
Then, punched card and magnetic media files were Then, punched card and magnetic media files were located in IS.located in IS.
Government legislation in the 1960s and 70s Government legislation in the 1960s and 70s eventually called management's attention to the eventually called management's attention to the importance of HR data.importance of HR data.
In the late 1970's the concept of an HRIS was In the late 1970's the concept of an HRIS was born.born.
E-104
Accountinginformation
system
Human resourcesresearchsystem
Manufacturingintelligencesubsystem
Work forceplanning
subsystem
Work forcemanagementsubsystem
Benefitssubsystem
Internalsources
Environmentalsources
Inputsubsystems
Outputsubsystems
Users
Data Information
Environmentalreporting
subsystem
HRISDatabase
HRIS ModelHRIS Model
Recruitingsubsystem
CompensationSubsystem
E-105
Accounting Information Accounting Information SubsystemSubsystem
Two main types of dataTwo main types of data1. Personnel -- name, birth date, sex, marital 1. Personnel -- name, birth date, sex, marital
status, education, skills, etc.status, education, skills, etc.
2.2.Accounting -- hourly rate or monthly salary, Accounting -- hourly rate or monthly salary, taxes, insurance deductions, etc.taxes, insurance deductions, etc.
E-106
Human Resources Human Resources Research SubsystemResearch Subsystem
Examples: Examples: – Job analyses and evaluationsJob analyses and evaluations– Succession studiesSuccession studies– Grievance studiesGrievance studies
This research can generate new data for the This research can generate new data for the database (job analyses)database (job analyses)
And it can use existing database contents And it can use existing database contents (succession studies)(succession studies)
E-107
Human Resources Human Resources Intelligence Subsystem [cont.]Intelligence Subsystem [cont.]
Government Government – Stay current on legislationStay current on legislation– File reports.File reports.
Suppliers Suppliers – Employment servicesEmployment services
Labor unions, local community, Labor unions, local community, competitors competitors – Sources of employeesSources of employees
E-108
Human Resources Human Resources Intelligence Subsystem [cont.]Intelligence Subsystem [cont.]
Global community intelligenceGlobal community intelligence Financial community Financial community
– Employee planningEmployee planning
Competitor intelligenceCompetitor intelligence
E-109
The HRIS DatabaseThe HRIS Database
Type of data:Type of data:
1.1. Employee Employee82.5% of the firms maintain only employee data82.5% of the firms maintain only employee data
2.2. Nonemployee Nonemployee8% of the firms8% of the firms
mainly organizations external to the firmmainly organizations external to the firm
E-110
Possible HRIS Database Possible HRIS Database LocationsLocations
0
100
200
300
400
Firm's centralcomputer
HR computer Operatingdivision
computer
Outside servicecenter
342
174
52 32
E-111
Database LocationDatabase Location Operating division -- decentralizedOperating division -- decentralized Outside service center -- outsourcedOutside service center -- outsourced Central computer is still the most popular Central computer is still the most popular
locationlocation
Some firms keep database in multiple locations
E-112
Executives
Non HR
10 3 41 12 3 4 5
(2.78)
Managers
(3.09)
HRDirector
(3.79)
Other HRManagers
(4.33)
Not at all Occasionally Monthly Weekly Daily
Users of the HRIS DatabaseUsers of the HRIS Database
E-113
PeriodicReports
DatabaseQueries
MathematicalModels
ExpertSystems
94.584.4
34.7
8.7
PeriodicReports
DatabaseQueries
MathematicalModels
ExpertSystems
Percentage of firms
reporting output types
Basic Forms of HRIS OutputBasic Forms of HRIS Output
E-114
SoftwareSoftware
Custom software is usually developed Custom software is usually developed jointly by HR and ISjointly by HR and IS
Some software is integrated into a core Some software is integrated into a core HRISHRIS
Some is standaloneSome is standalone
E-115
Work Force Planning Work Force Planning SubsystemSubsystem
Enable manager to identify future personnel Enable manager to identify future personnel needsneeds
Organization chartingOrganization charting Salary forecastingSalary forecasting Job analysis/evaluationJob analysis/evaluation PlanningPlanning Work force modelingWork force modeling
E-116
In Being
Application name use developed
____________________________________________
Organization charting 238 58
Salary forecasting 237 47
Job analysis/evaluation 176 66
Planning 68 61
Work force modeling 66 29
____________________________________________
Totals 785 261
Number of Firms Using Number of Firms Using Work Force Planning Work Force Planning
ApplicationsApplications
Percent applications in use: 75 E-117
Recruiting SubsystemRecruiting Subsystem
Applicant trackingApplicant tracking Internal searchInternal search Tracking job applicantsTracking job applicants
E-118
Number of Firms Using Number of Firms Using Recruiting ApplicationsRecruiting Applications
Application name In BeingUse Developed
________________________________________Applicant tracking 235 98 Internal search 111 56 ________________________________________Totals 346 154
Percent applications in use: 69
E-119
Work Force Work Force Management SubsystemManagement Subsystem
Performance appraisal Performance appraisal TrainingTraining Position control -- ensuring that headcount does Position control -- ensuring that headcount does
not exceed budgeted limits.not exceed budgeted limits. RelocationRelocation Skills/competencySkills/competency SuccessionSuccession DisciplinaryDisciplinary
E-120
Number of Firms Using Number of Firms Using Work Force Management Work Force Management
ApplicationsApplications In Being
Application name use developed _____________________________________________Performance appraisal 244 60 Training 216 102 Position control 177 108 Relocation 121 33 Skills/competency 115 107 Succession 110 102 Disciplinary 63 39 _____________________________________________Totals 1046 551 Percent applications in use: 65
E-121
Compensation SubsystemCompensation Subsystem
Most systems in useMost systems in use– Merit increasesMerit increases
– PayrollPayroll
– Executive compensationExecutive compensation
– Bonus incentivesBonus incentives
– AttendanceAttendance
E-122
Number of Firms UsingNumber of Firms UsingCompensation ApplicationsCompensation Applications
In Being Application name use developed ___________________________________________ Merit increases 404 36 Payroll 389 21 Executive compensation 273 39 Bonus incentives 230 31 Attendance 191 69
_____________________________________________Totals 1,487 196
Percent applications in use: 88
E-123
Benefits SubsystemBenefits Subsystem
Defined contributionDefined contribution Defined benefitsDefined benefits Benefit statementsBenefit statements Flexible benefitsFlexible benefits Stock purchaseStock purchase Claims processingClaims processing
E-124
Number of Firms UsingNumber of Firms UsingBenefits ApplicationsBenefits Applications
In Being Application name use developed
_____________________________________________ Defined contribution 275 38 Defined benefits 270 47 Benefit statements 234 57 Flexible benefits 195 55 Stock purchase 149 16 Claims processing 88 11 _____________________________________________Totals 1211 224 Percent applications in use: 84
E-125
Environmental Reporting Environmental Reporting SubsystemSubsystem
Reports firm’s personnel policies and Reports firm’s personnel policies and practices to the governmentpractices to the government– EEO recordsEEO records
– EEO analysisEEO analysis
– Union increasesUnion increases
– Health recordsHealth records
– Toxic substanceToxic substance
– GrievancesGrievances
E-126
Number of Firms UsingNumber of Firms UsingEnvironmental Reporting Environmental Reporting
ApplicationsApplications In Being
Application name use developed _____________________________________________EEO records 402 43 EEO analysis 352 47 Union increases 165 13 Health records 102 41 Toxic substance 80 32 Grievances 66 31 _____________________________________________Totals 1,167 207 Percent applications in use: 85
E-127
Executive Perception ofExecutive Perception ofHRIS ValueHRIS Value
HRIShas littlevalue
HRIS isvalued lessthan othersystems
HRIS isvalued on apar withother systems
HRIS isvalued higher thanother systems
HRIS isthe most highly valued
9
185
242
4
Top mgmtis unawareof HRIS
2531
E-128
Users of HRIS
HR director X X X X X XOther executives X X X X X XCompensation/benefits manager X XHR planning manager XEmployee/labor relations manager X XEEO/AAP manager X X X X X XRecruiting & selection dvlpmnt mgr X XTraining manager XManager of accounting X XPayroll manager X XOther managers X X X X X X
Wor
k F
orce
Pla
nnin
g
Rec
ruiti
ng
Wor
k F
orce
Man
agem
ent
Com
pens
atio
n
Ben
efits
Env
ir on m
enta
lR
epo r
ti ng
E-129
SummarySummary HR function has four primary activitiesHR function has four primary activities
– Recruiting and hiringRecruiting and hiring– Educating and trainingEducating and training– Management employee-related data Management employee-related data – Termination and benefit administrationTermination and benefit administration
HRIS helps managers manage the personnel HRIS helps managers manage the personnel resourceresource
Two big influences on HRIS developmentTwo big influences on HRIS development– GovernmentGovernment– MicrochipMicrochip
E-130