2 learning objectives when you finish this chapter, you will recognize different business functions...

3Chapter 3Chapter 3Information SystemsInformation Systemsin Business Functionsin Business Functions

Management Information Systems, Second EditionEffy Oz

3

2

Learning ObjectivesLearning Objectives

When you finish this chapter, you will

Recognize different business functions and the role of ISs in these functions.

Understand how ISs in the basic business functions relate to each other.

Be able to show how ISs of different business functions support each other.

3

3

Learning ObjectivesLearning Objectives

Understand how IT is used in the most common business functions to make business processes more effective and more efficient.

Understand the notion of Enterprise Resource Planning systems.

Recognize business areas where information technology facilitates the work of managers and knowledge workers.

3

4

Effectiveness and EfficiencyEffectiveness and Efficiency

ISs can help companies attain more effective and efficient business processes.

Effectiveness The degree to which a task is accomplished

Efficiency Determined by the relationship between resources

expended and benefits gained in achieving a goal

3

5

Effectiveness and EfficiencyEffectiveness and Efficiency

Figure 3.1 Information technology supports a variety of business functions

3

6

Effectiveness And EfficiencyEffectiveness And Efficiency

Figure 3.2 Information systems in different business functions are interdependent.

3

7

AccountingAccounting

AISs automatically post transactions in the books and automate generation of reports for management and legal requirements.

Three types of AISs Transaction processing systems (TPS)

Cost accounting systems

Managerial accounting systems

3

8


Electronic Data Processing (EDP) Audits

Ensure electronic systems comply with standard regulations and acceptable rules

Ensure systems cannot be manipulated to circumvent acceptable principles

3

9


Figure 3.3 Accounting information systems include features that reflect up-to-date performance of the organization in financial terms.

3

10

FinanceFinance

The job of financial managers is to manage money as efficiently as possible by:

Collecting payables as soon as possible Making payments by the latest time allowed by

contract or law Ensuring that sufficient funds are available for day-

to-day operations Taking advantage of opportunities to accrue the

highest yield on funds not used for current activities

3

11

FinanceFinance

Figure 3.4 Financial information systems help manage cash and investment portfolios.

3

12

FinanceFinance

Cash Management

Financial ISs help balance the need to accrue interest against the need to have cash available.

Cash management systems (CMS): Handle cash transactions specifically.

Electronic fund transfer (EFT): The electronic transfer of cash from one bank account to another.

3

13

FinanceFinance

ISs and Investment Analysis and Service

Analyze and project the prices of a specific stock or bond.

Transmit buy and sell orders electronically.

Provide clients with a detailed statement.

Monitor account information and news online.

3

14

EngineeringEngineering

ISs reduce engineering lead time or time-to-market. Key to maintaining a competitive edge

Computer-Aided Design (CAD) Systems Help engineers and technicians design new products

and quickly modify and store drawings electronically.

Rapid Prototyping: Creating one-of-a-kind products to test design in three dimensions.

3

15

EngineeringEngineering

Figure 3.5 Engineering information systems aid engineers in designing new products and simulating operations.

3

16

Manufacturing andManufacturing andInventory ControlInventory Control

IT helps in these manufacturing activities:

Plant activity scheduling Material requirement assessment Material reallocation between orders Dynamic inventory management Grouping work orders by “characteristics” Resource qualification for task completion

3

17


Figure 3.6 Manufacturing and inventory control information systems help reduce cycle times and the cost of maintaining inventory.

3

18


Materials Requirement Planning (MRP)

Take customer demand as initial input Number of product units needed and when they

are needed

Use long-range forecasts to put long-lead material on order

Help reduce inventory cost while ensuring availability

3

19


Figure 3.7 Materials requirement planning and manufacturing resource planning

3

20


Manufacturing Resource Planning (MRP II)

Combines MRP with other manufacturing-related activities to plan the manufacturing process such as Shop activity control and purchasing Source of demand Customer order entry and forecasting Support functions such as financial

management, sales analysis, and data collection

3

21


Manufacturing Execution Systems (MES)

Track, schedule, and control manufacturing processes

Collect data such as Hours machine operates every day of the month Hours the machine is idle and why

3

22

Marketing, Sales, and Marketing, Sales, and Customer ServiceCustomer Service

Market Research

Statistical models help market researchers find the best populations for new and existing products.

Targeted Marketing

Database management systems (DBMS) help define potential customers as narrowly as possible.

3

23


Figure 3.8 Marketing and sales information systems help target potential buyers and serve clients.

3

24


The Computer as a Marketing and Selling Medium

Companies send customers promotional disks with information on their products and services.

Commercial announcements are posted on public bulletin board systems.

The Web lets companies reach more shoppers and serve them better.

3

25


Figure 3.9 The Past and Future of Selling on the Web

3

26


Sales Force Automation Equipping salespeople with information

technology to facilitate productivity. IT allows salespeople to present different options

for products and services on the spot.

Customer Service Customer service via the Web is available 24

hours/day, 7 days/week. Saves companies labor hours and telephone

expenses

3

27

Human ResourcesHuman Resources

Figure 3.10 Human resource management information systems help managers optimize the assignment of employees and provide payroll, benefits, and other employee-related services.

3

28


Employee Record Management Reduce space needed to store records, time

to retrieve them, and costs of both

Promotion and Recruitment Search databases for qualified personnel

Use intranet to post job vacancies

Use the Web to recruit

3

29


Training Multimedia software training is replacing

classrooms and teachers.

Training software simulates an actual task or situation and includes evaluation tools.

Evaluation Evaluation software helps standardize the

evaluation process and adds a certain measure of objectivity and consistency.

3

30


Compensation and Benefits Management

ISs can help manage compensation efficiently and effectively. Calculate salaries, hourly pay, commissions, and

taxes Automatically generate paychecks or direct

deposits

Special software helps manage benefits, such as health insurance, life insurance, retirement plans, and sick and leave days.

3

31

Enterprise Resource PlanningEnterprise Resource Planning

Enterprise Resource Planning (ERP) All business functions served by one system

that supports different activities for different departments

Support supply chain management, the series of main and supporting activities from order to delivery.

3

32

Groupware andGroupware andCollaborative WorkCollaborative Work

GroupWare lets workers in different locations communicate ideas, brainstorm, and work together as if they were in the same place.

Document Control Users can distribute and track electronic documents

without working with outdated information.

Collaborative Projects Users can coordinate work on a single document

from many different terminals.

3

33

Ethical and Societal IssuesEthical and Societal IssuesPrivacy? What Privacy?Privacy? What Privacy?

What is Privacy?

One’s right to control information about oneself.

Not a constitutional right per se; secured by laws or convention.

Increasing number of organizations may access information via better IT hardware and software.

Business and civil rights advocates dispute degree of privacy vs. utility of information access.

3

34


Business Arguments

Necessary to collect basic financial and personal information as cheaply as possible

Higher costs to all businesses absent readily available information

Consumers benefit eventually from competitive environment augmented by readily available information

3

35


Consumer Arguments

Resent unsolicited mail and telephone calls

Resent being refused credit because of credit bureau mistakes

Frightened by ‘dossier phenomenon”

Loss of control over information unfair—information gathered for a particular purpose with permission should remain restricted

3

36


Seven Commandments of Personal Data Collection and Maintenance

Purpose. Companies should inform people who provide information of specific, exclusive purpose.

Relevance. Companies should record and use only data necessary to fulfill their own purposes.

Accuracy. Companies should ensure that their data are accurate.

3

37


Currency. Companies should make sure that all data about an individual are current.

Security. Companies should limit data access to only those who need to know.

Time Limitation. Companies should retain data only for the time period necessary.

Scrutiny. Companies should establish procedures to let individuals review their records and correct inaccuracies.

2 learning objectives when you finish this chapter, you will recognize different business functions...

Documents