Chap 2_Business Information Systems

8/12/2019 Chap 2_Business Information Systems

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Module 2


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Introduction There are many ways to use IT in business, as there are

many business activities to be performed, businessproblems to be solved, and business opportunities to

be pursued.A business professional should have basic

understanding of the major ways IS are used tosupport each of the functions of business.

We already know that business IS can be studiedunder two heads: Functional IS or Functional Business Systems

Constituency IS or Cross-Functional Enterprise Systems

2Business Info. SystemsTeena Y. Sharma


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Functional Business Systems Can be of the following types:

Sales and Marketing IS

Production and Operations IS Human Resource IS

Finance and Accounting IS

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Functional Business Systems

FunctionalBusinessSystems

Marketing

CRM

InteractiveMarketing

Targeted Marketing

Sales ForceAutomation HRM

CompensationAnalysis

Employee SkillsInventory

PersonnelRequirementForecasting

Production/Operations

ManufacturingResource Planning

ManufacturingExecution

Accounting

Order Processing

Inventory Control

Accounts Payable

Accounts Receivable

General Ledger

Finance

Cash Management

Credit Management

InvestmentManagement

Capital Budgeting

Financial Forecasting



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Sales and Marketing IS Sales and Marketing IS provide IT support to major tasks of the

marketing function.

Apart form doing the basic routine tasks for marketing function,

IS provides support to various other activities as well. For e.g.:

Internet/Intranet websites services make an Interactive Marketingprocess possible, where customers can become partners in creating,marketing, purchasing and improving products and services.

Targeted Marketing is an important tool for advertising andpromotion strategies of the firm.

Sales Force Automation Systems use mobile computing andInternet technologies to automate many information processingactivities for sales support and management.



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In an organization, the sales and marketingdepartment is responsible for selling its products andservices.

Marketing is concerned with identifying the needs ofthe customers, and developing products/services tosatisfy these needs.

Sales is concerned with selling these products/servicesto the end customers.

Sales and Marketing Information Systems supports allthese activities.

Business Info. Systems 6

Sales and Marketing Information

Systems

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SYTEM DESCRIPTION GROUPS SERVED INTHE ORGANIZATION

Developing NewProduct/Service

Shape, Size, Packagingetc

Production Employees

Designing PromotionalActivities Print, Video Ads, or otherPromotional Activities Middle and SeniorManagement

Order Processing Entre, Process andTracking the Orders

Operational ManagementEmployees

Pricing Analysis Determine Prices forProducts/Services

Middle Management

Sales Forecasting Prepare Sales Forecast forOne, Two, Five years etc

Senior Management


Sales and Marketing Information

Systems

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Some more activities of Sales and

Marketing IS

Sales andMarketing IS

InteractiveMarketing

TargetedMarketing

Sales Force

Automation CRM



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Sales by customer

Sales by salesperson

Sales by productOperationaldatabases

Databasesof valid

transactionsfor each

TPS

Transactionprocessing

systems

Businesstransactions

Sales andMarketing IS

Databases ofexternal data

Databases ofinternal data

ManufacturingDSS

ManufacturingES

Marketingapplications

databases

Pricing report

Total service calls

Customer satisfaction



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Inputs to Marketing MIS Strategic Plan and Corporate Policies of the

organization

The TPS External sources:

The competition

The market



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Marketing IS outputs or results Marketing research

Product development

Promotion and advertising Product pricing



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Sales and Marketing IS: Interactive

Marketing Interactive Marketing:

The term Interactive Marketing was coined to describe a customerfocused marketing process that is based on using the Internet,Intranet and extranets to establish two-way transactions between

business and its customers or potential customers. The goal of Interactive Marketing is to enable the company to

profitably use the those networks to attract and keep customerswho will become business partners with the business in creating,marketing, purchasing and improving products and services.

It encourages customers to become in product development ,

delivery and service issues , using various Internet tools such aschats and discussion groups, web-based forms or questionnaires, e-mails etc.

Final outcome is a rich mixture of vital marketing data, newproduct ideas, volume sales, and strong customer relationships.



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Sales and Marketing IS: Targeted

Marketing Targeted Marketing:

It has become an important tool in developingadvertising and promotion strategies for companys e-commerce website , as well as traditional businessavenues.

Targeted marketing is basically an advertising andpromotion concept that includes five targeting concepts.



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Sales and Marketing IS: Targeted

Marketing

Community

Content

Context

Demographic/Psychographic

OnlineBehavior



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Sales and Marketing IS: Sales Force

Automation Increasingly computers and Internet/ Intranet are

providing basis for Sales Force Automation.

In many companies, the sales force is being outfitted with

notebook computers, web browsers and Sales ContactManagement software, that connect them to marketing

websites on the Internet/ Intranet/ Extranet.

This increases the personal productivity of the sales personand speeds up the capture and analysis of sales data from

filed to a company headquarters. In return, this allows the people of marketing and sales

department, improve the delivery of information andsupport to the salespersons.



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Sales and Marketing IS: Sales Force

Automation

Inquiry/

ProspectCustomize Commit Order



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Production and Operations IS These systems are popularly known as Manufacturing

Information Systems.

Production IS support all activities concerned with theplanning and control of the processes of production ofgoods and services.

Operations IS along with TPS, plans, monitors,

controls inventories, purchases and flow of goods andservices.



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This department is actually responsible for producingthe goods/services, as specified.

They deal with planning, development andmaintenance of production activities.

Planning the goal achievement strategies, resourceplanning, scheduling of activities for production etc.

Manufacturing and Production Information Systemssupports these activities.


Manufacturing and Production

Systems

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SYSTEM DESCRIPTION GROUPS SERVED INTHE ORGANIZATION

Resource Planning Materials, Resources andLabor Requirement

Finance, Operation,Production, MiddleManagement

Production Planning Decides When and HowMany products should beproduced

Middle Management

Machine Control Controls the actions ofmachines and

equipments

Operations

Facilities Control Decides where to locatenew production facilities

Senior Management


Manufacturing and Production

Systems

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Production and Operations ISApart from the basic functions of Production and

Operation, additional tasks done by POIS are:

Process Control

Machine Control



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Human Resource IS HRM and the Internet

HRM and Corporate Intranets

Staffing Training and Development



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The Human Resource department is responsible forattracting, developing, and maintaining firms workforce.

Human Resource Information Systems support activities

such as identifying potential employees maintainingcomplete records on existing employees, and creatingprograms to develop talents and skills of the employees.

Human Resource Information Systems also helps the senior

management to identify the human resource requirement,i.e. skill, educational level, types of positions, number ofpositions , for meeting the firms long-term business plans.


Human Resource Systems

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Benefit reports

Salary surveys

Scheduling reportsOperationaldatabases

Databasesof valid


TPS


systems


HumanResource

IS



OperationalDSS

OperationalESS

Humanresource

applicationsdatabases

Training test scores

Job applicant profiles

Needs and planningreports



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Finance and Accounting IS Provides financial information to all financial

managers within an organization.



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The Finance department is responsible for managing the firmsfinancial assets, such as cash, stocks, bonds and other investments, inorder to maximize the returns on all of these.

The finance department is also responsible for managing the capital of

the firm. The accounting department on the other hand is responsible formanaging the financial records of the firm: receipts, disbursements,depreciation, payroll to account for flow of funds in the firm.

Finance and Accounting departments share related activities in theorganization

The Finance and Accounting Information Systems takes care of all theabove listed activities. Senior management uses these systems to establish long-term financial

goals of the firm.


Finance and Accounting Systems

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SYSTEM DESCRIPTION GROUPS SERVED INTHE ORGANIZATION

Accounts Receivable Tracks money owned bythe firm

Operation, SeniorManagement

Budgeting Prepares short-termbudgets

Middle Management

Profit Planning Plans long-term profits Senior Management


Finance and Accounting Systems

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Accounting Order Processing

Inventory control

Accounts ReceivableAccounts Payable

Payroll

General Ledger



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Financial Management Systems Cash Management

Online Investment Management

Capital Budgeting Financial Forecasting and Planning



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Financial statements

Uses and managementof funds

Financial statisticsfor control

Operationaldatabases

Databasesof valid


TPS


systems



Internetor

Extranet

Finance &Accounting

IS




FinancialDSS

FinancialES

Financialapplications

databases

Customers,Suppliers



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Inputs to the Financial

Information System Strategic plan or Corporate Policies

Contains major financial objectives and often projectsfinancial needs.

Transaction processing system (TPS) Important financial information collected from almost

every TPS - payroll, inventory control, order processing,accounts payable, accounts receivable, general ledger.

External sourcesAnnual reports and financial statements of

competitors and general news items.


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Although the functional perspective, for understanding thetypes of information systems is important, to understandhow do these systems serve the various departments/

functions in the organization. We also need a perspective which examines the IS in terms

of do they help managers to manage the organization.

How do the support the various levels of management, the

types of decisions they support. How to they enable various departments to integrate with

each other.


ypes o n orma on ys ems:Constituency Perspective / Cross-

functional IS

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Cross-Functional Information

Systems Transaction Processing systems

Enterprise Application Systems



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TPS, MIS, DSS, and AI/ES Hierarchy:

AI/ES

DSS

MIS

TPS

Information

Data

Less More Less More

More MoreLess Less

RoutineDecisionsupport

Input &output

Sophistication& complexity of

processing & analysis



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Transactions Transactions

Basic business operations such as customer orders, purchaseorders, receipts, time cards, invoices, and payroll checks in an

organization Transaction processing systems (TPS)

Perform routine operations and serve as a foundation for othersystems



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Transaction Processing Systems Transaction Processing Cycle:

Data Entry

Transaction Processing:

Batch Processing

Real Time Processing

Database Management

Document and Report Generation Inquiry Processing



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Outputs of a

Management Information System Scheduled reports

Produced periodically, or on a schedule (daily, weekly, monthly)

Key-indicator report Summarizes the previous days critical activities Typically available at the beginning of each day

Demand report Gives certain information at a managers request

Exception report Automatically produced when a situation is unusual or requires

management action



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Opportunities with usage of IS

1. Enhanced global competitiveness

2. Capture market opportunities

3. Support corporate strategy4. Enhance worker productivity

5. Improve quality of goods and services



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Chap 2_Business Information Systems

Documents

Transcript of Chap 2_Business Information Systems