CS507 - Information Systems - Lecture Handout 14

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No information system can exist in an organization without being linked with other functional information systems. This linkage is important for the over all smooth functionality of the information system since it allows easy transformation and usage of information.

  • Marketing
    Production subsystem needs to be linked with the marketing system so as to produce right amount of product.
  • Human resource system
    Most of the human resource is involved in the manufacturing process. Since factory premises has to be working continuously, availability of relevant labour is critical.
  • Accounts and Finance
    Accounts should have a control over various recording points in the entire process from procurement to finished good store room. This would help both in recording transactions for financial statements and approving and arranging for cash payments.

Accounting information system (AIS) is linked to all the information systems in an organization. This is important because the data required for proper book keeping and generation of transactional reports is extracted from all over the organization. For instance sales information can be sought only from marketing information system and stock information is available in manufacturing information system.

Here we would consider an example to see how AIS records internal data describing manufacturing operations – this requires use of data collection terminals at the manufacturing facility. It also records external data describing firms transactions with its suppliers.

Accounts and Finance

The figure shows twelve data collection terminals located at the factory area. Raw materials are received from suppliers, and receipt data is entered into the terminal. Quality control inspection is conducted and results are recorded at terminal two. Acceptance into and release from the raw materials room is logged in to the terminal three. Terminals four to ten are used by production employees to record start and completion of each step of production. Terminal eleven records the entry into the finished goods store room. Shipping to customers is recorded at terminal 12.

Accounting & Financial Information Systems

Accounting and financial information systems cater for the needs of Accounts & Finance Department.
These are responsible for managing financial assets in order to maximise return, like

  • Cash
  • Stocks
  • Bonds
  • Other investments
  • Financial liabilities
  • Capitalization of the firm through acquisition of new financial assets

It also produces the periodic and annual financial statements.

Importance of Accounting & financial Information Systems

Every transaction that an organization undertakes has a financial impact, to be recorded and reported by the accounts & finance department. Hence there is a share of interest for every department in reports and information produced by this system. Financial Information Systems like other information systems should cater for information requirements at each level, for instance.

Strategic level

  1. Investment goals
  2. long range forecasts for firm’s financial performance
  3. Acquisition of financial resources and goals

Knowledge Level

  1. Analytical tools to design the right mix for investment
  2. Portfolio updates
  3. Market information analysis

Management level

  1. Control over firm’s financial resources
  2. Investment management
  3. Budget management
  4. Tax management
  5. Profitability & Performance Evaluatio

Operational Level

  1. Cash flow statements through various transactions
  2. Inventory and debtors management
  3. Creditors Management

Human Resource Information Systems

It is an information system that combines many human resources functions, including benefits administration, payroll, recruiting and training, and performance analysis and review into one package. It helps in

  • Building database of employees
  • Keeping track for new positions or vacancies
  • Keeping master records for each employees
  • Performance evaluations and training assessments

IT Department

Information by itself is proving to be the most critical resource for organizations. Such is the criticality that other resources of the organization cannot be managed without it. This has lead to the evolution of information systems to efficiently manage the information resource of the organization. This system is usually employed by the Information Services department which is the major functional area of the organization.

Evolution of the IT Department

IS department function has been evolving based on the needs of user departments

  • Traditional Computing -- Initially User was not directly linked with using the computing facilities and the IT workforce was involved in assisting user to achieve his computer related goals.

Evolution of the IT Department

  • End User Computing – As the computer users become more literate, much of the work was done by users themselves and IT department took over as a support function.

End User Computing