ACS-1803
Introduction to
Information Systems
Instructor: David Tenjo
The University of Winnipeg - ACS1803 - Fall 2015
Functional Area Systems
Lecture 5
1
1. ACCOUNTING TRANSACTION
SYSTEMS
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Business Transaction Cycles
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Business Transaction Cycles
• Transaction cycle: An interlocking set of business transactions.
• Most business transactions can be aggregated into a set of transaction cycles related to the sale of goods,
payments to suppliers, payments to employees, and payments to lenders.
• Sales Cycle • Purchasing Cycle • Payroll Cycle • Financing Cycle
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Baseline Accounting and
Business Transaction Cycles
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Accounting process for a
Customer / Sales Transaction
• Example of the baseline accounting process for a customer /
sales transaction within a company:
• Company with an ecommerce website • Customer places an online order • The order is processed
• The order shipment is confirmed the company’s warehouse – which fulfils the order, ships the product and notifies Accounting • Accounting Generates the invoice and sends it to the customer
• How is the accounting / sales system designed in order to
manage this business process?
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Sales Transaction Cycle
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Finance Information Systems
• Finance Area: Acquires and manages cash for a business
• Acquire trough shares or loans
• Invest Cash wisely
• Company must maintain liquidity
• Need to analyze considerable financial information
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Finance Information Systems
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Tactical Systems in Finance
•
Budgeting Systems
• Plan Revenues and expenses line-by-line
• Can summarize in various ways
• Can compare this year’s budget to last year’s
• Can compare actual expenses vs. budgeted (Get actual results from General Ledger System
• Variance analysis
• Spreadsheet-type systems useful for budgeting (use of formulas)
• Can use previous budget as basis for next year, 5 years, 10 years
• How is such system tactical?
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Tactical Systems in Finance
•
Cash Management Systems
• Ensure that the business has sufficient cash to meet its needs
• Day-to-day operations
• For acquisition of long-term assets
• Important output is the Cash Flow Report
• Can forecast cash flows of a period of time
• Flow = total cash receipts - total cash payments Th
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Tactical Systems in Finance
•
Capital Budgeting Systems
• Provide help with planning acquisition (disposal) of major plant assets that will be used by the business during many years
• Provide outgoing and incoming cash for the life of the asset
• Use assumptions
• Consider the time value of money (net present value)
• E.g. Can help decide whether to lease or buy a new printer
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Tactical Systems in Finance
•
Investment Management Systems
• Oversee organization’s investment in stocks, bonds, and other securities
• Online databases provide immediate updates for stick and bond prices
• Value screen inputs the current price of each stock and calculates the gain or loss the company’s investment portfolio would generate if sold now
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Strategic Systems in Finance
• Support very high-level managers
• Strategic systems relate to organizational goals
• Often, such systems use internal data (which may have originated in organizational AIS) and external data (eg. From online databases that contain economic, social, demographic, etc., info)
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Strategic Systems in Finance
•
Financial Condition Analysis Systems
• Provide insightful analysis of financial statements anddata (e.g. Debt:equity ratio, current ratio)
• Online databases can allow for financial analysis of competitors, suppliers, buyers and other organizations
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Strategic Systems in Finance
•
Long Range Forecasting Systems
• May use both internal and external data• Apply statistical techniques
• Heavy use of graphics
• Analyze trends
•
Corporate Planning Systems
• Use data from past, like forecasting systems
• More elaborate. It contains simulation models for various aspects of business
• Models must have valid assumptions
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HUMAN RESOURCE INFORMATION
SYSTEMS
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Operational Systems in HR
•
Historically,
payroll
was the first
•
But, we consider it to be part of the AIS
•
Related to expenditure cycle
•
Employee information systems
• Maintain information on every employee for various reporting purposes
• Employee profile: basic personal data, education, previous experience, employment history in org., preferred location for work ….
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Operational Systems in HR
•
Employee Information System
• May contain skills inventory component• Employee’s work experience, work preferences, test scores, interests, special skills
• How could this be used
•
Attendance recording systems
• May use negative reporting (only when absent)
• Include overtime credits etc. Th
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Operational Systems in HR
•
Performance management systems:
• Collect and store textual data e.g., written comments of supervisor
• Need careful documentation of employee
performance and how performance was measured (e.g., for grievance hearings)
• May have tactical components
• Which supervisors give high number of poor evals.
• Which labour sources provide unacceptable workers T
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Tactical Systems in HR
• Position control systems
• Keep data on each job position in the org.
• E.g. task content
• Can be useful for job redesign
• Which job positions require data entry?
• Which require statistical analysis
• Recruiting systems
• Provide list of planned retirements
• List skills, preferences of current employees
• Analyze turnover rates among various classes of employees
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Tactical Systems in HR
• Compensation and benefit systems
• “cafeteria style benefits” for employees to choose from
• Considerable data storage here
• Tactical:
• how much to increase compensation plans to attract high quality employees
• What kind of benefits are different categories of employees choosing?
• May be available on organizational intranet
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Strategic Systems in HR
• Labour negotiation support systems
• Must be timely and have ad hoc capacity
• Assist in bargaining sessions with unions
• Keep track of:
• Negotiating teams
• Information about previous negotiations
• Bargaining items
• Bargaining stages
• Long-term workforce planning
• What are the HR needs to meet organization’s
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http://www.mercer.com/
HRMS Software Characteristics
• HR systems store much more textual data than other
functional systems
• There are specific HR systems for sale (OTS)
• Use of HRMS is not as widespread in small to medium
businesses
• Security is of great concern
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MARKETING AND SALES
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The Marketing Function
• Process of planning and executing the conception, pricing, promotion, sales and distribution of ideas, goods and / or services to create exchanges that satisfy individual (customer) and organizational (business ) goals.
• Ideal marketing systems must be coordinated with other organizational systems:
• Order Entry • Manufacturing • Inventory
• Credit management
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Operational Systems in
Marketing
• Customer contact management systems
• Provide information on past contacts with specific customers
• Output: call report:
• No. of sales calls made by a salesperson
• No. and dollar amount of sales made by this person
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•
Sales Process/Activity Management
• Include a sequence of sales activities• Guide sales reps through each discrete step in the sales process
Opportunity Generated
Opportunity Generated
Lead allocated
Prospect contacted
Prospect qualified
Solution identified
Order placed Sales process
Sales activity
Operational Systems in Marketing
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•
Customer
contact management systems
• Provide information on past contacts with specific customers • Output: call report:•
Number of sales calls made by a salesperson
•
Number and dollar amount of sales made by
this person
Operational Systems in
Marketing
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•
Telemarketing systems
• Identify customers and automatically call them
• Use electronic phone directories
• Can make notes about calls
• In a LAN-based system, 200 telemarketers can use the same system at the same time
•
Direct mail advertising systems
• Create mailing labels•
Delivery tracking and routing systems
• Help plan optimal delivery routesOperational Systems in
Marketing
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Tactical Systems in Marketing
•
Objective of tactical marketing managers:
• To reach the sales goals set by top marketing executives
• They must make tactical decisions such as:
• How sales territories should be shaped
• How to allocate salespersons to territories
• What products should be offered to what customers
• Sales management systems help here
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Strategic Systems in Marketing
•
May contain both strategic and tactical elements
•
Sales forecasting systems
• Forecast sales for entire industry • For entire organization• For each product
• For market segments for a product
• Employ sophisticated statistical models and may produce considerable graphic output
•
Market research systems
• Process results of surveys and interviews • Provide analyses of statistical significance • Use considerable data from outside the company
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CRM
•
Highly Related to Marketing
•
Using data on previous contacts with a specific
customer to enhance future contacts with that
customer
•
Enables customization of products / services
•
Will be covered later
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PRODUCTION / OPERATION SYSTEMS
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Computers in Manufacturing
• As there are different types of inventories in a manufacturing organization:
• Raw materials inventories
• Work-in-process inventory
• Finished goods inventory
• There are systems that keep track of quantities, costs, (an other aspects)…
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Manufacturing Resource
Planning
• Master production schedule (tactical)
• Materials Resource Planning (MRP) (tactical / operational)
• Capacity Requirements planning (tactical / operational)
• Shop floor control (operational / tactical)
• Quality control (operational / tactical)
• Cost allocation (material, labour, overhead) to finished goods
• This is a comprehensive, integrated way of managing manufacturing
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Manufacturing Resource
Planning
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Bill of Materials
• A list of raw materials needed to produce one unit of finished
product and the quantity of each material
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Materials Requirements
Planning
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• Process that uses BOMs, raw material and work-in-process
(RM/WIP) inventory status data, open order data, and the
MPS to calculate a time-phased order requirements schedule.
• With Materials Planning & Scheduling (MPS) and Bill of Materials (BOM), a system can produce time-phased purchase orders for raw materials (main output of MRP)
Capacity Requirements
Planning (CRP)
• Uses info from the MPS and time-phased order requirements
schedule to develop detailed machine and labor schedules that consider the feasibility of production schedules based on available Capacity
• Route Sheet shows sequence of required operations and the standard time allowed for each operation (usually person + machine)
• How much machine time and worker time do we have?
• May need to rent more floor space and / or machines • May need to hire temp workers
• CRP generates a detailed production schedule
• It releases manufacturing orders to the production floor
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Production Planning and
Control
• Raw materials acquisition (when, how much) • Machine and worker requirements
• Detailed production schedules
• Gathering evaluation statistics
• Sensors, scanners, shop floor terminals
• Quality control
• Comparing performance data to plans
• Cost accounting for manufactured goods goods
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MRP
Inventory levels Supply Capacity Amounts to be produced Staffing levels
(MRP)
Capacity Requirements Planning
Quality control
Evolution to MRP2 Strategic Planning
Tactical Planning
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Operational & Tactical Systems
• Master Production Scheduling system
• Material requirements planning system
• Capacity requirements planning system
• Detailed Production Schedule
• Shop floor control (comp. to schedule)
• Quality control (comp. to quality standards)
• Inventory Control
• Cost accounting Put together in MRP II (Mfg Resource
Planning)
• 12
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Just-In-Time (JIT)
Manufacturing
• Raw materials arrive just when they are needed on the production floor
• Minimizes inventory
• Requires complex information systems (operational)
• May have vendor managed inventory
• (supplier’s computers tap into buyer’s inv. systems)
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JIT
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JIT
• suppliers are gaining access to an organization’s production planning schedules to assure an ability to fulfill orders
• producing organization is opening its systems to the customer to allow the customer to view inventory and production levels before placing orders
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IT Considerations in
Manufacturing
•
Large databases
designed for varied and quick
retrieval
•
Data capture in variety of ways
(incl. sensors,
measurement devices, scanning)
•
Connectivity throughout
production facilities
•
Both
operational and tactical
(eg. Shop floor
control)
•
Integration with system outside
mfg.
The
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Evolution of MRP into ERP
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50 1960s
Inventory Management &
Control
combination of information technology and business processes of maintaining the appropriate level of stock in a warehouse. Activities include identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status.
1970s
Material Requirement Planning (MRP)
utilizes software for scheduling production processes. Generates schedules for the operations and raw material purchases based on the production requirements of finished goods, the structure of the production system, the current inventories levels and the lot sizing procedure for each operation.
1980s
Manufacturing Requirements Planning (MRP II)
utilizes software for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution.
1990s Enterprise Resource
Planning (ERP)
Uses multi-module software for improving the performance of the internal business processes. ERP systems often integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product
distribution, fulfillment, to order tracking. ERP systems may include application modules for supporting marketing, finance,
MRP2 - Evolution to ERP
MRP2 Evolved to
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