Published on October 21, 2009
Slide 1: Types of INFORMATION SYSTEMS Slide 2: Accounting Information System (AIS) AIS gathers data describing the firm’s activities, transforms data into information and makes the information available to users both inside and outside the firm. AIS performs four basic data processing tasks Data gathering :- is the accumulation of data describing the firm’s internal actions and its environmental transactions. The environmental transactions include the actions related to the movement of products and services to its environment. Data manipulation :- is the transformation of data into information. It includes 1) Classifying :- it’s the process of encoding certain data elements such that they can be identified and grouped using those codes. 2) Sorting :- it’s the process of arranging records in a certain sequence based on the codes or other data elements. 3) Calculating :- it includes the arithmetic & logical operations performed on the data elements to produce additional data elements. 4) Summarizing :- it’s the process of synthesizing large amounts of data by creating totals, averages etc. Slide 3: Data storage :- it’s the accumulation of all necessary accounting data of the entire firm in the form of digital data storage using computers. Document preparation :- it’s the output that is normally got from any AIS. The documents are created in two main cases 1) By action :- Outputs are produced when some event happens which demands an output like preparation of customer bills as soon as the customer does its purchase. 2) By a time schedule :- Outputs are produced at a regular interval of time, like payroll sheets. Slide 4: Model of Accounting Information System Environment Physical resources Management Transformation Data processing software Database Accounting Information System Information Data Data Information Slide 5: Characteristics of Accounting Information System It is implemented by the firm to achieve and maintain control as the AIS maintains the record of all the financial activities of the firm. It adheres to all the standard procedures, regulations and accepted practices performed during data processing. It handles data in a detailed and authentic manner hence it can provide an audit trial where the financial activities can be traced from beginning to end and also reverse. It contains the data gathered during past hence it has a detailed focus on historical financial events of the firm. The output from AIS gives the primary solution to the problems. Slide 6: AIS for Problem Solving It produces some information output in the form of standard accounting reports. These reports are valuable in the financial area of the firm and at top management levels. It provides a rich database that can be very useful in problem solving. This rich database provides much of the information for MIS, DSS and to some extent knowledge-based systems. Slide 7: ASSIGNMENT # 5.1 Explain AIS and why its required by firms? Explain the AIS model. What are the various data processing tasks in AIS? Explain the characteristics of AIS. How AIS contributes in problem solving?.Justify with an example. Give a case study of a firm explaining the how AIS helped to solve accounting problems of the firm. Slide 8: Executive Information System An Executive Information System (EIS) is a system that provides information to the executives on the overall performance of the firm. The information can be accessed easily and can also provide varying levels of details. It usually consists of a PC networked to a central computer. The PC works as the executive workstation providing access to the executive database. Its also known as Executive Support System (ESS). Slide 9: EIS Model Executive database Personal Computer Information request Information display Making Corporate Information available Corporate Database Electronic Mailboxes Software library Current news, explanations External data & information CENTRAL COMPUTER EXECUTIVE WORKSTATION Slide 10: The EIS Model It usually consists of a personal computer. In large firms the PC is networked to a mainframe or the central computer. The executive’s personal computer serves as the executive workstation. The hardware configuration includes hard disks as the secondary storage device. The executive database contains data and information that has been processed by the firm’s central computer. The executive is provided by an EIS software, which are menu driven software to implement EIS. The system permits the use of firm’s electronic mail system and access to the environmental data & information. EIS software support input of explanations of the information and current news updates on the information. Slide 11: Assignment #5.2 Explain computer based Executive Information System. Draw and explain the computer based EIS model. Explain the term Drill Down with respect to EIS activity. Give a case study of a firm explaining how EIS helped the executives of the firm to elevate the efficiency & usefulness of the employees. Slide 12: Marketing Information System ( MKIS ) MKIS is based in the pioneering work of several marketing theorists. There are manly two types of subsystems that can be seen in an MKIS, the Input subsystem and Output subsystem. The input subsystem includes AIS, 2) Marketing research, 3) Marketing intelligence subsystem The AIS provides sales order data for the software that produces information in the form of Periodic reports, 2) Special reports, 3) Outputs from Mathematical - -models and Expert systems. Marketing research utilizes a variety of data gathering techniques Surveys, 2) In-depth interviews, 3) Observations, 4) Controlled - - experiments. Most of the MKIS activity is aimed at establishing an intelligence-gathering capability. Slide 13: MKIS Model Accounting Information system Marketing research subsystem Marketing intelligence subsystem Database Integrated-mix subsystem Price subsystem Promotion subsystem Place subsystem Product subsystem I F O R M A T I O N U S E R S Internal sources Environmental sources Data Data Data Output Subsystem Input Subsystem Slide 14: The MKIS Model The Input Subsystem The Accounting Information System gathers data describing the firm’s marketing transactions. The Marketing Intelligence Subsystem gathers information about the firm’s marketing operations. The Marketing Research Subsystem conducts studies of the marketing operations for the purpose of learning customer needs and improving marketing efficiency. Database It contains the necessary data and information that is gathered by the Input Subsystem, which is then utilized by the Output Subsystem. Slide 15: Output Subsystem The Product Subsystem provides information about the firm’s products. The Place Subsystem provides information about the firm’s distribution network. The Promotion Subsystem provides information about the firm’s advertising and selling activities. The Price Subsystem helps the managers to make decisions related to fixing or changing the price of a product. The Integrated Mix Subsystem helps the managers to develop strategies on those areas which are effected from all the above mentioned subsystems, example – sales forecast. The users category mainly consists of managers. Slide 16: Assignment #5.3 Define Marketing Information System (MKIS). 2) Draw and explain the model of MKIS. 3) Give a case study of firm explaining how MKIS helped the firm’s managers to improve their market position and increase sales. Slide 17: Manufacturing Information Systems In Manufacturing Information Systems, manufacturing management uses the computer both as a Physical system. Conceptual system. The computer as part of Physical System consists of Computer Aided Design (CAD) Computer Aided manufacturing (CAM) Robotics. Slide 18: The computer as part of Physical System Computer Aided Design (CAD) It uses computers to assist in the design of a product that is to be manufactured. The design engineer can use a visual display terminal equipped with a light pen as an input device, to create designs. The CAD software refines the drawings, the engineer can subject the design to various virtual tests that can detect the defects in the design (if any). The CAD software can simulate the moving parts of the design to show real like movements, closer to practical situations. Once the design is confirmed the CAD software can prepare the detailed specifications that are required for manufacturing the product. These specifications are stored in a Design Database. Slide 19: The computer as part of Physical System Computer Aided Manufacturing It’s the application of computers in the production process. These applications control the production machines such as drills, lathes etc. to produce products according to the specifications obtained from the Design Database. A single minicomputer can control several production machines as now a days the many production machines have built-in microprocessors. Robotics It includes the use of Industrial Robots (IR) which automatically perform manufacturing processes. Robots enable firms to cut costs & achieve high levels of quality and also perform hazardous tasks. Slide 20: The computer as an Information System includes Material Requirements Planning Systems. ( MRP ) Reorder Point Systems. ( ROP ) Just-In-Time Approach Systems. ( JIT ) Material Requirements Planning Systems It consists of software to calculate and estimate the requirements of the production materials, their quantities and date on which they will be needed. Here the production managers don’t have to wait till the reorder points. The orders are placed long before the reorder point as the estimated date for reorder is calculated by the computer based MRP systems. Slide 21: The computer as an Information System Reorder Point Systems It’s the task of managing the firm’s inventory using computer based systems. Here a reactive approach is followed. So if an item balance reaches a particular level called Reorder Point ( ROP ), it then triggers a purchase order. The formula for calculating Reorder Point is R = L * U + S Where:- R – reorder point. L – Supplier lead time ( the amount of time the supplier needs to - - fill the order ) U – Usage rate ( number of units used or sold per day ) S – Safety stock level ( precautionary stock in units ) Slide 22: The computer as an Information System Just-In-Time Approach Systems It attempts to minimize inventory costs by producing in smaller quantities. Here the ideal lot size is 1. The single unit should move from various workstations of production until its production is completed. Timing is the key of JIT systems,as the supply of raw materials arrive from the supplier just before a production run is scheduled to begin. Slide 23: A Model of Manufacturing Information System Accounting Information system Industrial Engineering subsystem Manufacturing intelligence subsystem Database Cost subsystem Quality subsystem Inventory subsystem Production subsystem I F O R M A T I O N U S E R S Internal sources Environmental sources Data Data Data Output Subsystem Input Subsystem Slide 24: The Model of Manufacturing Information System Input Subsystem The Accounting Information System gathers internal data describing the manufacturing operation and environmental data that describes the firm’s transactions with its suppliers. The Industrial Engineering Subsystem consists of special data-gathering projects from inside the firm. It provides proper production standards. The manufacturing Intelligence Subsystem gathers data from the environment. The data collected includes recent updates from the activities of labor unions and suppliers. Slide 25: The Model of Manufacturing Information System Output Subsystem The Production Subsystem measures the production process in terms of Time i.e. tracking the work flow step by step. The Inventory Subsystem measures the production process in terms of Volume of production – transformation of raw materials in to finished products. The Quality Subsystem measures the quality of materials as they are transformed during the production process. The Cost Subsystem monitors and measures the cost required during the production process. Slide 26: Assignment #5.4 Explain Manufacturing Information Systems. What is Reorder Point?. How its calculated?. Explain the difference between Just-In-Time & Material Requirement Planning systems. Draw & explain the model of Manufacturing Information System. Explain how managers use the manufacturing Information Systems. Explain using a case study, how Manufacturing Information Systems help the managers to control and improve production standards & processes. Slide 27: Financial Information System A Model of Financial Information System Accounting Information system Internal Audit subsystem Financial intelligence subsystem Database Control subsystem Funds Management subsystem Forecasting subsystem I F O R M A T I O N U S E R S Internal sources Environmental sources Data Data Data Output Subsystem Input Subsystem Slide 28: Model of the Financial Information System. Input Subsystems The Accounting Information subsystem and Financial Intelligence subsystem are dedicated to gathering information about accounts and financial resources. The Internal Audit subsystems consist of firm’s internal auditors who analyze the firm’s conceptual systems to ensure that they process financial data properly as required. The Financial Intelligence subsystem seeks to identify the best sources of additional capita and the best investment of surplus funds. It gathers data and information from stockholders and financial community. Slide 29: Output Subsystems It exerts influence on the firm’s money flow. The Forecasting subsystem projects the firm’s long-range future activity in an economic environment. The forecasting methods are classified mainly in to two groups 1) Non quantitative forecasting, where no computation is involved as the forecasting is done using subjective estimates. There are mainly two methods for subjective estimation. a) Panel consensus technique, it consists of a group of experts who analyze the present scenario and predict the future. b) Delphi method, it involves a group of experts who do not meet in person but instead submit responses to a series of questionnaires that are prepared by the coordinator. These questionnaires are refined by going through various rounds thus refining the contents for forecasting. 2)Quantitative forecasting methods use various computation methods like regression analysis. Slide 30: The Funds Management subsystem manages the money flow to make it more balanced and positive. The flow can be managed to achieve the goals in the following manner To ensure that the revenue inflow is greater than the expense outflow. To ensure that the above condition remains as stable as possible throughout the year. The Control subsystem helps the managers to take effective advantage from all types of resources of the system. Slide 31: Assignment #5.5 Draw and explain the model of Accounting Information System. Explain how the control subsystem helps the managers to elevate the financial level of the firm and do effective forecasting. Explain with a case study the advantage of using Accounting Information System for easy control and establishment of more balanced and positive money flow. Slide 32: Human Resource Information System Human Resource basic activities Recruiting and hiring HR helps bring new employees into the firm by publishing ads through media ( audio & visual ) By taking the help of both government & private employment agencies. By conducting campus interviews. By conducting general tests. Education & Training To enhance the employees’ job related skills and knowledge the firms conduct educational and induction programs. A motivation factor is added like promotion benefits for those who attend and learn from the induction programs. Slide 33: Basic HR activities contd.. Data Management HR maintains a database of employees related data and processes those data to meet the information needs of the users ( usually sister concerns) Termination and Benefit Administration During employment the employees receive in addition to their basic salary, additional benefits like hospital, housing, profit sharing etc. When employees leave their jobs or are terminated, the HR processes the necessary paperwork and often conducts exit interviews. HR administers the firm’s retirement program for the former employees who are eligible. Slide 34: Accounting Information system HR research subsystem HR intelligence subsystem HRIS Database Workforce management subsystem Benefits subsystem Workforce planning subsystem I F O R M A T I O N U S E R S Internal sources Environmental sources Data Output Subsystem Input Subsystem Recruiting subsystem Compensation subsystem Environmental reporting subsystem Data A Model Of HRIS Slide 35: HRIS Model The Input Subsystems Accounting Information System Personal data elements :- they are relatively permanent and non financial in nature. These personnel data elements are created by HR at the time of employment and are kept updated as long as the employee is working for the firm. Similar data is kept for retired employees. Accounting data elements :- they are financial and tend to be more dynamic like monthly salary, income tax etc. Human Resource Research Subsystem Succession studies :- are conducted for the purpose of identifying those people in the firm who are candidates for the positions that become available including promotions. Job analysis and evaluation :- is done to identify the scope, qualifications and skills required for all the jobs in the firm. Grievance studies :- are conducted for the solution of the problems faced by the employees, where employees file complaints. Slide 36: HRIS model contd.. Human Resource Intelligence Subsystem Government Intelligence :- The govt. provides data and information that assist the firm in complying with various employment related laws and regulations. Supplier Intelligence :- Here the suppliers mean such firms and organizations which provide employee benefits like insurance companies. Also employment agencies. They provide data and information that help the firm for recruitment and hiring of people. Labor Union Intelligence :- The data and information provided by the labor unions are used for administering labor contracts between the unions and firms. Global Community Intelligence :- The global community provides information that describe local resources like housing, education, recreation etc. Competitor Intelligence :- Includes the data and information about the employees of the competitors who are very efficient, also called potential recruits and various effective strategies for better human resource development & management used by the competitors. Slide 37: HRIS Database Database Contents Employee data :- contains the data of all the present employees of the firm. Non employee data :- contains the data related to organizations like employment agencies, colleges, labor unions and government. It also contains data related to the employees like dependents, survivors and beneficiaries. Output Subsystems Work Force Planning Subsystem The basic work here is the future planning of the personnel needs of the firm. It also includes salary forecasting and job analysis & evaluation. Slide 38: HRIS output subsystems contd.. Recruitment Subsystem It includes activities related to tracking of job applicants prior to recruitment. Ascertaining the authenticity of the applicants. Workforce Management Subsystem It includes the various manpower evaluation and strengthening activities. Performance appraisal and training are its most popular tasks. Development efforts, in position control activities, competency checks and succession evaluation are also its parts. Slide 39: HRIS output subsystems contd.. Compensation Subsystem It includes various compensation calculation activities. It mainly includes extra money to be paid to the employees. Benefits Subsystem It includes the activities related to defined contribution and defined benefits plans that allow the employees to accumulate retirement funds to meet a specified standard of living. Flexible benefits plans enable employees to select the benefits that they want to take, which they are eligible for. Environmental Reporting Subsystem It includes reporting of firm’s personnel policies and practices to the government and also the labor unions. Slide 40: Assignment #5.6 Explain various HR activities. How the HR activities help in managing the HR needs of the firm. Draw and explain the HRIS model. What are the contents of the HRIS database? How does it help the output subsystems in the HRIS model. Give a case study explaining the how HRIS helped in solving the problems related to the quality of recruits and job satisfaction for the employees.