4. information systems in functional areas
TRANSCRIPT
Information Systems in Functional Areas
1Prof. Nivedita Roy, IBS-Gurgaon
Marketing Information Systems• The marketing oriented firm needs some form of
process and a system to carry out the activities of collection, storage, processing, retrieval and use of information
• Such a system is called a marketing information system (MKIS).
• Kotler defines an MKIS as:
‘…. Consisting of people, equipment and procedures to gather, sort, analyse, evaluate and distribute needed, timely and accurate information to marketing decision makers.’
2Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• To manage a business well is to manage its future and this means the management of information (MIS) of which the MKIS is an integral part, which is a valuable resource to be carefully managed as any other resource e.g. Human resources and financial resources.
• It is a framework to day-to-day managing and structuring of information gathered regularly from sources inside and outside the organization
3Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• Provides a continuous flow of information about such factors as prices, advertising expenditure, sales, competition and distribution expenses
• The marketing databank is a file that contains data collected from the MIS and market research projects
• Marketing intelligence is a collection of data and ideas available in an organization
4Prof. Nivedita Roy, IBS-Gurgaon
Contd.
‘MKIS (MIS) is a set of procedures and methods for the regular, planned
collection, analysis and presentation of information for use in marketing
decisions’
American Marketing Association
5Prof. Nivedita Roy, IBS-Gurgaon
Role of IT in Marketing
• Operational need – Mainly supports accounting and operational functions
(e.g. Stock control, staffing decisions). – Besides periodic reports are also used
• Decision support databases – Supports traditional marketing functions like: target
marketing, cross-selling, sales analysis/ forecasting, market basket analysis, promotional analysis, churn analysis, profitability analysis, customer life time value measurement, product packaging etc
6Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• Customer relationship management. • The major marketing functions are:
• Campaign management • E-marketing management,• Call centre management, • Profitability analysis, • Customer retention / loyalty, • Integration of customer touch points
7Prof. Nivedita Roy, IBS-Gurgaon
Hierarchical view of MKIS
Strategic
Tactical
Operational
• External environment monitoring• Market scanning• Analytical tools
Functional information:• Price• Product• Promotion• Distribution• Finance• HR
Customer handling :• Product availability• Order processing • Salesperson
Productivity• Telemarketing
8Prof. Nivedita Roy, IBS-Gurgaon
The components of a computerised MKIS
Model Bank
Data Bank
StatisticalBank
MKISDisplay
unitMarketingManager
9Prof. Nivedita Roy, IBS-Gurgaon
Components of MKIS
• Data bank– Raw data e.g. Historical sales data, secondary data
• Statistical bank – Programmes to carry-out sales forecasts, spending
projections• A model bank
– Stores marketing models e.g. Ansoff’s matrix, Boston matrix
• Display unit – VDU and keyboard
10Prof. Nivedita Roy, IBS-Gurgaon
Alternative representation of MKIS
DECISION SUPPORT SYSTEM (MKIS)
Marketing intelligence system
Marketing research system
Internal accounting
system Analytical marketing system
11Prof. Nivedita Roy, IBS-Gurgaon
Internal Accounting System
• All firms generate data as part of the general process of carrying out their business.
• The generation, recording, storage and retrieval of such data is referred as the ‘internal accounting system of the firm’.
• It refers to all information received and generated by the firm.
• Perhaps a better name for this system would be the ‘internal documentary system’.
• The important thing for the management of marketing firms to realise is that such information is available and can be retrieved from within the internal documentary system or ‘internal accounting’ system of the firm with little effort and at small cost.
12Prof. Nivedita Roy, IBS-Gurgaon
The Marketing Intelligence System
• Kotler defines the marketing intelligence system in the following manner:
‘A marketing intelligence system is a set of procedures and sources used by managers to obtain their everyday information about pertinent developments in the marketing environment’.
• In the course of carrying out their business for the firm, members of staff may come across potentially valuable and interesting information
• So a systems is required to collect, collate and manage this source of collected information that is referred to as the ‘marketing intelligence system’
13Prof. Nivedita Roy, IBS-Gurgaon
The Marketing Research System
• This is the final input to the marketing information system.
• The marketing research system makes use of– Secondary data (data that are already in existence)– And primary data (data collected for a specific piece of
research for the first time).
14Prof. Nivedita Roy, IBS-Gurgaon
The Analytical Marketing System
• This sub system of the overall MKIS does not produce any new data.
• Rather, it takes the data from the other three component parts of the system in the form of input data and enhances its value.
• Users of the system are able to do this by applying ‘management science’ techniques to the data thereby transforming it in to a form that makes it more easily understood and more valuable to the marketing decision maker.
• Information collected from formal marketing research, marketing intelligence gathering of internally generated information can be used as input data in a wide variety of forecasting models.
15Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• Data collected over a period of time can be extrapolated in to the future by the use of time series techniques that allows the manager to model seasonality and cyclicality effects.
• Trend fitting, using the mathematical functions of known ‘curves’ can also be used to forecast sales and model likely future product life cycles.
• Linear and multiple regression are more sophisticated forecasting techniques that make use of ‘econometric’ procedures
16Prof. Nivedita Roy, IBS-Gurgaon
Sources of data for MKIS
External• On-line databases or• CD-ROM
– Census data– Market researchers– POS data
• Annual reports• Trade press
Internal• Transaction data
– Order entry– Invoicing– Billing– Service calls
• Market research• Sales call reports
17Prof. Nivedita Roy, IBS-Gurgaon
Marketing Information System (tactical)
Marketing Research
Marketing Intelligence
Order Entry
Invoicing
Call Reporting
Transaction Processing Subsystems
Boundary-Spanning Subsystems
Product Subsystem
Place Subsystem
Promotion Subsystem
Price Subsystem
Sales Forecasting
Marketing-Mix Subsystems
Internal Databases
External Sources of Information
Customer and Prospect
Data
Competitor Data
Transaction Data
18Prof. Nivedita Roy, IBS-Gurgaon
Marketing Information System
19Prof. Nivedita Roy, IBS-Gurgaon
Manufacturing Information Systems: An Overview
• Most of the manufacturing centric organizations prefer an integrated manufacturing information system (MIS) that supports all the activities pertaining to production/operation
• Manufacturing information system based on computers use a variety of techniques to support computer integrated manufacturing (CIM) that simplifies, automates and integrates all the production processes.
20Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• Most of the manufacturing set-ups use computer aided design (CAD) and computer aided manufacturing (CAM) for assisting the engineers in product design and manufacturing activities.
• Computer aided process planning (CAPP) is also used for improvised production processes
21Prof. Nivedita Roy, IBS-Gurgaon
Categories of Manufacturing Information Systems (MIS)
Broadly speaking any type of MIS fall into the following three categories:
• Manufacturing planning system• Manufacturing control system• Transaction processing system
22Prof. Nivedita Roy, IBS-Gurgaon
Manufacturing Planning System
• This captures the details related to the following production activities:– Production planning– Manpower planning– Material requirement planning
23Prof. Nivedita Roy, IBS-Gurgaon
Manufacturing Control Systems
This relates to the activities like:• Production scheduling • Material requirement planning • Capacity requirement planning • Engineering• Maintenance • Shop floor control • Quality control • Process control • Machine control• Robotics etc.
24Prof. Nivedita Roy, IBS-Gurgaon
Transaction Processing Systems
• Here the following activities are carried out:– Shop floor reporting– Inspection– Work order processing
25Prof. Nivedita Roy, IBS-Gurgaon
Benefits from Manufacturing Information System
Direct benefits of MIS are as under:• Improved efficiency in the manufacturing processes• Better production schedule planning • Higher productivity• Better quality control• Regular feedback monitoring and control of all the
production functions and operations• Reduced inventories• Improved customer service
26Prof. Nivedita Roy, IBS-Gurgaon
Computer Integrated Manufacturing
• CIM involves the use of computers to automate, control and
document manufacturing activity through the entire
manufacturing process
• Applications for quality control, scheduling and yield
analysis are included in CIM systems
• Integration is the key word
27Prof. Nivedita Roy, IBS-Gurgaon
28Prof. Nivedita Roy, IBS-Gurgaon
Manufacturing integration
29Prof. Nivedita Roy, IBS-Gurgaon
Computer Aided Design
• CAD is the use of computers for the synthesis, analysis, and optimization of a design.
• This is an iterative process that constitutes of certain steps
30Prof. Nivedita Roy, IBS-Gurgaon
Use of Computer Aided Design
• CAD programs are good for– 2d sketches– 3d modeling– Animation in 3d space (rotation/translation/scaling)– Geometric and physical simulations/analysis– Virtual reality
• Be present in 3d world with 3d objects• Touch/feel the objects• Interact with the environments
31Prof. Nivedita Roy, IBS-Gurgaon
CUSTOMER REQUIREMENTS,CUSTOMER NEEDS
FUTURE
DIRECTIONS
PROBLEM IDENTIFICATION
PRELIMINARY IDEAS
REFINEMENT PROCESS
ANALYSIS AND DECISION PROCESS
IMPLEMENTATION
CRITERIA SATISFIED
REFINEMENT PROCESS
YES
NO
Computer Aided Design Process
32Prof. Nivedita Roy, IBS-Gurgaon
Computer Aided Manufacturing
• CAM is the use of computer systems to plan, manage, and control the operations of a manufacturing plant through either direct or indirect computer inter face with the plant's production resources.
• CAD/CAM covers a wide spectrum of activities that include production specification, conceptual design, final design, drafting, process planning, manufacturing, assembly, and inspection.
33Prof. Nivedita Roy, IBS-Gurgaon
Role of Human Resource Department
• Is responsible for attracting and maintaining an appropriate work force for the firm.
• The human resources process entails:– Attracting the work force – Developing the firm's work force to meet the firm's
personnel needs– Maintaining the work force
34Prof. Nivedita Roy, IBS-Gurgaon
Human Resource Management Process
Organizational
Strategic Plan
Human Resource Planning Job Appraisal & Design
Compensation
Staffing
Training
Replacement
Evaluation
35Prof. Nivedita Roy, IBS-Gurgaon
Use Of IT In HR Activities • 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
• Training– Multimedia software training is replacing classrooms and
teachers.– Training software simulates an actual task or situation and
includes evaluation tools.
36Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• Evaluation– Evaluation software helps standardize the evaluation process
and adds a certain measure of objectivity and consistency.– Compensation and benefits management– IS 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.
37Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• Human Resource Information Systems support human resource management in organizations.
• They include:
– Information systems for staffing the organization– Training and development– Compensation administration
38Prof. Nivedita Roy, IBS-Gurgaon
Common Use of Computers in HRM
• Job analysis• Equal employment opportunity and affirmative action
reporting• Recruitment• Selection• Human resource development and career planning• Performance appraisal• Compensation and benefits• Health and safety• Labor relations• Selection out• New and future applications
39Prof. Nivedita Roy, IBS-Gurgaon
HRIS In Practice
• Manpower Planning• Labor Force Tracking
• Labor Cost Analysis• Turnover Analysis
• Recruitment• Workforce Planning
• Skill assessment• Performanceevaluation
• Payroll control• Benefits Administration
• Compensation effectiveness• Benefits Analysis
• Contract costing• Salary forecast
• Succession planning• Performance appraisal plans
• Training effectiveness• Career matching
Staffing Training &
Development CompensationAdministration
StrategicSystems
TacticalSystems
OperationalSystems
40Prof. Nivedita Roy, IBS-Gurgaon
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
TRAINING & DEVELOPMENT TRACK TRAINING, SKILLS, APPRAISALS OPERATIONAL
CAREER PATHING DESIGN EMPLOYEE CAREER PATHS KNOWLEDGE
COMPENSATION ANALYSIS MONITOR WAGES, SALARIES, BENEFITS MANAGEMENT
HUMAN RESOURCES PLANNING PLAN LONG-TERM LABOR FORCE NEEDS STRATEGIC
HRIS: Description
41Prof. Nivedita Roy, IBS-Gurgaon
Recruiting & hiring Education & training Data management Termination & benefit administration
Primary HR Activities
42Prof. Nivedita Roy, IBS-Gurgaon
Channels of Recruiting
Walk-in
Write-in
Employee referrals
Advertising
Department of labor
Private placement agencies
Educational institutions
43Prof. Nivedita Roy, IBS-Gurgaon
Preliminary reception of application
Employment tests
Selection interview
References and background check
Medical evaluation
Conference
Realistic job previews
Hiring decision
Selection Process
44Prof. Nivedita Roy, IBS-Gurgaon
Human Resource Development
Orientation
Training
Education
45Prof. Nivedita Roy, IBS-Gurgaon
Compensation
Payroll
Executive compensation
Bonus incentives, etc.
46Prof. Nivedita Roy, IBS-Gurgaon
Flow of Information in HR
Recruiting
Potentialemployees
Hiring
Employees
Educationand
Training
BenefitAdministrationTermination
Retiredemployees
Data Management
The Firm
47Prof. Nivedita Roy, IBS-Gurgaon
Concept of HRIS( 5 C )
Capability• Top management• HR department• IS department
Control Cost Communication
• Information flow Competitive advantage
48Prof. Nivedita Roy, IBS-Gurgaon
A model of a Human Resource Information System
Accountinginformation
system
HRsresearch
subsystem
HRsintelligencesubsystem
Inputsubsystems
Data Information
HRISDatabase
Internal sources
Environmental sources
Work forceplanning
subsystem
Work forcemanagement
subsystem
Benefitssubsystem
Environmentalreportingsubsystem
Compensationsubsystem
Recruitingsubsystem
Outputsubsystems
Users
49Prof. Nivedita Roy, IBS-Gurgaon
HRIS Subsystems
• Accounting Information System• Personnel data elements• Accounting data elements
• Human resources research subsystem• Succession studies• Job analyses and evaluations• Grievance studies
50Prof. Nivedita Roy, IBS-Gurgaon
Contd.
Human Resources Intelligence Subsystem Government intelligence Supplier intelligence Labor union intelligence Global community intelligence Financial community intelligence Competitor intelligence
51Prof. Nivedita Roy, IBS-Gurgaon
Contd.
Work force planning subsystem Organization charting Salary forecasting Job analysis / evaluation Planning Work force modeling
Recruiting subsystem Applicant tracking Internal search
52Prof. Nivedita Roy, IBS-Gurgaon
Contd.
Work force management subsystem Performance appraisal Training Position control Relocation Skill / competency Succession Disciplinary
Compensation subsystem Merit increases Payroll Executive compensation Bonus incentives Attendance
53Prof. Nivedita Roy, IBS-Gurgaon
Contd.
Benefits subsystem Defined contribution Defined benefits Benefit statements Flexible benefits Stock purchase Claims processing
Environmental reporting subsystem EEO records ( equal employment opportunity ) EEO analysis Union increases Health records Toxic substance Grievances
54Prof. Nivedita Roy, IBS-Gurgaon
Accounting Information Systems (AIS)
• Comprise the functional area of business responsible for providing information to the other areas to enable them to do their jobs and for reporting the results to interested parties.
• Used to identify, analyze, measure, record, summarize, and communicate relevant economic information to interested parties.
• Is a unified structure that employs physical resources and components to transform economic data into accounting information for external and internal users.
55Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• The first function of the AIS is to support the performance of the organization’s business activities.
• For this the revenue cycle is used that includes a recurring set of business and related information processing operations associated with providing goods and services to customers and collecting cash payment for those sales.
56Prof. Nivedita Roy, IBS-Gurgaon
Accounting Information Systems
57Prof. Nivedita Roy, IBS-Gurgaon
Basic subsystems in the AIS
ExpenditureCycle
HumanResources
ProductionCycle
RevenueCycle
FinancingCycle
General Ledger & Reporting System
58Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• The expenditure cycle• Involves activities of buying and paying for goods or
services used by the organization.• The production cycle
• Involves activities converting raw materials and labor into finished goods.
• The human resources/payroll cycle• Involves activities of hiring and paying employees.
59Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• The revenue cycle• Involves activities of selling goods or services and
collecting payment for those sales.• The financing cycle
• Involves activities of obtaining necessary funds to run the organization, repay creditors, and distribute profits to investors.
60Prof. Nivedita Roy, IBS-Gurgaon
TrialBalance
TrialBalance
GeneralJournal
GeneralJournal
GeneralLedger
GeneralLedger
SourceDocuments
SourceDocuments
AdjustingEntries
AdjustingEntries
FinancialStatements
FinancialStatements
ClosingEntries
ClosingEntries
The Accounting Information System Model
INPUTS
PROCESSING
OUTPUTS61Prof. Nivedita Roy, IBS-Gurgaon
Basic activities of revenue cycle
• Sales order entry • Shipping• Billing and accounts receivable• Cash collections
62Prof. Nivedita Roy, IBS-Gurgaon
Use of IT in sales order entry
– On-line processing of sales orders with e-mail/web site– Optical character recognition (OCR)– Electronic data interchange (EDI)– Linking EDI with customers’ point-of-sale (POS)– Sales force automation
63Prof. Nivedita Roy, IBS-Gurgaon
Billing and Accounts Receivables
• Following two activities are performed at this stage of the revenue cycle: Invoicing customers Maintaining customer accounts
• The decisions and information required here include:– Accurate billing and information identifying the items
and quantities shipped, prices, and special sales terms.– Decisions about policies regarding sales returns and
warranties.
64Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• Billing• The sales invoice notifies customers of the
amount to be paid and where to send payment.• Cycle billing.
• Maintain accounts receivable• Open invoice method• Balance-forward method
• A monthly statement summarizes transactions that occurred and informs customers of their current account balance.
• Account adjustments and write-offs• A credit memo
65Prof. Nivedita Roy, IBS-Gurgaon
Use of IT in billing and A/c Receivables
– On-line processing of invoices– Electronic Data Interchange (EDI)– Imaging to create and store digital versions of all paper
relating to a customer’s account.
66Prof. Nivedita Roy, IBS-Gurgaon
Cash Collections
– Reduction of cash theft is essential.– The billing/accounts receivable function should not
have physical access to cash or checks.– The accounts receivable function must be able to
identify the source of any remittances and the applicable invoices that should be credited.
– Checks are received and deposited.– Remittances
• Remittance list - shows the customer, invoice number, and the amount of each payment.
• Lockbox
67Prof. Nivedita Roy, IBS-Gurgaon
Use of IT in cash collection
– Electronic lockbox– Electronic funds transfer (EFT)– Financial electronic data interchange (FEDI)
68Prof. Nivedita Roy, IBS-Gurgaon
Users of Financial Information
• Internal users– Managers– Non managers
• Environmental users– Those with direct business relationships– Those with no direct relationships
• Information type– Periodic and special reports– Results of mathematical simulations– Electronic communications – Advice of expert systems
69Prof. Nivedita Roy, IBS-Gurgaon
Financial Information Systems
• Financial information systems provide necessary support for the finance function.
• Financial information systems provide a wide range of information for both managers and interested external people
• Uses include:– Auditing– Financial intelligence– Forecasting– Funds management– Budgeting
• Financial modeling is one of the oldest uses of mathematical simulations in business
70Prof. Nivedita Roy, IBS-Gurgaon
Database
Accountinginformation
system
Internal audit
subsystem
Financialintelligencesubsystem
Forecastingsubsystem
Fundsmanagementsubsystem
Controlsubsystem
Internal sources
Environmentalsources
Inputsubsystems
Outputsubsystems
Users
Data Information
A model of a Financial Information System
71Prof. Nivedita Roy, IBS-Gurgaon
Financial Intelligence Subsystem
Represents the firm in establishing two-way links with:• Stockholders or owners• Stockholder relations department
– Annual meetings– Annual reports– Quarterly reports
• Financial community- Indirect influence from the government sources of
financial intelligence:– Word of mouth– Periodicals– Computer databases
• Environmental influence on the money flow
72Prof. Nivedita Roy, IBS-Gurgaon
Forecasting Subsystem• One of the oldest mathematical activities in business
– Rely on past data– Make semi structured decisions– Cannot be perfect
• Short-term forecasts – One to three years– May be done by marketing
• Long-term forecasts – Usually done by finance, or special planning group
73Prof. Nivedita Roy, IBS-Gurgaon
Contd.
• Non-quantitative (qualitative)– Panel consensus– Delphi method
• Electronic meeting system (EMS) help combine non-quantitative and quantitative methods
• Quantitative forecasting methods– Regression analysis is dominant– Related methods are available– Many software packages used
• Minitab• SAS• SPSS
74Prof. Nivedita Roy, IBS-Gurgaon
Funds Management Subsystem
• Manage to achieve– Revenue flow inflow exceeds expense outflow– Maintain stability
• Cash flow models– Performs cash flow analysis
75Prof. Nivedita Roy, IBS-Gurgaon
Control Subsystem
• Operating budget for the fiscal year• Three approaches
– Top-down– Bottom-up– Participative
76Prof. Nivedita Roy, IBS-Gurgaon
1.
2.
3.
4.
Final organizationalbudget
5.
The Budgeting Process
Forecasting model
Sales forecast
Topmanagement
Resource planningmodel
Human resourcerequirements
Financerequirements
Manufacturingrequirements
Marketingrequirements
Financemanager
Human resourcemanager
Informationservicesmanager
Manufacturingmanager
Marketingmanager
Requestedfinancebudget
Requestedhumanresourcesbudget
Requested informationservices budget
Requestedmanufacturingbudget
Requestedmarketingbudget
Approved sales forecast
Topmanagement
Information servicesrequirements
77Prof. Nivedita Roy, IBS-Gurgaon