INFORMATION TECHNOLOGY FOR Module 4 - Session 15 - Semester 2

Application, Use of Information

MANAGERS System in Business and its
advantages
USE OF INFORMATION SYSTEM IN BUSINESS
❖ Operational Excellence
▪Improves the efficiency to attain higher profitability and is the most important tool to
achieve that.
▪Effectiveness of ability of an individual or an organization to do things that should be
done.
▪Manager predicts the conditions that may be problematic terms before it causes problems
arise; effective manager who joined the Badly problems that had prevented them.
▪Information systems, which provide information to help managers evaluate the situation
and choose the best options and thereby improve the effectiveness of that.
❖ New products, services and business models
▪Any business striving to enhance and to give a strong hold on the future has to instill a well
organized Business Information System.
▪An IS can help in analyzing independent processes and enables organized work activities.
Hence an information system entitles the companies to understand how the company
generates, develops and sells the services or products.
▪Information systems are major enabling tool to create:
▪New products or services
▪New business models
❖Improved decision making
 Business Information System, eases the process of decision making and simplifies the process
of delivering the required information and hence assists in taking better decisions instantly.
 When managers do not have the correct information they rely on forecasts and guesses which
result in:
 Over or under production
 Poor response times
 Misallocation of resources
 Poor outcomes raise costs and loss of customers
❖Competitive advantage
 Delivering better performance
 The organization that has improved the efficiency and effectiveness of the use of
information systems to be able to have the potential to transform the way organizations
compete
 Charging less for products
 Responding to customers and suppliers in real time
❖Survival
▪Information technology is needed for a business.
❖Productivity Improvement
▪Productivity improvement occurs when the work can be done more or less the same source.
▪In Organizations, improve productivity happen when improve work processes occur.
▪For example, when an employee may be replaced with new methods of processing 25 Orders
to 50 Orders, his labor productivity is 2 fold. Information systems can be faster, easier and
more effective to do things that are improving productivity in this way.
❖Information storage
▪Keeping a log of activities is important for all the organizations, to understand the reason for the
problems and so to provide solution to the same.
▪Business Information System makes it simple to store operational data, revision histories,
communication records and documents.
▪The storing of data manually involves a lot of time and money.
▪A sophisticated Information system stores the information in the database which simplifies the
process of finding the data easily.
❖Customer and supplier intimacy
▪Serving customers well and also raising revenue and profits
▪Intimacy with supplier result in lower costs and allows them to provide them with vital inputs
❖Behavioral change
▪Business Information System can be effectively implemented to help communication
better between the employers and the employees.
▪Information Systems work better as it stores documents and files in folders that can be
accessed and shared by the employees.
▪This ensures to oversee the flow of information between the management and the
lower-level employees.
▪This also allows the front-line employees to be a part of the decision making process
and hence feel motivated and committed towards doing a task.

❖Cost reductions
❖Continuous availability of the systems
❖Growth in communication capabilities and methods
HOW TO USE INFORMATION SYSTEMS
EFFECTIVELY?
Use instant messaging, emails, voice and video calls, and even chatbot technology to
improve communication with customers and suppliers. This could save you time, money
and effort, allowing you to react quickly to new work.
Integrate various IT systems to reduce administrative costs. For example, you can link
your online e-commerce shop front with stock control and accounting systems to
streamline your processes. See how to integrate your back-office systems.
Use labelling products with unique numbers and scannable barcodes to boost your
efficiency, and improve your stock control and supply chain management.
Use different solutions, such as customer management systems or mobile technologies,
to improve levels of customer service. These may help you record, organize and plan
contact with customers, access customer details on the go and view customer
interactions
KIND OF SYSTEMS IN AN ORGANIZATION
APPLICATION IN FUNCTIONAL AREAS
FEATURES OF INFORMATION SYSTEMS
PAYROLL TPS SYSTEM
❖Payroll TPS, which is a typical accounting transaction processing system found
in most firms. A payroll system keeps track of the money paid to employees.
❖The master file is composed of discrete pieces of information (such as a name,
address, or employee number) called data elements.
❖Data are keyed into the system, updating the data elements.
❖The elements on the master file are combined in different ways to make up
reports of interest to management and government agencies and to send
paychecks to employees.
❖These TPS can generate other report combinations of existing data elements.
PAYROLL TPS
DECISION MAKING WITH TPS
❖Managers need TPS to monitor the status of internal operations and the firm’s
relations with the external environment.

❖TPS are also major producers of information for the other types of systems.

❖For example, the payroll system illustrated, along with other accounting TPS,
supplies data to the company’s general ledger system, which is responsible for
maintaining records of the firm’s income and expenses and for producing
reports such as income statements and balance sheets.
MIS IN FUNCTIONAL AREAS
❖MIS summarize and report on the company’s basic operations.
❖The basic transaction data from TPS are compressed and are usually presented
in long reports that are produced on a regular schedule.
❖MIS transforms transaction level data from inventory, production, and
accounting into MIS files that are used to provide managers with reports.
❖TPS supply summarized transaction data to the MIS reporting system at the end of the time
period. Managers gain access to the organizational data through the MIS, which provides them
with the appropriate reports.
❖MIS usually serve managers primarily interested in weekly, monthly, and yearly results, although
some MIS enable managers to drill down to see daily or hourly data if required. MIS generally
provide answers to routine questions that have been specified in advance and have a predefined
procedure for answering them.
THANK YOU
INFORMATION TECHNOLOGY FOR Module 4 - Session 16 - Semester 2

Application of Information System

MANAGERS in Business and its advantages and
in accounting and finance
DSS IN FUNCTIONAL AREAS
EIS IN FUNCTIONAL AREAS
INFORMATION SYSTEMS IN ACCOUNTING AND
FINANCE
Accounting and finance system record and report the flow of funds through an
organization on a historical basis and produce important financial statements
such as balance sheets and income statements.
Many accounting software packages are available for these applications
The collection, storage, and processing of financial and accounting data used
by internal users to report information to investors, creditors and tax authorities.
It is generally a computer-based method for tracking accounting activity in
conjunction with information technology resources.
Produces reports including accounts receivables aging reports based on
customer information depreciation schedules for fixed assets, and trial balances
for financial reporting. Customer lists, taxation calculations, and inventory levels
may also be reproduced.
BENEFITS FOR ACCOUNTING AND FINANCING
Interdepartmental Interfacing:
An accounting information system strives to interface across multiple
departments. Within the system, the sales department can upload the sales
budget.
This information is used by the inventory management team to conduct
inventory counts and purchase materials.
Upon the purchase of inventory, the system can notify the accounts
payable department of the new invoice.
An AIS can also share information about a new order so that the manufacturing,
shipping, and customer service departments are aware of the sale.
Internal Controls
An integral part of accounting information systems relates to internal controls.
Policies and procedures can be placed within the system to ensure that sensitive
customer, vendor, and business information is maintained within a company.
Through the use of physical access approvals, login requirements, access logs,
authorizations, and segregation of duties, users can be limited to only the
relevant information necessary to perform their business function.
COMMON BUSINESS ACCOUNTING SYSTEM
It is a system that every organization has maintained day to day to know and run
the organization smoothly. It is summarized as:
1. Order processing
2. Inventory control
3. Accounts receivables
4. Account payables
5. Payroll
6. General ledger
1. Order processing: Captures and processes customer orders and produce data for inventory
control and accounts receivables

2. Inventory control: Processes data reflecting changes in inventory and provide shipping and
reorder Information.

3. Accounts receivables: Records amounts owed by customers and produce customer invoices,
monthly customer statements and credit management reports.

4. Accounts payable: Records purchases from, amounts owed to and payments to suppliers and
produce cash management reports.

5. Payroll: Record employee work and compensation data and produce paychecks and produce
paychecks and other payroll documents and reports

6. General ledger: Consolidates data from other accounting system to produce the periodic
financial statements and reports of the business.
FINANCIAL MANAGEMENT SYSTEM
Supports business managers and professional in decision concerning the
financing of a business and allocation and control of financial resources within
a business

Major financial management system includes cash and investment

management, capital budgeting, financial forecasting and financial planning

Financial analyst typically use electronic spreadsheets and other financial

software to evaluate the present and projected financial performance of a
business
ACCOUNTING PACKAGES
➢Free accounting software
It is possible to get small business accounting software for free.
However, free software often comes with limitations - for example, disruptive
advertising or locked access to advanced features that are bundled into paid
tiers.
If you're not sure which accounting software to use, freeware may allow you to
try out different products without having to commit.
It can also help you familiarize yourself with using different features so you have
a better idea of what type of product you might need.
➢Small business accounting software
Small business accounting software typically provides all the basic bookkeeping
features like invoicing, payroll, reporting and more.
These are usually simple programs, easy to use, available off-the-shelf or over
the internet.
They may have different tiered price plans, providing more functionality for
additional fees.
Some small business accounting packages may allow you integrate them with
other services your businesses uses, for example job scheduling or online
payments.
Other solutions may allow you to create customised functions or modules to fit
your specific needs
➢Enterprise accounting software
Enterprise accounting software is a package of programs that allows an organization to track their
financial transactions and the resulting data.
These types of packages are usually more expensive and offer all the standard financial tools and
reports, as well as a wider range of features and functions. For example, they will often integrate:
•Billing
•purchasing
•Reconciliation
•Supply chain software
•Inventory control
•Customer relationship management
•Business intelligence through analytics and dashboards
Enterprise-level software commonly features industry-specific modules, eg for construction or
manufacturing. Keep in mind that advanced features come at a higher price, so unless you run a
complex operation or have very specific business needs, investing in such software may not be
worth your while.
➢Online accounting software
Both free and paid for accounting software may be hosted online or on remote
servers in the cloud. Such products offer accounting capabilities in a way that is
similar to Software as a Service (SaaS) business model.
Online accounting software usually offers great flexibility and cost benefits. It
frees you from having to install and maintain software on your premises and
allows you to access your data and your services from remote offices or on the
go. However, due to their nature, online accounting software systems pose
certain risks, in particular to:
•data protection
•portability of your data
•business continuity options
•service level agreements around service provision
•reliance on internet access and connectivity
THANKYOU