CHAPTER 2

The Role of Information

Technology

MA 2 – Managing Costs and Finances

Lecturer: Christine Colon, ACCA, MSc

LOG
O
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 Role of information technology

 Capturing and processing cost and
management accounting data
 Storing cost and management
accounting data
 Outputting cost and management
accounting data
 Management information systems
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The Role of Information Technology

Information for
Data Organize, Calculate Decision Makers
Inputs Processes Outputs

Store

To do all this you need a computer system

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Advantages of Computers

 Speed – process transactions and

data in large volume very much faster
and cheaper than humans – can
produce information timely..
 Accuracy – if programmed correctly,
the computer is accurate almost all
the time.
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Advantages of Computers
 Volume and complexity – can process
almost infinite transactions of high
complexity.
 Access to information – users can easily
access and use information stored from
anywhere if the database is linked to the
internet.

Disadvantage of computers
Computers lack human judgement and are susceptible
to human error in input
 Capturing and Processing Data
Automated data capture -
directly by an input device
without using a keyboard.
•Using document readers
Magnetic strips (OMR, MICR, OCR)
•Bar code readers
Smart cards
Origination – ie •Scanning pictures
transactions •EFTPOS
giving rise to data
Data input.
Methods should be fast,
cheap and with few errors

Transcription –
convert data in Keyboard with VDU
originating (GUI)
document to a Card reading devices
format for data
Touch screens
entry by staff
Voice recognition
Graphic User Interface
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Capturing and processing data
Data input methods examples
 GUI: Windows, pull down menu, icons, dialogue
boxes
 Document reading methods such as magnetic
stripe card or smart cards
 Card reading devices:
 MICR – magnetic ink character recognition
 OMR – optical mark reading
 Scanners and OCR – optical character
recognition
 BAR coding and EPOS – electronic point of sale
 EFTPOS – electronic funds transfer at point of
sale
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Capturing and processing data
 VDU- Video display Unit (monitor)
 Displays texts and graphics

 GUI- Graphical User Interface (deals with buttons,

textbox, graphic- based not text-based)
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Capturing and processing data
 OMR- Optical Mark Recognition- involves a pre-
printed form marked with a pen
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Capturing and processing data
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Capturing and processing data
OCR- Optical Character Recognition
(convert print into text)
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Capturing and processing data
POS- Point of Sale

EPOS- Electronic Point of Sale (place where retail

transaction is completed)

EFTPOS- Electronic Fund Transfer at Point of

Sale (Fund transfer based on the use of payment
cards)
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Storage Devices
hold data in the machine in a sensible
form until needed for further processing

Tape Disks
storage Hard disk
Floppy disks
Zip disk

DATA
STORAGE
CD / DVD
Memory sticks
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Output Devices

VDU
PRINTERS

Factors to consider when choosing output medium

Is hard copy required?

Quality required
Volume of production
Speed of output
Suitability of output medium
Cost
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Management Information Systems

Collection of hardware and software

to store and process data and provide
information on screen and print outs
to management.

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Management Information Systems

PC PC

 Departmental IS Unix
Enterprise
Server

 Enterprise-Wide IS Hub
PC

 Inter-Organizational IS Serial Terminals

In-house operations

Mux Thin
Client

Not confined to accounting Thin

information Client

Includes DIALUP/T1/T3/ISDN/FRAME RELAY

DIALUP/T1/T3/ISDN/FRAME RELAY

Operations
Mux

 Thin Client
PC
Mux

Thin Client
Appliance PC

 Accounting Appliance Appliance

Unix Server
Enterprise Store 3

 Finance Server
On-line Multi-station Store
Appliance
Server
Store 3
Store Location 1
On-line Multi-station Store

 Marketing Online Telenet System using the Internet

Store Location 2

 Human resources
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Importance of Planned MIS

• MIS distributes useful information to managers for them

to do their work properly.
• Bad information = bad decisions or no decisions.

MIS must be planned so that:

• Information is communicated timely.
• All relevant information is given to the appropriate staff
that needs it.
• There is reference available in the event of staff changes
(i.e. the staff that left do not take away important
information that is only kept in his/her head).

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end of lecture

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The Role of Information Technology

REVIEW
QUESTIONS
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Review Questions

Printers which print a whole page at a time

are known as:

A Bubble jet printers

B Inkjet printers
C Scanners
D Laser Printers
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Review Questions

Which of the following is an output device?

A Screen
B Keyboard
C CPU
D Disk
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Review Questions

A method of input which involves a machine

that is able to read characters by using lasers
to detect the shape of those characters is
known as:

A MICR
B OCR
C OMR
D CPU
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Review Questions

Which of the following factors may affect the choice

of computer output medium?
(i) Whether a hard copy of the output is required
(ii) Whether the output requires further computer
processing
(iii) Whether a large volume of output is to be used
for reference purposes

A (i) and (ii) only

B (i) and (iii) only
C (ii) and (iii) only
D All three factors
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Review Questions

Data input has three stages. One of these is

the origination of data. Select from the
choices below the TWO which correctly
describe the other two stages.

A Translation of data
B Transcription of data
C Inputting of data
D Formatting of data
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Review Questions

Which of the following choices does the

following describe?
“A physically small external storage device
usually connected via a USB port.”

A DVD
B CD-ROM
C Memory stick
D Zip Disk
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thank you!

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