Chapter

6
FUNCTIONAL BUSINESS SYSTEMS

BIS 1202 FOUNDATIONS OF INFORMATION SYSTEMS

Overview
Marketing Systems
Manufacturing Systems
Human Resource Systems
Accounting Systems
Financial Management Systems
 Functional Areas in an
Organisation A Vertical View

(Laudon & Laudon,

Marketing Finance Human Manufacturing
2006)
resources
Functional Areas in an Organisation. A Vertical
View
From the pyramid, Each vertical section represents a
functional area of the organization, and thus a
vertical view can be compared to a functional view
of the organization
Information systems can be designed to support the
functional areas or traditional departments such as,
accounting, finance, marketing, human resources, and
manufacturing, of an organization
Such systems are classified as functional information
systems. Functional information systems typically
follow the organizational structure
Functional Areas in an Organisation A
Vertical View
Functional information systems are typically
focused on increasing the efficiency of a particular
department or a functional area.
One disadvantage of functional systems is that
although they may support a particular functional
area effectively, they may be incompatible to each
other(NO interaction between internal systems ).
Such systems, rather than aiding organizational
performance will act as inhibitors to an
organization's development and change.
Functional Areas in an Organisation A
Vertical View
Organizations have realized that in order to be agile
and efficient they need to focus on organizational
processes
A process may involve more than one functional area.

Some Information Systems are cross-functional

Example: A TPS can affect several different business
areas: Accounting, Human Resources, Production, etc.
Some Information Systems concentrate on one particular
business area (Accounting for example)
 FUNCTIONAL INFORMATION SYSTEMS

These systems are:

Marketing Systems
Manufacturing Systems
Human Resource Systems
Accounting Systems
Financial Management Systems
Functional
Business
Areas
Marketing Systems
Marketing Information Systems provide
information technologies that support major
components of the marketing function.
Interactive Marketing
Customer focused marketing process
Based on using Internet, intranets, & extranets
to establish two-way communications between
customers or potential customers and the
business
Customers become involved in product
development, delivery, & service issues
Marketing systems

Market Research

Statisticalmodels help market researchers

find the best populations for new and
existing products
Targeted Marketing

Database management systems (DBMS)

help define potential customers as
narrowly as possible
Marketing systems
Five targeting components
Community: Customize their Web advertising messages
and promotion methods to appeal to people in specific
communities. Virtual communities.
Content: Advertising such as electronic billboards or
banners can be placed on various Web site pages, in
addition to a company s home page .These message
reach the targeted audience.

Context: Advertising appears only in Web pages that

are relevant to the content of a product or services.
So advertising is targeted only at people who are
already looking for information about a subject matter.
 Marketing systems
Five targeting components.
Demographic/psychographic: Marketing efforts
can be aimed only at specific type of class of
people: unmarried, twenty-something , middle
income , male collage graduates

Online behavior: Advertising and promotion

efforts can be tailored to each visit to a site by
individual. This strategy is based on Web cookie
files recorded on the visitors disk drive from
previous visits.
 Marketing systems

Sales Force Automation

The sales force is connected to marketing websites
on the Internet, extranets, & the company intranet
Equipping salespeople with information technology to
facilitate productivity
IT allows salespeople to present different options for
products and services on the spot.
Increases productivity of sales force Speeds up the
capture & analysis of sales data.
Allows management to provide improved delivery
information & better support of the sales force.
The Internet as a Marketing and Selling
Medium
Web lets companies reach more
shoppers and serve them better

Mobile Commerce (M-Commerce) is the

newest form of marketing

Commercial announcements pervade the

Web
Marketing Systems
Manufacturing systems.
Support the production/operations function
Assists firms in,
Planning, monitoring, & controlling inventories,
purchases, & the flow of goods and services
Plant activity scheduling

Material requirement assessment

Material reallocation between orders

Resource qualification for task completion

 Manufacturing Systems (continued)

Computer-Integrated Manufacturing (CIM)

the manufacturing approach of using computers to control the
entire production process
Objectives of CIM
Simplify production processes , product designs and
factory organization as a vital foundation to automation
and integration.
Automate production processes and the business functions
that support them with computers machines and robots.
Integrate all production and support processes using
computers telecommunications networks and other
information technologies.
Manufacturing Systems (continued)

Supports the concepts of flexible

manufacturing systems, agile
manufacturing, & total quality
management
Computer-Aided Engineering (CAE)
Computer-Aided Design (CAD)
Material Requirements Planning (MRP)
Manufacturing Systems (continued)

Computer-Aided Manufacturing (CAM)

Systems that Automate the production process
Manufacturing Execution Systems (MES)
Performance monitoring systems for factory floor
operations
Track, schedule, and control manufacturing processes
Collect data such as:
Hours machine operates every day of the month
Hours the machine is idle and why
MES includes shop floor scheduling and control, machine control,
robots control, and process control systems.
Manufacturing Systems (continued)
Process Control
The use of computers to control an ongoing
physical process
Machine Control
The use of a computer to control the actions of
a machine.
Also called numerical control
Manufacturing Systems (continued)
HUMAN RESOURCE SYSTEMS.

Human Resource Information Systems

Support
Planning to meet the personnel needs of the
business
Development of employees to their full potential
Recruitment, selection, & hiring
Job placement
Performance appraisals
Employee benefits analysis
Training and development
Health, safety, & security
Human Resource systems (Cont.)

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
Human Resource systems (Cont.)

Training
Multimedia software training is replacing
classrooms and teachers (CBT)
Training software simulates an actual task or
situation and includes evaluation tools
Evaluation
Evaluationsoftware helps standardize the
evaluation process and adds a certain measure
of objectivity and consistency
 Human Resource systems (Cont.)

Compensation and Benefits Management

ISs 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
Human Resource Systems (continued)
HRM and the Internet
Allows companies to process most common
HRM applications over their intranets.
Allows companies to provide around-the-
clock services to their employees.
Allows companies to disseminate valuable
information faster.
Allows employees to perform HRM tasks
online.
Human Resource Systems (continued)
 Accounting system.
AISs automatically post transactions in the books and automate
generation of reports for management and legal requirements
Record and report business transactions and other economic
events
Online Accounting Systems
Accounting Information Systems
are being affected by Internet and client/Server
technologies.
Using the internet ,intranets, extranets and other networks
changes how accounting information systems monitor and
track business activity.
Accounting Systems (continued)

Six widely used accounting systems

Order processing
Captures & processes customer orders and
produces data needed for sales analysis and
inventory control
Inventory Control
Processes data reflecting changes in items in
inventory.
Helps provide high-quality service while
minimizing investment in inventory & inventory
carrying costs
Accounting Systems (continued)
Accounts Receivable
Keeps records of amounts owed by
customers from data generated by
customer purchases and payments
Accounts Payable
Keeps track of data concerning
purchases from, and payments to,
suppliers
Accounting Systems (continued)
Payroll
Receives and maintains data from employee
time cards and other work records
General Ledger
Consolidates data received from accounts
receivable, accounts payable, payroll, &
other accounting information systems
Accounting systems (Cont.)

Electronic Data Processing (EDP) Audits

Ensureelectronic systems comply with standard
regulations and acceptable rules

Ensure
systems cannot be manipulated to avoid
acceptable principles
Accounting systems(Cont.)
Financial information system.
The job of financial managers is to manage money
as efficiently as possible by:
Collecting payables as soon as possible
Making payments by the latest time allowed by
contract or law
Ensuring sufficient funds are available for day-
to-day operations
Taking advantage of opportunities to accrue the
highest yield on funds not used for current
activities
Financial Management Systems

Supports financial managers in

decisions concerning
The financing of the business
The allocation & control of
financial resources within the
business.
Financial Management Systems
(continued)
Major financial management system categories
Cash Management
Collects information on all cash receipts and
disbursements on a real-time or periodic basis
Investment Management
Helps the financial manager make buy, sell, or hold
decisions for each type of security
Helps the financial manager develop the optimum
mix of securities in order to minimize risk and
maximize return
Financial Management Systems
(continued)
Capital Budgeting
Involves evaluating the profitability and financial
impact of proposed capital expenditures
Allows financial managers to analyze long-term
expenditure proposals for plant and equipment
Financial Forecasting & Planning
Evaluate the present and projected financial
performance of the company
Help determine financing needs and analyze
alternative methods of financing
Explore what-if and goal-seeking questions
Finance (Cont.)
Financial management system
Students research.
Cross functional systems
Enterprise resource planning(ERP)
Examples
Advantages and disadvantages.