UNIT - 3

Management Information System in functional Areas of Business

Unit-3 Management Information System in functional Areas of Business

Accounting information system Geographical information system Human resource information system, Inventory information system marketing information system Quality information system R&D information system.

Accounting information system

Accounting is mainly concerned with the collecting, recording and evaluation of financial data and then, communicating this information to the management and other people. It is viewed as an information system since it has inputs (financial data), processes (evaluation of data) and outputs (financial statement).

There are 3 general types of accounting Information system:

(1) Financial Accounting System: This system provides financial statements to investors, governmental authorities and other interested parties in accordance with their reporting formats. (2) Management Accounting System: It provide reports to managers both, for strategic and tactical decisions and on profitability of the organization. (3) Cost Accounting System: It provides reports to managers for cost planning, and cost control operations.

A Typical Financial Accounting System

The major objectives for implementing a computerized financial accounting system for an organization are: Preparation of a general ledger Maintaining account books Generating profit & loss account and balance sheet Generating updated financial data for other systems The various inputs to the system are: Cash vouchers Bank vouchers Journal vouchers Purchase vouchers or bills from vendor/ suppliers Sale vouchers or bills to customers

Cont.
A typical financial accounting system generates the following outputs: Account books (cash book, bank book, journal general ledger, purchase book, sales book) Trail balance Trading account Profit and loss account Balance sheet Accounts payable statement Accounts receivable statement

A typical Accounting Information System includes financial accounting, cost accounting and management accounting system. The major objectives of an accounting information system are: Preparation of account books and financial statements Generation of MIS reports
The various inputs to the system are: Updated financial data from general ledger and accounts Updated purchase data from inventory system Updated production data from production planning and control system Updated sales data from invoicing system Receivable/ payable system Updated pay data from payroll system

Geographical Information System

A geographical information system (GIs) is a computer based system that stores and manipulates data that is viewed from geographical point of reference. This system has four main capabilities: Data input Data storage and retrieval Data manipulation and analysis Data output Geography plays an important role in many business decisions, since 85% of corporate data involve a number of business decisions, such as store locations, sales territories, sale promotions and regulatory compliance, rely heavily on geographical data.

Cont
For example, a GIS allows a bank to compare deposits with loan approvals in given area and show that loan approval meet regulatory standards in areas with deposit.

Human Resource Information System (HRIS)

HRIS is a system that supports planning, control, coordination, administration and management of human resources of organization. They provide mangers with information, polices and procedures concerning recruiting, layoffs, employee evaluation, promotion, termination, transfer, salary equity monitoring, job description and responsibilities, training etc.

(HRIS)

Inventory Information System

Inventory refers to the stock of raw material and finished goods available in the organization for production and sale. An inventory control system ensures that proper stock levels of each item are maintained. The improper stock levels (low or high) cause the following problems: Low inventory of raw material leads to idle time in a production process and hence causes wastage of resources like labour, power, equipment's etc. needed for production. It may also lead to decrease in sale due to out-of-stock especially during periods of peak demands. Low inventory of finished goods leads to backorder, lost sale and loss in goodwill of the company due to out-of-stock positions. High inventory of raw materials and finished goods leads to unnecessary investments and hence, causes a financial burden on the organization.

The major objectives for implementing a computerized financial accounting system for an organization are: Maintaining an optimum level of raw materials and finished good inventory. Preparation of purchase orders and inventory status reports accurately and on time. Preparation of various analysis reports. Generation of MIS reports that help management for making effective and timely decisions. The various inputs to the system are: Data of vendors and buyers including code, name, address and other details of each one. Data of raw materials and finished goods including code, name, category, size, price and other details of each item along with their quantity. Goods received note (GRN) indicates the quantity received of various item along with their details. Material requisition slip indicates the quantity issued of various item to production departments or vendor along with details. Material rejection note indicates the quantity of items to buyers along with details. Delivery challan indicates the quantity sold.

The various outputs to the system are: Purchase order (PO) includes PO number, date, supplier name, address, item code/ name, category, quantity ordered, price, amount along with the terms and condition. Purchase book include the quantity and other details of item received. Inventory status report (detailed summary) Material return report indicated the quantity rejected along with other details. Material transfer report indicates the quantity of items issued to other branches/ departments along with other detail. Purchase analysis reports ( supplier and item wise) indicates the quantity and other details item purchased during a period from various suppliers.

Marketing Information System

Philip Kotler has identified three types of marketing information: Marketing intelligence: information that flows into the organization from the environment. Internal marketing information: information collected within the organization Marketing communication: information that flows from the organization outward to the environment Marketing strategies consist a mixture of ingredients that has been named, the marketing mix: product, promotion, place and price. Collectively they are known as the four Ps product is what the customer buys to satisfy a perceived want or need.

The various inputs to the system are: External environment data Marketing research data Marketing intelligence data Strategic plans Transaction processing data The various outputs to the system are: Product planning Place planning Promotion Price Budget allocation Sales forecast

Quality Information System

Quality information System are standalone systems or embedded systems that help an organization to achieve quality goals. The quality plan is derived from the strategic information plan.

Derivation of Quality Information System

Strategic Business Plan

Strategic Quality Plan Strategic Information Plan

Quality Information System

Responsiveness Flexibility Improved customer service Quality product Global competiveness The fig. shows how the strategic quality plan is derived from the strategic information plan. External Database Internal Database

In some case firm has no quality plan, but instead makes quality a component of other plans, such as marketing, manufacturing and so on. The information system (IS) department plays a major role in ensuring the success of TQM efforts in an organization. An IS can promote quality and provide tools and techniques to help the firm achieve its quality goals.IS also help firms to achieve quality certification. There are many institutions and agencies that certify the quality efforts of an organization and provide guidelines to firms that plan to instill quality in all aspects of their operations

R & D Information System

R & D has long recognized as an information intensive activity that is usually, responsible for evolving a stream of new products and production process innovation for the organization. R & D is responsible for creating and developing new products or services in order to capitalize in recognized opportunities. R&D may also be responsible for overcoming recognized weakness in current organizational production and operation processes in order to make them more efficient, cost effective, and competitive. Because of mandate and the potential of R&D to provide the organization with competitive advantage, many researchers suggest that R&D information system should be considered to be strategic information system. Like many other organizational system, R&D is an open system that has important information and communications exchanges with the external environment and other organizational subunits.