Survey of Business Information Systems

1
Survey of Business Information Systems

• The value of a program is proportional to the
  weight of its output.
• Laws of Computer Programming, VI

2
Levels of Business Activity

• Operational
• Tactical
• Strategic
• Supported by Information Systems
• Transaction Processing Systems
• Management Information Systems
• Decision Support Systems

Strategic
Tactical
Operational
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Operational Activities
External Environment
Corporation

• Day-to-day activities
• Acquire and consume resources
• Transaction Processing System
• Acquire data about an event
• Update corporate database
• Generate an appropriate response
• Example - invoice/payment

Event
TPS
Response
Database
4
Characteristics of TPS

• Real inputs and outputs (cash) - accuracy is
  important
• On-line
• Foundational data, to be summarized for
  higher-level applications

5
Tactical Activities

• Monitoring activities
• Allocating and organizing resources
• Management information systems
• Provides information about company to support
  management decision making
• Output consists of reports
• Regular
• Ad hoc
• Exception
• Transforming data into information
• Summarizing
• Aggregating
• Put into context

6
Strategic Activities

• Deciding on long-term goals, organization,
  governing policies
• Unstructured decision making process
• Decision support systems

7
Decision Support Systems

• Relatively new category - still developing
• Toolkit of components
• Query of corporate data (OLAP)
• Statistical analysis (SPSS, SAS)
• Scenario modeling, forecasting (spreadsheet)
• Environmental scanning (Internet, LEXIS/NEXIS)

8
Accounting Information Systems

• One of the earliest
• Most mature category
• Well-established set of rules
• Package software
• The accounting equation
• Assets Liabilities equity

9
Accounting Information Systems (cont.)

• Equation has to be kept in balance
• Receiving an invoice
• Paying a bill
• Double-entry bookkeeping
• Standard accounting reports
• Income statement
• Balance sheet

10
Accounting Information Systems (cont.)

• Package features
• Customizable chart of accounts
• Modular
• Heavy security and data integrity features
• Set of standard reports, with report-writing
  features

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Accounting Information Systems (cont.)

• Chart of accounts
• Package may impose a general numbering system
  that can be customized
• 1xxx asset accounts
• 2xxx liabilities
• 3xxx equity
• Will have to develop organizations chart of
  accounts

12
Accounting Information Systems (cont.)

• For conversion purposes, must determine initial
  balances
• Define accounting rules (i.e. capitalization
  thresholds)

13
Accounting Information Systems (cont.)

• Accounting modules
• General ledger
• Accounts payable
• Accounts receivable
• Inventory/Order entry
• Payroll (Human Resource)

A/P
A/R
G/L
Inventory
Payroll
14
Accounting Information Systems (cont.)

• General Ledger
• Heart of the system
• Maintain balances in the accounts
• Entry, editing and posting of entries
• G/L account inquiry
• Produce income statement and balance sheet

15
Accounting Information Systems (cont.)

• Accounts Receivable
• Uses and maintains G/L data
• Also maintains separate data
• Customer file
• Open invoices
• Sales history
• Records sales, receipts
• Prints invoices
• Postings to G/L
• A/R
• Cash

• Exception processing
• Partial or incorrect payment
• Discounts
• Interest or other charges (bounced checks)
• Credit memos
• Corrections to invoices
• Management reports
• Aged A/R report

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Accounting Information Systems (cont.)

• Accounts Payable
• Uses and maintains G/L data, plus
• Vendor file
• Invoice file
• Records invoices received
• Determines when invoices should be paid. How?
• Invoice must be approved (link to a P.O.)

• May be a check-writing module attached
• G/L postings
• Cash
• A/P
• Discounts taken
• Exception processing
• Disputed invoices
• Credit memos
• Duplicate invoices

17
Accounting Information Systems (cont.)

• Inventory/Order entry
• Tracks inventory based on sales and purchasing
  activity
• Reconcile against physical inventory
• Records sales, generate picking tickets, packing
  slips
• Valuation of inventory (LIFO vs. FIFO, other
  methods)

• Allow on-line query of order status
• Generate back-orders or purchasing advice when
  needed
• Exception processing
• Adjustments to reconcile to physical inventory
• Cancelled orders

18
Accounting Information Systems (cont.)

• Payroll
• Maintain employee master file (what kind of
  information?)
• Compute pay
• Gross (salary, wages, bonus)
• Deductions (taxes, FICA, benefits)
• Maintain employee totals for year-end forms
• Maintain leave balances

• Exception processing
• Garnishee of pay
• Medical savings accounts
• Bonuses