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How the finance function interacts with IT, Benefits and costs of using…
How the finance function interacts with IT
Main role of IT
Organisations need information systems to enable them to capture and generate the information that managers need for planning, control and decision making
4 TYPES
Information systems-
the management of information to run the organisation efficiently
Information technology-
The supporting equipment that runs Information systems
Management Information Systems-
Converts internal and external data into useful information which is communicated at all levels and across all functions to make timely decisions
Types of MIS
Decision support system (DSS)
aids management decisions
Executive information system (EIS)
for senior executives
Transaction Processing system (TPS)
for operational managers
Expert system
holds specialist knowledge like law and taxation
The IT Function-
responsible for operating and maintaining the hardware, software and network required by the organisation
Knowledge Management
Data<Information<Knowledge
Types of knowledge
Explicit knowledge
is knowledge the company has like customer insight
Tacit knowledge
is knowledge and expertise held by people within the organisation that hasn't been documented yet
Knowledge management
is the process of sourcing, storing and utilising knowledge
Knowledge management systems
is any type of IT that enhances the knowledge management process like data warehouse, data mining or groupware
Geographical dispersed teams
Advantages
Increased employee motivation, productivity and commitment
A method of attracting and retaining employees
lower infrastructure costs
employees not being adsent
Disadvantages
no organisation culture
equipment for employee is more costs
Difficult to control
Virtual Organisations and Teams
A virtual Organisation
outsource most of its functions and simply exist as a network of contracts
Virtual Teams
is a group of individuals who communicate and work together using digital tools on a project. key component of a virtual organisation
Enhancing internal and external relationships
Customer relationship management (CRM)
system is used to
retain existing customers
entice past customers back
identify, attract and win new customers
Features
web based ordering
identifying and tracking potential customers
Analysis of different kinds of customer segments
reports about revenue forecasting and trend analysis
A central database that is accessible and can be updated by all employees about customer data
Benefits
reduced customer services cost
wider customer base
improved target marketing campaigns
better and more widely decisions
improved customer service and loyalty and retention
Ethical issues with Information Systems
Data protection and data privacy-
an organisation should ensure its compliant with legislation and uses data for its intended use
Ethical issues
Corporate digital issues
an organisation's efforts beyond just legislation about data
Legal issue
Social issues
Information Systems (IS)
before IS is implemented an organisation should check if the benefits outweighs the costs
Cost of a system
Initial costs
Purchase costs
Testing and implementing costs
running costs
cost of material
service support costs
Labour time
Benefits of a new system
accurate and better access to information
improved communications
enhanced efficiency and capacity
better decision making and customer services
Benefits and costs of using Information systems
Privacy and security
viruses
anti-virus
hackers
firewall
Unauthorised access
internal controls
human error
seperation of duties
computer malfunction
backup
repetitive strains
ergonomic designs
Natural disasters
insurance covers
Data flow
is the movement of data by input, process to output
Good data flow will
give the organisation a unique insight
improve competitive edge
Costs
collecting and processing the data
mapping out the movement of the data
System architecture
is the way system infrastructures is organized together to support the organisation's functions and its overall goals
Decentralized information systems
is a interconnected infor system where no function is the sole authority
Benefits
security breaches will have less impact
less time consuming
not relying on a single system
Centralized Information systems
involves all functions being out of a single, central location
Advantages
may be economics of scale in buying equipment
it gives greater security and control
workers work on the same material supplied
Disadvantages
workers rely on the head office to supply resources
once the central computer gets fucked, its chaii
not flexible, resource have to be put on the server to be shared
system may override due to many users
Big data information management
Benefits
customization of data
improved decision making
performance improvement
effective risk control
enhanced transparency
Key performance indicators (KPI)
Cost of new technology
security breaches
system downtime
IT function as a leader in the market place
Ticket response rate for IT issues sent to IT support