Functional Business Systems A variety of types of

Functional Business Systems

• A variety of types of information systems that support the business functions of – Marketing – Finance – Accounting – Operations management – Human resource management

Functional Business Systems

• Marketing Systems: Marketing systems are concerned with – Planning, promotion, and sale of existing products in existing markets – Development of new products and new markets – Better attracting and serving present and potential customers

• Interactive Marketing : -- Interactive marketing encourages customers to become involved in product development, delivery and service issues. This is enabled by various Internet technologies, including chat and discussion groups, web forms and questionnaires, instant messaging. • Goal : -– Profitably use networks to attract and keep customers – Get customers to help create, purchase, and improve products and services

• Targeted Marketing Components : -(1) Community (2) Content (3) Context (4) Demographic/Psychographic (5) Online behavior

(1) Community : -- Companies can customize their Web advertising messages and promotion methods to appeal to people in specific communities. They can be communities of interest, such as virtual communities of online sports group, geographic communities formed by the Web sites of a city or other local organization.

(2) Content: -- Advertising, such as electronic banners can be placed on a variety of selected web-sites. The content of this messages is aimed at the targeted audience. An ad for a product campaign on the opening page of an Internet search engine is a typical example. - ads placed on a variety of selected websites, aimed at a specific audience

(3) Context (Situation): -- Advertising appears only in Web pages that are relevant to the content of a product or service. So, advertising is targeted only at people who are already looking for information about a subject matter (Ex: vacation travel) that is related to a company’s products (Ex: Car Rental Services) - ads placed on web pages that are relevant to a product or service

(4) Demographic / Psychographic : -- Web marketing efforts can be aimed only at specific types or classes of people : for Example, unmarried, Religious people, middle income, college graduates. - web marketing aimed at specific types or classes of people

(5) Online Behavior : -- Advertising and promotion efforts can be tailored to each visit to a site by an individual. This strategy is based on a variety of tracking techniques, such as Web “cookie” files recorded on the visitors disk drive from previous visits. This enables a company to track a persons online behavior at its web site to marketing efforts can be targeted to that individual at each visit to its website. - promotions tailored to each visit to a site by an individual

• Manufacturing Information Systems Supports the production functions that Includes all activities concerned with planning and control of the processes producing goods or services.

• Computer-Integrated Manufacturing

• Computer Integrated Manufacturing Manufacturers operated on a simple build-to-stock model. They built 100 or 1, 000 of an item and sold item them via distribution networks. They kept track of the stock of inventory and made more of the item once inventory levels dipped below a threshold.

• CIM Objectives : - • Simplify production processes, product designs, and factory organization • Automate production processes and the business functions that support them • Integrate all production and support processes using – Networks – Cross-functional business software – Other information technologies

• CIM Systems : -(1) Computer-aided manufacturing (CAM): CAM systems are those that automate the production process. For Ex: this could be accomplished by monitoring and controlling the production process in a factory.

(2) Manufacturing execution systems (MES) : MES are performance-monitoring information systems for factory floor operations. They monitor, track and control the five essential components involved in a production process: materials, equipment, personnel, instructions and specifications, and production facilities.

(3) Process control : Process control is the use of computers to control an ongoing physical process. Process control computer control physical processes in petroleum refineries, cement plants, steel mills, chemical plants, food product manufacturing plants etc. -A process control computer system use special device which measure temperature or pressure changes. - Control ongoing physical processes

(4) Machine control : -Machine control is the use of computers to control the actions of machines. This also popularly called numerical control. The computer based control of machine tools to manufacture products of all kinds is a typical numeric control application used by many factories throughout the world. – Controls the actions of machines

• Human Resource Management (HRM) The Human Resource Management function involves the recruitment, placement, evaluation, compensation and development of the employees of an organization. The goal of human resource management is the effective and efficient use of the human resource of a company.

• Human Resource Information Systems are designed to support following things : 1. Planning to meet the personnel needs of the business 2. Development of employees to their full potential 3. Control of all personnel policies and programs.

• HRM Systems : -

• HRM and the Internet : • Recruiting employees using the corporate website and commercial recruiting services • Posting messages in selected Internet newsgroups • Communicating with job applicants via email

• HRM and Corporate Intranets : - • Corporate intranet uses – Dispatch information faster than through previous company channels – Collect information from employees online – Allow HRM tasks to be performed with little HRM department intervention – Training

• Accounting Information Systems : - The oldest and most widely used information system in business - Records and reports business transactions and economic events - Produces financial statements such as balance sheets and Income statements. - Forecasts of future conditions such as project financial statements and financial budgets. - A firms financial performance is measured against such forecasts by other analytical accounting reports.

• Accounting Information Systems Typically consists of…. . - Order processing : Capture and process customer orders and produce data for inventory control and accounts receivable - Inventory control : Processes data reflecting changes in inventory and provide shipping and reorder information. - Accounts receivable : Records amounts owed by customers and produces customer invoices, monthly customer statements and credit management reports.

Accounts payable : Records purchases from, amounts owed to, and payments to suppliers, and produces cash management reports. Payroll : Records employee work and compensation data and produces pay checks and other payroll documents and reports. General ledger : Consolidates data from other accounting systems and produces the periodic financial statements and reports of the business.

Accounting Information Systems

• Financial Management Systems : • Supports business managers and professionals making decisions concerning – The financing of a business – The allocation and control of financial resources within a business

• Financial Management System Example

Importance of Financial Management Systems : (1) Cash Management : -- Cash Management systems collect information on all cash receipts within a company on a real-time or periodic basis. Such information allows businesses to deposit or invest excess funds more quickly, and thus increase the income generated by deposited or invested funds. These system also produce daily, weekly, or monthly forecasts of cash receipts. Mathematical models frequently can determine optimal cash collection programs and determine alternative financial or investment strategies for dealing with forecasted cash.

(2) Online Investment Management : -- Many business invest their excess cash in shortterm low-risk marketable securities or in higher-return/ higher-risk alternatives, so that investment income may be earned until the funds are required. Online Investment Management services help a financial manager make buying, selling, or holding decisions for each type of security so that an optimum mix of securities is developed that minimizes risk and maximizes investment income for business.

(3) Capital Budgeting : -- The capital budgeting process involves evaluating the profitability and financial impact of proposed capital expenditures. Long-term expenditure proposals for plants and equipment can be analyzed using a variety of techniques.

(4) Financial Forecasting and Planning : -Financial analysts typically use electronic spreadsheets and other financial planning software to evaluate the present and projected financial performance of a business. They also help determine the financing needs of a business and analyze alternative methods of financing.