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INTRODUCTION
Questions to be addressed in this chapter include:
What is the meaning of system, data, and information? What is an accounting information system (AIS)? Why is the AIS an important topic to study? What is the role of the AIS in the value chain? How does the AIS provide information for decision making? What are the basic strategies and strategic positions an organization can pursue?
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When youve reached the overload point, the quality of decisions declines while the costs of producing the information increases.
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WHAT IS AN AIS?
An AIS is a system that collects, records, stores, and processes data to produce information for decision makers. It can:
Use advanced technology; or Be a simple paper-and-pencil system; or Be something in between.
WHAT IS AN AIS?
The functions of an AIS are to:
Collect and store data about events, resources, and agents. Transform that data into information that management can use to make decisions about events, resources, and agents. Provide adequate controls to ensure that the entitys resources (including data) are:
Available when needed Accurate and reliable
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Strategy
AIS design is affected by information technology, the organizations strategy, and the organizations culture.
AIS
Information Technology
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Strategy
Information technology affects the companys choice of business strategy. To perform cost-benefit analyses on IT changes, you need to understand business strategy.
2006 Prentice Hall Business Publishing
AIS
Information Technology
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Strategy
While culture affects the design of the AIS, its also true that the AIS affects culture by altering the dispersion and availability of information.
2006 Prentice Hall Business Publishing
AIS
Information Technology
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These activities are sometimes referred to as line and staff activities respectively.
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These activities are sometimes referred to as line and staff activities respectively.
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Operations A pharmaceutical firm will Outbound logistics typically not be repairing its Marketing andproduct sales (though the product may be periodically reformulated). Service
The pharmaceutical company is more likely to be providing advisory services to pharmacists, etc.
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These activities are sometimes referred to as line and staff activities respectively.
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For the pharmaceutical company, these activities would include research and development to create new drugs and modify existing ones.
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materials, inventory, fixed Firm infrastructure assets) needed to carry out the Human resources entitys primary activities.
Technology Purchasing
In the pharmaceutical company, the purchasing folks are trying to get the best combination of cost and quality in buying chemicals, supplies, and other assets the company needs to run its operations.
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Customer Pharmacy Inbound Logistics Operations Outbound Logistics Marketing & Sales Service
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Customer Pharmacy Inbound Logistics Operations Outbound Logistics Marketing & Sales Service
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Customer Pharmacy Inbound Logistics Operations Outbound Logistics Marketing & Sales Service
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The linking of these separate value chains creates a larger system known as a supply chain. Pharmaceuticals, Inc. Inbound Logistics Operations Outbound Logistics Marketing & Sales Service
Customer Pharmacy Inbound Logistics Operations Outbound Logistics Marketing & Sales Service
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EXAMPLE: Deciding whether to diversify the company into other product lines
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Consequently, they must identify the improvements likely to yield the highest return. This decision requires an understanding of the entitys overall business strategy.
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EXAMPLE: Satellite Internet services are Variety-based strategic position intended primarily for customers in rural areas Needs-based strategic position who cannot get DSL or cable services.
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These strategic positions are not mutually exclusive and can overlap.
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Its critical to design the organizations activities so they reinforce one another in achieving the selected strategic position. The result is synergy, which is difficult for competitors to imitate.
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SUMMARY
What weve learned so far:
The meaning of system, data, and information What an AIS is
Why its an important topic to stody What its role is in the value chain How it provides information for decision making
What are the basic strategies and strategic positions an organization can pursue
How these interact with the AIS
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