AIS gathers data describing the firm¶s activities, transforms data into information

and makes the information available to users both inside and outside the firm.
AIS performs four basic data processing tasks
` Data gathering :- is the accumulation of data describing the firm¶s internal
actions and its environmental transactions. The environmental transactions
include the actions related to the movement of products and services to its
environment.
` Data manipulation :- is the transformation of data into information. It includes
1) Classifying :- it¶s the process of encoding certain data elements such
that they can be identified and grouped using those codes.
2) Sorting :- it¶s the process of arranging records in a certain sequence
based on the codes or other data elements.
3) Calculating :- it includes the arithmetic & logical operations performed
on the data elements to produce additional data elements.
4) Summarizing :- it¶s the process of synthesizing large amounts of data
by creating totals, averages etc.
` Data storage :- it¶s the accumulation of all necessary
accounting data of the entire firm in the form of digital
data storage using computers.
` Document preparation :- it¶s the output that is normally
got from any AIS. The documents are created in two main
cases
1) By action :- Outputs are produced when some
event happens which demands an output like
preparation of customer bills as soon as the
customer does its purchase.
2) By a time schedule :- Outputs are produced at a
regular interval of time, like payroll sheets.
 nvironment

Management
Information
Data processing
software Information

Accounting
Information Database
System Data

Data
Physical resources Transformation
1) It is implemented by the firm to achieve and maintain control as
the AIS maintains the record of all the financial activities of the
firm.
2) It adheres to all the standard procedures, regulations and
accepted practices performed during data processing.
3) It handles data in a detailed and authentic manner hence it can
provide an audit trial where the financial activities can be traced
from beginning to end and also reverse.
4) It contains the data gathered during past hence it has a detailed
focus on historical financial events of the firm.
5) The output from AIS gives the primary solution to the problems.
1) It produces some information output in the form
of standard accounting reports. These reports
are valuable in the financial area of the firm and
at top management levels.
2) It provides a rich database that can be very
useful in problem solving. This rich database
provides much of the information for MIS, DSS
and to some extent knowledge-based systems.
1) xplain AIS and why its required by firms?
2) xplain the AIS model.
3) What are the various data processing tasks in AIS?
4) xplain the characteristics of AIS.
5) How AIS contributes in problem solving?.Justify
with an example.
6) Give a case study of a firm explaining the how AIS
helped to solve accounting problems of the firm.
` An xecutive Information System (IS) is a system that
provides information to the executives on the overall
performance of the firm.
` The information can be accessed easily and can also
provide varying levels of details.
` It usually consists of a PC networked to a central
computer. The PC works as the executive workstation
providing access to the executive database.
` Its also known as xecutive Support System (SS).
 Information
request
xecutive Personal
database Computer Information
display

CUTIV WORKSTATIO

Making
Corporate Database Corporate
Information Current news,
lectronic Mailboxes available explanations

Software library
C TRAL COMPUTR

xternal data & information

The IS Model
It usually consists of a personal computer. In large firms
the PC is networked to a mainframe or the central
computer. The executive¶s personal computer serves as the
executive workstation. The hardware configuration
includes hard disks as the secondary storage device. The
executive database contains data and information that has
been processed by the firm¶s central computer. The
executive is provided by an IS software, which are menu
driven software to implement IS. The system permits the
use of firm¶s electronic mail system and access to the
environmental data & information. IS software support
input of explanations of the information and current news
updates on the information.
1) xplain computer based xecutive Information
System.
2) Draw and explain the computer based IS
model.
3) xplain the term Drill Down with respect to IS
activity.
4) Give a case study of a firm explaining how IS
helped the executives of the firm to elevate the
efficiency & usefulness of the employees.
] MKIS is based in the pioneering work of several marketing theorists.
] There are manly two types of subsystems that can be seen in an MKIS, the
Input subsystem and Output subsystem. The input subsystem includes
1) AIS, 2) Marketing research, 3) Marketing intelligence subsystem
] The AIS provides sales order data for the software that produces
information in the form of
1) Periodic reports, 2) Special reports, 3) Outputs from Mathematical -
-models and xpert systems.
] Marketing research utilizes a variety of data gathering techniques
1) Surveys, 2) In-depth interviews, 3) Observations, 4) Controlled -
- experiments.
] Most of the MKIS activity is aimed at establishing an intelligence-
gathering capability.
 Input Subsystem Output Subsystem
Data Product
Data subsystem
Accounting Data
I
Information Place
system F
subsystem
O U
Internal sources R
Promotion M S
Marketing subsystem
research Database A 
subsystem T
Price R
subsystem
I
nvironmental sources O S
Marketing Integrated-mix
intelligence subsystem
subsystem
 The Input Subsystem
` The Accounting Information System gathers data describing
the firm¶s marketing transactions.
` The Marketing Intelligence Subsystem gathers information
about the firm¶s marketing operations.
` The Marketing Research Subsystem conducts studies of the
marketing operations for the purpose of learning customer
needs and improving marketing efficiency.
Database
It contains the necessary data and information that is gathered
by the Input Subsystem, which is then utilized by the Output
Subsystem.
 Output Subsystem
` The Product Subsystem provides information about the firm¶s
products.
` The Place Subsystem provides information about the firm¶s
distribution network.
` The Promotion Subsystem provides information about the
firm¶s advertising and selling activities.
` The Price Subsystem helps the managers to make decisions
related to fixing or changing the price of a product.
` The Integrated Mix Subsystem helps the managers to develop
strategies on those areas which are effected from all the above
mentioned subsystems, example ± sales forecast.
` The users category mainly consists of managers.
1) Define Marketing Information System (MKIS).
2) Draw and explain the model of MKIS.
3) Give a case study of firm explaining how MKIS
helped the firm¶s managers to improve their
market position and increase sales.
In Manufacturing Information Systems, manufacturing
management uses the computer both as a
1. Physical system.
2. Conceptual system.
The computer as part of Physical System consists of
a) Computer Aided Design (CAD)
b) Computer Aided manufacturing (CAM)
c) Robotics.
 The computer as part of Physical System
Computer Aided Design (CAD)
` It uses computers to assist in the design of a product that is to be
manufactured.
` The design engineer can use a visual display terminal equipped
with a light pen as an input device, to create designs.
` The CAD software refines the drawings, the engineer can
subject the design to various virtual tests that can detect the
defects in the design (if any).
` The CAD software can simulate the moving parts of the design
to show real like movements, closer to practical situations.
` Once the design is confirmed the CAD software can prepare the
detailed specifications that are required for manufacturing the
product. These specifications are stored in a Design Database.
 The computer as part of Physical System
Computer Aided Manufacturing
` It¶s the application of computers in the production process.
` These applications control the production machines such as
drills, lathes etc. to produce products according to the
specifications obtained from the Design Database.
` A single minicomputer can control several production machines
as now a days the many production machines have built-in
microprocessors.
Robotics
` It includes the use of Industrial Robots (IR) which automatically
perform manufacturing processes.
` Robots enable firms to cut costs & achieve high levels of quality
and also perform hazardous tasks.
The computer as an Information System includes
` Material Requirements Planning Systems. ( MRP )
` Reorder Point Systems. ( ROP )
`Just-In-Time Approach Systems. ( JIT )

Material Requirements Planning Systems

` It consists of software to calculate and estimate the requirements of
the production materials, their quantities and date on which they
will be needed.
` Here the production managers don¶t have to wait till the reorder
points. The orders are placed long before the reorder point as the
estimated date for reorder is calculated by the computer based MRP
systems.
 The computer as an Information System
Reorder Point Systems
` It¶s the task of managing the firm¶s inventory using computer based
systems.
` Here a reactive approach is followed. So if an item balance reaches a
particular level called Reorder Point ( ROP ), it then triggers a purchase
order.
` The formula for calculating Reorder Point is
R=L*U +S
Where:-
R ± reorder point.
L ± Supplier lead time ( the amount of time the supplier needs to -
- fill the order )
U ± Usage rate ( number of units used or sold per day )
S ± Safety stock level ( precautionary stock in units )
 The computer as an Information System
Just-In-Time Approach Systems
` It attempts to minimize inventory costs by
producing in smaller quantities. Here the ideal lot
size is 1. The single unit should move from various
workstations of production until its production is
completed.
` Timing is the key of JIT systems,as the supply of
raw materials arrive from the supplier just before a
production run is scheduled to begin.
 Input Subsystem Output Subsystem
Data
Data Production
Accounting Data subsystem I
Information F
system
Inventory O
subsystem
U
Internal sources R
M S
Industrial
ngineering Database Quality
A

subsystem subsystem T
I R
nvironmental sources O
S
Manufacturing Cost
intelligence subsystem
subsystem
 The Model of Manufacturing Information System
Input Subsystem
` The Accounting Information System gathers internal
data describing the manufacturing operation and
environmental data that describes the firm¶s transactions
with its suppliers.
` The Industrial ngineering Subsystem consists of special
data-gathering projects from inside the firm. It provides
proper production standards.
` The manufacturing Intelligence Subsystem gathers data
from the environment. The data collected includes recent
updates from the activities of labor unions and suppliers.
 The Model of Manufacturing Information System
Output Subsystem
` The Production Subsystem measures the production
process in terms of Time i.e. tracking the work flow step by
step.
` The Inventory Subsystem measures the production process
in terms of Volume of production ± transformation of raw
materials in to finished products.
` The Quality Subsystem measures the quality of materials
as they are transformed during the production process.
` The Cost Subsystem monitors and measures the cost
required during the production process.
1) xplain Manufacturing Information Systems.
2) What is Reorder Point?. How its calculated?.
3) xplain the difference between Just-In-Time & Material
Requirement Planning systems.
4) Draw & explain the model of Manufacturing Information
System.
5) xplain how managers use the manufacturing
Information Systems.
6) xplain using a case study, how Manufacturing
Information Systems help the managers to control and
improve production standards & processes.
 A Model of Financial Information System

Input Subsystem Output Subsystem

Data
Accounting Data Data I
Forecasting
Information subsystem F U
system O
S
Internal sources Funds
R
Management M 
Internal subsystem A
Audit R
Database T
subsystem
Control
I S
nvironmental sources subsystem O
Financial
intelligence
subsystem
 Model of the Financial Information System.
Input Subsystems
m The Accounting Information subsystem and Financial
Intelligence subsystem are dedicated to gathering
information about accounts and financial resources.
m The Internal Audit subsystems consist of firm¶s internal
auditors who analyze the firm¶s conceptual systems to
ensure that they process financial data properly as
required.
m The Financial Intelligence subsystem seeks to identify
the best sources of additional capita and the best
investment of surplus funds. It gathers data and
information from stockholders and financial community.
 Output Subsystems
m It exerts influence on the firm¶s money flow.
m The Forecasting subsystem projects the firm¶s long-range future
activity in an economic environment. The forecasting methods are
classified mainly in to two groups
1) on quantitative forecasting, where no computation is involved as
the forecasting is done using subjective estimates. There are mainly
two methods for subjective estimation. a) Panel consensus
technique, it consists of a group of experts who analyze the present
scenario and predict the future.
b) Delphi method, it involves a group of experts who do not
meet in person but instead submit responses to a series of
questionnaires that are prepared by the coordinator. These
questionnaires are refined by going through various rounds
thus refining the contents for forecasting.
2)Quantitative forecasting methods use various computation methods
like regression analysis.
m The Funds Management subsystem manages the
money flow to make it more balanced and positive. The
flow can be managed to achieve the goals in the
following manner
1) To ensure that the revenue inflow is greater than the
expense outflow.
2) To ensure that the above condition remains as stable as
possible throughout the year.
m The Control subsystem helps the managers to take
effective advantage from all types of resources of the
system.
1) Draw and explain the model of Accounting
Information System.
2) xplain how the control subsystem helps the
managers to elevate the financial level of the
firm and do effective forecasting.
3) xplain with a case study the advantage of using
Accounting Information System for easy control
and establishment of more balanced and
positive money flow.
 Human Resource basic activities
Recruiting and hiring
] HR helps bring new employees into the firm by publishing ads
through media ( audio & visual )
] By taking the help of both government & private employment
agencies.
] By conducting campus interviews.
] By conducting general tests.
ducation & Training
] To enhance the employees¶ job related skills and knowledge the firms
conduct educational and induction programs.
] A motivation factor is added like promotion benefits for those who
attend and learn from the induction programs.
Basic HR activities contd..
Data Management
m HR maintains a database of employees related data and processes
those data to meet the information needs of the users ( usually sister
concerns)
Termination and Benefit Administration
m During employment the employees receive in addition to their
basic salary, additional benefits like hospital, housing, profit sharing
etc.
m When employees leave their jobs or are terminated, the HR
processes the necessary paperwork and often conducts exit
interviews.
m HR administers the firm¶s retirement program for the former
employees who are eligible.
 Output Subsystem

Data
Workforce
Input Subsystem planning
subsystem
Data I
Accounting Recruiting
Information subsystem F U
system O
Compensation S
Internal sources subsystem R
M 
HR Benefits A
research HRIS subsystem R
T
subsystem Database
Workforce I S
nvironmental sources
management O
subsystem
HR
nvironmental
intelligence
reporting
subsystem
subsystem
 The Input Subsystems




 
* Personal data elements :- they are relatively permanent and non financial in
nature. These personnel data elements are created by HR at the time of
employment and are kept updated as long as the employee is working for the firm.
Similar data is kept for retired employees.
* Accounting data elements :- they are financial and tend to be more dynamic like
monthly salary, income tax etc.
Ä


 
* Succession studies :- are conducted for the purpose of identifying those people
in the firm who are candidates for the positions that become available including
promotions.
* Job analysis and evaluation :- is done to identify the scope, qualifications and
skills required for all the jobs in the firm.
* Grievance studies :- are conducted for the solution of the problems faced by the
employees, where employees file complaints.
HRIS model contd..
Ä

  
* Government Intelligence :- The govt. provides data and information that assist
the firm in complying with various employment related laws and regulations.
* Supplier Intelligence :- Here the suppliers mean such firms and organizations
which provide employee benefits like insurance companies. Also employment
agencies. They provide data and information that help the firm for recruitment
and hiring of people.
* Labor Union Intelligence :- The data and information provided by the labor
unions are used for administering labor contracts between the unions and firms.
* Global Community Intelligence :- The global community provides information
that describe local resources like housing, education, recreation etc.
* Competitor Intelligence :- Includes the data and information about the
employees of the competitors who are very efficient, also called potential recruits
and various effective strategies for better human resource development &
management used by the competitors.
 HRIS Database
@

* mployee data :- contains the data of all the present employees of
the firm.
* on employee data :- contains the data related to organizations
like employment agencies, colleges, labor unions and government. It
also contains data related to the employees like dependents,
survivors and beneficiaries.
Output Subsystems
2



 
* The basic work here is the future planning of the personnel needs
of the firm.
* It also includes salary forecasting and job analysis & evaluation.
HRIS output subsystems contd..

 
m It includes activities related to tracking of job applicants
prior to recruitment.
m Ascertaining the authenticity of the applicants.
2



 
m It includes the various manpower evaluation and
strengthening activities.
m Performance appraisal and training are its most popular
tasks.
m Development efforts, in position control activities,
competency checks and succession evaluation are also its
parts.
HRIS output subsystems contd..


 
A It includes various compensation calculation activities. It mainly
includes extra money to be paid to the employees.
°  
A It includes the activities related to defined contribution and
defined benefits plans that allow the employees to accumulate
retirement funds to meet a specified standard of living.
A Flexible benefits plans enable employees to select the benefits that
they want to take, which they are eligible for.




 
A It includes reporting of firm¶s personnel policies and practices to
the government and also the labor unions.
1) xplain various HR activities.
2) How the HR activities help in managing the HR needs
of the firm.
3) Draw and explain the HRIS model.
4) What are the contents of the HRIS database? How does
it help the output subsystems in the HRIS model.
5) Give a case study explaining the how HRIS helped in
solving the problems related to the quality of recruits
and job satisfaction for the employees.