Unit 3 PDF

ITAB 2100
IT Application Tools in Business

Objectives
1) identify various business functions and the role of ISs in
these functions;
2) explain how ISs in the basic functions relate to each
other;
3) show how ISs of different business functions support
each other;
4) explain how information technology is used in the most
common business functions to make business
processes more effective and more efficient;
5) explain the notion of enterprise resource planning
systems; and
6) identify business areas where information technology
facilitates the work of managers and knowledge
workers.
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FR
Effectiveness and Efficiency of IS
IS in Business Functions
EFFECTIVENESS EFFICIENCY
defines the degree to which a goal is • is determined by the relationship
achieved. Thus, a system is more or less between resources expended and the
effective depending upon: benefits gained in achieving a goal.
(1) how much of its goal it achieves and;
(2) the degree to which it achieves better
outcomes than other systems do.
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FR
Information Technology
• Accounting
• Finance
• Engineering
• Manufacturing and Inventory Control
• Marketing and Sales
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Accounting
• The purpose of accounting is to track every

financial transaction within a company,
from dollar to multimillion dollar
purchases, from salaries to benefits, to
sales of every item.
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FR
Finance
• A firm’s health is often measured by its finances, • collecting payables as soon as possible
and ISs can significantly improve financial
• making payments at the latest time allowed by
management. The goal of financial managers,
contract or law
including controllers and treasurers, is to
manage an organization’s money as efficiently as • ensuring that sufficient funds are available for
possible. day-to-day operations
• taking advantage of opportunities to accrue the
highest yield on funds not used for current
activities
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FR
Finance
Cash Management Investment Analysis

• A Systems that deal specifically with cash are • Every investors goal is to buy an asset and later
often called cash management systems (CMSs). sell it for more than it cost. When investing in
One common use for a CMS is to execute cash securities, such as stocks and bonds, it is
transactions in which financial institutions important to know the prices of securities in real
transfer huge amounts of money using time, that is, “right now”.
electronic funds transfer (EFT). EFT is the
electronic transfer of cash from an account in
one bank to an account in another bank
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Engineering
• IT’s greatest contribution to engineering is

in the area of computer aided design (CAD)
and rapid prototyping (creating one of a
kind products to test design in three
dimensions).
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Manufacturing and Inventory Control
Materials Requirement Manufacturing Resources

Planning (MRP) Planning (MRP II)
Manufacturing MRP II systems can

Economic Order Quantity And quickly modify schedules
(EOQ) of a specific raw Inventory to accommodate orders.
materials is the optimal Control The most important input
quantity that allows ISs of MRP II systems is the
business to minimize master production
overstocking and save schedule (MPS), which
cost. specifies how production
Manufacturing capacity will be used to
Execution meet customer demands
Systems & maintain inventories.
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Manufacturing and Inventory Control
10
Marketing and Sales
• Market Research system help to find the

population and regions that are most likely
to purchase a new product or service. They
also help analyze how a new product fares
in its first several months on the market.
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Marketing and Sales
• The principle of targeted marketing is to

define the prospective customer as
accurately as possible and then to direct
promotional content only to those people
most likely to purchase your product.
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Marketing and Sales
• Computer telephony integration (CTI) is a technique allowing
computer to use the digital signal coming through a
telephone line as input in a computer system. It has been
used often in marketing, sales, and customer service.
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Marketing and Sales
• The Computer as Marketing and Selling Medium. For several
decades, radio and television were marketing’s only non-print
media. Now, the household computer has become a means of
promoting products.
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Marketing and Sales
• Sales Force Automation can increase sales productivity
significantly, making sales presentations more efficient.
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Marketing and Sales
• To better serve customer and learn of their changing needs,
companies use customer relationship management (CRM).
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Human Resources
• HR Management has become more complex due to the fast
growth in specialized occupations, the need to train and
promote highly skilled employees, and the growing variety of
benefits programs.
• HR management can be classified into five activities:
1. Employee Record Management
2. Promotion and Recruitment
3. Training
4. Evaluation
5. Compensation and Benefits Management
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Enterprise Resource Planning
• Many corporations have opted to replace their disparate ISs
with a single integrated systems. Rather than using an IS, or
several ISs, in each business function, all business functions
are served by one system that supports different activities for
different departments. Such systems are often called
enterprise resource planning (ERP) systems. Although these
systems do help in planning, their main focus is to help run
the different functions, therefore, their more accurate name
is enterprise applications, but ERP is their more popular
name.
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Groupware and Collaborative Work
• When people work together, either to provide a service or
create a product, they often do so in sequence: one person
provides his or her input to the project, then passes it along
to other person, who does the same, and so on along the
chain. A series of such repeated activities is called work cycle ,
or simply cycle.
• Work cycles may take a long time to complete.
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Document Control
Quality Manager document control module allows
companies to automate and manage internal and external
document.
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Collaborative Projects
• Managing a project– especially a large one involving many
organizational units– and keeping on track requires enormous
effort.
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Brainstorming
• In business, brainstorming refers to the process of a group
of colleagues meeting and working collaboratively to
generate creative solution and new ideas.
ITAB2100 22
FR
Reference
• Oz, Effy: Management Information Systems Third edition, Thomson

Learning Center, 5 Shenton Way UIC Building, Singapore 2002.
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END
ITAB 2100

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ITAB 2100

IT Application Tools in Business

• The purpose of accounting is to track every

Cash Management Investment Analysis

• IT’s greatest contribution to engineering is

Materials Requirement Manufacturing Resources

Manufacturing MRP II systems can

• Market Research system help to find the

• The principle of targeted marketing is to

• Oz, Effy: Management Information Systems Third edition, Thomson

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