MIS in Functional Areas of Business

Learning Objectives:-

- Accounting Information System
- Geographical Information System
- Human Resource Information SystemInventory Information System
- Manufacturing Information System
- Marketing Information System
- Quality Information System
- R&D Information System

Accounting Information System:-

- Accounting is mainly concerned with the collecting, recording and evaluation of financial data and then, communicating this information to the management and other people.
- It is viewed as an information system since it has inputs (financial data), processes (evaluation of data) and outputs (financial statements).
- All organizations need systematic maintenance of their records that help in the preparation of the financial statements such as Profit & Loss account and Balance sheet.
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 Three general types of Accounting Information Systems :

1).Financial Accounting System: This system provides financial statements to investors, governmental authorities and other interested parties in accordance with their reporting formats.
2).Management Accounting System: It provides reports to managers both, for strategic and tactical decisions and on profitability of the organization.
3).Cost Accounting System: It provides reports to managers for cost planning and cost control of operations.

- The major types of account books are : Voucher, Journal, General ledger, Purchase book, Sales book, Cash book, Bank book, Creditor's ledger and Debtor's ledger.
- The major financial statements are Trial balance, Trading account, Profit and loss account, Balance sheet, Accounts receivable statement, and Account payable statement.
- Major objectives for implementing a computerized financial accounting system for an organization are Preparation of a general ledger; Maintaining account books; Generating Profit & Loss account and Balance sheet; Generating updated financial data for other systems; Generating accounts receivables & accounts payable statements
- The various inputs to the system are Cash vouchers; Bank vouchers; Journal vouchers; Purchase vouchers or bills from vendor/suppliers; and Sale vouchers or bills to customers.
- A typical financial accounting system generates the outputs like Account books (cash book, bank book, journal general ledger, purchase book, sales book); Trial balance; Trading account; Profit & loss account; Balance sheet; Accounts payable statement; and Accounts receivable statement.

Accounting Information System:-

 

- A typical Accounting Information System includes financial accounting, cost accounting and management accounting systems.
- Major objectives of an accounting information system are Preparation of account books and financial statements; Generation of MIS reports.
- The various inputs to the system are :
1).Updated financial data from general ledger and accounts
1).Updated purchase data from inventory system
3).Updated production data from production planning and control system
4).Updated sales data from invoicing system
5).Receivable/payable system
6).Updated pay data from payroll system
 

- A typical accounting information system generates the following :
1).Account books i.e. cash book, bank book, sales book, purchase book, journal and general ledger.
2).Financial statements i.e. trial balance, trading accounts, profit & loss account, balance sheet, accounts receivable statement and accounts payable statements.
3).MIS reports i.e. cost analysis, forecasting and funds management reports.

Geographical Information System :-

- A geographical information system (GIs) is a computer based system that stores and manipulates data that is viewed from a geographical point of reference.
- This system has four main capabilities : data input; data storage and retrieval; data manipulation and analysis; and data output
- GIS is one of the powerful and versatile tools as it can create information by integrating different data, sometimes from different sources, and then displays the data in different ways to the end user.
- Geography plays an important role in many business decisions, since 85% of corporate data involve a number of business decisions, such as store locations, sales territories, sales promotions and regulatory compliance, rely heavily on geographical data.
- For organizations with a customer focus, a GIS provides clear profiles of customers and their needs; hence these tools can be integrated with any of the functional areas of the business already discussed.
- The ability to integrate different data, analyze their impact on the customer, and integrate the findings in organizational decision making is one of the key factors of GIS.

HUMAN RESOURCE INFORMATION SYSTEM:-

- A system that supports planning, control, coordination, administration and management of human resources of organizations.
- They provide managers with information, policies, and procedures concerning recruiting, layoffs, employee evaluation, promotion, termination, transfer, salary equity monitoring, job descriptions and responsibilities, training, etc.
Derivation of Human Resource Information System:

 

Inventory Information System:-

- Inventory information system ensures that proper stock levels of each item are maintained. The improper stock levels (low or high) cause the following problems:
1).Low inventory of raw materials leads to idle time in a production process and hence, causes wastage of resources like labour, power, equipments, etc., needed for production. It may also lead to decrease in sales due to out-of-stock especially during periods of peak demands.
2).Low inventory of finished goods leads to backorder, lost sale and loss in goodwill of the company due to out-of-stock positions.
3).High inventory of raw materials and finished goods leads to unnecessary investments and hence, causes a financial burden on the organization.

- Major objectives for implementing a computerized inventory control in an organization are:
1).Maintaining an optimum level of raw materials and finished goods inventory.
2).Preparation of purchase orders and inventory status reports accurately and on time.
3).Preparation of various analysis reports.
4).Generation of MIS reports that help management for making effective and timely decisions.

Inventory Information System (Cont..):-

- The inputs to the system are :
1).Data of vendors and buyers including code, name, address and other details of each one.
2).Data of raw materials and finished goods including code, name, category, size, price and other details of each item along with their quantity.
3).Goods received note (GRN) indicates the quantity received of various items along with their details.
4).Materials requisition slips indicate the quantity issued of various items to production departments or vendors along with their details.
5).Delivery challan indicate the quantity sold of various items to buyers along with other details.
6).Materials rejection note indicates the quantity of items rejected to vendors/suppliers along with the reasons of rejection.

- A typical Inventory System generates the following outputs :
1).Purchase order (PO) includes PO number, PO date, supplier name, address, item code/name, category, quantity ordered, price, amount along with the terms and conditions.
2).Purchase book includes the quantity and other details of items received.
3).Inventory status reports (detailed and summary), includes the quantity and other details of items sold, received, issued and rejected along with their closing balance.
4).Materials return report indicates the quantity of items rejected along with other details.
5).Materials transfer report indicates the quantity of items issued to other branches/departments along with other details.
6).Purchase analysis reports (supplier and item wise) indicates the quantity and other details of items purchased during a period from various suppliers.

 

Manufacturing Information System:-

- A system that supports the manufacturing functions of purchasing, receiving, quality control, inventory management, material requirements planning, capacity planning, production scheduling, and plant design.

- Production systems, a subset of manufacturing information systems, are directly associated with the production of goods and services. It specifically addresses information needs relating to raw materials, equipment, manpower and other issues directly related to production of goods and services. Primary decisions made in the manufacturing include product design, production, facility design and quality control.

- Product design is the starting point of the manufacturing process. Increasingly, product design and engineering are becoming more computerized through approaches like computer aided design (CAD), computer aided engineering (CAB), and robotics. The computer can also model plant layout.

- Many computerized approaches are used by organizations to model the production process as an integrated system. Some organizations try to integrate CAD, CAM and other manufacturing activities, a concept known as computer integrated manufacturing (CIM).

- Agile manufacturing refers to manufacturing environments that are dynamic and flexible enough to instantaneously produce customized goods and services in varying quantities and to effortlessly switch the manufacturing process from one product to another. Agile manufacturing has four main characteristics:

1). The ability to thrive on constant change.

2). Recognition by the organization that people are its main asset.

3). Incorporation of the virtual company idea through the use of telecommunications

4). A focus on creating products and services with real added value.

- One group of computerized quality control techniques that has helped in manufacturing operations is known as statistical process control (SPC). The objective of SPC is to closely monitor production units at various stages of the production process, identifying potential problems before they result in defects and adjusting the production process accordingly .through observations.

- Another promising role for the computer in quality control is in the area of vision inspection systems, where robotic 'eyes‘ replace humans in the quality control inspection process.

Marketing Information System:- 

- Marketing information may be Marketing intelligence, Internal marketing information, and Marketing communications.

- Marketing information system is a computer-based system that works in conjunction with other functional information systems to support the organization's management in solving problems that relate to marketing the organization's products.

- Marketing information system is a system that meets the information needs of an organization in sales, distribution, advertising, market analysis, market intelligence, product research, service management, customer profile, and other marketing functions.

- Since marketing information systems are primarily customer-oriented information systems, the systems work toward realizing the strategic sales plan and the marketing plan of an organization.
 

Inputs of Marketing Information System - External environment data, Marketing research data, Marketing intelligence data, Strategic plan and Transaction processing data.
Outputs of Marketing Information System - Product planning, Place planning, Promotion, Price, Budget Allocation and Sales Forecast.

Quality Information System:-

Quality information systems are standalone systems or embedded systems that help an organization to achieve its quality goals.
The quality plan is derived from the strategic information plan.
Derivation of QIS:

R&D Information System:-

- R&D has long been recognized as an information intensive activity that is usually, responsible for evolving a stream of new products and production process innovations for the organisation.
- R&D is responsible for creating and developing new products or services in order to capitalize on recognized opportunities.
- R&D is an open system that has important information and communications exchanges with the external environment and other organizational subunits.
- Major Information Flow Crucial for R&D Effectiveness: