Effectiveness and Efficiency
Information Systems help companies
attain more effective and efficient business processes.
Effectiveness
The degree to which a task is
accomplished
Efficiency
Determined by the relationship
between resources expended and benefits gained in achieving a goal
Drucker
defines them differently.
To Drucker, Effectiveness is doing the right
thing
Efficiency is doing things right
Accounting
Accounting tracks each financial transaction within a
company.
Accounting Information Systems (AISs) automatically post
transactions in the books and automate generation of reports for management and
legal requirements.
Three types of AISs
For managerial purposes, these systems assist in organizing quarterly and
annual budgets for departments, divisions, and corporations.
Electronic Data
Processing (EDP) Audits
Ensure electronic systems comply with standard
regulations and acceptable rules
Ensure systems cannot be manipulated to
circumvent acceptable principles
Finance
Financial managers manage money by:
Cash Management
Financial ISs help balance the need to
accrue interest against the need to have cash available.
Cash management
systems (CMS): Handle cash transactions specifically.
Electronic fund
transfer (EFT): The electronic transfer of cash from one bank account to
another.
ISs and Investment Analysis and Service
Analyze and
project the prices of a specific stock or bond.
Transmit buy and sell orders
electronically.
Provide clients with a detailed statement.
Monitor
account information and news online.
Support quality decisons.
Manufacturing and Inventory Control
The processing of raw
materials into physical products
Information Systems here can assist in:
Materials Requirement Planning (MRP)
Take customer demand as
initial input
Number of product units needed and when they are needed
Use long-range forecasts to put long-lead material on order
Help reduce
inventory cost while ensuring availability
Manufacturing Resource Planning (MRP II)
Combines MRP with other
manufacturing-related activities to plan the manufacturing process such as
Marketing, Sales, and Customer Service
Market Research
Statistical models assist market researchers in finding
the best populations for new and existing products.
Targeted Marketing
Database management systems (DBMS) help define potential
customers as narrowly as possible.
The Computer as a Marketing and Selling
Medium
Companies send customers promotional disks with
information on their products and services.
Commercial
announcements are posted on public bulletin board systems.
The Web lets companies reach more shoppers and serve them
better.
Sales Force Automation
Equipping salespeople
with information technology facilitates productivity.
Allows onsite salespeople to present different options for
products and services.
Customer Service
Customer
service via the Web is available 24 hours/day, 7 days/week.
Human
Resources
Employee Record Management
Reduce space and
costs needed to store records, time to retrieve them.
Training Training software simulates an actual task or
situation and includes evaluation tools.
Evaluation
Evaluation software helps standardize the evaluation process
and adds a certain measure of objectivity and consistency.
Compensation and
Benefits Management
ISs can help manage compensation
efficiently and effectively.
Calculate salaries, hourly
pay, commissions, and taxes
Automatically generate
paychecks or direct deposits
Special software helps manage benefits, such as
health insurance, life insurance, retirement plans, and sick and leave days.
Ethical and Societal Issues
Privacy is one's right to control information about oneself.
Not a constitutional right per se; secured by laws or convention.
Increasing number of organizations may access information via better IT hardware and software.
Seven Commandments of Personal Data Collection and Maintenance
