- Order placed by customer
- Checks made if order is available/in stock
- If available customer invoiced
- If unavailable production given order note
This sales transaction is extremely important where the invoice is concerned, as this is output data and information which is vital to the company as records are needed of the list below and what the company stores and relies on as information.
- Order description & No.
- Price
- Unique numbers/codes
- Customers name
- Customer address
- Delivery date
- Invoice no.
- Payment method
- Discounts (if any)
If the system was to be computerized it would give advantage in that it would eradicate repetition of data be able to perform such task in providing sales reports which would be used by the marketing department also it could automatically give daily sales figures to the accounting department.
PURCHASING TRANSACTION
The advantages in the case of the purchasing department of implemting a computerized system would be the fact that not only would the company be able to keep a minimal level of stock as far as raw materials is concerned, which would help to keep cost of purchasing at a minimal level thus creating profitability in the long run. It must also retain all the data that is held on suppliers their goods and services, which is a vast amount of data to be held manually.
The repetition of details that the system currently running is holding, is extremely time consuming and also probably taking up too much storage space, which could be put to much better use.
If the new system was to be introduced no unnecessary duplication would be made and also the computer could also order materials automatically when stock levels reach a minimal. This is good business practice and frees up money.
Another advantage in the proposed system would be one of the Internet, where managers of the department would be able to compare prices with what is available, also they would be able to see what competition has on offer as well.
THE MAIN ROLE OF IT BASED INFORMATION SYSTEMS
The goal of all management information systems is to provide managers with information that allows them to:
The main sources of information management concern themselves with are mainly marketing, research and development, human resources
Sales
This department runs in connection with the marketing department
Marketing
Marketing’s main priorities must be with the presentation of the products in which they are producing to the potential markets. Computerizing the system would enable data/information to be collected, which is used to forecast future sales, to show areas of growth etc.
Accounts
A computerized system would be a great advantage to the company in that it would be able to store accurate records of all transactions made. The accounts can be split into two categories, one where the financial side is catered for and the other where the management makes use of information that is captured and stored.
The financial side would benefit considerable with an automated system in that all cash flows in and out of the business, sales and purchases, are logged into the computer and
Computerizing the accounts would provide the management with reports of great importance to the whole organization as managements job is to forecast what sales they will make and what the costs of overheads of the business will be. Profit and loss reports and balance sheets that are essential to management because they show the organisations assets and liabilities can be generated by a computerized system.
It would identify bad debt customers and minimise its losses in the business quicker.
Since there is a legal requirement for all accounting records to be kept, it is much safer and less storage space when the system is computerized.
Human Resource Management
A computerized system would give the advantage in this department simple because it deals with the people of the company and as such should be regarded as a valuable resource. Contracts will be held in regards to the employees here.
Inputs would be such things as employee records, employment status, personal data about an employee etc. Automating the system would mean that records can be updated more efficiently with a great deal more speed, less effort and less man power to perform such tasks.
Managers would be able to use this system to analysis there employees, for example they could match certain employees skills to specific jobs. Outputs would contain reports for things such as skills analysis, salary reviews etc.
Question 3
Mention real time prossing & batch processing and the advantages
COMPUTERS IN BUSINESS
Business revolves around the making of decisions about what to produce, where to buy materials and the price to charge for the product. Computers can help with the making of these decisions by providing accurate and timely information, which will take the uncertainty out of the process.
Computers are needed in business because information is required to be not only accurate but to be produced quickly as well, so that correct, timely decisions can be made. When events occur they can be fed into the computer and files can be updated immediately.
Computers do not make mistakes (incorrect data maybe entered or a faulty program are the causes for mistakes) managers rely on information that computers produce.
For a business to function it needs information, obviously a computer based system rather than a manual one would act more efficiently, accurately and quicker, it would also inevitably assist management with decision making.
INFORMATION
Information comes from the relationships between pieces of data.
Information is a valuable resource without which management cannot function.
An Information System (IS) provides information about a company by using data to represent it.
At the heart of an IS integrated database; a structured collection of data and data descriptions.
Ref: D. Benyon/ Information & data modelling
Information must be complete accurate timely relevant and be cost effective, for a business to be successful, it needs three types of information:
- Planning – required to make decisions (e.g. forecasts) uncertainty
- Control – control the business (e.g. stock levels)
- Operating – day-to-day (e.g. customer orders)
All of the above being performed by a computerized system rather than manual, the benefits will be seen instantly and can only give any business an advantage since the rest of the business world is computerised and as so, Kwik Space must be also to put them on the same level, if not better with correct management skills in the system, this company will be able to regain there previous position as market leaders.
In any business there is a great deal of data such as values of invoices, the cost of materials, the quantities of raw materials in stock etc. Information is needed by management to make accurate decisions, for example, is the price for materials being charged correctly? To know this data is processed through the computer so that the costs of running the business and making its product will be known and a decision can be made, to weather the price is right or not.
MANAGEMENT INFORMATION SYSTEM
MIS is a system to convert data from internal and external sources into information, and to communicate that information in an appropriate form, to managers at all levels and in all functions, to enable them to make timely and effective decisions for planning, directing and controlling the activities for which they are responsible.
(Ref: lectures notes)
TPS’s provide the raw data used by MIS’s and produce management information on such things as:
- Reports on sales figures to date
- Total amounts owed to suppliers
- Total amounts owed by debtors
- Total stock turnover (to date)
- Current stock (value)
Most firms implement data processing systems since processing customer transactions is a necessity. As the data is collected a database is built up and becomes available to produce reports.
An electronical system would support the operations of the business in different ways, as stated previously they would be more accurate there is also the advantage that the data could be shared. Also it allows the business to react to environmental changes quickly. Checks on if production levels are being reached and if customers orders are being delivered on time, would all be available through such a system, by the push of a button or a simple click, also costs of materials and wage rates would also be available.
Not only are computerised TPSs the core of electronic commerce but most businesses use these systems and cannot operate successfully without them.
Implementing an IT – based information system could only make the company perform better than it currently is at present. When a company has a manual system their clients details are processed slowly and at a higher cost than what a IT based one would, therefore creating expense to the company and thus at present causing the company to loose unnecessary money. There is more paper work involved, correcting details and the likely hood of loss of documents.
The target of any business is to make money/profit. The more profit the business makes the more successful it will be. If the business can process information efficiently and quickly it would attract more customers therefore creating more profit, giving them an advantage over others.
Adopting IS into Kwik Space could only give rise to advantages for the company. Once these systems are in place routine processing of data can begin:
- Data collection - As transactions in the business occur the staff will collect such data on things like invoices, purchase orders etc.
- Data entry - Preparation (once data has been collected) for entry into computer for processing
- Processing – The computer will process the data, there are many different processes that can take place, but all are carried out in order to give useful information, the main one’s being:
Sorting – files held in sequences
Comparing – used to determine a course of action e.g. stock level’s low, therefore re-order would be done automatically
Inserting
Presentation – information presented in a format that is easily understood.
DATABASE’s
A comprehensive database would be used to hold different types of information and once this information has been processed it can then provide managers with ready-made reports, things like comparisons of actual sales and targeted sales. Allowing the data in the database that’s been collected over a period of time to be compared and analysed to produce graphical information about such things as:
- Sales
- Purchases
- Wages
- Stock levels
- Etc.
Also threw such a database a model that can do ‘what if’ queries can produce forecasts with the effects on such things as:
- Changes in market conditions
- Production rates
- Etc
The advantages of a Database would include such things as:
- Control of data redundancy
- Data consistency
- Quantity/amount of data
- Improved data integrity
- Improved security
- Enforcements of standards
- Economy of scale
- Balance of conflicting requirements
- Improved data accessibility and responsiveness
- Increased productivity
- Improved maintenance through data independence
- Increased concurrency
- Improved backup and recovery services
COMPETITIVE
Competitive advantage – The advantage that one business has over another business organisation due to more effective and efficient use of information systems and information technology to deal with competitive forces.
Ref: G.Elliot & S.Starkings BIT
Competitive advantage as explained above is mainly concerned with how organisations actually use their IT & IS to gain that advantage since Kwik Space doesn’t have either of these system it would be extremely difficult to even consider competing with other companies producing the same products as themselves. These companies will inevitably have their own IT & IS systems in place and as such Kwik Space can only follow suit in order to compete with them.
Customers can be gained and kept by good relationships that are built through the sales department,
The way in which these system would help gain an advantage would be, for example: Marketing could target customers and/or suppliers niches
Kwik Space Cabins current system is working in managing product quality. Production management and demand forecasting could be used for the company to give them a competitive advantage on prices that are held in the market at present.
DECISION MAKING
To be effective in decision-making managers need to be able to get accurate information whenever they need it.
Long-term decisions are for top management e.g. major capital investments
Medium-term decisions e.g. market planning, product modification
Operational decisions lower level management that have immediate effect, e.g. overtime, credit control.
SOFTWARE APPLICATION
The software that would be needed would depend on the cost that the company is allowing themselves
CONCLUSIONS
A transaction processing system can be enhanced to provide information for management decision-making, which in turn could be integrated into decision support systems to assist the management and executive decision-making functions of the business.
BIBLIOGRAPHY
Author: David Benyon
Title: Information and Data Modelling
Author: Stuart Crainer
Title: Key Management Ideas
Author: Terry Corbitt
Title: Information Technology and it’s Applications
Authors: Geoffrey Elliott & Susan Starkings
Title: Business Information Technology
Other notes: Lectures notes
