Functional Information System

Functional business systems Support a variety of operational and managerial applications of the basic business functions of a company. Examples: information systems that support applications in accounting, finance, marketing, operations management, and human resource management.

Accounting information systems help record business transactions, produce periodic financial statements, and create reports required by law, such as balance sheets and profit-and-loss statements.

The purpose of financial systems is to facilitate financial planning and business transactions.

In finance, information systems help organize budgets, manage cash flow, analyze investments, and make decisions that could reduce interest payments and increase revenues from financial transactions.

Marketing IS provide information that helps management decide how many sales representatives to assign to specific products in specific geographical areas.

The systems identify trends in the demand for the company’s products and services.

Human resource (HR) management systems help mainly in record-keeping, employee evaluation, and employee benefits.

Every organization must maintain accurate employee records. Human resource management systems maintain such records, including employees’ pictures, marital status, tax information, and other data that other systems, such as payroll, might use.

Another way of Classifying Information Systems is by which level of organisation it serves.Three main levels of Organisation information systems serve are as follows:

Operational-level systems: support operational managers, keeping track of the elementary activities and transactions

Management-level systems: serve the monitoring, controlling, decision-making, and administrative activities

Strategic-level systems: help senior management tackle and address strategic issues

To learn more about Functional Information Systems click the links below
Financial Information Systems
Manufacturing Information System
Marketing Information System

Geographic Information System

A geographic information system (GIS) is a computer system for capturing, storing, querying, analyzing, and displaying geospatial data.

What is geospatial data?
Geospatial data describe both the locations and characteristics of spatial features. To describe a road, for example, we refer to its location (i.e., where it is) and its characteristics (e.g., length, name, speed limit, and direction).

Components of a GIS

Like any IS GIS also has Inputs, Output and Processing in between with the help of Hardware, Software, Networks and People. Lets see what it encompasses.

Hardware. GIS hardware includes computers for data processing, data storage, and input/output; printers and plotters for reports and hard-copy maps; digitizers and scanners for digitization of spatial data; and GPS and  mobile devices for fieldwork.

• Software. GIS software, either commercial or open source, includes programs and applications to be executed by a computer for data management, data analysis, data display, and other tasks.

 GIS consists of the following  elements: geospatial data, data acquisition, data management, data display, data exploration, and data analysis. 

People. GIS professionals define the purpose and objectives for using GIS and interpret and present the results.

 Organization. GIS operations exist within an organizational environment; therefore, they must be integrated into the culture and decision-making processes of the organization

ELEMENTS OF GIS

GIS consists of the following  elements: geospatial data, data acquisition, data management, data display, data exploration, and data analysis.

To locate spatial features on the Earth’s surface, we can use either a geographic or a projected coordinate system. A geographic coordinate system is expressed in longitude and latitude
and a projected coordinate system in x, y coordinates. GIS represents geospatial data as either vector data or raster data


Data acquisition is usually the first step in conducting a GIS project. Data is usually got from public data if public data is not available then we can go for new data using satellite maps.

Data Management  - is usually done through DBMS, and GIS requires huge Databases to store all the data about each coordinate 

Data Display : while creating the data for display in GIS care should be taken that common notations in map making are followed.

Data exploration refers to the activities of visualizing,manipulating, and querying data using maps,
tables, and graphs. A common example is using public database to check if there is any water source nearby or checking for water table before planning any construction work etc.

Data Analysis - A GIS has tools for mapping the terrain in contours, profiles, hill shading, and 3-D views, and for analysing the terrain with  slope, aspect, and surface curvature. Another such tool is Geocoding, it converts postal addresses into point features, and dynamic segmentation locates linearly referenced data on an x-, y-coordinate system. Google Maps +codes is an example of this.

Some of the commercial and opensource GIS is listed below in the table

GIS in India:

So as an Indian you might be intrigued whether we have these kinds of software's in India, our Indian agencies have created many such tools . Some useful tools are listed below

Bhuvan

Financial and Accounting Information Systems

A Financial & Accounting Information System(AIS) is an functional information system which helps in the financial and accounting functions of an organization. The objectives of the AIS are listed below

Primary objective – to meet financial need of business

Secondary objective – to meet statutory compliance

Tools used

Typically every finance department will have some ratios and tools, the financial and accounting system also uses these tools based on data collected in the organization.

• Break even analysis
• Cost analysis
• Cash flow projections
• Ratio analysis
• Capital budgeting and ROI
• Financial modelling
• Management accounting
• Expense analysis, auditing and control

Query

The typical  query  will be from the sales and marketing team about

• Invoices 
• Payments
• Credit Notes  
• Debit notes

The corporate office might similarly enquire about

• Contract Payments
• Statutory Payments
•  Certified bills

The HR department might raise queries about payments made to employees

Decision analysis

There are various kinds of analysis which can be made from financial and accounting data, they are listed below. Each of these analysis is used to help in various decisions.

• Cash flow analysis
• Sources and uses of funds
• Debtors analysis
• Creditor analysis
• Budget analysis
• Capital budgeting
• Cost analysis

Controls:

Control is exercised, based on the exceptions found in the business operations. Some exceptions are as follows

• Accounts receivables – outstanding beyond acceptable norms

• Advances to creditors and non realisation of obligations
• Valuation of non-moving inventory for disposal
• Analysis of non-moving accounts and legal actions.
• Shortage of funds in excess of planned and rescheduling of activities
• Cost overruns beyond norms and action on alternatives
• Performance analysis of  lines of business showing adverse performance

Reports:

Statutory  compliance report- these are reports that will be generated due to government or regulatory agencies stipulations.

 Tax returns

• Registers – sales tax, excise tax, TDS,GST 
• Declaration of certain results to finacial institution, SEBI
•  Declaration of financial result to the public every six months,  NSE, BSE
• Declaration of annual results to the board, shareholders and public

Operations update:

These are internal reports which are generated to update the managers about important updates from  various activities in the accounting and finance department. Some examples are given below.

•  Filing of statutory returns and reports
•  Statutory payments
•  Transactions executed and accounted in the system
•  Reports on finished goods, dispatches and invoicing
•  Reports on material receipts and payments to suppliers
•  Obligatory payments- rents, insurance premium, membership fees, dividend

Information updates:

In addition to the operation updates the AIS should also frequently update the central data base about the current valuations ,outstanding bills and stock.

 Monthly trial balance, balance sheet and P&L account

 Stock valuation

 Accounts receivable

 Accounts payable

 Expenses on major accounts

 Cash position

Payments and receipts which are statutory obligations

Sales, purchase of assets by certain classification

Overall business acheivements in major lines of business.

Decision analysis:

The AIS also helps the managers take some decisions, the various types of decision support is as follows

 Break even analysis for cost and price decision

 ROI for choice of investment

 Trend analysis on price of  crucial commodities for changes and alternatives

 Cash flow, sources and uses of funds for selection of alternate source of funding

 Analysis of current and fixed assets in terms of use and decision on alternate use or disposal

 Analysis of current liabilities and decision on liquidation on priority basis

 Analysis of overdue receivables and decision on the revision of terms or commercial and legal actions.

Action update

AIS is the nerve centre for financial operations, so it should keep track of various exceptions and make sure all money owed to the company is collected for this it has to make various reminders to managers and officers, these are called Action updates, some of these are listed below.

1. Overdue receivables

1.Legal action

2.Termination of business association

2.Non supply of goods and services but advance paid

1.Legal action

2.Revision of terms

3.Termination of business association

3.Payments to creditors, where penalties are involved

4.Poor usage of fixed assets and disposal

5.Non-moving inventory and its disposal

6. Evolving new systems and procedures to control expenses and implementation

Conclusion:

If a company wants to be truly paper free and operate succesfully in an digital society, then it has to embrace Information systems, The Financial & Accounting Information System will help in various forms. Lets take the example of India, we have GST , if an organization operating in India has digitized all the process, then all the required documents for GST and TDS for employees can be done easily, eliminating the need for paper documents. This resonates with the push for DIGITAL INDIA by the government. Tally is one popular application used by many organisations in India for managing their accounts systems.

Role (Functions)of Information Systems

MIS plays very vital role in the management, administration and operation of the organization. The system ensures that an appropriate data is collected from various sources, processed and sent further to all the needy destinations and fulfil the information needs of an individual and top management 

At every phase of the management process, managers constantly need information in order to make effective decisions.Management information is the information required by managers as they make their decisions, such as the

–number of staff required to be employed by each department,

–their training requirements,

–career development plans,

–job descriptions,

–budgets,

–overall forecasts,

–benchmark surveys, and

–progress reports on socio economic conditions.

The role of MIS in an organisation can be broadly classified into  The support to Business Operations and support to decision making, some of the common areas where MIS plays a major role are given below.

(i) Timely and Accurate Transaction Processing.

(ii) Streamlining Accounting and Records Management.

(iii) Providing Managers with ad hoc and interactive support in decision-making.

(iv) Provision of an easy and systematic way in digging out critical information tailored according to specific requirements, and customized in preferred formats.

(v) Enables an organization to gain competitive advantage over others.

(vi) Better communication, inter-organizational computing, and internet-working. Supports business operations and successful management of business enterprises.

(vii) Better use of executive resources by automating routine functions.

(viii) Increased ability to make sound, rational and informed decisions involving complex combinations of factors, and doing so with more confidence and speed.

(ix) Better use of time by making facilities available every time they are required.

(x) Improved customer services and improved personnel relations within the organization 

The Functions of the Information system can be simply summarised in the following image below

Risks to Information Systems

What are the risks to Information Systems? When data is in physical form, the common risk might theft or damage from the physical location, but when data is converted in electronic form data is vulnerable from many sources this is illustrated from the diagram below

  There are threats from people, malware , virus, worms etc.. we shall see some of the most common risks to Information Systems. Most Information systems are web based, we can classify the threats from various points of access like 

• Client Side
• Communication Network
• Corporate Servers
• Corporate Systems

Risk 1: Unauthorized Access
One big security issue is people who are not authorised to access a system getting access to it, it can be due to bad or no password or even theft of password or devices

Risk 2: Internet Vulnerabilities

Due to current practices of having 24/7 internet for all devices, hackers find it easier to target a corporate network, also file sharing and multiple personal devices connected means more unregulated downloads and more unauthorized applications are installed. these cause even more vulnerabilities.

Risk 3: Wireless Security Challanges:

The prevalance of wireless networks made illegal access of networks much easier, with a simple SSID or public WiFi networks hackers can inject malicious codes into secure devices. So companies always advice their personnel never to use public WiFi networks.

    Risk 4: Malicious Software:
Malicious software can be called in various names

• Virus - self replicating malicious code
• Worms - self replicating and self spreading malicious codes
• Trojan - malicious code hidden under a different application
• Spyware - software designed to spy on the users systems
• Keylogger- software used to record all keyboard strokes
• SQL Injection Attacks - adding malicious codes into the network using websites poor coding.

Risk 5: Hackers and Crimes

•  Spoofing and Sniffing
•  Denial Of Service
• Identity Theft
•  Cyber terrorism and Warfare

Risk 6: Internal Threats

•  Software Vulnerability
•  Employees

Most ignored threat is the internal Threats by employees and software vulnerability, most companies use obsolete software and this gives many opportunity for hackers. also employees who have a grudge sometimes keep Logic Bombs or deactivate security system or steal and sell data.

These are some of the major risks to Information systems