FUNCTIONAL INFORMATION SYSTEMS are designed to support functional areas such as accounting, marketing and finance. They are comprised of several subsystems for specialized applications, and they interface with each other. A major portion of functional system is made up of MISs, whose major role is to provide routine and demand reports to functional area managers.
The core operations of organizations involve transactions such as ordering and billing. The information system that handles these transactions is called the transaction processing system (TPS). The TPS must provide all the information needed for effective operations in an efficient manner. The major transactions processed are preparing and maintaining, ledger, accounts payable and receivable and generating periodic records and statement.
Accounting information systems cover applications in the area of cost control, tax and auditing. In industry, accounting and finance are frequently in the same department. Financial information systems deal with topics such as investment management, financing operations, raising capital, risk analysis and credit approval.
Channel systems deal with all activities related to customer orders, sales, advertising and promotion, market research, customer service and product and service pricing. IT can assist marketing personnel in planning, advertising and pricing decisions, and sales activities such as ordering, telemarketing and efficient retailing.
Production and Operations Management (POM) activities are much diversified ranging from materials management and quality control to capacity planning and just-in-time (JIT) management. The major area of IT support to POM is in logistics and inventory management, quality control and planning: MRP, MRP II, Project Management, CAD, CAM and CIM.
All tasks related to human resources acquisition and development can be supported by human resources information systems. These tasks include employee selection, hiring, performance evaluation, salary and benefits administration, training and development, labor negotiations, and work planning. Web technologies and especially intranets are helpful in improving training, dissemination of information, fringe benefit management, recruitment and testing, and managing health benefits and insurance.
Integrated information systems are necessary to ensure effective and efficient execution of activities that cross functional lines or require functional cooperation. While supply chain software integrates several tasks in a functional area, or in a few areas, enterprise resource planning (ERP) software integrates all the tasks along the supply chain, frequently extending the integration to business partners. SAP software is designed to integrate across functional areas so that whatever resource or information is required from any functional area, it can be gathered and coordinated with all other inputs e.g., integrating HRM with supply chain management, so that human resources as well as materials for production can be ensured.
An interorganizational and/or global information system (IOS) involves information flow between two or more organizations, which may or may not be located in the same country. Its major objective is efficient processing of transactions. Interorganizational systems have developed in direct response to two business pressures (DRIVERS): the growing desirability to reduce costs and to improve the effectiveness and timeliness of business processes. IOSs enable effective communication at a reasonable cost, and collaboration to overcome differences in distance, time and language. They provide partners with access to each other's databases and frequently enable to work on the same projects while their members are in different locations.
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