12. IT and finance function Flashcards
What are the two general roles of information systems
- Supporting operations through processing and storing of transactions
- Supporting managerial activities such as decision making, planning, performance measuring and control
What is the difference between data, information and knowledge
Data: raw facts and figures
Information: processed organisaed data with value
Knowledge: application of cognitive process that becomes useful
What are the two categories of knowledge
- Tactit knowledge: organisation has but is unaware of or is unable to use
- Explicit knowledge: organisation is aware of and can use
What are the two categories of IT Systems
- IT systems that create information and knowledge
- IT systems that share information and knowledge between business functions
What are examples of IT systems that create information and knowledge
- Transaction processing systems
- Knowledge work systems
- Office automation systems
What are examples of iT systems that share informaiton and knowledge
- Management information system
- Decision support system
- Executive information systems
- Expert systems
- enterprise wide system
- knowledge management system
- customer relationship management system
WhaT are transaction processing systems
Systems that perform and record routine transactions
- Large amounts of transactions
What are knowledge work systems
Facilitate the creation and integration of new knowledge into an organisation
- eg. CAD, CAM, specialised financial software
What are office automation systems
Computer systems that are designed to increase productivity of data and information workers
- document management, facilitating communication
- eg. email, word processor, intranet software
What is management Information System
Convert data from mainly internal sources into information
- information enables managers to make timely and effective decisions for planning, directing and controlling activities for which they are responsible
What are teh characteristics of MIS
- Support structured decisions at operational and management levels
- Designed to report on existing operations
- Inflexible
- Little analytical capability
- Internal focus
What are decision support systems
Combine data and analytical models or data analysis tools to support semi-structured and unstructured decision making
- Consider number of alternatives to make good decision
What is the difference between structured and unstructured decision making
- Structured: automatically madeby computer - relies on logic
- Semi/Unstruuctured: human interaction needed
What is executive informaiton systems
- Pools data from internal and external sources to make information available to senior managers in easy form
- make strategic,unstructured decision
What are the features of executive informaiton systems
- Felxible
- Quick response time
- Sophisticated data analysis and modelling tools
What are expert systems
- Form of DSS (decision suppor system)
- allows users to beenfit from expert knowledge and information
- database holding specialised data and rules
What rules need to be met to use an expert system
- Well defined problem
- Expert can define rules by which problem can be solved
- Oroblem cannot be solved by conventional transactional processing
- Expert could be released to more dofficult problems
- Investment of expert system is justified
What is enterprise wide system
Designed to co-ordinate all business functions resources and information whereever they are geographically
- EG. Enterprise resource planning
What is knowledge management systems
Record and share knowledge held in organsiation
What are the benefits of KMS
- Valuable data is preserved
- Data is shared easily
- Data duplication prevention
- Allows employees to get up to sped quickly
What is CRMS
Customer relationship management system
- software applications which specialise in providing information concerning products, service and customers
What are the benefits of customer relationship management systems
- Personalised service
- Quick response to cusotmer
- increased motivation of customer facign staff- properly equipped
- Customer retention and loyalty
- Target marketing
How can IT create change in organisation
- Type of products and services provided
- The way in which products are made
- The way which employees are movilised
- The providing of services
- communication and structure
What features does virtual teams require to be effective
- Share information
- Make joint decisions
- Fulfill the collaborative funciton
What are the principles developed by Skyrme for virtual teams
- Team should develop sense of purpose, trust
- Team members should give back
- Teams should be small and multi disciplined
- Communication frequently
What are Porter’s five forces model
Profitability affected by:
- Industry competitiors : rivalvry among existin firms
- Potential entrants
- Baargaining power of customers
- Bargaining power of suppliers
- Threat of substitues of products
What are the two ways IT affect potential entrants/barriers to entry
- Defensively: increase economies of scale, raise capital costs on entry
- Offensively: help organisations overcome entry barriers
How does IT affect bargaining power of suppliers
- Increases competition between suppliers to through purchase databases
- Supplier power can be shared
- Suppliers can be integrated- system of electronic data exchange
How does IT affect bargaining power of customers
Using IT to ‘lock them in’
- Raise switching costs
- Cusotmer informaiton systems to tailor needs
How does IT affect subtitues
-System itself is the substitute eg. ecommerce instead of high street shops
- IT based systems to imitate existing goods and create new ones
- Technology can add value to existing services
What are virtual companies
- Virtual Companies: collective of separate companies which work together for bigger projects
What are virtual supply chains
Enabled through e-business links
Virtual businesses working together ans a organisaed supply network
What are the two types of organisation in virtual supply chain networks
- Producers: produces goods and services
- Integrators: manage supply network and own end customer contract
What are the advantages to an organisation of operating virtually
- Flexibility
- low risk
- less investment needed
What are the ethical considerations of IT Systems
- Information rights and obligations
- Property rights
- Accountability and control
- System quality
- Quality of life: degree of monitoring, degree of dependence on system, privacy, risk of cyber crime
What is cost and benefit analysis
Performed before or during the development of information system
- Uses estimates
What is cost benefit review
- Performed after system has been implemented with actual data and costs
What are methods of cost benefit analysis/review
- Payback method
- Discounted cahsflow
- Accounting rate of return
What are the types of costs of Information systems
Development costs: incurrred before system has been implemented
Implementation costs: to develop system ready for use
Running costs: day to day basis costs
What are the methods of implementation
- Direct/Big bang: old system completely replaced by new
- Parallel running: old and new systems both run togther for a while for cross checking, safety
- Pilot operation: selected parts of organisation operate new system to test
- Phased or modular: system is switched part by part
What are the advanatages/disadvantages of direct method
- Quick
- Minimal cost
- Minimise workload
- Risky
- Disruption
- Failure would be costly
What are the advanatages/disadvantages of Parallel running
- Safe
- Allows to verify results
- Costly to operate both systems
- time consuming
- Additional workload
What are the advanatages/disadvantages of pilot operation
- Less risk
- Less costly than parallel
- Can take longer to acheive total changeover
- Not as safe as paralell
What are the advanatages/disadvantages of phased or modular changover
- Less risky than direct change
- Other areas are unaffected by problems in one area
- Can take long time to change
- Interfaces between parts of system might make it complicated to implement
What are the costs of systems
- Equipement
- Installation
- Development
- Personnel
- Operating
What are the benefits of a information system
- Direct: reduced operating costs
- Indirect: better decision making, freeing of human brainpower
What are the types of cyber attacks
- Phishing: emails from trusted sources to get information
-Pharming: redirecting from website to bogus website to collect data - Hacking: specialist software to gain unauthorised access to computer system
- Distributed Denial service: botnets takeover to crashonline services
- Webcam manager: take control of user’s webcam
- File hijacker: gain access to system to ransom
- Keylogging: record of keystroke to gain passwords and details
- Screenshot manager: stealing screenshots
- Ad clicker: directs computer to bogus website through clicking links
What are the types of cyber security
- Access control: physical and network procedures to restrict access
- Boundary firewalls: software protection that intercept data
- Malware protection: prevents installation of suspicious programs
- Patch management: updating software
- Secure confirguration: systems set up with cyber security as priority
What are other threats to Information systems
- Natural disasters
- Malfunctions
- Unauthorised acceess
- Unintentional human errors
- Personnell injury or health problems
What is system architecture
Describes how the hardware and processing power of a system is organised: centralised or decentralised
What is centralised network architecture
- Data is processed in one computer or cluster of coupled computers in single location
- centralised file server to connect many devices
What are the advatages of centralised network architecture
- One set of files
- Better security and control over data
- Head office control over computing processes
- More affordable to get one large central computer
- Economies of scale in purchasing computer equipment and supplies
What are the disadvantaages of centralised network architecture
- Not flexible
- Delays or interruptions if central system has issues
- Reliance on single set of head offcie system
- If central computer or cluster breaks, entire system is out of operation
- Processin speed might deterioiate as more users log in
What is decentralised network architecture
- Prcoessing power is distributed throughout the organisation at several different locations
- Some sharing of informaiton through links
- End users are given more responsibility and control over data and programs
- More user friendly
What are advantages of decentralised network architecture
- Greater flexibility in system design depending on users
- Data transission reduced as files can be held locally- reducing risk
- Improvement of speed
- Effect of breakdown is minimised
- Better local control
- Facilitate more user involvement
What are disadvatages of decentralised network architecture
- Duplication of data in different computers
- Difficult to adminster and maintain - require IT over several sites
- More difficult backup protocols
- Security: introduction of malware and unauthorised copying of data
What is grid computing
- Pools the processing power of many computers
- Used for heavy numbers crunching
- EG/ data mining
What are the systems of data flows
- Local area network: devices connected locally
- Wide area network: connected devices over large area - many LANs connect via router
- Virtual Private network: share data with outsiders- private link
- Wireless local area network: LAN based on wifi wireless networkW
What are storage area networks
Connects servers to data storage devicces through technology like fibre channel
What is system area network
Links high performance computers with high speed connection in cluster configuration
What is client server network
Network consists of two kinds of computers : Clients and servers
- Clients are computer workstations sitting on desks of employees
- Servers are powerful comuters held in central location
what are peer to peer networks
Workstations connected to each other but not have servers
- Files can be shared betwen workstations and printer
What are the competencies required for the management of big data
- Systems in place to capture data
- Data stored accessibly
- Data handled, stored securely
- Commercially sensitve data should not be vulnerable to cyber attackW
What roles are there relevant to big data information
- Data scientist: skilled employees who perform analytics
- Data manager: manages big data system, ensure data quality
- Data champion: ensure decision based on big data are properly informed
What information can finance provide at each stage of fiance function through business partnering
- assembling information: collection of informaiton of IT costs, KPIS
- Analysing for insight: analysis of breakdowns, cost and benefit analysis
- Advising to influence: reporting on insights
- Apply for impact: creation of business cases to support investment, strategic review of technology
What KPIs are identified by Marr to support IT function
- IT cost as percentage of revenue
- IT project cost variance(scheduled project cost - actuaal project costs)
- Number of IT security breaches
- System downtime
- Help desk first call resolution
- IT Maintenance ratio
- Average age of IT Infrastructure
What are other KPIs
- Operational: response rate of IT usses, percentage of issues resolved
- Transformational: time savings from new systems, IT spend per employee
- Strategic: number of business opportunities created, revenue generated by new tech, rating fo IT function’s reputation in market
