Chapter 12 - How finance function interacts with IT

Question 1

What is an information system (IS)?

Answer 1

Provision and management of info to support running of organisation

Question 2

What is info technology (IT)?

Answer 2

Hardware that provides the infrastructure to run ISs

Question 3

What is the IT function responsible for?

Answer 3

Planning, evaluating, installing, operating and maintaining hardware, software, networks and data centres required

Question 4

What is a management info system (MIS)?

Answer 4

Converts internal and external data into useful info which is communicated to management

Question 5

What are the different types of MIS?

Answer 5

• Executive info system (EIS)
• Decision support system (DSS)
• Transaction processing system (TPS)
• Expert system

Question 6

What are the 2 broad types of knowledge?

Answer 6

• Explicit - knowledge company knows it has
• Tacit - personal knowledge and expertise

Question 7

What are the factors that influence the pace of tech adoption?

Answer 7

• Feasibility
• Cost
• Economic benefits
• Availability of labour
• Regulation

Question 8

How can having good IT infrastructure be beneficial?

Answer 8

• Adoption of new ways of working
• Productivity improvements
• Multi-source data capture and analysis
• Created of shared service capability
• Digitisation of info
• Flexible working practices
• Virtual organisations

Question 9

What are the advantages of remote working?

Answer 9

• Lower infrastructure costs
• Increased employee motivation and productivity
• Increased commitment
• Reduced staff turnover

Question 10

What are the disadvantages of remote working?

Answer 10

• Co-ordination difficulties
• Loss of control
• Dilution of culture

Question 11

What challenges do virtual teams face?

Answer 11

• Forming a team
• Knowledge sharing
• Processes and goals
• Leadership
• Cultural differences
• Morale

Question 12

What are the ethical and social issues with IS and data?

Answer 12

• Data protection
• Data privacy
• CDR

Question 13

What are the initial costs of a new IS?

Answer 13

• Design and development if bespoke
• Purchase price if not bespoke
• Purchase of new hardware
• Testing costs
• Training costs

Question 14

What are the running costs of a new IS?

Answer 14

• Labour
• Materials
• Service support
• Ongoing costs

Question 15

What are the benefits of a new IS?

Answer 15

• Speed
• Accuracy
• Volume
• Complexity
• Collaboration
• Presentation
• Lower costs

Question 16

What are the potential threats to privacy and security of an IS?

Answer 16

• Natural disasters
• Malfunction
• Unauthorised access
• Viruses
• Hackers
• Human error
• HR risk

Question 17

What is systems arcitecture?

Answer 17

The way the systems infrastructure is organised

Question 18

What are the 2 approaches to system arcitechture?

Answer 18

• Centralised (one location)
• Decentralised (many locations)

Question 19

What are the costs of decentralised arcitechture?

Answer 19

• Higher costs due to duplication
• Barriers to sharing data
• Inconsistent data
• Loss of control

Question 20

What are the benefits of decentralised arcitechture?

Answer 20

• Efficiency
• Ability to better meet local needs
• Fewer staff relying on one system
• Less reliance on key staff
• Problem diagnosis easier
• Security breaches less impactful

Question 21

Why do the finance and IT functions have to interact?

Answer 21

• Smarter investment in IT
• Info security and compliance
• Data analytics

Question 22

What do the finance and IT function work together to do?

Answer 22

• Identify appropriate KPIs
• Assemble KPI data
• Analyse
• Advise
• Apply