The Finance Function's Relationship with IT Flashcards
Explain the main role of the IT department
Enables knowledge management systems (KMS) between other departments
What are the different types of systems?
Closed system
Open system
Expert system
Data processing system
Management information system
Executive information system
Decision support system
Knowledge management system
Cloud based system
Define closed system
Has little to no interaction with its environment
Define open system
Has high level of interaction with its environment
Define expert system
Simulates problem-solving techniques by human experts - eg tailor-made automatically generated car insurance quotes from answering online questions
Define data processing system (DPS)/Transaction processing system (TPS)
Large volume processing easily captured. Usually simple and well defined information. Vital day-to-day operations. Older systems likely to be inflexible (legacy system)
Define management information systems (MIS)
Extension of DPS allows much greater reporting, normally has a report writing package attached. Helps with budgeting, forecasting and controlling
Define executive management system (EIS)
For senior executives that contain internal and external data, supports strategic decision making. Graphing and charting things like KPIs
Define decision support systems (DSS)
Data modelling software that uses mathematical formula to replicate organisational activity. Can be used in scenario planning
Define knowledge management systems (KMS)
Capture and manage knowledge
Define cloud based system
Applications, services or resources made available to users on demand via the internet
How can internet connect employees and stakeholders?
Connects computer networks, individual users and organisational computer facilities across the world
How can intranet connect employees and stakeholders?
A mini internet using the company’s own networked computers and internet technology. Useful to share knowledge internally
How can extranet connect employees and stakeholders?
A secure extension of a company’s private intranet and can be accessed by authorised outsiders such as suppliers/customers
How can Web 2.0 connect employees and stakeholders?
Second generation internet based services. They emphasise collaboration and two way communication rather than one party pushing information to another party
Examples of Web 2.0 tools: blogs, Twitter, Facebook, YouTube
How can social media connect employees and stakeholders?
Internet based applications that allow the creation and exchange of user-generated content
Communicate and collaborate with customers/potential customers and build a relationship which will bring benefits, eg improved customer satisfaction and retention
How can E-commerce connect employees and stakeholderrs?
Conducting business, including transaction processing, electronically
Enhances communications between employees
Cheaper information exchange with suppliers
Creation and maintenance of customer relationships
How can digital markets connect employees and stakeholders?
Any market available online - eg Amazon, high street retailers, individuals (eBay)
How can digital goods connect employees and stakeholders?
A product that can be transferred or consumed electronically - eg ebook, an app, a film streaming service
Threats to IT systems and controls
Threats:
Hackers
Viruses
Hoaxes
Denial of Service Attacks
Human error
Natural disasters
Fire
Controls:
IT general controls (ITGC) - control over IT environment. computer operations, access to programs and data, program development and program changes. An essential control is an effective Disaster Recovery Plan, or Business Continuity plan
IT application controls - transaction processing controls/input-processing-output controls. Specific to individual applications
How can finance interact with IT?
Discuss with finance how investment in technical aspirations can be financed
How company can use the many benefits from technology throughout its (financial) activities
Finance is also a customer of IT in relation to its operational and data needs
Define Electronic Data Interchange (EDI)
A standardised method of transferring data between different computer systems, typically used for transferring data that traditionally would have been included in paper documents such as despatch notes, delivery nots, goods received notes, invoices and related documentation
Often facilitates close relationship between organisations - eg between organisation and customer/supplier
Features of EDI
Errors arising from data entry will be reduced
Organisations can transmit a large amount of data
System cannot be easily adapted if processes change
Systems are time consuming to introduce
Advantages of Database Management System (DBMS)
Reduced duplication of data
Ensures data integrity, accuracy and consistency
Consistent for all data users
Improved security and control over data
Provision of more flexible reports
Disadvantages of Database Management Systems (DBMS)
High set up costs
Risk of failure
May not meet all users’ needs
Additional security considerations required
Data engineering & extraction vs Data strategy & planning vs Data modelling, manipulation and analysis vs Data insight and communication
Data engineering & extraction - ensures data is in suitable format
Data strategy & planning - How data can be used to support overall business strategy
Data modelling, manipulation and analysis - Documenting systems and changing data to be more relevant
Data insight & communication - Communicate findings in an understandable way to key stakeholders
