Business and ICT

1
Business and ICT
2
Core Business Systems

• Basic business systems
• serve the most elementary day-to-day activities
  of an organisation
• support all operations of the business
• supply data for higher-level management decisions
  (Management Information Systems -MIS)

3
Main Areas

• Manufacturing and production
• Sales and marketing
• Accounting and finance
• Human resources

4
Manufacturing and production

• Systems that supply data to operate, monitor and
  control the production process.
• procurement management
• purchasing, receiving, inventory systems
  shipping,
• manufacturing systems
• process control, CAD, CAM, robotics,

5
Impact of ICT on Manufacturing and Production1.
Procurement Management

• Traditionally in-house and paper based
• Now suppliers linked to manufacturer
  electronically
• Orders placed and processed over network
• Stock control database(s) tracks all items
• Funds transferred using EDI
• Much quicker and cheaper than paper based
• Many firm use just in time systems for
  materials stock
• No large warehouse for materials
• Materials delivered and used on same day

6
Impact of ICT on Manufacturing and Production2.
Manufacturing systems

• Traditionally - manual systems, lots of workers,
  long lead times etc.
• CAD
• originally just drawing .
• now can test items before manufacture
  (simulations).
• Rapid prototyping systems can even build 3d
  model of item.
• Lasers scan tank of liquid resin to produce solid
  resin/plastic model

7
Impact of ICT on Manufacturing and Production2.
Manufacturing systems (continued)

• CAM
• originally basic CNC machines
• Now integrated with CAD system (and others)
• CIM (computer integrated manufacturing)
• Integration of CAD, CAM and all other systems
• including stock ordering, warehouse, delivery
  systems
• Highly flexible, can quickly produce new
  products, much cheaper, fewer workers
• Widely used in consumer electronics

8
Impact of ICT on Manufacturing and Production2.
Manufacturing systems (continued)

• Robotics
• Widespread use
• basic
• pick and place
• intermediate
• welding/painting
• advanced
• integrated manufacturing cell
• robot(s) performs many functions from manufacture
  to paint and finish

9
Sales and marketing

• Systems that support the sales and marketing
  function by facilitating the movement of goods
  and services from producers to customers.
• order processing - process orders, produce
  invoices, supply data for sales analysis and
  inventory control

• point-of-sale - capture sales data at cash
  register of by scanner
• sales support - customer records, follow-up
• marketing - advertising, telesales, mailing
• customer credit authorisation - advise on credit
  to be allowed to customer.

10
Impact of ICT on Sales and Marketing1. Orders
and Sales

• Most ordering functions automated
• Linked directly to stock databases - E.G. Argos
  stock check
• Extensive use of data capture at POS
• Bar codes - on goods
• Magnetic stripe - on credit/debit cards
• Smart Card
• Biometric Security Systems
• Electronic Funds Transfer at Point of Sale
  (EFTPOS)
• Can be linked to customer database
• Provides real time sales information
• Can be used to monitor employee work rate

11
Impact of ICT on Sales and Marketing1. Orders
and Sales (cont)

• Typical Sales System
• When goods purchased
• in-store database updated
• money sent by EDI direct to stores bank
• At end of day -
• all files sent electronically to main office
• update of central stock database and stock orders
  generated
• goods shipped to stores by next day - just in
  time system
• customer record updated

12
Impact of ICT on Sales and Marketing1. Orders
and Sales (cont)

• E-commerce
• Major impact on selling of goods
• Low overheads -
• no stores e.g. Amazon books
• some companies do not hold any stock at all
• goods come direct from manufacturer
• fewer employees
• Threat to traditional high street stores
• Customers have concerns on security of data

13
Impact of ICT on Sales and Marketing2. Sales
Support and Marketing

• Businesses making increasing use of customer
  records (esp. Retail).
• Directed marketing
• In store customer specific marketing
• Promotions for regular customers - frequent
  traveller schemes etc.
• Value of many dot coms based on customer record
  database.
• E-mail marketing increasing

14
Impact of ICT on Sales and Marketing2. Sales
Support and Marketing (cont)

• Email
• Increasing use in all aspects of companies
• Typical Uses
• Basic in company communication - Intranet
• E-mail adverts - bulk mailing
• Sending attachments - photos, plans, diagrams,
  catalogues
• Communication with sales/work force off site.
• Communication with customers
• after sales support etc.
• pre-sales advice
• forwarding mail to relevant dept.

15
Impact of ICT on Sales and Marketing2. Sales
Support and Marketing (cont)

• Web Sites
• Most companies have at least point of presence
  site
• Used as marketing/advertising tool
• Some have full e-commerce
• Some offer incentives for ordering from site
• Small (UK) companies still reluctant to join in
• Cost, unsure of benefits, dot.com collapses
• Security of funds transfer etc.
• Some companies only exist on the web
• No physical site
• Many cost and other advantages

16
Impact of ICT on Sales and Marketing3.
Electronic Funds and Credit

• Electronic Funds Transfer (EFT) widely used
• Major benefits to businesses
• Funds transferred immediately to bank - unlike
  check/cash
• Fraud still a considerable problem
• Increasing use of IT to decide on credit
  worthiness
• From simple credit scoring to expert systems
• Most frequent use of Data Protection Act rights

17
Accounting and Finance

• Systems that maintain records concerning the
  flow of funds in the firm and produce financial
  statements, such as balance sheets and income
  statements.
• Among the earliest systems to be computerised.

• Examples of accounting systems
• accounts receivable, accounts payable, general
  ledger, payroll
• Examples of financial systems
• cash management, loan management, check
  processing, securities trading.

18
Impact of ICT on Accounting Systems.

• Core use of IT in business.
• Large businesses use mainframe computers
• Vast storage required
• Fast processing e.g. payroll, invoicing
• Utility companies have some of the biggest
  computer systems in the UK - millions of
  customers
• Increasingly used for financial modelling

19
Human resources

• Systems that deal with recruitment, placement,
  performance evaluation, compensation, and career
  development of the firms employees.

• Examples
• personnel record keeping, applicant tracking,
  positions, training and skills, employee
  benefits, time keeping etc.

20
Impact of ICT on Human Resources

• All systems make use of vast storage and fast
  retrieval capabilities
• Increasingly used for assessing training needs
• Often used when down sizing
• Can be linked to time keeping /productivity
  systems
• Many implications for Data Protection Act
• Especially security, sensitive data

21
The End