Information systems can be classified the specific organizational function they serve as well as organizational level. The following are the typical information systems that support each of the major business functions and provide examples of functional applications for each organizational level.
i) Sales and marketing information system
The sales and marketing function is responsible for selling the organization‘s products of services. Marketing is concerned with identifying the customers for the firm‘s products or services, determining what customers need or want, planning and developing products and services to meet their needs, and advertising and promoting these products and services. Sales are concerned with contacting customers, selling the products and services, taking orders, and following up on sales. Sales and marketing information systems support these activities.
At the strategic level, sales and marketing systems monitor trends affecting new products and sales opportunities, support planning for new products and services, and monitor the performance of
competitors. At the management level, sales and marketing systems support market research, advertising and promotional campaigns and pricing decisions. They analyze sales and marketing systems, assist in locating and contacting prospective customers, tracking sales, processing orders, and providing customer service support.
ii) Manufacturing and production systems
The manufacturing and production function is responsible for actually producing the firm‘s goods and services. Manufacturing and production systems deal with the planning, development, and maintenance of production facilities; the establishment of production goals; the acquisition, storage, and availability of production materials; and the scheduling of equipment, facilities, materials, and labor required to fashion finished products. Manufacturing and production information systems support these activities. Information systems can guide the actions of machines and equipment to help pharmaceutical and other types of firms monitor and control the manufacturing process.
Strategic-level manufacturing systems deal with the firm‘s long-term manufacturing goals, such as where to locate new plants or whether to invest in new manufacturing technology. At the management level, manufacturing and production systems analyze and monitor manufacturing and production costs and resources. Operational manufacturing and production systems deal with the status of production tasks.
Most manufacturing and production systems use sort of inventory system. Data about each item in inventory, such as the number of units depleted because of a shipment or purchase or the number of units replenished reordering or returns, are either scanned or keyed into the system. The inventory master file contains basic data about each item, including the unique identification code for each item, a description of the item, the number of units on hand, the number of units on order, and the reorder point (the number of units in inventory that triggers a decision to reorder to prevent a stockout). Companies can estimate the number of items to reorder or they can use a formula for calculating the least expensive quantity to reorder called the economic order quantity. The system produces reports that give information about such things as the number of each item available in inventory, the number of units of each item to reorder, or items in inventory that must be replenished.
Product life cycle management (PLM) systems are one type of manufacturing and production system that has become increasingly valuable in the automotive, aerospace, and consumer products industries. PLM systems are based on a data repository that organizes every piece of information that goes into making a particular product, such as formula cards, packaging information, shipping specifications, and patent data. Once all these data are available, companies can select and combine the data they need to serve specific factions. The software enables users to create a digital model of a part, a product, or a structure and make changes to the design on the computer without having to build physical prototypes.
iii) Finance and accounting information systems
The finance function is responsible for managing the firm‘s financial assets, such as cash, stocks, bonds, and other investments, to maximize the return on these financial assets. The finance function is also in charge of managing the capitalization of the firm (finding new financial assets in stocks, bonds, or other forms of debt). To determine whether the firm is getting the best return on its investments, the finance function must obtain a considerable amount of information from sources external to the firm.
The accounting function is responsible for maintaining and managing the firm‘s financial records- receipts, disbursements, depreciation, and payroll-to account for the flow of funds in a firm.
Strategic level systems for the finance and accounting function establish long-term investment goals for the firm and provide long- range forecasts of the firm‘s financial performance. At the management level, information systems help managers oversee and control the firm‘s financial resources. Operational systems in finance and accounting keep track of a firm‘s finances through transactions such as paychecks, payments to vendors, securities reports, and receipts.
iv) Human Resources Information Systems
The human resources function is responsible for attracting, developing, and maintaining the firm‘s workforce. Human resources information systems support activities, such as identifying potential employees, maintaining complete records on existing employees, and creating programs to develop employees‘ talents and skills. Human resources information systems reduce administrative costs, provide faster service to employees, and help firms manage their workforce.