There are 3 Basic Functions of AIS

 Collect and store data about organizational activities, resources, and personnel.

Organizationa have a number of business processes, such as making a sale or

purchasing raw materials which are repeated frequently.

 Transform data into information so management can plan, execute, control, and

evaluate activities, resources, and personnel. Decision making is discussed in detail

later in this chapter.

 Provide adequate controls to safeguard the organization’s assets and data.

A well designed AIS can add value to an organization by:

a. Improving the quality and reducing the costs of products or services

b. Improving efficiency

c. Sharing Knowledge

d. Improving the efficiency and effectiveness of its supply chain

e. Improving the internal control structure

f. Improving decision making

g. The factors influencing a design of the AIS are organizational culture, business

strategy, information technology.

h. The AIS and Corporate Strategy

i. AIS improvements are likely to yield the greatest return.

ii. Predictive analysis- uses data warehouses and complex algorithms to forecast

future events, based on historical trends and calculated probabilities.

The Role of AIS in the Value Chain- 5 Primary Activities

 Inbound logistics

 Operations

 Outbound logistics

 Marketing and Sales

 Service

 Support Activities allow the 5 primary activities to be performed efficiently and

effectively:

a. Firm Infrastructure

b. Human Resources

c. Technology

d. Purchasing

e. Quiz Solutions

 Information is output and data are input

 The expenditure cycle includes interaction between an organization and its suppliers

a. In the Value chain concept, upgrading IT is a SUPPORT ACTIVITY

b. In the revenue cycle a company ships goods to consumers.

 A firm, its suppliers, and its customers collectively form the supply chain.