AIS+ch02 - CHAPTER2 OverviewofBusiness Processes 1...

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1 CHAPTER 2 Overview of Business  Processes
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2 LECTURE OUTLINE The basic business activities in which an organization engages The decisions must be made The information required The major transaction cycles Revenue (ch10), Expenditure (ch11), Production (ch12), Human resources/payroll (ch13), Financing The four major steps in the data processing cycle The documents and procedures used The ways information is stored in CBIS The types of information that an AIS can provide
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3 INFORMATION NEEDS AND  BUSINESS ACTIVITIES Businesses engage in a variety of activities, such as selling goods or services, purchasing inventory, paying employees etc. (P. 51, Table 2-1) Each activity requires different types of decisions. Each decision requires different types of information. Types of information needed for decisions: Financial, non-financial Internal sources, external sources An effective AIS needs to be able to integrate information of different types and from different sources.
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4 INTERACTION WITH EXTERNAL AND  INTERNAL PARTIES The interaction is typically two-way , in that the AIS sends information to and receives information from these parties. AIS Internal Parties External Parties Employees, management customers, vendors, creditors, governmental agencies
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5 A transaction is: An agreement between two entities to exchange goods or services; OR Any other event that can be measured in economic terms by an organization. E.g. Sell goods to customers, Paying employees. The transaction processing is a process: Begins with capturing data about a transaction. Ends with an informational output, such as financial statements. BUSINESS CYCLES
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6 Many business activities are paired in give-get exchanges. The basic exchanges can be grouped into five major transaction cycles. (p. 55 Table 2-2) Revenue cycle: involves interactions with your customers . Expenditure cycle: involves interactions with your suppliers .
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