In everyday life, we come across a number of systems such as the transportation system, telephone system, accounting system, production system, business system, computer system etc. A system may consist of interrelated departments or functions which are called sub systems. Each system can be a sub system of a larger system. For example business system may have the following sub systems:
1. Production
2. Sales and Marketing
3. Personnel
4. Material
5. Finance
Each of the above sub systems has limited use as single independent unit. Only when these sub systems are properly coordinated, the larger system can function effectively and properly.
Common business applications are concerned with the various functions that business needs to perform. Major areas of such applications are finance, purchases, sales and marketing, stocks, production, internal administration and payroll etc.
1. Production
The goal of production management is to optimally deploy human resources, machines and materials to maximize production of goods by the organization. Production units have a limited number of resources available, for example machines. It is important to schedule jobs to be done among these available machines to ensure that all required jobs get done in the required time with available resources. Production management systems are mainly used for this purpose.
2. Sales and Marketing
The goal of this sub system is to maximize sales and ensure customer satisfaction. The sales department may use an order processing system to keep track of the orders. An order processing system helps in handling orders and keeping track of the orders received and their status. It can be used to generate the bills for orders dispatched, or to view the order yet to be processed or generate a report on pending bills etc.
There may be a sales management system which can properly analyze sales data by category such as by region, product, sales person etc. It can also be used for computing and distributing dealers' and salespersons' commissions.
Marketing Systems are also an important type of business application. These systems maintain a marketing database and are also used to direct the marketing effort. It may also be used for marketing forecasts.
3. Personnel
The major goal of Personnel management is to make best use of the available human resources in the organization. Manpower is an important resource and personnel systems are used to keep track of this resource. Skills databases are maintained where data on each employee is maintained, with details like qualifications, training, experience, interests, etc. For allocating manpower to any activity, the skills database may be checked to obtain the list of suitable persons and check their availability. These systems also keep track of current work allocations and of the time when a person will be released from current allocation.
Training databases are used to keep track of training courses available, faculty to be employed for each, which courses have been conducted and who have attended it. This is useful in scheduling and conducting training courses and for interfacing with skills database.
Administrative functions like keeping track of leave records, or handling other related functions like payroll and provident funds are also done using computer systems. Payroll systems compute and generate the pay slips, pay register, and related reports like the provident fund report etc.
4. Material
The main goal of Materials sub system is to get readily available materials needed by the organization and to keep optimal level of stocks of items. A common system used is the inventory system which is used to generate reports like the lists of items, stock in hand for each item, item on order from a particular vendor, vendor database etc.
5. Finance
The main goal of Finance sub system is to ensure financial viability of the organization, enforce financial discipline and plan and monitor the financial budget. A typical and commonly found business application is financial accounting. The financial accounting system is used for all the accounting needs. The chart of accounts is set up and all the financial transactions are entered into it regularly. The system is used for generation of various financial books and ledgers and reports like cash book, bank book, sales register, purchase register, journal ledgers and sub ledgers, trial balance, profit and loss statement, accounts payable, accounts receivable, balance sheet and schedules etc.
The Accounts Payable sub system keep track of payments that need to be made. When any business concern buys materials from suppliers on credit , it owes them money. The account payable cycle starts with the initiation of the purchase order, followed by receipt of goods and ends with the dispatch of the cheques to the supplier. Handling the full purchase cycle, along with printing of purchase orders and keeping track of what is received and what is pending , is also often handled as a system by itself, the purchase order system. Such a system also maintains a supplier database.
Another important sub system in accounting is the Accounting Receivable sub systems. Most companies extend credit to their customers. This necessitates keeping track of the accounts owed to it and following up on the receivables. Improper follow up may result in delayed or even missed receipts and severely affect credit sales. This sub system's task is to prepare bills and report the receivables for follow up.
1. Production
2. Sales and Marketing
3. Personnel
4. Material
5. Finance
Each of the above sub systems has limited use as single independent unit. Only when these sub systems are properly coordinated, the larger system can function effectively and properly.
Common business applications are concerned with the various functions that business needs to perform. Major areas of such applications are finance, purchases, sales and marketing, stocks, production, internal administration and payroll etc.
1. Production
The goal of production management is to optimally deploy human resources, machines and materials to maximize production of goods by the organization. Production units have a limited number of resources available, for example machines. It is important to schedule jobs to be done among these available machines to ensure that all required jobs get done in the required time with available resources. Production management systems are mainly used for this purpose.
2. Sales and Marketing
The goal of this sub system is to maximize sales and ensure customer satisfaction. The sales department may use an order processing system to keep track of the orders. An order processing system helps in handling orders and keeping track of the orders received and their status. It can be used to generate the bills for orders dispatched, or to view the order yet to be processed or generate a report on pending bills etc.
There may be a sales management system which can properly analyze sales data by category such as by region, product, sales person etc. It can also be used for computing and distributing dealers' and salespersons' commissions.
Marketing Systems are also an important type of business application. These systems maintain a marketing database and are also used to direct the marketing effort. It may also be used for marketing forecasts.
3. Personnel
The major goal of Personnel management is to make best use of the available human resources in the organization. Manpower is an important resource and personnel systems are used to keep track of this resource. Skills databases are maintained where data on each employee is maintained, with details like qualifications, training, experience, interests, etc. For allocating manpower to any activity, the skills database may be checked to obtain the list of suitable persons and check their availability. These systems also keep track of current work allocations and of the time when a person will be released from current allocation.
Training databases are used to keep track of training courses available, faculty to be employed for each, which courses have been conducted and who have attended it. This is useful in scheduling and conducting training courses and for interfacing with skills database.
Administrative functions like keeping track of leave records, or handling other related functions like payroll and provident funds are also done using computer systems. Payroll systems compute and generate the pay slips, pay register, and related reports like the provident fund report etc.
4. Material
The main goal of Materials sub system is to get readily available materials needed by the organization and to keep optimal level of stocks of items. A common system used is the inventory system which is used to generate reports like the lists of items, stock in hand for each item, item on order from a particular vendor, vendor database etc.
5. Finance
The main goal of Finance sub system is to ensure financial viability of the organization, enforce financial discipline and plan and monitor the financial budget. A typical and commonly found business application is financial accounting. The financial accounting system is used for all the accounting needs. The chart of accounts is set up and all the financial transactions are entered into it regularly. The system is used for generation of various financial books and ledgers and reports like cash book, bank book, sales register, purchase register, journal ledgers and sub ledgers, trial balance, profit and loss statement, accounts payable, accounts receivable, balance sheet and schedules etc.
The Accounts Payable sub system keep track of payments that need to be made. When any business concern buys materials from suppliers on credit , it owes them money. The account payable cycle starts with the initiation of the purchase order, followed by receipt of goods and ends with the dispatch of the cheques to the supplier. Handling the full purchase cycle, along with printing of purchase orders and keeping track of what is received and what is pending , is also often handled as a system by itself, the purchase order system. Such a system also maintains a supplier database.
Another important sub system in accounting is the Accounting Receivable sub systems. Most companies extend credit to their customers. This necessitates keeping track of the accounts owed to it and following up on the receivables. Improper follow up may result in delayed or even missed receipts and severely affect credit sales. This sub system's task is to prepare bills and report the receivables for follow up.
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