IT in Operational Processes

ACCA P5 Advance Performance Management

IT System and Budgetary Control System: Budget and forecasting concentrate on financial performance of organisation. So, budgetary control system compares actual financial performance and budgeted financial performance. The components of control system are budget, actual output (performance record), variance analysis, feedback from the analysis and interference by management. The use of IT programs (E.g. spreadsheet and database programs) in budgeting, recording actual output (real time software, E.g. EFTPOS in retail organisations) and analyzing variance is common practice in businesses today.

IT in Operational Processes: IT addressed inherent inefficiencies (delay and incomplete measurement) of traditional accounting system and other operational processes. Examples include: real time sales recording by non-accounting staffs using different accounting software, using IT in budgetary control system, perpetual inventory system – tracks real time inventory level, supply chain management software (both upward and downward) and customer relation management software, data and information management systems etc.

Ø  Business process change (Re-engineering and Re-development) :Integrating IT into business process is an example of re-engineering. Re-development is restructuring the re-engineered processes. A best way to remember this is re-engineering means replacing CD players with iPods and redevelopment means different series of iPods and iPhones. The same is for the business processes.  

Ø  Information management system: From recording source data to presenting information in the board involves different information processing technologies. Internet, intranet and extranet are means to deliver information from one place/party to another place/party which replaced historic telephonic means and post mail services. Their use has added speed, reliability and optimized performance of organisations.

E-marketing – the 7P’s

Ø  Product/services – range/choices, easy customized products and services

Ø  Place/distribution channel – independence of place, disintermediation, delivery over internet (softcopy of music and books)

Ø  Price – competitive, easy to compare, auctions over internet

Ø  Promotion – website – email customized

Ø  People/participants –  FAQ’s, messaging / voice chat assistance

Ø  Processes – e-procurement, e-payment

Ø  Physical evidence – dynamic layout of webpage, easy to use interface, compatible to different operating systems

ACCA Article: Strategic planning models