Information System in Business Enterprises

This report explores the importance of information systems in modern business enterprises. It discusses how different functional areas such as production, marketing, and finance use various information systems to carry out their operations properly at international markets. The report also highlights how information systems help improve efficiency and achieve goals and objectives of companies.

INFORMATION SYSTEMS
IN ORGANIZATION

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different functional areas of an organisation.........................................................................1
TASK 2............................................................................................................................................3
P2.1 Various Kinds of Information Systems..............................................................................3
P2.2 Current trends in using Information Systems applications to solve business problems.....7
P2.3Suistablity applicable in informnation system in various areas in organizarion.................9
TASK 3..........................................................................................................................................10
P3.1 information system helps for generating correct and valid data ......................................10
P3.2 Alternative methods of solving the problem.....................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Information system is basically a group of components that is used to produce
information. IS provides tools to company to control their information, with several applications
and software to extract it or view data structures and records. Large and small organisation uses
both information system technologies to manage business activities and assist in decision
making. Organisation use information system to collect and process data according to their need.
Organisation and management operates more efficiently by using different information system to
interact with customers and partners (Abbasi, Sarker and Chiang, 2016). There are various types
of IS for example: Transaction processing, decision-support, knowledge management system,
etc. In this report it will cover different types of organisational functions and its informational
needs and requirement to organisation. There are different types of information system in
company. For present report organisation selected is Tesco.
TASK 1
P1 Different functional areas of an organisation
Organisation consists of different types of functions; each function supports several
business operations. IS for a company does mean not only software but also hardware, user and
other related system. Functional Information system is based on various functions such as
operations, marketing, economical and organization, etc. Applications of each functional area
needs to execute several operations. The different areas of business organisation are:
Financial Information System: The function of finance department is to ensure availability
of funds in organisation and steady cash flow to support day to day transactions. In this area
analyses various financial related records of employees, receivables and payables accounts . In
any organisation financial advisors prepares the proper budget in order to achieve desired goal of
company (Dwivedi and et.al., 2015). There are various functions that are included in FIS: for
example, it is used to calculate salary and payroll. Also, it is used in preparing budget, billing of
products, and calculating profit and loss. Besides, this it used in providing financial statement of
a particular time period. Accounting system includes factors such as:
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 Records of account owed
 Records of accounts payable
 Pay-sheet records
 Records Inventory
 Company Ledgers
FS may believe on some external sources like on-line information system and custom-
made reports. The essential functions that FIS perform includes: Financial forecasting, planning,
and control, Funds management and Internal auditing.
Marketing Information system: there are several marketing activities like preparation,
promoting, and selling goods and services to satisfy the needs of customer. MIS supports
decision making regarding merchandising like trade good, price, property and publicity.
Organisation invests a huge amount of money in advertising their products through various
mediums like television, radio, social media etc. Electronic commerce makes it easy to know
statistics on actual buyer behaviour. The identification of customer needs is starting point for
Total Quality Management (TQM). One more important aspect of MIS is marketing
intelligence that is to gather and interpret data regarding competitors (Eastburn and Boland,
2015). The internet is a major source of competitive intelligence. The use of IT in marketing
has increased availability of info and product in distribution channel. For Example: UPSC,
POS scanning, EDI, Supports just-in-time product and customised delivery.
Manufacturing Information System: IS play important role in designing and
production process. MIS are challenging to develop and implement. MIS includes product
design and engineering, product scheduling, quality control facilities planning, etc. In
product designing CAD and CAE are widely used. CAD is used for machine-driven
calculations and display areas while storing information in database. Whereas CAE is used
for quality, safety, manufacturability and cost effectiveness. The CIM and CAM Strategies
are used in product scheduling. The quality control is main function of manufacturing system
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for which it includes TQM technique used for continuously improving quality of product.
Cost control program of manufacturing system depends on information system.
Human Resource Information System: HRM is one of the most important part of
organisational operation. To support employees of an organisation, HR also make sure of
improving performance efficiently as well. The HR function includes: Manpower planning,
staffing, T&D process, performance rating and separation activities (Fichman, Dos Santos
and Zheng, 2014). The Human Resource management is totally depended on its database.
Employee records are kept in a well-informed employee database. It may include 100 to 500
informations such as private info, qualifications information and skills, occupational
background, etc. HRIS offers payroll, benefits, recruiting and compliance solution. HRIS
have become one of the most important tool for business organisation for managing data.
Even a small firm of 20 people needs to realize benefits of HRIS.
In all firms there are many operations which needs to be carried out daily, in order to
achieve goals and objectives of business. Operations such as stock, bills and finance needs to be
controlled, customer services issues should be dealt and staff management etc. In Tesco all
functions are performed well to achieve the objective. Tesco focuses on new information
technology for business benefits. For Tesco information Technology is playing significant role in
their business. Tesco uses RTI (real time link) with BizTalk and SQL server to provide sales
data to management team. Tesco also uses data mining to analyse the information through
Electronic Point of Sale (EPOS). IT applications like oracle financial software is used for
invoicing. People soft HR software and Terra data MIS is used for measuring budgets bill used
by Tesco that helps in providing information on status of company. The MC50 devices helps
managers in sales which controls stock in store and to make note of sales of products (Gilmour
and et.al., 2015). In last few years Tesco continuously better growth and results after
implementation of MIS and One-in-front cameras system that has reduced queuing time while
processing checkouts.
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TASK 2
P2.1 Various Kinds of Information Systems
There are many types of information systems are used for different departments to deal
with specific problems and work that is found in an organisation. Different types of IS include:
1. Transaction Processing System: In every firm transaction is performed on daily basis.
Transaction function may differ for different organisations. For Example: In
manufacturing industry transaction includes shipping, order entry, receipt of goods etc.
While in banking sector transaction includes withdrawals, cash deposit, cheques
clearance, investments etc. There are several organisational levels such as HR, accounts,
sales, finance, plant, engineering and marketing along with them various transactions
occur such as credit sales, cash receipt, material accounting, return etc.
Transaction processing can be classified into 2 groups: single and real time transaction
processing. TPS is process daily transaction with efficiency and accuracy (Grabara, Kolcun and
Kot, 2014). Organisation will have many TPS for example: billing system to send invoices, to
calculate monthly payroll, raw material requirement production system, etc. The main role of
TPS:
 Producing data info for other system
 Cross boundaries (internal and external)
 used by operational personnel plus supervisory levels
 Efficiency oriented
2. MIS: These are management system that are used by organisation to perform effectively.
It helps in planning, supporting and decision-making functions by managers at middle
level. The MIS extracts transaction information from transactional processing system to
compile data to produce information products. The data format of reports is pre-specified
done by system. These reports are summary report, based on monthly, quarterly or yearly
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made by sales representative of organisation. If senior authority track the daily work done
by employees, MIS enables to do so. This system also facilitates managers in online
access of employees and organisation’s performance current as well as past. MIS made
reports on data provided by TPS. The data provided by transaction processing system is
summarized and then sorted into series of reports (Ifinedo, 2014). Some functions of MIS
in data processing is: Internal transaction are sorted and report is generated, Structured
data summarizes detailed reports provided by TPS merging into action reports. These
reports are used by middle manger's and operational supervisors. Some examples of MIS
such as inventory control, budgeting, sales management, MRS, Personnel (HRM)
system.
Role of MIS:
 It Supported the intrinsic data flow.
 Structured decisions are supported.
 Inflexible and little analytical capacity.
 Middle and lower managerial levels is used.
 Deals with past and existing data.
Decision Support System: it is same as MIS because it supports computer based information
system. It is also served at management level of organisation. It is dissimilar to MIS, because
DSS process information based on decision making process of managers. It provides information
to seniors to make intelligent decisions for organisation. DSS have analytical power and
flexibility as compared to other information system (Kavanagh and Johnson, 2017). The system
is designed for every manger to perform specific task or problem. Basically it helps manager to
make semi structured decisions, and sometimes also helps in taking complex decisions. DSS uses
input (transactional processing and management information system) and external system. This
includes financial planning and bank loan management system. Some examples of DSS is:
GDSS, CSCW, logistics systems, Financial planning system, spreadsheet models. Decision
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support system uses sophisticated mathematical models and statistical techniques (probability,
predictive modelling etc.) to provide effective solutions.
Role of DSS:
 Ill structured or semi structured decisions are supported
 Analytical and modelling capacity
 Senior managers used this system
 Afraid about future day.
3. Executive Information System: This is top IS among all data system. EIS helps senior
level managers to make strategic decisions. EIS system examine and summarizes the
intrinsic and extrinsic information used in business. It includes lot of data analysis and
modelling tools to help in making strategic decisions. As compared to DSS, EIS have
more computer capabilities, better telecommunication and efficient display options
(Selander and Jarvenpaa, 2016). This information system uses more advanced technology
like graphical representation displaying in charts or graphs that helps senior executive to
solve wide range of problems. Executive support system helps to track performances,
monitor activities of rival, determine new opportunities. Internal and external data is
accessed from MIS and DSS about rival challenges, business related policies and laws
and new tax laws.
Executive information or support system are designed such that it is directly operated by
executives and senior management without need of any intermediates. Examples of EIS: It tends
to be highly individualized and are often custom made for a particular client group; however, a
number of off-the-shelf EIS packages do exist and many enterprise level systems offer a
customizable EIS module.
Role of EIS:
 Afraid with ease of use
 Predicting future is more concern
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 Effectively oriented
 Highly flexible
 It is based on unstructured decisions
 Use internal and external data sources
 Used by senior managers levels.
4. Office Automation System: An office automation system is combined to perform
official task with help of communication and computer technology. It operates office
transactions and supports official activities at organisational level (Abbasi, Sarker and
Chiang, 2016). OAS system have to perform two types of tasks that is clerical and
managerial activities. Clerical include written communication, typesetting, mailing,
scheduling meeting, printing etc. Under managerial activities' comes conferencing,
creating reports, controlling performance etc.
5. Knowledge Work System: This system is specialized to promote creative activity of
knowledge. It is ensured that technological skills and abilities are properly merged into
business. By providing info through graphs and documents. Besides this various
analytical and management tools are used by manger in KWS. This system gives easy
access to external databases and user friendly interface to help users get the required
information. Some examples of KWS is Computer-aided design, virtual reality system,
financial workstations etc.
P2.2 Current trends in using Information Systems applications to solve business problems
The IS is continuously changing to help in problem solving of organisation. As constantly
advancement in technology it is becoming difficult for MIS professionals to update the system
as the needs of business (Dwivedi and et.al., 2015). Some large MIS trends affecting business are
big data analytics, cloud computing, mobile computing and smart machines etc.
Big Data Analytics: It is defined as collection and analysis of large set of data of
organisation. In two areas where MIS professionals involved in big data analytics are raw
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material maintenance and mining. Raw data maintenance determines maintaining business raw
facts and figures usually in form of database. It is huge library of information that is stored in
well organised manner in easy accessible format. The management is responsible for business
database organized in order to keep everything functioning smoothly. Database for company is
important in case of any removing, adding and changing entities like employees etc. (Eastburn
and Boland, 2015). which may lead disorganisation and even malfunction if not addressed that's
where database maintenance comes in. It takes regular backup that helps company in retrieving
data in case of technical reason, security breaches and other problems.
The huge amount of raw data is converted into useful information done by data mining. It
used technical tools to sort the data into well structure format. With this management can process
data to get useful information so that future goals and objectives can be developed. These
internal information-technology in MIS is used by organisation for calculate effectiveness of
their data mining techniques.
Cloud Computing: Cloud computing is storing and accessing data and applications
using internet rather than hard drives. It is become an important part of modern business.
CompTIA (IT industry trade association) report, 5th Annual Trends in cloud computing, more
than 90% of organisations uses this for data applications. It is an example of virtualised system
in which natural evolution for data centres that uses automated system management, workload
balancing and virtualisation technologies. The security alliance provides assurance in cloud
computing. Its main objective is to promote understanding, researching best practices, launching
awareness campaigns (Fichman, Dos Santos and Zheng, 2014). The value of cloud computing in
business is high like agility, new models, less operational issues, better use of resources and
reduction in capital expense. A big role for cost reductions within organisation plays elasticity of
cloud computing services.
Smart Machines: Artificial intelligence helps in making work more productive and
efficient constantly. Using advanced technology in business can restructure their overview of
organisation, transform HR department. Artificial Intelligence is definitely not eliminating jobs,
but it is minimize task and creating new jobs. This machine will provide various and deep
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business impacted by 2020. Advanced technologies in machine are efficient for learning, solving
complex problems, making strong and quick decisions without human interactions .
P2.3Suistablity applicable in informnation system in various areas in organizarion
IS is an intrinsic part of any organisation as it plays an crucial role in assembling,
disseminating and storingthe information which is necessary requirement for making decision
and operating business operations. Tesco is one of the largest retail company all over world.
Need of information system for various functional areas in operations in different countries. In
Tesco the major functional areas where information system is important is marketing,
manufacturing, financial and human resource and development department. Operation
department is highly related to organisation’s productivity and profitability (Gilmour and et.al.,
2015). The need of information system in this department is to know about supplier, different
sources of raw material and assessing quality of material from suppliers. Using information
system in manufacturing, Tesco definitely improving quality of product and bring cost
effectiveness. Tesco can use the latest technological methods in their assembly line and
manufacturing process that will help in easy production of various products.
Marketing functional area needs information system to connect directly with customers
and current trend of market. The marketing management of Tesco has to deal with intense
competition so they need information about market. Moreover, information system integrate with
manufacturing department to provide services. The opinions and complaints about product from
customer is also a part of information system which help Tesco in improvements. TPS is used in
marketing department which involves information storage of all kind of transactions done by
company.
Tesco’s finance department is to ensure the availability of funds in organisation and
steady cash flow to support daily transactions. It analyses various financial records of employees
like receivable and payables accounts, product related transaction. To record various kind of
transactions of company, Tesco used TPS (transaction processing system) is helps for sorting
the data in proper manner and then list or merge the data to provide appropriate reports
(Grabara, Kolcun and Kot, 2014). Tesco’s TPS is designed to process daily transaction
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efficiently and accurately such as billing system to send invoices to customers, to calculate
monthly payroll and tax payments, raw material requirement production and stock control
systems etc. Also, it is used in preparing budget, billing of products, and calculating profit and
loss. Besides, this it used in providing financial statement of a particular time period of Tesco.
Further HRM is one of the most important part of organisational operation. To support
employees of an organisation, HR also make sure of improving performance efficiently as well.
MIS and DSS or EIS (Executive Information system) provides the opportunity to assess
performance of Tesco company by comparing outputs and making decisions effectively. The
Human Resource management is totally depended on its database and MIS works with TPS. In
record of each worker is kept in a sophisticated employee database. Tesco’s HRIS offers payroll,
benefits, recruiting and compliance solution in sales management, inventory control and
budgeting system. In Tesco HRIS have become one of the most important tool for business
organisation for managing data. The main purpose of EIS in Tesco is to understand future trend
for business entity. Tesco’s senior level managers makes strategic decisions. EIS system analyses
and summarizes the key internal and external information used in business. It involves lot of data
analysis and modelling tools to help in making strategic decisions (Ifinedo, 2014). This IS uses
more advanced technology like graphic software to display critical information in charts or
graphs that helps Tesco’ senior executive to solve deep problems. Executive support system
helps to monitor performance, track activities of competitors, identify new opportunities of
company which lead Tesco to high productivity and increase its profits.
TASK 3
P3.1 information system helps for generating correct and valid data
Nowadays, Modern technology is becoming the fastest growing technique which helps
for increasing business process. The information system helps “Tesco PLC” in improving
performance of company. Tesco Plc is based on British organizartion which is operated across
the world and holds no.1 Position in retail industry in UK. Company is leading in retail industry
in various areas such as development strategies, proper use of technology. When a decision is
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taken on product price in Tesco, the information system analyses the previous and new price
policy of product to give report of profit/ loss of company in adopting new price (Kavanagh and
Johnson, 2017). Tesco faced a problem in which managers of stores was not having enough time
to look on sales because they spend most of their time in analyse data and also connect with
information technology applications, emails. This lead to launch “Symbol MC50” which
combines Tesco's Enterprises entrprises applications and also facilitates in e-mail, phone,
applications, scheduling/calendar. IT device also includes featuring of data capture, telephony
communication, bank exchange, device level management, wireless ad security options and also
barcode scanning which scan products more quickly as expected.
Enterprise Resource planning (ERP) is an effective information system which is very
useful in integrating the both internal and external management across the organization. It is
very useful in integrating the key functional areas of the Tesco's business into unified system. It
is very useful in automating the task which in managing the task on a real time basis in order to
improve efficiency and productivity of the Tesco plc.
Tesco’s performance has been consistently better throughout periods but it has good
result after implementation of MIS. The company is improving its performance by introducing
“one-in-front” cameras system (Selander and Jarvenpaa, 2016). This device reduced queuing
time of customers because the checkouts have been become more fast and its gaining customer
satisfaction. Implementation of oracle in Tesco uses different technology such as for and Terra
data management information system invoicing, people-soft HR software. This helps company in
measuring budget targets and providing information on status of company. By adapting this
process of centralized purchasing system it eliminates the risk and threats on entering into
foreign market. In TP system Tesco needs custom made TPS which works with company
business strategy and process. With the help of TPS Tesco have 2 types of transactions: Batch
processing that stores data for processing at pre-defined times, which is useful because it
processes huge amount of data using limited resources. And Second One Real Time Processing
which react to event within a prearranged time (Abbasi, Sarker and Chiang, 2016). Tesco rely on
their TPS because all transaction made to suppliers, customers and any middle partiers involved
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are done by this system with every product have bar code which uses by TPS to figure out how
many products have been ordering and sold etc.
Furthermore, with the help of SAP Tesco easily explores information and quickly reply to
important business queries via simple search on daily, monthly, weekly and yearly basis. It
analyses the salary trend on regular basis. SAP also examines recruitment success rate, applicant
statistics and dropout reason. This provide Tesco accurate data from HRMS applications in
making better and more strategic decisions. Oracle retail warehouse management system
provides Tesco standards of supply chain across world. It is liable for steep alteration distribution
centres productivity and potential.
Security and protection is a major concern of any organisation. (Dwivedi and et.al.,
2015). Tesco uses RTI (real time link) with BizTalk and SQL server provides team management.
It provides mangers view store performance, real time applications including inventory
management and monitoring. Tesco do data mining and analysing information through
(Electronic Point Of Sale).EPOS device differentiate such as a redit or debit card reader, digital
scanner which reads bar codes, printer, display etc.
Hence, all these devices and tools is designed to solve problems which Tesco is facing
currently. It also increases the productivity and profitability of every stores and implemented
and indulged managers in improving customer's experiences. The Tesco company is not only
uses systematic management system and protect their information system which is used by
Company for problem solving (Eastburn and Boland, 2015).It took a long time for Tesco to
achieve profits. But company can attain first postion if they amended its strategies over
expansion throughout the world by using more advanced information system in company.
Enterprise resource planning (ERP) is very useful to focus on key operational areas of the
business which mainly includes finance, production, marketing, human resource, supply chain
management and customer relationship management. ERP implementation focuses on two core
components which includes platform of service and in infrastructure of services in order to make
work easier and effective.
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P3.2 Alternative methods of solving the problem
In organisation successfully solving problem result in increase in profit and enhanced
productivity. With this employee morale and capabilities will enhance.
Transparent Communication: Communication is a skill to know about the decision that
has made. Communication is the fundamental necessity of any organisation in every area like
productivity, decision-making, problem solving (Fichman, Dos Santos and Zheng, 2014).
Effective communication plays important role in organization to manage the entire business
process and that has some ability to manage working environment. It helps for solving problem
solving of specific tasks.
Root Cause Analysis: This is important to know cause of problem. The final goal of
management to find out the actual problem of business process. The root cause of any problem is
corrected or eliminated at that time it will prevent the problem from occurring. A most common
method to be used in root cause analysis in problem solving is cause effect diagram. Use
different tools such as labour inputs, problem solvers reviews operations raw material,
equipment, physical environment and management, brainstorming tool, policies that may cause
to identified problems. Once the issues' solver identified the root causes of problems, it can
impact on performance under consideration (Gilmour and et.al., 2015). To identify root cause of
problem this analysis may include analysing symptoms. In organisation symptoms like missed
deadlines, software and connectivity problems, lack of material marketing. This analysis allows
business managers to evaluate symptom of problem and diagnose it.
Solid Foundation Strategies: This strategy is implemented in order to solve any problem it
is because without any strategy or plan change in situation is merely substitution not evolution.
(Grabara, Kolcun and Kot, 2014). They motivate people to share their ideas and opinions by
communicating each other. This helps on engaging them and working together. The leader
should act bravely to solve problem quickly and effectively. If problem solving creates conflicts
in groups, it means leader have to concentrate more on issues and develop another strategies to
solve them
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Expert support system is also an effective technique which is effectively designed to
solve various complex problems by taking proper reasoning from the expert. Expert system helps
Tesco in aiding to solving various problems by effectively processing the knowledge with the
help of computer programs. Another effective information system is management information
system which in turn acts as a backbone to carry out the operation of the organization in a
systematic and appropriate manner. It helps in gathering data from various online sources and
analyse information in order to make strategic decision.
CONCLUSION
From this report it is concluded that information system is an effective tool for modern
business enterprises. Organisation consists of different types of functions; each function supports
several business operations. There are various information system for different functional areas
to performed their operations properly at international market such as production, marketing and
finance. This is reason why information system helps in carrying out the business processes. It
also helps in improving efficiency of process and achieving goals and objectives of company
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REFERENCES
Books and journals
Abbasi, A., Sarker, S. and Chiang, R.H., 2016. Big data research in information systems:
Toward an inclusive research agenda. Journal of the Association for Information Systems. 17(2).
Dwivedi, Y.K., and et.al., 2015. Research on information systems failures and successes:
Status update and future directions. Information Systems Frontiers. 17(1). pp.143-157.
Eastburn, R.W. and Boland Jr, R.J., 2015. Inside banks' information and control systems:
Post-decision surprise and corporate disruption. Information and Organization. 25(3). pp.160-
190.
Fichman, R.G., Dos Santos, B.L. and Zheng, Z.E., 2014. Digital innovation as a
fundamental and powerful concept in the information systems curriculum. MIS quarterly. 38(2).
Gilmour, S., and et.al., 2015. Global trends and projections for tobacco use, 1990–2025: an
analysis of smoking indicators from the WHO Comprehensive Information Systems for Tobacco
Control. The Lancet. 385(9972). pp.966-976.
Grabara, J., Kolcun, M. and Kot, S., 2014. The role of information systems in transport
logistics. International Journal of Education and Research. 2(2). pp.1-8.
Ifinedo, P., 2014. Information systems security policy compliance: An empirical study of
the effects of socialisation, influence, and cognition. Information & Management. 51(1). pp.69-
79.
Kavanagh, M.J. and Johnson, R.D. Eds., 2017. Human resource information systems:
Basics, applications, and future directions. Sage Publications.
Selander, L. and Jarvenpaa, S.L., 2016. Digital action repertoires and transforming a social
movement organization. MIS Quarterly. 40(2) pp.331-352.
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Online
Different Functional Information Systems. 2018. [Online]. Accessed through:
<http://ecomputernotes.com/mis/structure-and-classification/explain-briefly-the-different-
functional-information-systems>
Functional Area of an Organisation Information. 2015. [Online]. Accessed through:
<https://www.ukessays.com/essays/information-technology/functional-area-of-an-organisation-
information-technology-essay.php>
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