How Does an AIS Add Value?

How Does an AIS Add Value?

• A well thought out AIS can add value through effective and efficient decisions.
• Having effective decisions means quality decisions
• Having efficient decisions means reducing costs of decision making

AIS and Strategy

• An AIS is influenced by an organization’s strategy.
• A strategy is the overall goal the organization hopes to achieve (e.g., increase profitability).
• Once an overall goal is determined, an organization can determine actions needed to reach their goal and identify the informational requirements necessary to measure how well they are doing in obtaining that goal.

AIS in the Value Chain

• The value chain shows how the different activities within an organization provide value to the customer.
• These activities are primary and support activities.
• Primary activities provide direct value to the customer.
• Support activities enable primary activities to be efficient and effective.

Key Terms

• System
• Goal conflict
• Goal congruence
• Data
• Information
• Information technology (IT)
• Information overload
• Value of information
• Business process
• Transaction
• Transaction processing
• Give-get exchange

• Revenue cycle
• Expenditure cycle
• Production (conversion) cycle
• Human resource/payroll cycle
• Financing cycle
• General ledger and reporting system
• Accounting information system (AIS)
• Predictive analytics
• Value chain
• Primary activities
• Support activities
• Supply chain

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