Tasks Involved In Information Systems Management Accounting Essay

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Nowadays, with the explosion of technologies a great amount of information is now made available for the development of the organisation. The ability of ICT to model almost any situation and organisation tackles a problem, hence allowing the identification of risk that might slow down the performances of an IT system. More and more companies around the world are going for decision support systems to aid an effective more productive decision making.

'Informed and thoughtful decision-making is the cornerstone of business success. Transparent decision-making, especially at a leadership level, is still confidence in employees, inspires trust, and builds momentum and support for company-wide practices. But decision-making at all levels requires solid business intelligence. Providing insight into the fundamental workings of a company, business intelligence helps leaders investigate universal management questions like: How are we doing? Why are we performing this way? And how can we change?' [3]

Decision support software from IBM gives companies the tools to answer these questions, laying a solid platform for meeting challenges and improving performance based on clear vision and data support. On the other hand, to decentralise budgeting processes, Thomas Cook Belgium wanted to replace its annual budgeting being slow to process with continuous planning and to allow all manager to take ownership of their share of budgeting from the new information system.

2.0 Description of the Organisation (100 words)

Thomas Cook Belgium organized the holidays of some 1.8 million holiday makers and its more than 1,000 employees generated a turnover of around '900 million. TCB is the market leader in the organized travel sector in Belgium. [2]

The urge of a better predictable performance, has lead TCB to faster growth and a better managements on its budgeting cycle. A better prediction of the budgeting processes has resulted in boosting company's market value. TCB opted to use Cognos planning budgeting and forecasting processes to allow managers to take more responsibilities over the budget and hence spends less time on its budget cycle.

3.0 Description of the Implementation methods used (190 words)

The implementation methods used are as follows:

1. Analyse the planning resources in details.

2. Model all the interrelated activities resulted from the detailed analysis of the planning processes

3. Interview all the controllers and some key users.

4. Model the driver-based planning environment from above activities.

5. From the creation of the planning model, some data coming out of one departmental model can be used as input data for another. Example, revenue from first division may become an expense for another division. The different flows must be spotted and described within the business logic where necessary.

6. Designing the new system

7. Building the solution.

8. Manual population of all dimensions created with data from SAP.

9. The dimensions are combined into clusters and creating the applications.

10. Setting up the security.

11. Cutting down the size of the applications and apply limitation to user inputting data to the necessary fields.

12. Avoid manual input by creating load processes for some drivers.

13. Loading actual data.

14. Initial testing of the environment.

15. Creating an administrator & user manual.

16. Training & Coaching of the information system.

17. Testing and acceptance of IS solution.

4.0 Summary of case study (300 words)

Thomas Cook Belgium is a European travel company that groups together the activities of several tourist organizations spread throughout Europe, Egypt, Canada and India. TCB was experiencing some issue with the budget follow-up process, resulting to a lack of support related to financial information including in a budget and hence, leading to improper accountability.

'TCB has a complex planning cycle with plans/budgets produced at different levels (shareholder plan, management plan and internal plan). In addition, regular forecasts are held during the year. '[4]

The plans and budgets planning cycles are inputted into Microsoft excel spreadsheets and gathered over the years to be able to come up with prediction, plans and takes too much time in processing.

The solution foreseen had to enable mature bottom-up logic as well as a possibility to fit top-down by securing certain data when examining other different scenarios. This change has been made possible with the collaboration of element61 [1] in defining and building a company-wide solution to automate its budgeting process.

Thomas Cook Belgium now has solved almost all the problems traditionally associated with the use of Microsoft Excel to support forecast and planning budgets. With a fully automated planning solution, Budgeting & Forecasting processes are sorted within the organisation business logics. It is now easy to gather input from the business, decrease/avoid possible bottlenecks processes, create plans and forecast against history of figures, and hence allowing the corporate controlling department to run different, 'what if' scenarios to predict the performance and profitability for the coming financial year. The new System will provide concrete information to support the today and future needs of the organisation.

However the system generating positive views and feedback some bugs and issues were still present but not long lasting since the new release of the maintenance patch solved problems encountered.

5.0 Critical analysis of the success (or failure) of the method used (max 1200words)

5.1 Positive point with the methods used to manage the budgeting cycle of the company.

"Not only can our managers' better monitor and master their budget figures, they also have a much clearer understanding of what drives the costs and performance of their departments. Furthermore, they are now able to do simulations. We couldn't have achieved all this without the solution that IBM provided.' Bram Van Nieuwerburgh, Head of Planning and Controlling, Thomas Cook Belgium. [4]

During the analysis of the needs for the new information system the good outcome were as follows:

1. With the introduction of cognos planning information system, the level of complexity has decreased considerably with the ability to import and export spreadsheet into the decision support system.

2. Compared to the previous system where the budgeting was centralized now with cognos the line manager of each department is takes ownership of their budget and hence decreasing the work load by increasing the efficiency of each manager.

3. Cognos is highly flexible and very user friendly which will allow any staff with little computer literacy to understand the 'how to' in a short amount of time. Hence avoid additional cost for training.

4. Cognos allows the company to give privileges to certain users. Hence avoiding sensible information to flow around freely. Example: making salary for certain staff read only or visible to only the person concerned.

5.2 Negative point with the methods used to manage the budgeting cycle of the company.

'It was a really difficult exercise, every year anew. Thousands of spreadsheets would be collected and merged but we could never be entirely certain of the final result,' explains Bram Van Nieuwerburgh, Head of Planning and Controlling. '[2]

During the analysis of the needs of the new information system, some issue that the Element61 team came up with are as follows:

1. Lots of time consumption in breaking down the complexity of the company, since TCM has got many legal entities, different branches and business rules.

2. After interviewing all the actors of TCM, a breakdown of all the different interrelated activities of TCM was done and some of the dimensions came out very big, hence increasing the complexity and load of metadata.

3. Cognos planning not being a consolidation solution also happens to remind one to a proper business logic definition and examine carefully the functionalities of the systems to be modelled.

Issues faced during the design of the system are as follows:

1. A split of the project into different applications was needed since some dimensions came out with numerous items and each items becoming too complex lead to both a top-down and bottom-up model to be implemented with links to both. Top down model approach meaning information whereby the decision makers or executive at the top of the company delegates authorised jobs to lower level in the organisation hierarchy. Positive aspect about Top-down is that one can have an overview of the higher levels and also internalise external effects. On the other hand, the negative side of this approach is that reform can be hard to accept for lower level if it was to happen there will be resistance to change. Whereas, a Bottom-top model allow a better view and feel or the organisation at a lower level and involves a better decision making.

2. During the process of making a working model of the new information systems, the dimensions meaning the number of cells should be used to shrink the application to the needs of the end-user without any lost in their functionality.

Issues faced while the solution was being built.

1. The correctness of the data delivered by the current reporting environment was incoherent with the desired format. The creation a new way of extracting data from the system was created.

2. The data not existent and driver missing on the operational system had to be inserted manually.

5.3 Conclusion

With the implementation of the new information system Thomas Cook Belgium has now a better control and management over the financial decisions to be made hence increasing their efficiency and effectiveness. With the integration of financial and organisation data into one single source, TCB has found its productivity boost considerably in such a way that market growth came from both bottom and top margin.

Their operations in planning, budgeting and forecasting the organisation finance became more agile, breaking free from the numerous spreadsheets to a more productive, relevant and dynamic resource allocation.

The performance management, side of cognos planning tool allow the company to spot vital information about the company that was before left aside due to not seeing it and hence applied to the business logic renders a better, higher performing system.

Now presenting reports and presentations to higher managements had become more graphical and user friendly. Time take and ease to generate any report is now just a click away.

Finally, 'Van Nieuwerburgh' concludes. 'Not only can they better monitor and master their budget figures, they also have a much clearer understanding of what drives the costs and performance of their departments. Furthermore, they are now able to do simulations. We couldn't have achieved all this without the solution that IBM provided.' [3]