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Summary Performance Management F5 ACCA
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content covered from the syllabus from 2021 to 2022
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A Information, Technologies andsystems for organisational
performance.
Wednesday, March 30, 2022 6:02 PM
• Data processing is the conversion of data into information perhaps by classifying, sorting or producing total figures
• Information systems refer to the provision and management of information to support the running of the organisation
• Control that exist to safeguard the privacy and security of data as well as ensuring complete and accurate processing of data
(integrity and security)
General controls Application and program controls
○ Personal controls - segregation of duties, ○ Completeness checks to ensure all data is
policies on usage, hierachy of access. processed
○ Access control - passwords, time lock-outs. ○ Validity checks to ensure only valid data is input
○ Computer equipment controls - protect the and processed
equipment from damage, destruction and ○ Indentification and authorisation checks to ensure
theft. users are identified and authorised
○ Business continuity plan - risk assessment to ○ Problem management facilities to ensure problems
decide which systems are critical to the are recorded and managed on a timely basis
business continuing its activities.
Controls over generating internal information
• Before starting any report of cost benefit analysis has to be undertaken
For routine reports certain procedures may be For ad hoc reports; reports on an as needed basis one
1. Formats layouts and definitions used in report must be time use specific,
consistent to avoid misinterpretation and time wastage • Should only be prepared if requested
on making corrections information doesn't already exist
2. Requirements should be clearly understood and targeted • Such reports cost money and writers of such
to meet those requirements report is assessed once reports should be given only relevant and up-to-
prepared date information so that reliability can be
3. Must indicate the actions that users can take on increased and writers clearly identified
information presented
Controls over distributing internal information Security of highly confidential information
• Information should be available to authorized persons and third • Passwords - a very good means of control and allocated
parties only suitable access rights
• Distribution lists should be prepared indicating who should • Physical and logical access control - preventing
receive the reports procedure manuals are also usually available unauthorized persons from gaining access to hardware
indicating formats of such report and when routine reports locks and doors. Logical access control prevents
should be issued. unauthorized presence from gaining access to data or
• All employees are required not to shall confidential information software.
to third parties as specified in employment contract • Database security controls - as databases can be accessed
• Emails are usually undesirable for confidential information and by a large number of people, computer security interfence
long reports control attempts to prevent users from interferring
• Information should be physically safeguarded reports locked and • Firewalls - can be software or hardware based.
protected by passwords firewalls to protect data from external • Encryption - encoding information were hackers/
access. eavesdroppers cant read it.
• Anti- virus and anti-spyware software
• Personal data - data protection Act to safeguard individuals
from having their persoanl data transferred to 3rd parties
Control purposes
• To control (compare actual results against the plan) internal information is required. Variance reports are very useful at
arriving at control action
○ Identify sales variances , why has sales fallen; competition?quality issues?
○ Stock inventory levels within org helps to identify ways to increase sales of slow moving items
• External info is useful for benchmarking (with competitors in the same industry; competitive benchmarking).
Costs of obtaining internal information Costs of obtaining external information
• Direct data capture costs - type of data input where there is no data entry. • Direct search costs - subcription costs to
Data is input into a computer through a reader usually collected for a particular databases, journals.
purpose. E.g. barcodes or account details being read directly by a chip • Indirect access costs - time spent on finding
embedded in the credit card. useful info
• Processing costs - costs relating to processing and analysing the information • Management costs - costs of recording,
e.g. costs relating to input data and to analyse it to get more useful info processsing and dissemination info, time maybe
• Indirect costs - info can be used inefficicently. For instance wasted if there is info overload or duplication
○ Reduced quality of info due to info overload • Infrastructure costs - use of internets requires
○ Poor decision making skills installing networks and servers
○ Too many areas to focus on and do issues are not followed up on • Time theft - lost and wasted time even through
○ Focuses on the wrong things - only those that the business area and the unauthorised use of internet facilities.
targets that are easy to measure.
, • An Intranet is a private network within an organization purpose of an intranet is to share information internally. An extranet is an intranet that can be
partially accessed by authorized outside users enabling businesses to exchange information over the Internet in a secure way. An extranet can limit both
the amount of information available and users who have access to it
Information systems and data analytics
DATA PROCESS INFORMATION
• Managers need information to formulate plans and take decisions if actual results are different from the plan control is needed
• Structured data refers to any data that is contained within a field in a data record or file for example data contained in a
spreadsheet and database
• Unstructured data is data that is not easily contained within a structured data field web pages emails pictures emails blogs are
typically examples of unstructured data. It needs to be analyzed to uncover trends and other information to aid decision making
Level of control Activity Characteristics Systems used
Strategic Plans long term • Both internal and external sources used Executive information systems EIS - broad mix of
planning strategies of the • Due to the long term nature of such planning it internal and external information to support strategic
organization should include risk and uncertainty analysis I.e. decisions. Draws data from MIS and also includes data
discounted cash flow techniques from external sources like competition.
• Forward looking model that assist management - To help senior managers get information quickly
in making business decisions which include and effectively.
financial as well as non financial information. - Includes data analysis and modeling tools what if
• Enhanced information about competitors analysis ERP system.
suppliers and technology - facilitates the flow of information between all
• Summarized information is a characteristic or business functions inside the boundaries of the
strategic reports with an option to drill down to organization and manage connections externally.
obtain details - Tracking and summarizing critical strategic info
Management Medium term planning • Concerned with implementing decisions of Management information systems MIS -
control or tactical and control decisions. strategic managers Provides managers with information so they can make
management responsible with • Tactical level managers require a summarized better more informed decisions and exercise oversight
implementing form of information primarily generated and control on parts of the organization they are
decisions of strategic internally in the form of reports example responsible for. Collate information from the TPS and
managers ensures the productivity measurements. provides periodic reports to middle managers to
organization's aims are • Prepared on a regular basis control the firm. Eg EPOS system analyzing sales data
achieved and • very often quantitative expressed in monetary to highlight sales trends (suited it to all levels of
resources are used terms such as variance analysis reports cashflow management)
effectively. forecast and functional budgets for next year.
Decision support systems DSS - offer enhanced ability
to manipulate data modulate and allow user to explore
alternative situations to help make informed decisions
and exercise judgment.
Each DSS tends to be tailored to the organization that
operates it.
Example cost accounting system, capital budgeting
system budget, variance analysis system.
Operational Concerned with • Making sure day to day tasks are carried out Transaction processing systems (TPS) - computerized
control controlling the day-to- effectively and efficiently system that performs records daily routine
day operations of the • Most of the information is obtained internally it transactions, it collects stores modifies and retrieves
organization; short must be detailed and precise. More detailed transaction often organization high volume data
term decisions and precise than management control. processing needs.
• Operational information is expressed in units 1. batch transaction processing collects data as a group
hours kilograms etc. with the actual updating of database later. for example
• Operational reports are likely to be produced credit card companies process billing monthly.
frequently and contain accurate information on
businesses current position 2. Real time transaction processing is immediate
processing of data. A number of transactions can take
place at the same time access to a central online
database is required. example reservation systems for
flights point of sale terminals and library loans
Big Data Analytics An expert system emulates the decision making
• Big data is an emerging technology that involves the collection and analysis of a large amount off ability of a human expert for example a tax
data to find trends understand customer needs and help organisations to focus resources more specialist
effectively leading to competitive advantage improve productivity and increase levels of Uses of big data
innovation. It is relevant to long term and short term decision making and updated in real time so • Social network traffic
it doesn't go out of date • web server logs
• One key challenge of dealing with big data is to identify repeatable business patterns in this • Traffic flow monitoring
unstructured data significant quantities of which is in text form • Satellite imagery
• Big data should be used alongside traditional sources to make decisions such as economic data • Streamed audio content
and sales trends • Banking transactions
The 5 V's • Audio downloads
1. Velocity - how fast data is streaming from sources; speed with which data is generated analyzed • Web page content
and reprocessed. • Government documentation
2. Volume - the level of sources there are from data generation • GPS tracking
3. Variety - different forms of data structured data may take the form of numerical data whereas • Financial market data
unstructured data may take the form of an email or video • Telemetric from consumer and commercially
4. Veracity - how accurate valid is the data source big data involves working with all degrees of operated vehicles.
quality and credibility. Risks of big data
5. Value - added value for companies for embarking on big data projects with a clear understanding Availability of skills since systems are rapidly
developing support is not always easy and readily
Big data is used to gain insight into customer behavior and preferences they can be used to identify and available
engage brand advocates and detractors and assess responsiveness to advertising campaigns and Security of data greater risks of leaks and losses
promotions Data protection issues organizations to collect
Sports teams can use fast data to form future team strategies for example player formations
, added value for companies for embarking on big data projects with a clear understanding Availability of skills since systems are rapidly
developing support is not always easy and readily
Big data is used to gain insight into customer behavior and preferences they can be used to identify and available
engage brand advocates and detractors and assess responsiveness to advertising campaigns and Security of data greater risks of leaks and losses
promotions Data protection issues organizations to collect
- Sports teams can use fast data to form future team strategies for example player formations greater range of data from increasing personal
injuries results sources such as facebook .
- Companies can monitor data from their equipment determine usage and wear to predict optimal Data can be measured doesn't mean it should be
replacement cycle hence valuable time may be wasted on measuring
- Financial service organizations can use data on customer activity to segment customer base and relationships that had no value.
target accurately with relevant offers Benefits of big data
- Health organizations can monitor patients records and admissions identify risk of recurring Driving innovation by reducing time taken to answer
problems and intervene. key business questions and make decisions
The big data pyramid by Milan Zeleny Competitive advantage
1987 Improving productivity, reduce idling time
Know why - gives insight and ability to make relevant appropriate business decisions.
Know how - information gotten through data mining can be further processed to
support decision Making.
Know what -move from raw data through a process of data mining; identifying trends
and Patterns in large sets of data. Also identifies relationships such as associations
sequences and Correlation. Through methods such as statistics, machine learning and
database systems. Adding meaning to data structure and context.
Know nothing - unprocessed facts and items such as texts and numbers, vids
Defines a sequence of efforts; model representing structural and functional relationship between
Data, information, knowledge, and wisdom.
Information is defined in terms if data, knowledge in terms of info and widom in terms of knowledge.
Each step up the pyramid answers the questions about and adds value to initial data.
Predicitve analysis - data mining to predict future events. Gives valuable insights based on past data to allow analysts to extrapolate
from the past to assume behaviour and outcomes in the future. Uses statistical models to estimate future outcomes based on past
data.
Data analytics can't be relied upon to predict the future with absolute certainty therefore managers must be skeptical and recognize
limitations of such analysis as predictions can only be based on reasonable probabilities and assumptions.
Big data management
• Storage administration control of a vast quantities of both structured and unstructured data
• Aim is to ensure the data is stored is of high quality and accessible
• Effective data management and analyzing large sets of data from a variety of relatively new sources such as social media sites
• Big data analytics is the process of scrutinizing big data to identify patterns correlations relationships and other insights, this will affect
companies competitive strategy and marketing campaigns and directly affect their future profitability.
• Big data sources may require more advanced software tools than in traditional data mining. Open source technologies such as Hadoop are
constantly evolving,
• Hadoop is an open source programming framework which enables the processing of large datasets from the first phase of the big data
pyramid to the information phase.
The non current asset register only lists non current assets the machine maintenance schedule will not necessarily detail last production.
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