You will prepare and submit a term paper on Financial Management of Information Systems. Your paper should be a minimum of 2500 words in length.

You will prepare and submit a term paper on Financial Management of Information Systems. Your paper should be a minimum of 2500 words in length. The objective of using information technology in business is to determine business processes, which are relevant for applications, which will improve business performance. This may involve improvements in the efficiency of operations, in the quality of the management processes and even in the way. the business is conducted or organized. When it is targeted at operational efficiency, transaction processing becomes important.

Transaction processing is a fundamental activity of every organization. Although an information system has a very important role to play in supporting management, ensuring control, and undertaking other knowledge work, such emphasis should in no way, obscure its importance in transaction processing. Without transaction processing, the normal functioning of an organization would be impossible, and the data for management information would not be available. Beyond such operational level, processing of data, information systems have specific applications in the various functions of an organization, like accounting, etc.

Information technology can benefit businesses in many ways. It helps businesses in performing various functions, solving business problems and pursuing business opportunities. Since organizations are goal-oriented, there should be a clear understanding of the type of information to be collected, stored and analyzed. Management can be categorized into top, middle and lower management. Due to the difference in the nature of decisions taken at different levels of management, their information needs also vary. This information should also be consistent with the requirement of the organizational level at which it is targeted.

Accounting information systems are the oldest, and perhaps the most widely used information systems and business. These information systems are responsible for recording and reporting business transactions and other economic events in an organization.

Accounting information systems are based on the double-entry bookkeeping concept. More recent concepts as responsibility accounting and activity-based costing are also considered. Computer-based accounting systems record and report the fun-flow in an organization, on a chronological basis and produce important financial statements such as the balance sheets and income statements. Such systems also generate forecasts of future conditions such as projected financial statements and financial budgets.

Many accounting software packages are available to enable the implementation of such systems. Generally, these systems include transaction-processing systems such as order processing and inventory control.

A company’s portfolio is managed by collecting all information relating to investment and security trading. There are several portfolio management software packages that manage the portfolio for the company.

The process of capital budgeting involves the evaluation of profitability and the financial impact of proposed capital expenditures. The capital budgeting application involves the use of spreadsheet models that incorporate present value analysis of expected cash flows and probability analysis of risk in order to arrive at the optimum mix of capital projects for a business.

Financial models can be built and manipulated using electronic spreadsheet packages, DSS software and Web-based groupware.