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Companies that produce highly diversified products often organize around product lines, creating separate divisions for each. Product segmentation allows the organization to devote specialized management, labor, and resources to segments separately, almost as if they were separate firms. 3. Business Function. Functional segmentation divides the organization into areas of specialized responsibility based on tasks. The functional areas are determined according to the flow of primary resources through the firm.

The data collection stage should be designed to filter irrelevant facts from the system. Efficient data collection procedures are designed to collect data only once. These data can then be made available to multiple users. Capturing the same data more than once leads to data redundancy and inconsistency. Information systems have limited collection, processing, and data storage capacity. Data redundancy overloads facilities and reduces the overall efficiency of the system. Inconsistency among redundant data elements can result in inappropriate actions and bad decisions.

Data Processing Once collected, data usually require processing to produce information. Tasks in the data processing stage range from simple to complex. Examples include mathematical algorithms (such as linear programming models) used for production scheduling applications, statistical techniques for sales forecasting, and posting and summarizing procedures used for accounting applications. Database Management The organization’s database is its physical repository for financial and nonfinancial data.

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Accounting Information Systems by J. Hall


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