The Purpose & Areas of Organisations

Most businesses exist to make money. They do this by producing and selling products and services. However, to actually produce and sell those products and services, there are a lot of activities being performed in the background.

To perform these activities, organisations rely on a wide range of technology systems. Each department will use different IT systems to help them perform their tasks efficiently and accurately to help to business achieve its aims.

In this lesson, we’ll learn about:

  1. Understand the purpose of different types of organisations
  2. Understand the key areas of organisations and how IT is used to support them

1. The Purpose of Organisations

As the lesson introduction says, most businesses exist to make money. To do this, they provide some form of product or service to a client or customer. In recent years the line between a digital product and a service has become less clear, as we shall see.

Providing a Product

A product is usually defined as a tangible item that can be seen, touched and felt. This is made slightly more complicated in the modern world, as there are digital goods, which of course cannot be touched or felt. However, we still typically use the definition that they are “tangible items”. Examples of products could be anything from clothing to electronics to furniture.

For example, within the technology sector a business could provide a hardware product, such as a laptop, mobile phone or printer. Alternatively, it could be a software product such as a film purchased on Blu-Ray or 4KUHD disc or a video game purchased through an online store.

The idea is that the customer has bought the product and owns it outright. If there are any problems, they have to buy another one.

Some other sectors and example products they provide include:

  • Manufacturing – This sector makes vehicles, tools and clothing.
  • Construction – This sector produces homes, offices and bridges.
  • Entertainment – This sector makes movies, TV shows, and other types of videos.
  • Publishing – This sector makes books, magazines and posters.
  • Retail – This sector sells goods like clothing, groceries, electronics or furniture.

Providing a Service

A service is an action or task that is performed by a business for its customers. Services can be either physical or intangible. Physical services are things like haircuts, car repairs, massages, etc. Intangible services are things like consulting, coaching, or teaching.

For example, within the technology sector, this could be a network engineer that might repair or fix something for a client. Alternatively, it could be an online service like cloud computing or storage.

A business that provides a service will usually have a list of customers that they support and will make small amounts of money regularly.

Some other sectors and example services they provide include:

  • Hospitality – This sector provides hotels, restaurants and theme parks.
  • Finance – This sector provides banking, financial advice, credit checking and loans.
  • Education – This sector provides schools, universities and online learning.
  • Healthcare – This sector produces doctors, hospitals, dentists & opticians.
  • Personal care – The sector provides hairdressers, masseurs and manicurists.

Further Thought

Think about how many services you are subscribed to? Would any of these be better as a single product you could purchase?

2. Organisation Areas & Their IT systems

All businesses will be broken up into different areas (or departments).

Each area will have a different role within the business and will therefore have different IT systems that will help the area carry out its tasks more effectively. Common business areas include:

Human Resources (HR)

This department deals with all information regarding the day-to-day management of employees. Typical HR data recorded could include:

  • Employee contact data.
  • Employee attendance, lateness and sickness data.
  • The number of holidays taken and remaining.
  • Current salary levels.
  • Any employee disciplinary issues, records and reports.

To manage this, HR departments could make use of IT systems that record information about each employee. Such systems could include:

  • Basic spreadsheets or databases to track employee data.
  • Custom HR software such as SAP HR or Oracle HRMS.
  • Word processing software to create reports.

Research, Design and Development (RDD)

This area is used by companies that are building physical or digital products for sale. This department will be responsible for:

  • Working out if it is possible to build the product or service (research).
  • Working out how the product or service is going to be built (design).
  • Actually building the product (development).

Depending on the type of product, there could be a range of software tools available including:

  • Surveying software like Survey Monkey for gathering data from the public on what products or services they might like.
  • Project management software for mapping out deadlines in the RD&D process.
  • 3D Computer Aided Design (CAD) tools such as AutoCAD for producing designs of products.
  • 3D printers and other CAM-controlled machinery for producing prototypes of new products.

Logistics

Logistics is the department responsible for making sure that the product ordered actually gets to the customer.

Logistics department responsibilities might include:

  • Making sure that there is enough of the item in stock.
  • Processing all incoming orders.
  • Making sure the item is packaged correctly.
  • Making sure the item is despatched using the appropriate postage method.
  • Tracking the item using GPS monitoring to make sure the item is delivered.

Logistic software could include:

  • Warehouse database software to track the amounts of products in stock.
  • Automated stock control to update the product numbers once ordered.
  • GPS tracking of the delivery using Google Maps.

This might use a custom software solution e.g. SAP Supply Chain Logistic Software.

Marketing

Marketing is the business area responsible for making the product, service or business itself visible to the public so that they can purchase the product or service or identify the business.

Marketing department responsibilities might include:

  • Creating social media campaigns and increasing brand awareness.
  • Creating physical media campaigns( e.g TV or radio).
  • Creating email campaigns.
  • Creating and updating the company website.
  • Tracking and responding to enquiries from customers.

IT systems to help with this could include:

  • Web content authoring software like WordPress for running a website effectively.
  • Email clients or newsletter software like MailChimp to run email marketing campaigns.
  • Desktop publishing & graphics editing software like Adobe InDesign & Photoshop for producing flyers, posters & other marketing materials.
  • Social media platforms such as Facebook, Instagram or Twitter for running social media advertising campaigns.
  • Customer Relationship Management (CRM) software such as Oracle CRM or MS Dynamics CRM to record and track customer enquiries.

Finance

This is the department responsible for handling everything to do with the money a business makes and spends.

Finance department responsibilities might include:

  • Tracking and recording all the sales income.
  • Tracking and recording all the money spent by the business on hardware and software used to support the business.
  • Making sure employees are paid on time.
  • Dealing with any customer refunds.
  • Making sure the UK Government is paid business and employee taxes on time.

IT systems to help with this could include:

  • Accounting software like Sage and QuickBooks for calculating tax and payroll, tracking expenses, and budgeting.
  • Alternatively, spreadsheet software like Microsoft Excel could be used for similar purposes.

Management

Management departments will be responsible for the day-to-day running of the business.

Management department responsibilities might include:

  • Making sure employees are working productively.
  • Making sure that new products are being built on time.
  • Dealing with any problems that arise.
  • Reporting information to senior managers.

Typical IT systems used by management include:

  • Email systems to communicate with employees and other managers.
  • Word processing software (e.g. MS Word) to create and read reports.
  • Presentation software (e.g. PowerPoint) for displaying information during meetings.
  • Data processing software such as Excel or Access.
  • Reporting software e.g. Crystal Reports for extracting and presenting data from data storage systems.

Further Thought

Look at each of these key areas again. Can you think of any other ways they might use technology to complete their tasks?

Lesson Summary

So to summarise what we’ve learnt in this lesson:

  • Businesses exist to make money by providing a product or service.
  • A product is something you buy and own outright; a service is something that a business can do for a customer.
  • The Human Resources (HR) department stores all information related to each employee of an organisation, e.g. contact details, pay levels and any disciplinary records. IT systems will help store and report on this information.
  • Research, Design and Development (RDD) is responsible for determining if a product can be built and then working out how to build it. RDD departments require CAD design software.
  • Logistics is responsible for tracking stock levels and making sure that the product purchased by the customer is packed, shipped and delivered on time and without damage.
  • Marketing is responsible for making the public aware of the business or a product so that people will buy the product so the business can make money.
  • The finance department works out how much money comes into and out of a business and therefore if the business has made a profit or not. It is also responsible for making sure employees are paid on time.
  • Management is responsible for the day-to-day running of the business: making sure employees are working productively and dealing with any issues that arise. Managers mostly make use of Office-based programs, such as email, Word and PowerPoint.