A business needs different departments that communicate together to run successfully. Each department within the business have specialist functions and without careful communication using the company’s information system then the correct business decisions will not be made and the company will not operate successfully and gain maximum profit.
The purchasing department is responsible for buying materials, good and service needed to run a business. Purchasing will work with external companies and internal departments to find the best quality and most suitable products required. For example manufacturing will send a list of materials needed to make the product that the company sells. Purchasing will then source the products finding the best quality product available at the cheapest prices. The purchasing department is responsible for communicating with external companies supplying the goods and services to ensure they can deliver the product and services on time based on the needs of the departments within the company. Purchasing also need to communicate with the Administration department to ensure that they have the stationary and computing equipment needed to run the organizational side of the business. Purchasing will need to send information about where they buy the products from so that Administration can liaise with finance to ensure accounts are set up and the goods are paid for.
The sales department is responsible for communicating with existing customers and gaining new customers. The sales department will take orders from the company’s customers and communicate the information to the manufacturing department about what needs to be made for the customer. If the business has an ongoing production line then sales will need to communicate with manufacturing to make sure the products are available to ship to the customer at the requested date. Sales will need to send information to the finance department on what has been sold so that Finance can communicate with Administration to ensure the goods are paid for. Sales will communicate with marketing and manufacturing to ensure information is made available to customers about products that are on special offer or that can be offered at reduced rate for bulk orders.
The manufacturing department needs to communicate with both sales and purchasing to find out what needs to be made and to send a list of the materials needed to make new products. If manufacturing are running short of a certain material needed to make the product then they need to let purchasing know that this product is needed. If purchasing tried to source this item and there was a wait for it then they might need to pay more so that the materials arrived on time. Manufacturing and purchasing need to let finance know about this to see if ordering the materials is financially viable and if it still enables the company to make a profit. Manufacturing would also need to communicate information to the sales and marketing department about the products that are in stock so that they can drive to sell these items so that the company has the minimal amount of stock at all times.
The finance department needs to communicate information to and from all departments to ensure the business operates successfully. The finance department is probably the most important department as they need to make quick decisions based on the sales and purchasing of producing the items that the company sells to ensure that the company makes a profit. If the cost of manufacturing is too high then the company will need to communicate with manufacturing to cut production costs. This might be working with the purchasing department to make sure that the maximum price that they pay for a certain raw material is never higher than a fixed amount. They might also tell manufacturing that all machines need to be switch off when not in use. Finance might communicate information to the personnel department to put manufacturing on short hour contracts so that they can send staff home when they are not needed. If the employee has already worked the maximum hours on their weekly contract then the company is within their rights to do so.
The personnel department needs to keep up to date information on all employees within the company for legal reasons. They will have their up to date address and correct bank details so that employees are paid correctly. Personnel will communicate with finance and all departments when new employees are hired so that they offer the correct contract and work with administration to ensure all employee qualifications are correct before starting in the company.
The administration department needs to deal with the paperwork related to running the business. They will work with finance to file previous financial information about the company. They will also work with the sales and purchasing departments to set up relationships with customers and suppliers. Administration takes on the role of supporting management in a secretarial role and certain people within the administration department might act as personal assistants to senior managers.