UNIT 5

FUNCTIONAL AND
ENTERPRISE
SYSTEM
IT Application Tools in Business

Presented by Group 5
 OBJECTIVES

This unit presents the various types of functional and enterprise systems that
are being used by many business organizations today. It also provides clear
discussions on the business processes, functionalities, and information being
managed by each enterprise system.
 UNIT OUTLINE

5.1 MIS 5.2 TIPS 5.3 CRM

5.4 DSS 5.5 SIS 5.6 VMS

5.7 AIS 5.8 HRMS 5.9 ERP

 5.1 MANAGEMENT INFORMATION SYSTEM (MIS)

According to the Eller College of Management website, a Management

Information System or MIS studies people, technology, and organizations.

MIS is defined as the integrated machine system that provides relevant

information in order to support business operations, management, and decision
making.

MIS has subsystems that are approached according to the following:

Organizational Functions
Managerial Activities
SOME EXAMPLES OF FUNCTIONAL SUBSYSTEMS OF MIS:

1. Management or Top Management

2. Logistics
3. Marketing
4. Human Resources
5. Finance and Accounting

USERS OF MIS IN RELATION TO ITS ACTIVITIES:

1. Clerical Staff
2. Managers (first level)
3. Information Specialists
4. Top Management
MANAGEMENT INFORMATION SYSTEM FOR DECISION-MAKING
Two types of decisions as follows:

1. Structured or Programmable decisions

2. Unstructured or Nonprogrammable decisions

ADVANTAGES OF MANAGEMENT INFORMATION SYSTEM

Communicates effectively
Produces reports
Compares plans and budgets
Smooth flow and transition of data
Main source of information use in accounting
Cost and Management Control
CHARACTERISTICS OF MANAGEMENT INFORMATION SYSTEM PROFESSIONALS

Excellent problem-solving skills

Strategic thinking about technology
Ability to bridge business and technology
Detailed-oriented and ability to see the big picture
Excellent communication skills
Excellent time and resource management skills
Versatiity and ability to work with different people
Willingness to implement and develop ideas
 5.1 CASE SCENARIO
PSM Company is struggling LEVEL 0 LEVEL 1

with an outdated inventory

system based on spreadsheets.
The system is inefficient, prone
to errors, and lacks the ability to
track orders effectively. Ms.
Phoebe proposes a modern
online system to solve these
problems, promising improved
efficiency, accuracy, and
communication.
 SALES & INVENTORY MANAGEMENT SYSTEM REPORTS

Status reports
Analysis and Margin reports
Forecasting reports
Inventory Ageing reports
Sales Summary reports
Sales Report per Product and Product Type
Sales Report per Customer Group
Stock Inventory Report
 5.2 TRANSACTION PROCESSING SYSTEM (TPIS)

A transaction processing system (TPS) is an IS that captures and processes a

company’s business transactions necessary to update data and support its basics
operations.

Functions of a transaction processing system

1. Input function – capturing of data coming from the users.

2. Process function – manipulating of the data entered into the system.

3. Output function – producing valuable results.

4. Storage function – storing data files into the database.

 DATA PROCESSING ACTIVITIES OF
FEATURES OF A TRANSACTION
A TRANSACTION PROCESSING
PROCESSING SYSTEM
SYSTEM

a. Basic data entry

b. Data validation 1. Rapid processing
c. Data verification
definition, examples, etc... 2. Reliabillity
d. Data process 3. Standardization
e. Data storage 4. Controlled access
F. Report of information
 FOR A TPS TO BE QUALIFIED, THE SYSTEM MUST PASS THE ACID
TEST AS FOLLOWS:

1. Atomicity – a TPS makes sure that the entire process of a transaction is performed.
2. Consistency – a TPS observes integrity constraints or rules that ensure the consistency
of a processed information.
3. Isolation – transactions should appear isolated in a TPS.
4. Durability – transactions performed by a TPS are irreversible.
 TYPES OF TRANSACTION PROCESSING SYSTEM

The following are the three main types of transactions a TPS could perform:

Batch Processing – a business organization collects data from transactions,

which accumulate over a period of time, puts them together in a group or
batch, and allows the system to process the entire batch all at once.
Online and Real - time processing -this involves data being processed
immediately upon entry or if a transaction occurs.
Hybrid Processing – (this is a combination of the first two) it collects date upon
entry but processes them in a specific period of time or in intervals.
 5.3 CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Customer Relationship Management

or CRM refers to the strategies and
technologies used by business
organizations to manage and analyze
data from their stakeholders, current
customers, and potential customers.
 Benefits of CRM Components of a CRM System

CRM offers customer data overview. 1. Marketing automation

Business collects and shares customer 2. Salesforce automation
insights. 3. Contact center automation
Forecasting is much easier and more 4. Geolocation technology or
accurate. location-based services
CRM centralized platform for 5. Workflow automation
managing customer inquiries and 6. Lead management
provides a unified view of the 7. Human resource (HR) management
business. 8. Analytics
9. Artificial intelligence (AI)
 CRM Examples in Practice CRM Challenges
1. Unorganized data: Poor data organization
1. Contact center
can lead to difficulties in accessing and
utilizing information.
2. Complications with the user interface: If
2. Social CRM
the CRM system is not user-friendly, it can
hinder the effective use of the platform.
3. Duplicated or outdated customer
3. Mobile CRM
information: This issue can cause
inefficiencies and lead to longer or
inappropriate support or service.
4. Lack of thorough maintenance:
4. Business-to-Business (B2B) Practices
Companies need to regularly maintain
CRM systems to keep them functioning
properly, and failure to do so can lead to
system issues.
 5.4 DECISION SUPPORT SYSTEM (DSS)
It retrieves and presents data such as assets, legacy and relational data sources,
comparative data figures, projected figures, consequences of alternative
decisions, and so on.
DIFFERENT TYPES OF DSS

1. Communication-driven DSS
2. Data-driven DSS
3. Document-driven DSS
4. Knowledge-driven DSS
5. Model-driven DSS
 CHARACTERISTICS OF A DECISION SUPPORT SYSTEM
1. Facilitation
2. Interaction
3. Ancillary
4. Repeated use
5. Identifiable
6. Task-oriented
7. Decision impact
8. Supports individual and group decision making
9. Comprehensive data access
10. Easy to develop and deploy
11. Integrated software
12. Flexibility
 COMPONENTS OF A DECISION SUPPORT SYSTEM
1. Inputs- data to be analyzed
2. User knowledge and expertise- inputs that are analyzed by a user or employee
3. Outputs- processed data that generate decisions.
4. Decisions- results produced by the system.

ADVANTAGES OF USING A DSS

1. Time-saving 5. Reduced costs

2. Enhanced effectiveness 6. Increased decision-maker satisfaction
3. Improved interpersonal communication 7. Promotes learning
[Link] competitive advantage 8. Improved personal efficiency
 DISADVANTAGES OF USING A DSS

1. Monetary cost
2. Overemphasized decision-making
3. Assumption of relevance
4. Transfer of power
5. Unanticipated effects
6. Obscuring responsibility
7. False belief in objectivity
8. Status reduction
9. Information overload
 5.5 STRATEGIC INFORMATION SYSTEM (SIS)

Types of Strategic Information System

1. Financial Systems
2. Operational Systems
3. Strategic Systems
 5.6 VENDOR MANAGEMENT SYSTEM

VMS INCLUDES:
Job requisition
Tracking services
Billing automation
Functionalities of business intelligence (BI)
Management reporting
Approval of procedures and processes
Workflow engine
 ADVANTAGES OF USING A VENDOR MANAGEMENT SYSTEM
The hiring of staff is only applicable if selected from the list of approved staff.
Competitive bidding will arise if the vendors will bid for their staff to be hired.
Standard job descriptions are created by the purchaser.
All staff information and specific details are available in one particular system, and
the system can rank proposals based on the given requirements of the purchaser.
A workflow engine is centralized and made available to manage the processes
effectively.
A tracking system is available. All questions, interviews, or even rejections can be
tracked, and they are recorded and noted.
Most staff rates are low because of the competitive environment.
The entire process is faster, and there is no time spent in reviewing staff that are too
costly.
 MANAGEMENT OF STAFF WITH THE USE OF A VENDOR
MANAGEMENT SYSTEM
All staff use the same use the same time cards, and they are being hired with the
same rates and expenses.
The reporting schedules and time for all consultants are the same.
Staff utilization is being observed.
Time sheets or time records are available in one particular place.
Overtime can be checked, capped, and approved.
BENEFITS OF VENDORS
Staff approval is easy and fast.
Invoices are accurate and presented faster in a standardized manner.
Errors found in reports are minimized.
They can access staffing requirements faster at any time.
 5.7 ACCOUNTING INFORMATION SYSTEM (AIS)

Accounting Information System (AIS) is

a system of collecting, storing, and
processing financial and accounting
data that are used by decision makers. It
is generally a computer-based method
for tracking accounting activity.
Three (3) levels or subsystems of AIS
Basic Level
Intermediate Level
Top Level
 5.7 ACCOUNTING INFORMATION SYSTEM (AIS)

General Model of an Accounting Information System

3 essential tasks that the AIS
database should perform
Storage
Retrieval
Deletion
USING ACCOUNTING INFORMATION SYSTEM IN BUSINESS PROCESSES

Business Processes refers to the sequence of performed

tasks that produces a desired output for a business
organization. It is an event that has a beginning and an end.
Examples of Business Processes
a. Revenue Process
b. Expenditure Process
c. Conversion Process
d. Administrative Process
 USING ACCOUNTING INFORMATION SYSTEM IN BUSINESS PROCESSES

Many business organizations implement strict

INTERNAL CONTROL processes in order to
avoid errors and prevent possible fraud in the
future.
 5.7 ACCOUNTING INFORMATION SYSTEM (AIS)

Functions of an Accounting Information System

 TYPES OF ACCOUNTING INFORMATION SYSTEM

Business organization can choose the appropriate AIS they

want to implement depending on the following:

a. The size of the business organization

b. The nature of its business processes
c. The extent of computerization
d. The management’s philosophy
 3 TYPES OF ACCOUNTING INFORMATION SYSTEM

1. Manual System
Manual accounting systems require the use of
source documents and paper-based ledgers and
journals.
 3 TYPES OF ACCOUNTING INFORMATION SYSTEM

Turnaround documents refers to the outputs of the accounting

system that can serve as inputs to another part of the accounting
system.
Other documents required for this type of system are the following:
a. General Ledger
b. General Journal
c. Special Journal
d. Subsidiary Journal
 3 TYPES OF ACCOUNTING INFORMATION SYSTEM

2. Legacy System
This system refers to an existing system of business operations in
a business organization. It uses old versions of technology which
business organizations may consider as investments.
3. Modern and Integrated IT System
In today’s modern world of business, AISs are readily available in
the market to easily integrate the business processes of an
organization.
 5.8 HUMAN RESOURCE MANAGEMENT SYSTEM (HRMS)

Is a human resource software that

handles various human resource
modules, binding human resource
management and technology
together.
Human Resource Management
(HRM) is a discipline that merges
technology with its HR processes.
ADVANTAGES OF HUMAN RESOURCE MANAGEMENT SYSTEM

1. Paperless HR department
2. Efficient HR department
3. Less talk performance time
4. Simple performance management
5. Planning and analysis
6. Quick analysis of HR issues
7. Quick and accurate retrieval of information
 FEATURES OF A HRMS
Most HRMS contains the following:
History of transactions
Employees personal information, such as name
gender, date of birth and qualifications
Work experience
Appraisal information
Career plans etc.
In addition, HRMS can also be run in various Web-based
methods such as the following:

Intranet
Extranet
Portals
 5.9 ENTERPRISE RESOURCE PLANNING (ERP)

Enterprise Resource planning or ERP is an integrated

software tools that uses, maintains, and manages
enterprise data. it helps business organizations manage
the supply chain, production, human resources, customer
orders, and other important business functions
 Re-engineering with Enterprise Resource
Planning
Benefits of Enterprise Resource Planning in a Busi
Organization

•Faster reponse time

•Improved interaction in every corner of the
enterprise •Data can be shared anytime
•Improved order management •Data redundancy is reduced
•Improved interaction with clients and
customers
•Data consistency is maintained
•Reduced operating costs and financial and improved
responsibilities •Data independence is observed
•Reduced it cost
•Data integrity is improved
•Improved productivity
•Improved standardized processes and
systems
System Application and
products (SAP) is a German
company and market leader in
ERP. It is considered the third
largest software company in
the world. SAP solution cater
mostly to small and medium -
sized enterprises (SMEs).
 San Carlos College

THANK
YOU
Presented by Group 5

BS Accountancy 2-A | 2024