Functional and

Enterprise System
UNIT FIVE

PRESENTORS:

Carlea Mantaring Colleen Allison Burgos Shery Me Llave Cherry May Rogas
UNIT
OUTLINE
5.1 Management Information System (MIS)
5.2 Transaction Processing System (TPS)
5.3 Customer Relationship Management (CRM)
5.4 Decision Support System (DSS)
5.5 Strategic Information System (SIS)
5.6 Vendor Management System (VMS)
5.7 Accounting Information System (AIS)
5.8 Human Resource Management System (HRMS)
5.9 Enterprise Resource Planning (ERP)
OBJECTIVES
Describe the concepts and functions of each
system;

Identify the most appropriate enterprise system

for a business organization; and

Evaluate how ERP systems improve the

effectiveness of business organizations.
5.1
MANAGEMENT
INFORMATION
SYSTEM (MIS)
 MIS: CONCEPT & OVERVIEW
IS are useful for businesses of varying nature and purpose.
Employees of different levels and roles make use of these systems.

MIS is defined as the integrated machine system that provides

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

This MIS utilizes the following in order to meet its purpose:

• A computer hardware and software
• Certain clear procedures (manual procedures)
• Appropriate models for certain operations like analysis, decision-
making, and more
• A database
The figure demonstrates that MIS manages business
organizations efficiently and effectively by providing
them with information that they require.
 MIS: CONCEPT & OVERVIEW
MIS has subsystems that are approached according to the following:
• Organizational functions - refers to the support given by an MIS to a business organization.
• Managerial activities - refers to activities that could be used by a business organization.

This MIS utilizes the following in order to meet its purpose:

• A computer hardware and software
• Certain clear procedures (manual procedures)
• Appropriate models for certain operations like analysis, decision-making, and
• Database

The following are some examples of functional subsystems of MIS and its uses:
1. Management or top management
2. Logistics
3. Marketing
4. Human Resources
5. Finance and Accounting
 Users of Management Information System in Relation to Its Activities
1. Clerical staff
2. Managers (first level)
3. Information specialists
4. Top management more

Management Information System for Decision-Making

There are multiple decisions that can be made with respect to the MIS structure and the type of decision
provided to them. There are two types of decisions as follows:

1. Structured or programmable decisions

A decision can be considered structured or programmable if and only if the rules of instantly
recognizable decisions rules have been specified in advance.
This could be depicted in a flowchart or a decision table.
2. Unstructured or nonprogrammable decisions
A decision can be considered unstructured or decision procedure or rule. It is uncommon to justify the
possibly because the decision procedure is unclear or unpredictable.

Advantages of Management Information System

• MIS communicates effectively with stakeholders of business organizations.

• MIS produces reports that are used to evaluate the performance of employees, machines, and
investments for the management to make decisions for the future.
• MIS compares plans and budgets to the actual performance of a business.
• MIS produces reports that would identify the strengths of business organizations which could
lead to the availment of opportunities.
 Advantages of Management Information System
• MIS allows for the smooth flow and transition of data in various levels of business organizations.
• When it comes to accounting, MIS is the main source of information about the financial health
and situation of business organizations.
• MIS helps in cost and management control by taking away risks that are involved in decision-
making at the managerial level.

Characteristics of MIS Professionals

The following are skills MIS professionals possess:

• Excellent problem-solving skills

• Strategic thinking about technology

• Ability to bridge business and technology

• Detail-oriented and ability to see the big picture

 Characteristics of MIS Professionals
• Excellent communication skills

• Excellent time and resource management skills

• Versatility and ability to work with different people

• Willingness to implement and develop ideas

Data flow diagram

Is a modelling tool in the Structured System Analysis and Design Method (SSADM) that is commonly used to

describe the flow of data in a system.

Two Different levels of DFD:

1. Level 0

2. Level 1
 2 Levels of Data flow diagram

1. Level 0

The high-level process of an inventory management system. Level 0 shows a single high-level process and its

relationship to the external entities of the sales and inventory system. The external entities include the suppliers,

customers, purchasing department, and inventory manager.

The high-level entities involved in the Level 0 process are the following:

• Customer Management

• Purchasing Management

• Inventory Management

• Payment Management

• Supplier Management
 2 Levels of Data flow diagram

2. Level 1

The Sales and Inventory Management System can produce many useful reports that can be generated directly

from the system which include the following:

a) Status Report. This type of report includes location, and duration, as well as the current inventory status

that could help in fulfilling orders and placing new inventory.

b) Analysis and Margin Report. This type of report focuses on profitability. It includes the reviews of the

turnover, demand, and profitability.

c) Forecasting Report. This type of report shows the anticipated demand depending on the results of an

analysis to be done using a data analytics tool. This report can help optimize reordering processes and monitor

inventory to avoid overstocking and spending.

 2 Levels of Data flow diagram

d) Inventory Ageing Report. This type of report saves a business organization from any form of delay in

shipment as it measures the period of on-hand inventory.

e) Sales Summary Report. This type of report gives a business organization an overview for sales within

a specified period of time. It contains information related to the cost of goods sold, profit, tax, or margins.

f) Sales Report per Product and Product Type. The sales report per product identifies the best and worst

products in business organizations. This report will help in deciding which product needs to be let go and which

one needs to be kept.

 2 Levels of Data flow diagram

g) Sales Report per Customer or Customer Group. This type of report describes the sales per customer

or customer group. With this report, it is easier to identify important customers, as well as those who engage

with a company's brand for the improvement of marketing strategies and communication with customers.

h) Stock Inventory Report. This type of report is one of the main inventory statements that regularly

update the stock record in real time. It summarizes the stock-in-hand for a particular date.
5.2
TRANSACTION
PROCESSING
INFORMATION
SYSTEMS (TPIS)
 TPS: OVERVIEW
A transaction processing system (TPS) is an IS that captures and

processes a company’s business transaction necessary to update data

and support its basic operations,

It plays a significant role in recording, collecting, storing, modifying,

validating, manipulating, processing, and retrieving diverse data

transactions.
 Functions of a TPS

1. Input function. This function involves the capturing of data coming from the users or other
systems based on a certain source document. Then, it enters data into the TPS and checks data entry.
2. Process function. This part manipulates the data entered into the system.
3. Output function. This produces valuable results in the form of a report (i.e., summary report).
4. Storage Function. This stores data files into the database, as well as accesses, sorts, updates, and
deletes stored data.
 Data Processing Activities of a TPS

Steps how a TPS processes data:

a. Basic data entry. This refers to data entered by users into the system.
b. Data validation. A TPS uses a set of programs that would allow for the computation and
validation of data entered by users.
c. Data verification. A TPS verifies data coming from specific users.
d. Data process. A TPS validates data from users, checks their accuracy and authenticity, and
processes the data based on the instructions given by the users.
 Data Processing Activities of a TPS

e. Data storage. After processing the data, a TPS stores data in a memory device either for a short
or the users.
f. Report of information. When the processed data turn into pieces of information, a TPS displays
the information according to the template of certain reports.
 Features of a TPS

1. Rapid processing. A TPS is devised to instantly process transactions to ensure the availability of
customer data when needed. With the quick advancement of technology, customers expect companies
to meet their needs immediately; thus, fast data processing has become necessary.

2. Reliability. A TPS also has the ability to protect information and prevent the system from crashing.
Transactions and site operations should be secure and stable for customer satisfaction.
 Features of a TPS

3. Standardization. Standardization makes data processing efficient. A TPS should uniformly perform
transactions, meaning every process of transaction should be similar regardless of who the customer is.

4. Controlled access. A TPS should be accessible only to select group of people to maintain
information and -TPS should be accessible only to avoid access by uncertified employees.
4 stages of the ACID tests:

• Atomicity
• Consistency
• Isolation
• Durability
Transactions performed by a TPS are irreversible. In

the event of a system failure, a log must be made

which documents all finished transactions .
 Types of TPS

1. Batch Processing. A business organization collects time, puts them together in a group or batch, and
allow system to process the entire batch at all once.
This process can be done in a cyclic method.

2. Online and Real-time Processing. This involves data being processed immediately upon entry or if
a transaction occurs.
It is more expensive than batch processing, and its database is always up to date. It requires a fast
secondary storage such as magnetic disks.
 Types of TPS

3. Hybrid Processing. This is a combination of two methods, batch and online and real-time
processing. It collects data upon entry but processes them in a specific period of time or in
intervals.
Business organizations expect TPSs to do the following:
• Maintain a high degree of data integrity and accuracy.
• Perform transactions in an organized manner.
• Produce timely relevant reports and documents.
• Improve business organizations in terms of labor efficiency and fast transaction.
• Help provide quality service to clients and customers.
• Help build harmonious relationships and maintain customer loyalty.
• Help attain competitive advantage.
5.3
CUSTOMER
RELATIONSHIP
MANAGEMENT
(CRM)
 CRM OVERVIEW
Customer relationship management or CRM refers to the strategies and technologies used by
business organizations to manage and analyse data from their stakeholders, current customers,
and potential customers.

CRM system helps business organizations reach out to and stay connected with their
customers, improve profitability, and streamline processes.
 CRM OVERVIEW
CRM perform the following tasks:
• Record and store the contact information of current and prospective customers
• Identify and analyze sales opportunities
• Collect, store, and solve customer service issues
• Manage and monitor marketing campaigns

A CRM system records the interactions and conversations taking place between customers and
business organization daily.
 Benefits of CRM
• CRM systems can provide an overview of data regarding current and prospective customers.
• A business organization can collect its customers' profiles, information, preferences, reviews, and

views regarding competitors and include them in social media accounts and activities.

• Forecasting is much easier and more accurate with the use of CRM systems.

• A CRM system can design a platform where inquiries the same time, give customers a single view
about company sales, services, and marketing strategies.
EXAMPLE OF CRM SOFTWARE

SALESFORCE
EXAMPLE OF CRM SOFTWARE

PIPEDRIVE
 Components of a CRM
1. Marketing automation
2. Salesforce automation
3. Contact center automation
4. Geolocation technology or location-based services
5. Workflow automation
6. Lead management
7. Human resource management
8. Analytics
9. Artificial intelligence
 Types of CRM Technology

1. On-premises CRM
This type of CRM system allows a company to

use the software for the management,

organization, security, and maintenance of its

operations. This arrangement requires the

company to purchase the system and comply

with system upgrades.

 Types of CRM Technology
2. Cloud-based CRM
This type of system works by having company data stored

in a remote, external network that is accessed by

employees using the Internet.

A third-party service provider can be hired to install the

CRM system for a company.

This CRM system is a pealing to companies paid for

through monthly or annual subscriptions.

 Types of CRM Technology
3. Open-source CRM. This CRM
system makes a source code available

to the public, allowing changeswith

zero cost.

Customer Relationship Management in

Practice
1. Contact center

2. Social CRM

3. Mobile CRM

4. Business-to-Business (B2B) Practices

 Customer Relationship
Management Challenges

• Difficulties may result from unorganized data and complications with the user interface.
• Duplicated or outdated customer information also poses support or service.

Possible Solution: Companies should invest in thorough maintenance essential to keep CRM
systems working.
5.4
DECISION
SUPPORT
SYSTEM (DSS)
 DECISION SUPPORT SYSTEM
Decision-making becomes easier with the help of a DSS which uses data, knowledge, communication

technologies, and models to assist the decision-makers of a company.

A DSS may use Al to present detailed information to senior employees or executives.

TYPES OF DSS
1. Communication-driven DSS

This type of system makes use of the Internet or client/server links such as messaging software and online

meeting systems.

2. Data-driven DSS

This type of DSS is used for seeking answers from a given database.
 DECISION SUPPORT SYSTEM

3. Document-driven DSS
This type of DSS is the most common. It is used to search through websites and pages to find documents

using keywords.

This system uses the Internet and a client/server system.

4. Knowledge-driven DSS

This type of DSS has a broad range of users, from employees of a company and its customers to third-party

entities.

It is used to spread management instructions or to choose products and/or services.

This system uses servers, the Internet, or a PC software.

5. Model-driven DSS
This is a complex system used by staff and managers to analyze and make decisions regarding a business.

This DSS uses a PC software and hardware, the Internet, and client/server systems.

Characteristics of a DSS
1. Facilitation 7. Decision impact
2. Interaction 8. Supports individual and group decision-making
3. Ancillary 9. Comprehensive data access
4. Repeated use 10. Easy to develop and deploy
5. Identifiable 11. Integrated software
6. Task-oriented 12. Flexibility
Objectives for Using a DSS
1. Make decision-making processes easier and more effective

2. Assist a decision-maker, but not replace him/her

3. Improve decisions made for a company

Components of a DSS
1. Inputs- These are data to be analyzed such as numbers, factors, and characteristics.

2. User knowledge and expertise - These are inputs that are analyzed by a user or employee.
3. Outputs - These are processed data that generate decisions.

4. Decisions - These are the results produced by the system according to the user or employee.
 Advantages and Disadvantages of Using a DSS

ADVANTAGES

1. Time-saving

2. Enhanced effectiveness

3. Improved interpersonal communication

4. Increased competitive advantage

5. Reduced costs
6. Increased decision-maker satisfaction

7. Promotes learning

8. Improved personal efficiency

 Advantages and Disadvantages of Using a DSS

DISADVANTAGES

1. Monetary cost

2. Overemphasized decision-making Applications of Decision Support System

3. Assumption of relevance • Medical diagnoses

4. Transfer of power • Business and management

5. Unanticipated effects • Agricultural production

6. Obscuring responsibility • Forest management

7. False belief in objectivity

8. Status reduction

9. Information overloady
5.5
STRATEGIC
INFORMATION
SYSTEM (SIS)
SIS OVERVIEW

In 1982, Dr. Charles Wiseman introduced the SIS, which had the

primary purpose of gaining competitive advantage for businesses.

An SIS uses an IS that analyzes business initiatives to efficient,

effective, and controlled operations.

ROLES OF SIS IN BUSINESS
1. Strategic Planning and Decision-Making
2. Competitive Advantage

3. Market Positioning and Expansion

4. Customer Relationship Management (CRM)

5. Supply Chain Management

6. Risk Management

7. Performance Monitoring and Metrics

8. Change Management and Adaptability

9. Knowledge Management
 Types of Strategic Information System
1. Financial systems. These computerize the operations of a business relating to finance, such as accounting
and budgeting.

2. Operational systems. Also known as service systems, these control the business.

3. Strategic systems. These combine business strategies with computer strategies.

Characteristics of an SIS

1. Main task

2. Key objective

3. Direction

4. Main approach
5.6
VENDOR
MANAGEMENT
SYSTEM (VMS)
 VMS OVERVIEW
A Vendor Management System (VMS) is defined as the web-based procurement application that allows

business organizations to directly manage the process of procurement for both temporary and permanent
staff and contract and contingent staff.

A VMS includes:

a. Job requisition e. Management reporting

b. Tracking services f. Approval of procedures and processes

c. Billing automation g. Workflow engine

d. Functionalities of business intelligence (BI)

Advantages of Using a VMS
• 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

• A workflow engine is centralized and made available to manage the processes effectively.

• A tracking system is available.

• Most staff rates are low because of the competitive environment.

• The entire process is faster.

Management of Staff with the Use
of a VMS
• All staff use the same time cards.
• The reporting schedules and time for all consultant 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 with the Use of a VMS

• 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)
 AIS OVERVIEW

The use of an Accounting Information System (AIS) in business organizations is not only for accounting but

also for improving management control.

AIS is sometimes regarded as a machine that can transform inputs into high volume of outputs.

However, AIS can provide more information; it can also process, organize, retrieve, and select huge amounts

of data to meet the needs of managers.

 3 Subsystems of AIS
Basic level Intermediate level
It refers to elementary data that It refers to elementary data that are
are produced by business reorganized in order to respond to
processes related to simple the standards set by financial
accounting to produce financial
daily business operations.
statements and other related financial
reports.
Top level
It refers to both operational and financial
data that are processed in order to produce
relevant information and knowledge to
support either managerial or strategic
management decisions such as budgeting.
This level basically refers to management
accounting systems.
General Model of an AIS
 General Model of an AIS
1. End users – can be internal and external users.
2. Data sources – AlSs allow data to enter the system through data sources such as financial transactions.

3. Data collection - The most crucial stage of an AIS because of the concept of garbage-in, garbage-out

(GIGO).

4. Data processing - Data must be processed to be transformed into useful information.

5. Data management - The database is the main repository of any IS of a business organization.

6. Information generation - This is a process where relevant information is compiled, arranged, formatted,

and presented to users.

 3 Essential Tasks of AIS Database:

Storage Retrieval Deletion

Allows users to locate and extract Allow users to permanently delete
Allow users to add new records in existing records from database and records from database.
an AIS and store them in a certain process them accordingly.
place in a database.
 Using AIS in Business Processes
Business processes
Refer 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:

• revenue process - sales processes, sales return processes, and cash collection processes
• expenditure process - purchasing processes and purchase return processes
• conversion process- planning processes
• administrative process- investment processes

Internal control – refer to the set of procedures and policies set by a business organization in order to safeguard business

assets.
 Function of an AIS
1. Identify business processes and capture relevant accounting data
2. Record accounting data whether from manual or computer-based records
3. Observe internal control processes
4. Process, classify, summarize, and consolidate raw accounting data
5. Generate internal and external reports

Importance of an AIS to Accountants

Accountants can serve as:
1. Users of AISs
2. Members of the AIS design and implementation team
3. AIS auditors
 Types of Accounting Information System

Manual System
Manual accounting systems require the use of source documents and paper-based ledgers and journals.
• Source documents refer to records that entirely capture the key data of every business transaction.

Source documents are useful because:

a. They provide data as inputs necessary to record business transactions.
b. They activate business processes for their initial start.
 Types of Accounting Information System

• Turnaround documents refer to the outputs of the accounting system that can serve as input to another part of the
accounting system.

Other documents required for this type of system are the following:
a. General ledger - This provides complete details of all the accounts used by a business organization.
b. General journal - The original entries for business transactions are done in this journal.
c. Special journal - This records special types of transactions.
d. Subsidiary journal - This maintains accounting information.
 Types of Accounting Information System

Legacy 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.

Advantage
• Customizable
• Can support unique business processes
• Can contain significant and invaluable old or historic data
• Can be understood by old employees who are trained to use the system

Modern Integrated IT System

AIS are readily available in the market to easily integrate the business processes of an organization.
Modern and user-friendly, utilize latest chnologies, have high data storage and accessible to different platforms.
5.8
HUMAN RESOURCE
MANAGMENT
SYSTEM (HRMS)
 HRMS OVERVIEW
- A Human Resource Management System (HRMS) is a human resource software that handles various human resource
modules, binding human resource management and technology together.

- An HRMS is a system that combines HRM and IT processes to automate human resource activities within a business
organization.

Task of HRMS
• to keep track of all business organizations' employees and their information.

- It helps a business organization transform its workplace.

In the past, HR databases were paper-based, which posed problems such as data inaccuracy, incomplete information, and difficulty tracking employees.
Advantages of
Human Resource
Management System
1. Paperless HR department
2. Efficient HR department
3. Less task performance time
4. Simple performance management.
5. Planning and analysis
6. Quick analysis of HR issues
7. Quick and accurate retrieval of information
Examples of Human
Resource Functions
Integrated Into a HRMS
• Employees' record management
• Keeping employees' attendance records and tracking absences
• Self-service portal for employees
• Managing payroll
• Employees' leave and absence management
• Employees' performance management
• Employees' appraisal management
• Employees' scheduling
• HR analytics and decision-making
 HRMS as a Tool for
Business Features of a HRMS
Organizations
• History of transactions

Security • Employees' personal information

• Employment information
- is a main concern for business organizations as the
• Work experience
information stored in the system are confidential and
• Appraisal information
highly sensitive because of employee’s personal
• Professional development record
information.
• Career plans
5.9
ENTERPRISE
RESOURCE
PLANNING (ERP)
 ERP OVERVIEW

Refers to a type of software that organizations use to manage their day-to-day activities. This includes various business
processes such as accounting, procurement, project management, manufacturing, supply chain management, and more.

Primary goal of ERP: is to streamline internal business processes and facilitate communication and collaboration across
different departments within an organization.

What business functions can be optimized with ERP?

Commerce
Finance
Human resources
Manufacturing
Supply chain
 Benefits of ERP
Faster response time
Improved interaction in every corner of the enterprise
Improved order management
Improved interaction with clients and customers
Reduced operating costs and financial responsibilities
Reduced IT cost
Improved productivity
Improved standardized processes and system

Advantages of integrated databases

• Data can be shared anytime
• Data redundancy is reduced
• Data consistency is maintained and improved
• Data independence is observed
• Data integrity is improved
Re-englneering with Enterprise Resource Planning
ERP reduces data redundancy which could contribute to data consistency.

Main goal of re-engineering: is to enable business organizations to be more responsive to the needs of the market, their
changing target markets, and the strategies of their competitors.

Vendors of ERP
Classification of ERP Vendors
1. Tier I
Tier I ERP vendors sell to business organizations or companies that have annual revenues exceeding 1 billion dollars ($1
billion).
These organizations or companies are multinationals, which are present in various geographic regions.
Vendors of ERP
Classification of ERP Vendors

2. Tier II.
Tier II ERP vendors sell to mid-sized business organizations or companies that have revenues ranging from $50 million to
$1 billion.
Tier Il products are built specifically to handle and provide multiple or single locations of deployment.

3. Tier III.
Tier III ERP verdors sell to business organizations or companies that have revenues between $10 million and $50 million.
The products of Tier IIl are simple and easy to implement and have lower costs of ownership.
ERPs of this category are installed in single locations.
SYSTEM APPLICATIONS AND PRODUCTS (SAP)
SAP is a German multinational software corporation that specializes in enterprise software solutions to
manage business operations and customer relations.

SAP is best known for its ERP (Enterprise Resource Planning) software, which helps organizations
integrate and manage their business processes efficiently.
THANKYOU