AIS REVIEWER CH.

5: Functional Unstructured or nonprogrammable decisions

and Enterprise Systems  A decision can be considered unstructured or

nonprogrammable if there was no pre-established
decision procedure or rule.

MANAGEMENT INFORMATION SYSTEM (MIS)

 MIS is defined as the integrated machine system ADVANTAGES of MIS

that provides relevant information in order to
a. MIS communicates effectively with stakeholders of
support business operations, management, and
business organizations.
decision-making.
b. MIS produces reports that are used to evaluate the
performance of employees, machines, and
investments for the management to make decisions
MIS has subsystems that are approached according to for the future.
the following: c. MIS compares plans and budgets to the actual
 Organizational functions - The approach to performance of a business (please see next slide).
organizational functions refers to the support given d. MIS produces reports that would identify the
by an MIS to a business organization. strengths of business organizations which could
 Managerial activities - The approach to managerial lead to the availment of opportunities.
activities refers to activities that could be used by a e. MIS allows for the smooth flow and transition of
business organization. data in various levels of business organizations.
f. MIS is the main source of information about the
financial health and situation of business
organizations.
Functional subsystems of MIS and its uses:

 Management or top management - MIS is used by

the top management mainly for strategic planning. Characteristics of MIS Professionals
 Logistics - MIS is used for planning, control, and
distribution. a. Excellent problem-solving skills
b. Strategic thinking about technology
 Marketing -MIS is used for planning, sales forecast,
c. Ability to bridge business and technology
or sales or customer analysis.
d. Detail-oriented and ability to see the big picture
 Human Resources - MIS is used to plan relevant
e. Excellent communication skills
employee requirements, analyze employee
f. Excellent time and resource management skills
performance, or administer salaries.
g. Versatility and ability to work with different people
 Finance and Accounting -MIS is used in financial
h. Willingness to implement and develop ideas
analyses, cost analyses, and so on.

Sales and Inventory Management System

Users of MIS in Relation to Its Activities
a. Status Report
 Clerical staff - It refers to the users that handle
b. Analysis and Margin Report
direct transactions, process the inputs, and answer
c. Forecasting Report
various inquiries.
d. Inventory Ageing Report
 Managers (first level) - It refers to users that obtain
e. Sales Summary Report
data related to operations and assist in scheduling,
f. Sales Report per Product Type
planning, or making decisions.
g. Sales Report per Customer or Customer Group
 Information specialists - They refer to users that h. Stock Inventory Report
would analyze information and assist in planning
and reporting.
 Top management - It refers to users that would
Sales and Inventory Management System
check and analyze reports regularly, retrieve
requests, and assist in the identification of problems 1. Status Report - This type of report includes the
and opportunities and decision-making. status of inventory in terms of time, location, and
duration, as well as the current inventory status
that could help in fulfilling orders and placing new
MIS for Decision - Making inventory.
2. Analysis and Margin Report - This type of report
Structured or programmable decisions focuses on profitability. It includes the reviews of
 A decision can be considered structured or the turnover, demand, and profitability.
programmable if and only if the rules of instantly 3. Forecasting Report - This type of report shows the
recognizable decisions rules have been specified in anticipated demand depending on the results of an
advance. analysis to be done using a data analytics tool. This
report can help optimize reordering processes and
 monitor inventory to avoid overstocking and 3. Data verification. A TPS verifies data coming from
spending. specific users.
4. Inventory Ageing Report - This type of report saves 4. Data process. A TPS validates data from users,
a business organization from any form of delay in checks their accuracy and authenticity, and
shipment as it measures the period of on-hand processes the data based on the instructions given
inventory. by the users.
5. Sales Summary Report - This type of report gives a 5. Data storage. A TPS stores data in a memory device
business organization an overview for sales within a either for a short or long period of time, depending
specified period of time. It contains information on the instruction the users.
related to the cost of goods sold, profit, tax or 6. Data storage. A TPS stores data in a memory device
margins. either for a short or long period of time, depending
6. Sales Report per Product Type - The sales report on the instruction the users.
and Product Type. The sales report per product 7. Report of information. When the processed data is
identifies the best and worst products in business turned into pieces of information, a TPS displays the
organizations. This report will help in deciding which information according to the template of certain
product needs to be let go and which one needs to reports.
be kept.
Transaction Processing System Features of a TPS:
7. Sales Report per Customer or Customer Group - It
is easier to identify important customers, as well as a. Rapid processing
those who engage with a company's brand for the b. Reliability
improvement of marketing strategies and c. Standardization
communication with customers. d. Controlled access
8. Stock Inventory Report - This type of report is one
of the main inventory statements that regularly
update the stock record in real time. Transaction Processing System TPS Qualifiers:

1. Atomicity. A transaction could only be processed

TRANSACTION PROCESSING INFORMATION SYSTEM completely either in full or not at all.
(TPIS) 2. Consistency. A TPS observes integrity constraints or
rules that ensure the consistency of the processed
• A transaction processing system (TPS) is an IS that information.
captures and processes a company’s business 3. Isolation. Transactions should appear isolated in a
transactions necessary to update data and support its TPS.
basic operations. 4. Durability. Transactions performed by a TPS are
irreversible.
• It plays a significant role in recording, collecting,
storing, modifying, validating, manipulating, processing,
and retrieving diverse data transactions.
TYPES OF TPS
• A TPS should be accurate, reliable, and user-friendly
and should have good performance. 1. 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
FOUR FUNCTIONS OF A TPS
batch all at once.
1. Input function - This function involves the capturing 2. Online and Real-time Processing This involves data
of data coming from the users or other systems being processed immediately upon entry or if a
based on a certain source document. transaction occurs. It is more expensive than batch
2. Process function - This part manipulates the data processing, and its database is always up to date. It
entered into the system. requires a fast secondary storage such as magnetic
3. Output function - This produces valuable results in disks.
the form of a report. 3. Hybrid Processing This is a combination of two
4. Storage function - This stores data files into the methods, batch and online and real-time
database, as well as accesses, sorts, updates, and processing. It collects data upon entry but processes
deletes stored data. them in a specific period of time or in intervals.

Organizations expect TPSs to do the following:

Data Processing Activities of Transaction Processing
System 1. Maintain a high degree of data integrity and
accuracy.
1. Basic data entry. This refers to data entered by 2. Perform transactions in an organized manner.
users into the system.
3. Produce timely relevant reports and
2. Data validation. A TPS uses a set of programs that
documents.
would allow for the computation and validation of
4. Improve business organizations in terms of
data entered by users.
labor efficiency and fast transactions.
5. Help provide quality service to clients and 6. Lead management: Sales teams can scan for
customers. leads by inputting and analyzing data using
6. Help build harmonious relationships and certain CRM software.
maintain customer loyalty. 7. Human resource management: The human
7. Help attain competitive advantage. resources department can also benefit from
using CRM systems when they check employee
5.3 CUSTOMER RELATIONSHIP MANAGEMENT information, contact details, and performance
(CRM) reviews.
• Customer relationship management or CRM 8. Analytics: CRM systems help companies
refers to the strategies and technologies used by analyze customer data to provide better
business organizations to manage and analyze data products and services to customers, as well as
from their stakeholders, current customers, and produce appropriate product marketing
potential customers. materials.
• Businesses need to employ CRM in order to 9. Artificial intelligence: CRM technologies have
improve business-customer relationships, which built-in artificial intelligence to perform routine
could result in customer retention, increase in tasks and identify patterns in customer
sales, and attraction of new customers. behavior, purchases, and so on.
• A CRM system helps business organizations reach
out to and stay connected with their customers, TYPES OF CRM TECHNOLOGY
improve profitability, and streamline processes.
 On-premises CRM: Allows a company to use
A CRM system allows a business organization to the software for the management,
perform the following tasks: organization, security, and maintenance of
its operations.
1. Record and store the contact information of  Cloud-based CRM: Company data is stored
current and prospective customers. in a remote, external network accessed by
2. Identify and analyze sales opportunities. employees via the Internet.
3. Collect, store, and solve customer service  Open-source CRM: Source code is available
issues. to the public, allowing changes with zero
4. Manage and monitor marketing campaigns. cost.

CUSTOMER RELATIONSHIP MANAGEMENT CRM

EXAMPLES IN PRACTICE:
Components of a CRM
1. Contact center: Used by sales and
1. Marketing automation: To ease marketing marketing teams to track leads and
efforts, CRM systems automate routine work customers.
such as sending marketing materials to 2. Social CRM: Social media platforms are
prospective customers through or messages. used to interact with customers.
2. Salesforce automation: CRM systems ease 3. Mobile CRM: CRM applications for
customer information tracking and automated smartphones and tablets allow employees
business functions, which help the sales to access customer data off-site.
divisions of business organizations acquire new 4. Business-to-Business (B2B) Practices: CRM
customers. systems monitor sales for faster issue
3. Contact center automation: A CRM software resolution.
provides pre-recorded audio for customer
troubleshooting and inquiries to alleviate the DECISION SUPPORT SYSTEM (DSS)
workload of a company's contact center agents, • A computer-based application that helps
as well as to diminish call time. Tools can also companies identify and give solutions by making
be installed on an agent's computer to decisions on how to solve problems including
streamline customer service procedures. issues on raw data, documents, employee and
4. Geolocation technology or location-based company profiling, and management and business
services: Some CRM software also provides models.
geolocation technologies which can help • Responsible for delivering information to
identify a customer's location, build networks, managers who make assessments about specific
and find prospective customers using their scenarios that are not well-managed.
location. • Decision-making becomes easier with the help of
5. Workflow automation: CRM systems help this system which uses data, knowledge,
simplify a company's operations by managing communication technologies, and models to assist
workloads to improve employee creativity and the decision-makers of a company.
performance.
• This may use AI to present detailed information
to senior employees or executives.
• Data such as assets, legacy and relational data
sources, comparative data figures, projected Components of a DSS
figures, consequences of alternative decisions, and
so on are the ones usually retrieved and presented a. Inputs - These are data to be analyzed, such as
by a DSS. numbers, factors, and characteristics.
b. Outputs - Processed data that generate
decisions.
Types of DSS c. Decisions - Results produced by the system
according to the user or employee.
1. Communication-driven DSS
 Focuses on the internal aspect of a Advantages of DSS
company, providing a platform for people • Time-saving
to meet and collaborate. • Enhanced effectiveness
 Makes use of the Internet or client/server • Improved interpersonal communication
links such as messaging software and • Increased competitive advantage
online meeting systems. • Reduced costs
2. Data-driven DSS • Increased decision-maker satisfaction
 Used for seeking answers from a given • Promotes learning
database. • Improved personal efficiency
 Managers, staff, and suppliers use the
Internet, a mainframe system, or a Disadvantages of DSS
client/server link to access databases. • Monetary cost
3. Document-driven DSS • Overemphasized decision-making
 The most common type. • Assumption of relevance
 Used to search websites and pages to find • Transfer of power
documents using keywords. • Unanticipated effects
 Utilizes the Internet and a client/server • Obscuring responsibility
system. • False belief in objectivity
4. Knowledge-driven DSS • Status reduction
 Used by employees, customers, or third- • Information overload
party entities to spread management
instructions or select products/services.
 Utilizes servers, the Internet, or PC Applications of Decision Support System
software. • Medical diagnoses
5. Model-driven DSS • Business and management
 A complex system used to analyze and • Agricultural production
make decisions regarding a business. • Forest management
 Uses different models depending on
purpose.
 Utilizes PC software and hardware, the STRATEGIC INFORMATION SYSTEM (SIS)
Internet, and client/server systems. • 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
CHARACTERISTICS OF A DSS to create strategies.
• Facilitation • The primary purpose is to gain competitive
• Interaction advantage for businesses.
• Ancillary • These systems are used by companies for more
• Repeated use efficient, effective, and controlled operations.
• Identifiable
• Task-oriented
• Decision impact
• Supports individual and group decision-making Types of Strategic Information System
• Comprehensive data access
• Easy to develop and deploy a. Financial systems- Computerize operations
• Integrated software relating to finance, such as accounting and
• Flexibility budgeting.
b. Operational systems - Also known as service
systems, these control the business.
Objectives of Using a DSS
c. Strategic systems - Combine business strategies
• Make decision-making processes easier and more
with computer strategies.
effective.
• Assist a decision-maker, but not replace him/her.
• Improve decisions made for a company.
Characteristics of a Strategic Information System Management of Staff with the Use of a Vendor
Management System
1. Main task: Use business strategies to gain
competitive advantage.  All staff use the same time cards.
2. Key objective: Maximize opportunities with the  The reporting schedules and time for all
integration of IS and business strategies. consultants are the same.
3. Direction: Comes from executives and  Staff utilization is being observed.
employees to reinforce the integration of  Time sheets or time records are available in one
management with IS. particular place.
4. Main approach: Entrepreneurial and multiple.  Overtime can be checked, capped, and
approved.

VENDOR MANAGEMENT SYSTEM (VMS)

Benefits of Vendors

A vendor management system (VMS) is defined as  Staff approval is easy and fast.
the web-based procurement application that  Invoices are accurate and presented faster in a
allows business organizations to directly manage standardized manner.
the process of procurement for both temporary  Errors found in reports are minimized.
and permanent staff, and contract and contingent  They can access staffing requirements faster at
staff. any time.
A VMS includes:
ACCOUNTING INFORMATION SYSTEM (AIS)
 Job requisition
 Tracking services  A computerized accounting system is a
 Billing automation software that helps maintain account records,
 Functionalities of business intelligence (BI) automatically generate financial statements,
 Management reporting calculate billing amounts, and more.
 Approval of procedures and processes  It is sometimes regarded as a machine that can
 Workflow engine transform inputs into a high volume of outputs.

ACCOUNTING INFORMATION SYSTEM (AIS)

AIS is organized into three levels or subsystems:
Advantages of Using a Vendor Management
System 1. Basic level:

 The hiring of staff is only applicable if selected  Refers to elementary data that are
from the list of approved staff. produced by business processes related to
 Competitive bidding will arise if the vendors will simple daily business operations.
bid for their staff to be hired.  This level is for operational accounting
 Standard job descriptions are created by the systems or transaction processing systems.
purchaser.
 All staff information and specific details are 2. Intermediate level:
available in one particular system, and the  Refers to elementary data that are
system can rank proposals based on the given reorganized in order to respond to the
requirements of the purchaser. standards set by financial accounting to
 A workflow engine is centralized and made produce financial statements and other
available to manage the processes effectively. related financial reports.
 A tracking system is available. All questions,  This level refers to financial accounting
interviews, or even rejections can be tracked, systems, financial reporting systems, or
recorded, and noted. general ledgers.
 Most staff rates are low because of the
competitive environment. 3. Top level:
 The entire process is faster, and there is no
time spent reviewing staff that are too costly.  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 refers to management accounting
systems.
General Model of an AIS Functions of an Accounting Information System
• Identify business processes and capture relevant
 End users: accounting data.
 External users: Those who are not part of a • Record accounting data whether from manual or
business organization but have a huge part computer-based records.
in an AIS, such as stockholders, suppliers, • Observe internal control processes.
customers, and investors. • Process, classify, summarize, and consolidate raw
 Internal users: Those within a business accounting data.
organization, such as management and • Generate internal and external reports.
operation staff.

 Data sources:
 AISs allow data to enter the system through Importance of an AIS to Accountants
data sources such as financial transactions.
These data coming from financial 1. Users of AISs - The users of AISs must fully
transactions could either be from internal or understand the functions, concepts, and
external sources. purpose of AISs in order to perform accounting-
related tasks properly.
 Data collection:
 The first operational level of an AIS 2. Members of the AIS Design and
collects data from various sources and Implementation Team: An AIS is not only
ensures that these data are accurate, designed by programmers, system analysts, or
valid, complete, and free from any software engineers, but a large portion of it is
errors. designed by accountants.
 This is the most crucial stage of an AIS 3. AIS Auditors:
because of the concept of garbage-in,  The role of an auditor in business
garbage-out. organizations is to conduct assurance
services and ensure that proper procedures
 Data processing: have been followed in the performance of
 Data must be processed to be tasks.
transformed into useful information.  The auditor must fully understand the AIS
 Tasks involved in the data processing and the way data are entered, processed,
phase range from simple to complex. and reported before making informed
 Data management: decisions.
 The database is the main repository of
any IS of a business organization. Three (3) Types of AIS
 An AIS has a repository that would store
financial and non-financial data. 1. Manual System
 The AIS database should perform the  Some small and medium-sized enterprises
three essential tasks of storage, still use a manual accounting system to
retrieval, and deletion. record and maintain their accounting
records.
 Information generation:  Large business organizations that use AISs
 This is a process where relevant may still use manual processes for certain
information is compiled, arranged, activities.
formatted, and presented to users.  Manual accounting systems require the use
 The information should be summarized, of source documents and paper-based
accurate, relevant, and complete and ledgers and journals.
should always be related to the
transactions done in the AIS. Manual System (continued)

Using AIS Processes  Turnaround documents: Outputs of the

• AISs capture, record, process, and maintain accounting system that can serve as inputs
financial transactions within a business to another part of the accounting system.
organization.  Other documents required:
• An AIS must identify the business transactions • General ledger: Provides complete details
that are considered relevant and record and of all accounts used by a business
capture important transaction details. organization.
• Business processes refer to the sequence of • General journal: Original entries for
performed tasks that produces a desired output for business transactions are done here.
a business organization. • Special journal: Records special types of
transactions.
• Subsidiary journal: Maintains accounting
information.
2. Legacy System Benefits of Enterprise Resource Planning in a
Business Organization
 Refers to an existing system of business • Faster response time.
operations using old technology that business • Improved interaction across the enterprise.
organizations consider as investments. • Improved order management.
• Enhanced client and customer interaction.
3. Modern and Integrated IT Systems • Reduced operating costs and financial
responsibilities.
 AISs readily available in the market can easily • Reduced IT costs.
integrate the business processes of an • Increased productivity.
organization. • Standardized processes and systems.

HUMAN RESOURCE MANAGEMENT SYSTEM Re-engineering with Enterprise Resource Planning

(HRMS) • ERP relies on the use of IT, such as:
• A human resource management system (HRMS)
is human resource software that handles various  Client-server applications and computing.
HR modules, combining HR management and  Shared databases.
technology.  Other IT-related tools.
• HRM (Human Resource Management) merges • Business organizations aiming to re-
technology with HR processes. engineer their processes must implement IT
• An HRMS automates HR activities within a tools.
business organization.
Vendors of Enterprise Resource Planning
• Tier I: Vendors sell to companies with annual
Advantages of Human Resource Management revenues exceeding $1 billion.
System • Tier II: Vendors sell to mid-sized companies with
• Paperless HR department. revenues between $50 million and $1 billion.
• Efficient HR department. • Tier III: Vendors sell to companies with revenues
• Less task performance time. between $10 million and $50 million.
• Simple performance management.
• Planning and analysis.
• Quick analysis of HR issues.
• Quick and accurate retrieval of information.

Features of an HRMS
• History of transactions.
• Employees’ personal information (e.g., name,
gender, date of birth, qualifications).
• Employment information (e.g., salary, position,
employment status).
• Work experience.
• Appraisal information.
• Professional development records (e.g., trainings,
seminars, workshops).
• Career plans.

ENTERPRISE RESOURCE PLANNING (ERP)

• Enterprise resource planning (ERP) is an
integrated software tool that uses, maintains, and
manages enterprise data.
• ERP helps manage the supply chain, production,
human resources, customer orders, and other
business functions.
• ERP automates and integrates business
processes.
• It allows information sharing across the company
and produces relevant output in a real-time
environment.