The document outlines the architecture of Accounting Information Systems (AIS), detailing components such as data input, storage, processing, and output, along with the role of Database Management Systems (DBMS) in managing transactional data. It discusses the significance of data modeling, security measures, and the evolution of database management technologies, including notable historical milestones. Additionally, it highlights the definition, benefits, and implementation considerations of Enterprise Resource Planning (ERP) systems, emphasizing their role in streamlining business processes across organizations.
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AIT 3 (Architecture-ERP)
The document outlines the architecture of Accounting Information Systems (AIS), detailing components such as data input, storage, processing, and output, along with the role of Database Management Systems (DBMS) in managing transactional data. It discusses the significance of data modeling, security measures, and the evolution of database management technologies, including notable historical milestones. Additionally, it highlights the definition, benefits, and implementation considerations of Enterprise Resource Planning (ERP) systems, emphasizing their role in streamlining business processes across organizations.
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AIS ARCHITECTURE
- AIS architecture refers to the structure and arrangement of
components within, an Accounting Information System (AlS), which includes data input, processing, storage, and output mechanisms DATABASE MANAGEMENT SYSTEM (DBMS) IN AIS designed to support financial + data management and reporting within an organization. Definition and Purpose: A Database Management System (DBMS) is a software that enables COMPONENTS OF ALS ARCHITECTURE users to create. manage, and manipulate databases. Data input - is the process of capturing and entering transactional In the context of AIS. DBMS serves as the foundation for storing and data into the AIS. managing transactional data related to business processes. Data Storage - involves storing transactional data in databases or DBMS provides features such as data storage. retrieval, other storage systems. manipulation, security, and concurrency control to ensure the Data Processing - encompasses various operations performed on integrity and consistency of the data. transactional data to generate meaningful information. Information Output - involves presenting processed data in a DATA MODELING AND DESIGN: meaningful format for decision-making purposes. DBMS facilitates the creation of logical and physical data models that define the structure and relationships of the data stored in the database Data modeling techniques such as Entity-Relationship (ER) DATA INPUT modeling and normalization are used to design efficient and scalable - It involves various methods such as manual data entry barcode databases. scanning Electronic Data Interchange (EDI), and automatic DBMS supports the implementation of databases, schemas, tables, identification technologies (e.g., Radio Frequency Identification indexes, and constraints based on the data model (RFID)). Examples: - Data validation and verification procedures are often implemented to a. Entity-Relationship (ER) Model – a method to visually represent ensure the accuracy and integrity of input data. the relationship between entities and a database system. Utilize visual Examples: representation and graphics. To identify real-world connections. a. Point-of-Sale (POS) Systems: Retail businesses use POS systems to b. Normalization – breaking down a database into smaller and record sales transactions, capturing data such as items sold, manageable tables and structured in a way that reduces duplication. quantities, prices, and payment methods. b. Online Forms: Websites and e-commerce platforms collect customer DATA STORAGE AND RETRIEVAL information through online forms, including orders, registrations, DBMS stores transactional data in tables organized into rows and inquiries, and feedback. columns, following the database schema. c. Barcode Scanners: Warehouses and distribution centers use barcode Users can query the database using Structured Query Language scanners to input data quickly and accurately by scanning barcodes (SOL) to retrieve specific data based on predefined criteria. on products or inventory items Indexes and optimization techniques are employed to enhance the performance of data retrieval operations. DATA STORAGE - Relational databases are commonly used for storing structured data, SECURITY AND ACCESS CONTROL: while data warehouses may be used for storing and analyzing large DBMS implements security measures to protect sensitive data from volumes of historical data. unauthorized access, modification, or disclosure. - Data storage solutions must provide security, scalability, and efficient Role-based access control, authentication mechanisms, encryption, retrieval mechanisms to support the needs of the AIS and auditing are common security features of DBMS. DBMS ensures Examples: data integrity by enforcing constraints, validation rules, and a. Relational Databases: Organizations use relational database transaction management mechanisms. management systems RDBMS) like MySQL, PostgreSQL, or Oracle Role-based access control – is a method restricting system to access ta store structured transactional data in tables wit predefined authorized users based on their role within an organization. schemas. b. Data Warehouses: Companies aggregate and store large volumes of DEFINITION, PURPOSE, AND SIGNIFICANCE OF DBMS historical transactional data in data warehouses for analysis, reporting and decision-making purposes DBMS is a software application that allows users to efficiently c. NoSQL Databases: Some AlS architectures leverage MoSQL create, manage, and access databases. databases like MongoDB or Cassandra to store unstructured or semi- structured transactional data, such as log files or socia media In the realm of Accounting Information Systems (AIS), DBMS plays interactions. a critical role in storing, organizing, and manipulating financial and transactional data DATA PROCESSING - This includes data manipulation, calculation of financial metrics, DBMS provides a structured framework for storing data ensuring aggregation, summarization, and generation of reports data integrity, and facilitating efficient retrieval and manipulation of - Data processing may be performed in real-time or in batches, information. depending on the requirements of the organization. For AlS, accurate and reliable data management is crucial for Examples: generating financial reports. conducting analysis, and supporting a. Financial Calculations: AlS systems process transactional data to decision-making processes. calculate financial metrics such as revenue, expenses, profits, and cash flows. NOTABLE DATES AND INDIVIDUALS b. Inventory Management: AlS systems update inventory levels, track 1. 1960's-1970's - Edgar F. Codd, an English computer scientist, stock movements, and generate reports on stock levels, reorder introduced the relational model for database management in his points, and stockouts. (e.g. Just-in-Time (JIT) Inventory – to landmark paper "A Relational Model of Data for Large Shared Data minimize or optimize the use of raw materials, at that moment, at that Banks" published in 1970 time) 2. 1970's-1980's - The development of Structured Query Language c. Customer Relationship Management (CRM): AIS systems analyze (SQL) as a standard language for interacting with relational customer transaction data to identify patterns, preferences, and databases. trends, enabling personalized marketing campaigns, targeted 3. 1980’s-1990s - Oracle Corporation, founded by Larry Ellison, Bob promotions, and customer segmentation. Miner, and Ed Oates in 1977, grew to become a dominant player in the database market with its Oracle Database product. INFORMATION OUTPUT 4. 1990’s-2000's - The rise of enterprise resource planning (ERP) - Reports, dashboards, and data visualizations are common output systems led to increased demand for robust and scalable database formats used to communicate financial and operational information solutions to support integrated business processes. to stakeholders. 5. 2000's-Present - The ongoing development of Al and machine - Information output should be timely, accurate, and relevant to learning technologies is driving innovation in database management support effective decision-making. systems, with a focus on predictive analytics, real-time processing, Examples: and automation. a. Financial Statements: AlS systems generate financial reports such as balance sheets, income statements, and cash flow statements to ENTERPRISE RESOURCE PLANNING (ERP) provide insights into an organization's financial performance. b. Management Dashboards: Executives and managers use Definition and Scope: dashboards to visualize key performance indicators (KPIs), trends, Enterprise Resource Planning (ERP) systems are integrated software and metrics related to sales, operations, finance, and other areas. solutions designed to streamline and automate core business (KPIs – just like a grading system, directed towards employees. It is processes across departments and functions within an organization. an indicator or an assessments) ERP systems typically cover areas such as finance, accounting, c. Alerts and Notifications: AlS systems send alerts and notifications human resources, supply chain management, manufacturing, and to stakeholders for critical events, exceptions, or threshold breaches, customer relationship management. enabling timely responses and corrective actions. KEY FEATURES AND MODULES: • ERP systems offer a suite of modules or applications that address specific functional areas of the organization. • Common ERP modules include financial management, procurement, inventory management, production planning, sales and distribution, and customer relationship management (CRM). • Integration among modules enables seamless data flow and process automation across the organization.
BENEFITS OF ERP SYSTEMS:
• ERP systems help improve operational efficiency, visibility, and collaboration by providing a unified platform for managing business processes. • Benefits include streamlined workflows, reduced data redundancy, improved decision-making through real-time insights, and enhanced customer satisfaction. • ERP systems enable standardization of business processes and compliance with regulatory requirements.
IMPLEMENTATION AND CONSIDERATIONS:
• ERP implementation is a complex undertaking that requires careful planning, stakeholder engagement, and organizational change management. • Key considerations include defining business requirements, selecting the right ERP vendor and solution, data migration, customization, training, and ongoing support and maintenance. • Successful ERP implementation requires alignment with organizational goals, strong executive sponsorship, and effective communication throughout the process.