EXAM 2 CHAP 15
Centralized database
A central database stores each data item just once (thus avoiding data redundancy and inconsistency), and Makes it immediately available to all the various functions in an organization. Example: price lists of product selling prices Multiple copies (data redundancy) are maintained by a variety of functional units such as marketing department, A/R function, production department, web master, etc. Overtime, price list data will diverge among these different functional areas (data inconsistency). A central database, however, can ensure data integrity across these functional areas.
Mid-Range Accounting Software
A mid-range software package is useful when transaction processing needs grow in volume and in complexity. Some examples are Microsoft's Dynamics GP Sage software's MAS 90, MAS200 , Everest and ACCPAC Modules can be purchased separately. More advanced features such as foreign currency transactions are incorporated. Can be deployed from an array of options including the hosted solution arrangement which facilitates scalability and accessibility.
Accounting Software
primarily processes bookkeeping transactions with great speed and accuracy organizes transaction processing in interconnected modules General ledger module (foundation of the system) Other modules: A/R, A/P, inventory, payroll, etc Journal entries recorded in other modules update the general ledger module. provides sophisticated financial and budgeting analysis tools and customized, graphic accounting reports. has E-commerce features. Scalability accommodates business growth and leads to significant cost savings
Business Process Reengineering (BRP)
Buying an ERP system is akin to a new way of doing business entails reengineering an organization by conforming to the best practices of the industry encourages the separate units to conform to standard practices and be more productive Although a business may either change its processes to fit the functionality in the ERP system, or change the software to fit the existing business practice, customizing ERP software is not encouraged because it can introduce bugs into the system, and can create problems with software upgrades Corporate culture impact: resistance to changes
Costs associated with ERP Implementation
Costs of hardware and software Costs of training: technical training and training in the new business processes Cost of data conversion: transferring data from the legacy system to the new system, and setting up uniform codes for data items Costs of software maintenance and upgrade Note that the cost of software package itself is small in comparison to the costs of associated with implementing and using the package. Risk of implementation failure (big bang vs. modular approach)
Costs and Benefits of Enterprise Systems
Hardware Software Training Technical Business processes Data conversion Interfaces and customization Professional services Reassigned employees Software maintenance Software upgrades Reduction in inventory investment Improvement in asset management Improved decision-making Resolution of data redundancy and integrity problems Increase in flexibility and responsiveness Improved customer service and satisfaction Global and supply chain integration
Enterprise-Wide Accounting Software Solutions
High-end accounting software programs such as Enterprise resource planning (ERP) systems do much more than process strictly accounting data. are essentially very complex packages that 1) are designed using a REA model, and 2) use relational database technology as the underlying implementation platform ERP systems include SAP Oracle/PeopleSoft Microsoft Dynamics GP Enterprise Two important features of ERP software are a central database & integration.
Benefits from Enterprise Solutions
Many of the benefits are from cost reductions in inventory and employees as a result of streamlining, speeding up processes, or consolidating processes. Other benefits include data integrity and data analysis features. Benefits such as improving decision process, achieving the business objectives more effectively can be sometimes difficult to quantify.
Small Business Accounting Software
Small Business Accounting Software is a good AIS solutions for businesses with less than $5 million in revenue, few employees and relatively a small number of transactions per month. At the low end, it is available for as low as $100. Popular small business accounting software include: Microsoft Small Business Accounting Quickbooks & Quicken by Intuit Peachtree products
Buying Accounting Software
The approach to buying accounting software varies with the complexity of the business and features of the software. At the low end, for small businesses, the approach is much quicker and less expensive. Mid-range or high-end accounting software packages are usually purchased from a value-added reseller (VAR) VARs provide buyers with a broad array of services such as installation, customization, and training Consultants are hired to do a thorough analysis of the organization's needs and processes for companies considering implementing a ERP system.
ERP Functions
Traditional ERP functions are concerned with back-office functions which primarily deal with internal systems, such as manufacturing and human resources. Today's ERP systems are extended with e-business and other front office capabilities, and have the ability to interface with customers and suppliers through a variety of applications including: Traditional capabilities Supply chain management (SCM) Customer relationship management (CRM) Business intelligence (BI) tools Partner relationship management (PRM)
Integrated Business Processes
Unlike traditional accounting applications, an ERP integrates the financial (accounting) module with other subsystems (e.g. human resources, manufacturing, distribution). Example of cross-functional integration: An ERP system can be configured to automatically react to the creation of a new customer order by Updating the shipping schedule Updating the production schedule Ordering any needed parts Updating online sales