chapter 15-1. chapter 15-2 accounting information systems, 1 st edition it infrastructure for...

Chapter 15-1

Chapter 15-2 Accounting Information Systems, 1st Edition

IT Infrastructure for E-Business

Chapter 15-3

1. The overview of an ERP system

2. The history of ERP systems

3. Current ERP system characteristics

4. The modules of an ERP system

5. The market segments of ERP software systems

6. Implementation issues of ERP systems

7. The benefits and risks of ERP systems

8. ERP systems and the Sarbanes–Oxley Act of 2002

Study ObjectivesStudy ObjectivesStudy ObjectivesStudy Objectives

Chapter 15-4 SO 1 The overview of an ERP systemSO 1 The overview of an ERP system

Overview of ERP SystemsOverview of ERP SystemsOverview of ERP SystemsOverview of ERP Systems

Enterprise Resource Planning (ERP) system integrates all business processes and functions into a single software system, using a single database.

ERP system components:

1. Financials

2. Human resources

3. Procurement and logistics

4. Product development and manufacturing

5. Sales and services

6. Analytics

Data in a(n)

1. Operational database

2. Data warehouse

Chapter 15-5 SO 1 The overview of an ERP systemSO 1 The overview of an ERP system


Exhibit 15-1 An ERP System

Chapter 15-6

b. Reducing inventory quantities.

Manufacturing companies implement ERP systems for the primary purpose of

Concept CheckConcept Check

c. Sharing information.

d. Reducing investments.

a. Increasing productivity.

SO 1 The overview of an ERP systemSO 1 The overview of an ERP system


Chapter 15-7 SO 2 The history of ERP systemsSO 2 The history of ERP systems

History of ERP SystemsHistory of ERP SystemsHistory of ERP SystemsHistory of ERP Systems

ERP systems:

Developed during the 1960s and 1970s.

First generation was materials requirements planning (MRP) software.

MRP evolved into manufacturing resource planning (MRP II).

ERP software did not become popular with large corporations until the 1990s.

Chapter 15-8

b. Data storage.

In the late 1990s, the Y2K compatibility issue was concerned primarily with computer systems’


c. Human resource comparisons.

d. Capital budgeting.

a. File retrieval capability.

SO 2 The history of ERP systemsSO 2 The history of ERP systems

History of ERP SystemsHistory of ERP SystemsHistory of ERP SystemsHistory of ERP Systems

Chapter 15-9 SO 3 Current ERP system characteristicsSO 3 Current ERP system characteristics

Current ERP System CharacteristicsCurrent ERP System CharacteristicsCurrent ERP System CharacteristicsCurrent ERP System Characteristics

EDI, Internet EDI, or extranets are used to connect a company’s ERP system to the IT systems of its suppliers and customers.

Exhibit 15-2 An ERP II System



ERP spending in 2005 was up 16% over 2004. Some reasons for the increase are:

1. Need to improve customer service through standardizing and combining business processes.

2. Global companies may have separate ERP systems in different countries.

3. Aging ERP systems.

4. Bigger IT budgets in 2005.

5. Many companies needed upgraded systems to comply with Sarbanes–Oxley Act.

Chapter 15-11


SO 3 Current ERP system characteristicsSO 3 Current ERP system characteristics

Exhibit 15-3Pie Chart of ERP Implementations

Chapter 15-12

b. Globalization and increased competitive pressures.

Which of the following is not one of the reasons for increased spending on ERP systems in recent years?


c. The need for earnings management.

d. The need for customer service enhancements.

a. The need for Sarbanes-Oxley compliance.




ERP ModulesERP ModulesERP ModulesERP Modules

The top-selling ERP system for large corporations and organizations is SAP.

Exhibit 15-4SAP® View of ERP Modules

Chapter 15-14


BE 36: Match the ERP modules with their purpose of the related processes.

a. Taking customer orders and preparing for the impending revenue and cash collection.


Chapter 15-15


b. Maintenance of the general ledger and supporting journals and subledgers.



Chapter 15-16


c. Keeping track of purchasing and movement of goods and materials.



Chapter 15-17


d. Accounting for personnel and payroll activities.



Chapter 15-18


e. Data mining and other processes for obtaining feedback and supporting managerial decision making.



Chapter 15-19


f. Planning and scheduling of conversion activities.



Chapter 15-20 SO 5 The market segments of ERP software systemsSO 5 The market segments of ERP software systems

Market Segments of ERP SystemsMarket Segments of ERP SystemsMarket Segments of ERP SystemsMarket Segments of ERP Systems

Tier One Software

Usually implemented in very large organizations.

Minimum cost to purchase is approximately $350,000. Often, the cost exceeds $1 million.

Three most popular ERP systems in tier one are SAP, Oracle, and Peoplesoft.

Chapter 15-21 SO 5 The market segments of ERP software systemsSO 5 The market segments of ERP software systems


Tier Two Software

Intended for organizations with approximately $25 to $250 million in sales.

Popular ERP systems are Axapta, Epicor, MAS 500 ERP, Great Plains ERP, and Macola ERP.

Price range between $30,000 and $100,000.

Chapter 15-22

b. Modular implementation.

The type of ERP system used by large, multinational corporations is known as


c. Tier one software.

d. Tier two software.

a. Big bang implementation.

SO 5 The market segments of ERP software systemsSO 5 The market segments of ERP software systems


Chapter 15-23 SO 6 Implementation issues of ERP SO 6 Implementation issues of ERP

systemssystems

Implementation of ERP SystemsImplementation of ERP SystemsImplementation of ERP SystemsImplementation of ERP Systems

Important factors and issues to considers when implementing an ERP system.

1. Hiring a consulting firm

2. The best fit ERP system

3. Which modules to implement

4. Best of breed, verses ERP modules

5. Business process reengineering

6. Customization of ERP system

7. Costs of hardware and software

8. Testing the ERP system

9. Data conversion

10.Training of employees

11.Method of conversion, or “go live”

Big Bang Location-Wise Modular

Chapter 15-24

b. The modular implementation approach.

Which of the following ERP approaches accomplishes the ERP implementation beginning with one department?


c. The big bang approach.

d. The location-wise implementation method.

a. The pilot method.

SO 6 Implementation issues of ERP SO 6 Implementation issues of ERP systemssystems

Implementation of ERP SystemsImplementation of ERP SystemsImplementation of ERP SystemsImplementation of ERP Systems

Chapter 15-25

Benefits and Risks of ERP SystemsBenefits and Risks of ERP SystemsBenefits and Risks of ERP SystemsBenefits and Risks of ERP Systems

Benefits of ERP Systems

1. Interactive nature of the modules.

2. Real-time nature of processing.

3. “Best Practices” nature of the processes.

4. Single database enhances sharing of information.

5. Capability to analyze large amounts of data.

6. Capability to enhance e-commerce and e-business

7. Capability to interact in real-time.

8. ERP systems are scalable.

SO 7 The benefits and risks of ERP systemsSO 7 The benefits and risks of ERP systems

Chapter 15-26

Benefits and Risks of ERP SystemsBenefits and Risks of ERP SystemsBenefits and Risks of ERP SystemsBenefits and Risks of ERP Systems

Risks of ERP Systems

1. Implementation Risks

2. Operation Risks

a. Security

b. Availability

c. Processing integrity

d. Online privacy

e. Confidentiality

SO 7 The benefits and risks of ERP systemsSO 7 The benefits and risks of ERP systems

Chapter 15-27

ERP Systems and the Sarbanes-ERP Systems and the Sarbanes-Oxley ActOxley ActERP Systems and the Sarbanes-ERP Systems and the Sarbanes-Oxley ActOxley Act

SO 8 ERP systems and the Sarbanes–Oxley Act of 2002SO 8 ERP systems and the Sarbanes–Oxley Act of 2002

ERP systems

Provide feedback information to management regarding internal control.

Tracking each employee’s ID and password,

Used to properly segregate duties.

Can incorporate a matrix of tasks that are incompatible.

Allows real-time monitoring and reporting of exceptions.

Chapter 15-28

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chapter 15-1. chapter 15-2 accounting information systems, 1 st edition it infrastructure for...

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