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108 Cards in this Set
- Front
- Back
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business process
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= is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers. It often can be visualized with a flowchart as a sequence of activities with interleaving decision points or with a Process Matrix as a sequence of activities with relevance rules based on the data in the process.(components of an information system)
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operations process
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a man-made system consisting of the people, equipment, organization, policies, and procedures whose objective is to accomplish the work of the organization.
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management process
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= a man-made system consisting of the people, authority, organization, policies, and procedures whose objective is to plan and control the operations of the organization.
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system
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a set of interdependent elements that together accomplish specific objectives. A system must have organization, interrelationships, integration, and central objectives.
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subsystem
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a part of a system; these parts are interrelated or integrated as a single system.
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data
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raw facts; facts or figures in raw form
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information
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useful decision making; data presented in a form that is useful in a decision making activity.
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reliability
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relates to the provision of appropriate information management to operate the entity and exercise its fiduciary and governance responsibilities.
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validity
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an information quality concerning the inclusion of actual authorized events and actual objects.
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accuracy
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the correspondence or agreement between the information and the actual events or objects that the information represents.
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completeness
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the degree to which information includes data about every relevant object or event necessary to make a decision and includes that information only once.
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relevance
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information that is capable of making a difference in a decision-making situation by reducing uncertainty or increasing knowledge for that particular decision.
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timeliness
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information that is available to a decision maker before it loses its capacity to influence a decision.
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decision making
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the process of making choices, which is the central activity of all management.
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intelligence
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searching the environment for conditions calling for a decision.
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design
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inventing, developing, and analyzing possible courses of action.
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choice
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selecting a course of action
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structured decisions
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those for which all three decision phases are relatively routine or repetitive. (intelligence,design,choice)
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Unstructured decisions
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a decision for which none of the decision phases are routine or repetitive.
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Roles of an Accountant
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a. DESIGNER = the accountant brings knowledge of accounting principles, auditing principles, IS techniques, and systems development methods.
b. USER= the accountant may also be called to participate in the AIS design process. The user must know how systems are developed, the techniques used to develop a system, and the technology that will be used in a new system. c. AUDITOR = As internal and external auditors, accountants audit the AIS or provide the assurance services. Auditors are interested in the reliability of the accounting data and of the reports produced by the system. They may test the system’s controls, assess the system’s efficiency and effectiveness, and participate in the system design process. To be effective, the auditor must possess knowledge of systems development techniques, of controls, of the technology used in the IS, and of the design and operation of the AIS. |
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enterprise system
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Integrate business processes and information from all of an organization’s functional areas. Helps coordinate the operation of business functions and provide a central information resource for the organization
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Types of Systems
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a. TPS = transaction processing system. Deals with supply and demand; done by lowest level of management pyramid.
b. DSS= decision support system. Used by middle management. c. MIS = management information system. Also used by middle management. d. EIS = executive information systems. Ie stock market and industry |
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ERP
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enterprise resource planning. Software packages that can be used for the core systems necessary to support enterprise systems.
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ERP
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enterprise resource planning. Software packages that can be used for the core systems necessary to support enterprise systems.
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CRM
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customer relationship management. Maintains an organizations customer-related database. This data is collected from multiple customer interactions, such as web, call centers, field sales, service calls, and dealer and partner networks.
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SCM
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supply chain management. Helps plan and execute the steps in an organizations supply chain, including demand planning; acquiring inventory; and manufacturing, distributing, and selling the product.
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Middleware
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a software product that connects two or more separate applications or software modules.
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Best of Breed
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combines modules from various vendors to create an information system that better meets an organizations needs to obtain B-O-B functionality of modules.
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ATP
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available to promise. When the customer will receive the product/service.
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Value of System Integration
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b. Without integrated information systems, organizations have difficulty managing on a day-to-day basis and being successful in the long run.
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Value Chain Model Primary Activities
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i. Inbound logistics = automated warehousing systems
ii. Operations = computer controlled machining systems iii. Sales and Marketing = computerized ordering systems iv. Service = equipment maintenance systems v. Outbound Logistics= automated shipment scheduling systems |
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Value Chain Model Secondary Activities
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i. Administration and management = electronic scheduling and messaging systems.
ii. Human resources = workforce planning systems iii. Technology = computer-aided design systems iv. Procurement = computerized ordering systems |
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Order-to-Cash
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the events surrounding the sale of goods to a customer, the recognition of revenue, and the collection of the customer payment. Comprises all activities in the order entry/sales process, billing/AR/cash receipts process and general ledger process.
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Purchase-to-Pay
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the events surrounding the purchase of goods from a vendor, the recognition of the cost of those goods, and the payment to the vendor.
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SD
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sales and distribution.
1. Contains functions related to the sale of goods to customers and includes recording a customer order, shipping goods to the customer, and billing the customer. 2. Connects to = MM, FI, CO |
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MM
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materials management.
1. Contains functions related to the acquisition of goods from vendors and management of the goods while they are in stock. Includes preparing and recording a PO, receiving the goods from the vendor, and recording the vendor’s invoice. 2. Interacts with = SD, FI, CO |
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FI
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= financial accounting.
1. Plays a central role in the SAP system. Incorporates data from other modules into general ledger accounts and financial statements. Business events from other modules are incorporated into the general ledger accounts and included in the external financial statements. The FI module also includes accounts receivable and accounts payable functions to record and manage that data directly and to complete events begun in the SD and MM modules. |
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CO/PA
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controlling and profitability analysis.
1. Handles internal accounting including cost center accounting, profitability analysis for sales, activity-based accounting, and budgeting |
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HR
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human resources.
1. Includes functions related to Recruiting, management and administration of personnel, Payroll processing, Training and travel, benefits, and reports. |
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Advantages of Enterprise Systems
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i. Single database
ii. Integrated system iii. Process orientation iv. Standardization of business processes and data, easier to understand across organization v. Timely info vi. Better financial management vii. Improved cash management |
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Disadvantages of Enterprise Systems
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i. Centralized control vs decentralized control
ii. Inability to support traditional business process that may be best practices for that organization iii. Loss of flexibility in rapidly adapting to desired new business processes in the post-implementation period. iv. Increased complexity of maintaining security, control, and access permissions for specific information embedded in central database v. The rigidity of ‘standardization’ can impede creative thinking related to ongoing business process improvements |
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e-business
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application of electronic networks (including internet) to exchange information and link business processes among organizations and individuals.
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B2C
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business to customer (ie amazon.com)
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B2B
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business to business; Business-to-Business covers various business interactions from producers of raw materials to retailers. For example – vendor managed inventory – when Wal-Mart scans an item, not only are sales recorded, but the warehouse inventory balance is also updated. Wal-Mart’s vendors read that data, and, if the warehouse quantities fall below the reorder point for the item, the vendor ships replenishment stock to the Wal-Mart warehouse automatically.
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manual accounting process
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pencil to paper journal entries, posting to journal, posting to general ledger, create trial balance.
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automated accounting process
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record invoice (on computer) to sales journal. Automatically updates AR master data, GL master data, and prepares trial balance.
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master data
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repositories of relatively permanent data maintained over an extended period of time. Contains data related to entities, places, and things. Includes AR master data, customer master data, and GL master data.
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transaction data
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a book of original entry used for recording business events. These business events comprise the activities of the organization, such as purchasing goods from vendors and collecting cash from customers.
Business event data are often used as a key source to update various master data. These master data updates incorporate new master data into existing master data by adding, deleting, and replacing master data or records. |
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OLTE
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a. Use of data entry devices allows business event data to be entered directly into the information system at the time and place that the business event occurs. Merges the traditional sub processes of business event occurrence and records business event data. Considered online because the data entry device is connected to the computer.
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Advantages of an OLTE
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b. Eliminates the need to have one person enter business event data on a source document and then have a second person perform the data entry to convert the business event data to a computer ready form. The only human impact on accuracy of the input data us the necessity to properly scan items into the system.
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OLRT
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a. Gather and record business event data at time of occurrence. Update master data instantaneously. Provide results in real time. Also known as immediate mode in which little or no delay occurs between any two data processing steps.
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Advantages of OLRT
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b. Allows users to nearly eliminate the delay in accessing up to date information.
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communication networks
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Client/server technology, Local area networks (LANs), Wide area networks (WANs), Internet, Web browsers, Intranet, Extranet
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Packet Switching
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Messages are divided into small packets for transmission. Individual packets of the same message may take different routes to their destinations.
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Client/Server Computing
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The physical and logical division between user-oriented application programs that are run at the client level (i.e., user level) and the shared data that must be available through the server (i.e., a separate computer that handles centrally shared activities–such as databases and printing queues–between multiple users).
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Intranet
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Mini internal equivalents to the Internet that link an organization’s internal documents and databases into a system that is accessible only to members of the organization, through Web browsers or, increasingly, through internally developed software designed to maximize the benefits from utilization of organizational information resources.
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Extranet
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By combining the benefits of the Internet and intranets, many organizations have begun to allow customers, vendors, and other members of their value system access to the company’s intranet. This type of network, which had been extended to limited external access, is referred to as an extranet.
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email
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the electronic transmission of nonstandarized messages between two individuals who are linked via a communications network (usually and intranet or the Internet).
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VAN (value added network)
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a service that acts as the EDI “post office.” An organization can connect to the VAN when it wants, leave its ongoing messages, and, at the same time, pick up incoming messages from its “mailbox.” A VAN generally operates as a hub by linking many business partners together.
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Service-oriented architectures (SOAs)
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well-defined, independent functions (or applications) that can be distributed over a network via Web Services. The SOA applications are essentially plug-and-play components that are available over the Internet. To be plug-and-play, they must be for a well defined process, as well as self-contained and independent of other processes.
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Cloud Computing
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the use of the Internet to provide scalable services, such as software, and resources, such as data storage, to users. Examples include Google.
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"Narrative"
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Describes order entry systems, which is interpreted and used to derive DFDs
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Context Diagram
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a top-level, or least a detailed, diagram of a system depicting the system and all its activities as a single bubble and showing the data flows into and out of the system and into and out of the external entities (those entities (i.e., persons, places, or things) outside the system that send data to, or receive data from, the system.
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Balanced DFDs
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c. Two DFDs are balanced when they have equivalent external data flows.
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tables of entities and activities
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We create tables of “entities and activities” since the list will lead to a quicker and more accurate preparation of DFDs and systems flowcharts because it clarifies the information contained in a narrative and helps document the system correctly.
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elements of a logical DFD
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a. Graphical representation of a system showing the systems processes (as bubbles), data stores, and the flows of data into and out of the processes and data stores.
b. Specifies what activities the system is performing, without specifying how, where, or by whom the activities are accomplished. c. Logical DFDs portray a systems activities. Physical DFDs depict a systems infrastructure |
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Systems Flowchart
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a graphical representation of a business process, including information processes (inputs, data processing, data storage, and outputs), as well as the related operations processes (people, equipment, organization, and work activities).
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Database
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defined as a collection of data within 1 or more files. In databases, accounting and other business information is stored in database tables. The information stored in these tables is used to generate accounting reports (for example, financial statements). There are two main aspects to managing data in a database accounting system: the creation and maintenance of master data, and the recording of business event data.
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Why do businesses use databases?
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Some companies keep a separate database, called a data warehouse, to compile historical data over time. This data can be used for various analytical purposes, such as identifying trends to make predictions about the future.
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Business Intelligence
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Business intelligence uses state-of-the-art information technology to store and analyze data in order to help managers make tactical and strategic decisions for their companies. This data is typically obtained from the company’s data warehouse. Business intelligence uses both financial and nonfinancial data, related to both accounting and non-accounting functions, from both inside and outside of the company. The ultimate goal is to convert this data into information so that managers can use it to make the best decisions.
Business Intelligence systems are usually added on to the company’s existing ERP system. |
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Application Approach
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-focuses on the process being performed, rather than the data itself. Data are important to the extent that they play a supportive role to the programs that run in each application system. Each application collects and manages its own data in a separate file from those of other applications.
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Centralized database Approach
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the data itself is emphasized, unlike in the application approach. Business event data are
stored in relational database tables rather than separate files. This improves the efficiency of business event data processing because it eliminates data redundancies and improves data integrity. In essence, databases have allowed businesses to create integrated business information systems consisting of data from various areas of a company’s operations in a collection of relational tables. This aids employees in all departments of the business because they can aggregate and use the data in whatever way best suits their needs. |
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Advantages of a centralized database
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-elimination of data redundancy – an item of data is stored only once; this saves the cost of
having to store and maintain duplicate files and data elements. -ease of maintenance – since an item of data is only stored once, it’s easy to make additions, deletions, or changes to the database. -reduced labor and storage costs – no redundant data, so storage space is reduced, which saves on storage costs -data integrity – when several versions of the same data are stored, inconsistencies will arise; with only one version of each data item, these inconsistencies are prevented. -data independence – applications and databases can exist independently, so a database can be modified without affecting applications using that database. In systems using a centralized database approach, data independence is reflected through a three-tier structure: the user or presentation tier, the application or business logic tier (“middleware”), and the data or database tier -privacy – security modules available in most datab |
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DBMS
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set of integrated programs designed to simplify the tasks of creating, accessing, and managing a centralized database. Integrates a collection of files that are independent of application programs and are available to satisfy a number of different processing needs. Supports normal data processing needs and provides data useful to managers.
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Physical View
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how the data is actually stored on the computer hardware
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Logical View
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how a user thinks of the data in a database
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Parts of a relational DBMS
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-entity – an individual fact or type of information
-table – a place to store data; a two-dimensional collection of information -query – tool that allows users to access data stored in a table and convert the data into information -form – an onscreen presentation that allows users to view data in tables (or collected by queries of various tables) and input new data -report – a printed list and summary of data stored in tables or collected by queries of various tables |
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Entity
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an individual fact or type of information (such as customer, sales, inventory, etc.).
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Many-to-Many
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an example of this can be found in the relationship between inventory items
and orders; each inventory item can have many orders, while each order can have many inventory items |
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One-to-Many
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an example can be found in the relationship between orders and customers; each customer may have many orders, but for each given order, there can be only one customer. Therefore, the relationship is one-to-many.
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One-to-One
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this means that an instance of an entity is related to one specific instance of another entity. If two entities have a 1-to-1 relationship, each row in the first table will be related to just 1 row in the second table. In this instance, the two tables are usually combined into one.
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Normalization
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the process of transforming tables that that are not in normal form into tables that comply with normal form rules by applying the normal forms to collections of data. he objective of normalization is to get all of the relations in the database model to be in 3NF (third normal form).
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1NF
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a table is in 1NF if it does not contain certain repeating groups. To transform a table from unnormalized form (where there are repeating attributes within each row) to 1NF involved removing the repeating groups.
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2NF
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a table is in 2NF if it is 1NF but contains no partial dependencies. A partial dependency arises when there is an attribute (for example, Item Name) that is dependent on a portion of the primary key (Item Number), not on the entire key.
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3NF
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a table is in 3NF if it is in 2NF with no transitive dependencies. A transitive dependency exists in a table when a non-key attribute is functionally dependent on another non-key attribute.
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QBE(Query by Example)
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provides a simple interface for a user to enter queries. Instead of writing an entire SQL command, a user can simply fill in blanks or select items to define the query they want to perform. (to see some example queries
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SQL(Structured Query Language)
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a powerful database language that can be used to define database systems, query the database for information, generate reports from the database, and access databases from within programs using embedded SQL commands. It is the de facto standard database query language. Using an intelligent interface, a user enters a description of the desired output, and the system generates an SQL query.
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SDLC (Systems development cycle)
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Procedures or steps undertaken to create, modify, or maintain an organization’s information system The progression through the phases of the systems development process, from birth through
implementation to ongoing use |
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SDLC methodology
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formalized, standardized, documented set of activities used to manage a systems development project
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PADDTIM
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Planning, analysis, design, development, testing, implementation, maintenance
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Planning
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From mission to needs
o Assess strategic information needs (e.g., business needs and strategy, business requirements, feedback, users requests for new system) o Competitive Environment o Legacy Situation (system interfaces, architecture, and user requirements o Produce plan and timetable |
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Analysis
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Identify the problem
o Define problems – Nature and scope o Specify objectives o Determine feasibility – technical, economic, legal, operational, schedule o Prepare Proposal o Evaluate Proposal – priority vs. cost vs. strategic impact o Gather information about the current system (e.g., Diagrams – DFDs, ERDs) o Conceptualize alternative designs – DFDs, systems diagrams, controls |
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Design
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Systems selection – Acquire or Build?
Acquisition- request and evaluate requests for proposals, outsourced/hosted solutions (ASP, SaaS, Cloud computing) (6,7,10) Feasibility analysis and cost-benefit analysis of each option |
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Development
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waterfall, extreme programming, prototyping, rapid application development
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Testing
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Evaluate different aspects of the system
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Implementation
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move it to a live situation (parallel, direct, modular)
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Maintenance
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system updates (corrective, perfective, adaptive)
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Phases of project management
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CONCEPTION (Planning and Analysis – SDLC) – Project Planning, Project Charter (11)
DEFINITION (Analysis and Design – SDLC) – Project Planning, Project Charter (11) EXECUTION (Development, Testing, Implementation – SDLC) o Design, Development, Procurement, construction/production, implementation o Compares plan to actual performance, time, and cost OPERATION (Implementation and Maintenance – SDLC) o the project has been terminated, system evaluation and maintenance |
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project deliverable
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any measurable, tangible, verifiable outcome, result, or item that is produced to complete a project
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Sign off
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signify approval of the development process and the system being developed
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Waterfall Method
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original methodology, not commonly used anymore o Step by step process o Does not allow you to incorporate changes o Risky with large projects because if you encounter problems down the line must recreate the
phases |
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Rapid Application Development (RAD)
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basic functionality, quick
o Includes 20% to 40% functionality, includes the key functions or critical features necessary for the system |
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Extreme Programming (XP)
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breaks project into small phases, separate phases to finish each component
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Prototyping
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Full function system, but missing some components, includes basic requirements to give you an
idead of what the system will look like o Identify basic requirements, develop a working prototype first, and then use the prototype o If the user is NOT satisfied, revise and enhance the prototype o If the user is satisfied, create an operational prototype |
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Applications Service Provider (ASP)
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Applications hosted online Offers a traditional outsourcing by hosting, managing, and providing access to application software and
hardware over the internet to multiple customers (accessed over the internet, web interfaces) o Relives the company of developing or buying and installing software and hardware User obtain constantly updated software, no technical resources to install or support the application Good choice for applications the user does not want to purchase or maintain, simply wants access from any internet access point Fee is rental based on usage or some are free and obtain revenue from advertising and sale of other service |
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Parallel Implementation
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most controlled o Both the old and new systems operate together for a period of time o During this period, usually one operating cycle (e.g., 1 month or quarter), the outputs of the
systems are compared to determine whether the new system is operating comparably to the old o Management makes the decision when ready to terminate the old system o Most controlled – the old system is not abandoned until users are satisfied that the new system adequately replaced the old o Costly – expensive to keep 2 systems running simultaneously (e.g., excess computer processing capacity, data storage space, human labor) |
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Direct Implementation
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most risky – “big bang” or “cold turkey”
o Old system is terminated and new system begins simultaneously o No validation that the new system operates comparably with the old o Can lead to a disaster if not carefully tested, planned, and executed o Level of comfort or control is lost, BUT less costly With large implementations, such as enterprise systems, often capacity- or cost-prohibitive to take parallel approach o Force users to learn the new system b/c no old system to fall back on Immediate negative effects on user satisfaction- do not want to let go of the old system or fear new system However, if implementation is properly planned, the users are thoroughly trained, could lead to increased satisfaction |
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Modular Implementation
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“phased” approach
o Can be combined with parallel or direct approaches to tailor implementation to the circumstances If properly planned and executed, modular can combine the safety and control of parallel approach with cost/time savings of a direct approach o New system is either implemented one subsystem or module at a time or is introduced one organization unit at a time o Permits pilot testing of a system or system component and elimination of any problems discovered before full implementation |
