Ais Chapter 10

Front 1

Encarta definition of E-business

Back 1

The exchange of goods and services by means of the Internet or other computer networks. E-commerce follows the same basic principles as traditional commerce--that is buyers and sellers come together to exchange goods for money. But rather than conducting business in the traditional way--in stores and other "brick and mortar" buildings or through mail order catalogs and telephone operators--in e-commerce buyers and sellers transact business over networked computers.

Front 2

Benefits of e-business

Back 2

1. Marketing: geographic location, market expansion, hard to reach markets, more targeted marketing
2. Reduced operating costs: marketing, telecommunications, transaction processing.
3. Streamlined operations
4. Quicker, easier product and service delivery

Front 3

Costs of e-business

Back 3

1. Financial costs associated with setting up networks.
2. Need to develop different, better internal control systems
3. Potential for customer distrust.
4. Severe consequences for technology breakdowns.

Front 4

FRom a marketing point of view what does e-business allow customers to do?

Back 4

From a marketing point of view, e-business allows companies to reach customers they might never be able to contact in a traditional brick and mortar operating. For example, while visiting Budapest, Hungary, his travel included a flight on Malev, the Hungarian national airline, without the benefit of e-business, I might never have known about or considered flying with Malev because their routes are restricted to a few geographic areas.

Front 5

How does e-business help reduce operating costs?

Back 5

Consider for example moviefone or fandango which allow moviegoers to purchase their tickets before arriving at the theater. Moving ticketing sales to internet would help theaters reduce personnel costs in the box office, In addition it reduces the costs of transaction processing, since online ticket sales could be fed directly into the company's AIS system or ERP system, lessening the need for employees to make journal entries and update accounting records.

Front 6

How does e-business help companies streamline their operations?

Back 6

For example, tourists in so ca, can purchase ticekts to disneyland and other attractions online, print them out on their own computers eliminating the need to stop at a ticekt booth when they arrive at the park.

Front 7

How does e-business promote quicker, easier product and service delivery?

Back 7

Prior to the advent of e-business, holiday shopping was extremely stressful. Pick out gifts, fight traffic to shop for them, package them securely, ship them well in advance to ensure they arrive on time. Now, with e-business, the process is much simpler. Virtually all of the shopping can be doe at home in an hour or 2.

Front 8

What are the costs involved with switching to an e-business system?

Back 8

There are significant financial costs associated with developing, purchasing, and configuring hardware and software to support the e-business operation. In addition e-business systems necessarily require different kinds of internal controls than brick and mortar operations. Such controls would probably include customer identity authentication via usernames and passwords. Sometimes customers are required to input a control number from the back of their credit card. IN addition billing records must match a credit card company's records as a preventative internal control as well. Most companies engaged in e=business must also process transactions using a secure server dedicated to that point.

Front 9

What are trust services, WebTrust and SysTrust?

Back 9

Trust Services are defined as a set of professional advistory services based on a common framework to address the risks and opportunities of IT. Trust Services principles and criteria are issed by the Assurance Services Executive Committee of the AICPA. Webtrust is the accounting profession's answer to concerns relating to electronic professional guidance and serve as best practices for electronic commerce. Using these new principles and criteria either separately or in combination, CPAs can offer a range of advisory services to help either clients or employers address security, online privacy, availability, and confidentiality if need be.

Front 10

What is Web Trust?

Back 10

Webtrust is the accounting profession's answer to concerns relating to electronic professional guidance and serve as best practices for electronic commerce. Using these new principles and criteria either separately or in combination, CPAs can offer a range of advisory services to help either clients or employers address security, online privacy, availability, and confidentiality if need be.

Front 11

What is SysTrust?

Back 11

SysTrust is the accounting profession's answer to concerns relating to system reliability. SysTrust is based on the Trust Services Principles and Criteria, which constitute professional guidance as well as serving as best practices for system reliabilty. Using these PRinciples and Criteria either separately or in combination, CPAs can offer a wide range of advisory assurance and assurance services to help either clients or employers address their security, availability, processing integrity, and confidentiality needs.

Front 12

Data encryption's role in e-business

Back 12

DAta encryption is another common internal control found in e-business systems. With data encryption, the party that receives data over the internet must have a decryption key to make it understandable; without encryption,, computer criminals can use high tech techniques to incept data as they are transmitted electronically.

Front 13

How are the segregations of duties split?

Back 13

Three important responsibilties should be vested in three different people; phsical custody, authorization for use, and recordkeeping.

Front 14

How does segregation of duties relate to e-business?

Back 14

In e-business operations, designers can restrict access to various parts of the system based on organizational level and or job functon. For example, faculty members can access certain student informatinon that is unavailable to others at a university.

Front 15

What effect does doing business have on customer distrust?

Back 15

Doing business online can create significant amounts of customer distrust--particularly for customers who are accustomed to doing business in a traditional brick and mortar context. Perhaps you knoww someone who refuses to purchase online due to data concerns.

Front 16

What are the risks associated with technology breakdowns

Back 16

Techonolgy breakdowns can result in loss of customer confidence, loss of sales, overloaded customer service lines, and generalized damage to a company's reputation.

Front 17

5 part classification scheme for business classifications.

Back 17

1. Business to consumer B2C Travelocity
2. Business to Business B2B Dell computes
3. Government to consumer G2C IRS
4. Government ot busiiness G2B EDGAR
5. Consumer to consumer C2C Ebay

Front 18

What is involved in a basic AIS system?

Back 18

inputs, processing tools, storage media, inputs and internal controls

Front 19

Can e-business remove the need for human intervention in AIS systems?

Back 19

NO. But it can significantly reduce the need. And all the attendant problems that accompnay it (e.g. data entry mistakes, billing problems, and incorrect journal entries.)

Front 20

From an output perspective what does an e-business system do?

Back 20

It helps facilitate the preparation of general purpose finanical statements and other reports. Used to be that at the end of each day had to manually prepare an A/R aging balance showing each customer's name, balance owed, and length of time the balance had been outstanding. In an e-business system, generating an A/R aging is a matter of pushing a button The computer does the analysis and prints out the results with little or no human effort.

Front 21

Enterprise resource planning system

Back 21

An ERP is a modular, relational database designed to provide internal organizational stakeholders with more timely, comprehensive information for deisions. Because most of these systems are modular, they can be implemented one piece at a time according to an enterprises needs and budget. Because they are relational they organize information in database tables.

Front 22

What do typical ERP modules include?

Back 22

1. customer relationship management
2. financial management
3. human resource management
4. supply chain management

Front 23

What does a customer relationship management ERP system do?

Back 23

Helps the organization manage customer data. Beyond basic data such as customer name, address, and phone number, organizaitons can also capture data such as credit limits, transaction histories, contacts, and appointments and referrals. For example, upon logging into amazon, the system has recommendations based on past purchases.

Front 24

What does a human resource management ERP do?

Back 24

It concerns itself with employee data. Again, they can track mundane data such as name and address. However, an HRM module also might include details on work goals, disciplinary problems, and training and development plans. For example universities can maintain a database of faculty experts for the media and other purposes. If a newspaper reporter wants a quote on the impact or recyclin on the environemtn, public affairs personnel can consult the database and make recommendations.

Front 25

What does supply chain management ERP do?

Back 25

It focuses on vendors--the usual data, plus transaction histories, comments about product quality, and personnel interactions, amont other items. Financial management would go far beyond the basic general purpose financial statements. For example, organizations can input their budget data into a finanicial management module, then generate variance reports quickly and easily at any point in time. Forecasting is another inportant function of most financial management ERP modules.

Front 26

Most ERP systems provide information associated with 4 key stakeholders groups:

Back 26

1. Customers (customer relationship management)
2. employees (human resource management)
3. VEndors (supply chain management)
4. stockholders (financial management)
Manageing an organization in terms of relationships with key stakeholder groups has been referred to as the resource dependencey model of the firm. The RDM assumes that organizations will enter into relationshops with stakeholders to get the resources they need to operate. Most ERP systems help managers stay aware of the importance of those relationships; they also allow an individual anager to concentrate on the relationships that are most important o him/her while simultaneously providing comprehensive information throughout the organization.

Front 27

RDM

Back 27

Manageing an organization in terms of relationships with key stakeholder groups has been referred to as the resource dependencey model of the firm. The RDM assumes that organizations will enter into relationshops with stakeholders to get the resources they need to operate. Most ERP systems help managers stay aware of the importance of those relationships; they also allow an individual anager to concentrate on the relationships that are most important o him/her while simultaneously providing comprehensive information throughout the organization.

Front 28

10 major causes of ERP implementation failure.

Back 28

1. Poor leadership from top magemet
2. Automating existing redundant or non value added processes in the new system
3. Unrealistic expectations.
4. poor project management
5. inadequate educationa nd training
6. trying to maintain the status quo
7. a bad match between ERP software and organizational processes
8. A bad match between ERP software and organizational processes.
9. Inaccurate data in the system.
10. ERP implementation viewed as an IT project.
11. Significant technical difficulties.

Front 29

CAuses of ERP faillture poor leadership from top management

Back 29

Selecting and installing an ERP system is an enormous undertaking in terms of time, money, and energy. Clear, strong independent leadership and support from top management are essential for a successful implementation. Without them, employees are likely to view an ERP system as just another initiative.

Front 30

CAuses of ERP failure automating existing redundant or non value added processes in the new system.

Back 30

Implementation of an ERP system is a fantastic time to reconsider the company's business processes. In other words, do policies, procedures, document flows, and internal controls make sense from a business pov? Do the proesses add value to the organizational stakeholders? In most organizations, at least a few policies and processes will need to be changed to make the most of the ERP system. Otherwise, managers will be doing the sema, inneffective things, only faster.

Front 31

Causes of ERP failure unrealistic expectations

Back 31

An ERP system is desinged to collect, process, and report data and information for making decisions more effectively. They are ot a panacea for problems with organizational culture, poorly designed processes or inadequate internal controls. Expecting the ERP system to fix these types of problems is a forlon hope and will seriously harm the projec'st success.

Front 32

Causes of ERP failure poor project management

Back 32

ERP system selection, testing, and implementation are time intensive, long term projects. To be successful, managers have to apply solid project management techniqes for selecting the right people, completing tasks in the right order, and staying on schedule.

Front 33

CAuses of ERP failure inadequate education and training.

Back 33

This failure is linked to other things on the list. For exampl,e without proper training, employees may have unrealiztic expectations as to what an ERP can do. They may also see the ERP as an IT project rather than an opportunity to analyze and make business processes better.

Front 34

Causes of ERP failure trying to maintain the status quo

Back 34

Since an ERP system is such a major undertaking, implementation will almost always create fear and uncertainty throughout an organization. When people are fearful about their job security and future in the firm they will likely act in very dysfunctional ways, either intentionally or unintentially. To avoid this problem, be upfront and honest from the start about the purpose and possible results of implementing the ERP system.

Front 35

CAuses of ERP failure a bad match between ERP software and organizational processes

Back 35

Every organization has it's own way of doing business. And, while an ERP system can be customized to a degree such modifications are time consuming and expensive manager sshould consult with colleagues in the field about what ERO software has worked well and what has failed for a given industyr.

Front 36

ERP failure inaccurate data in the system

Back 36

The reports and info generated by an ERP system are only as valid and useful as the data that ungrid them. Faulty or innacurate data in the ERP system can be even worse than the same condition in a less integrated system, since they will be used throughout the organization for decision making.

Front 37

ERP failure ERP implementation viewed as an IT project

Back 37

Implementing an ERP system goes way beyond IT requireents. Fundamentally, an ERP project needs to be viewed as holistic, touching not only information techonolgy but also business processes and organizational behavior risks.

Front 38

ERP failure Significant technical difficulties

Back 38

Even though an ERP system isn't solely concerned with IT issues, some technical issues may arise. Bugs in the software, pronlems interfacing with existing information systems, and hardware difficulties.

Front 39

6 conditions necessary for ERP success

Back 39

1. obtain organizational commitment
2. Communicate strategic goals clearly
3. View ERP as an enterprisewide venture.
4. Select a compatible ERP system
5. REsolve multisite issues
6. Ensure data accuracy

Front 40

ERP success Obtain organizational support

Back 40

This speaks to poor leadership. The ERP project team needs to get a clear strong sense of committment ot the project throughout the organization but esp from top management. Without a psychological and financial commitment to see the project through to tis completion, the projct may lose steam when faced with difficult problems.

Front 41

ERP success communicate goals clearly

Back 41

This deals with the risk of unrealistic expectations and also inadequat eeducation. Employees in all levels need to understand the goals of the ERP project--typically, providing better information more quicly for decision making.

Front 42

ERP success View ERP as an enterprisewide venture

Back 42

An ERP system will eventually touch every aspect of operations, therefore; it must be viewed as a companywide project. if it's viewed asn IN IT initiative, managers will lose the opportunity to examine businesses processes thoughtfully and critically--possibly adding to the automatin g redundant or non value added processes.

Front 43

ERP success select compatible ERP system

Back 43

don't believe everything the software vendor and implementation consultants say. ASk other copaanies who have had successful and or unsuccessful ventures.

Front 44

ERP system success ensure data accuracy

Back 44

Final key is related to peoject team needs to educate employees about the importance of accurate data entry; test runs with ficittious dat before the syste goes live is a good idea.

Front 45

Organizations that want to move into e-business have 2 choices for doing so.

Back 45

1. create applications form scratch
2. hire an application service provider

Front 46

What is an application service provider?

Back 46

an APS is a third party entity which deploys, hosts, and manages access to a packaged application and delivers software-based services and solutions to customers across a wide area network from a central data center. Applications are delivered over networks on subscription or rental basis. IN essence, ASPs are a way for companies to outsource some or all aspects of their IT needs.

Front 47

Benefits of ASPs

Back 47

1. less costly than purchasing software outright
2. increased flexibility
3. potentially improved customer service
4. role in disaster recovery plans

Front 48

ASP risks and risk minimization practices.

Back 48

1. psycological and behavioral factors
2. service interruptions
3. compromised data
4. inability to pay monhly fees.
Risk anagement
1. estabilsh a budget for the ASP project
2. back up data daily
3. provide on going training for employees using the ASP
4. create firewalls and encryptions.

Front 49

SAS 70

Back 49

Widely recognized audinting standard developed by the AICPA. A service examniation performed in SAS 7o is widely recognized b/c it represents that a service orga has been thouruh an intensive audit of their control objectives and control activities, which often include controls over IT and related processes. IN today's globla econ service ogrs nust deomonstrate that they have adequate controls wh they host or process data whch belongs to their customers.

Front 50

3 types of C2C websites

Back 50

1. Good E-bay. Categories to search, search bar, recent searches related to what they do. Add to watch list allows you to track things everyday. Secure and reliable data protection. Prodict reviews. Breakdown of shipping. They have a learning center for new users with info about how to use craigslist. Likely an ERP
2. Oodle-okay Can search and register still looks professifonal. You cannot pay through the company though. Still they are likely to be based off of an ERP system.
3. Craigslist. Pick city and find adds within the city. Worst because when you click a category who ever sells the item can put whatever they want. No payments or filings. Mainly cash no history of reliability. Basic relational database.

Front 51

Is Craigslits an ERP or a relational database

Back 51

Craitslist just has a basic relational database on Craitslist.

Front 52

3 B2C websites

Back 52

1. BEst Wal-mart easy navigation search bar with tabs. When you buy something you can track your order. They fill out the information such as the primary key (order number) Their website has an ERP.
2. Wholesale jersey-have a search bar but they do not have a way to say what items are in stock. When you do order there's a real person who e-mails you back. Paypal can be used or credit card. ERP.
3. golfshoesmen.com They don't really sell you the shoes they send you to another website. This is an example of an ASP. They contract their information out.

Front 53

What can we say as a generalization about ERPs relational databases and ASPs

Back 53

Large wel run B2C's are typically ERPs.
Medium firms have relational databases.
Small firms have ASPs

Front 54

3 webstites B2B

Back 54

1. Good Intel. Website for businesses they have all the info and they process transactions. ERP.
2. Barnes and Noble. CAn order boo,s similar to best buy businesses have thei own website. ERP.
3. Worst A.W. Shultz-Bad website. Very basic, No way to put information in have to contact them over teh phone. They use accounting in house accounting. No ordering system. They are below the ERP or ASP systems.

Front 55

What type of generalizations do we make about B2B websites

Back 55

Many still use ERPs but not all are that sophisticated.

Front 56

3 types of G2C websites

Back 56

1. Best MO Dept of conservation. Simple direct and to the point if you just do a couple clicks you can order a hunting liscene. ERP works with a lot of databases. The more likely the easier the website is to use we most likley have an ERP related to customer relationship management
2. Worst KS revenue worst. Have do navigate, figure out where to go and what to do. LARGE database. Probably an ASP because it takes you to a diff site for e-filing. Government websites aren't susually sophisticated enough to be ERPs
3. MOKC-Medium easy to use most likely an ERP related to customer relationship management.

Front 57

G2C Gernerallizations what can we say?

Back 57

Generally interfaces are much less sophisticated. Their underlying AIS at most would be a relational database. MOst of them are ASP.

Front 58

G2B

Back 58

1. Good SEC EDGAR easy to use well organized ASP because federal government has a lot of info and we can search different companies.
2. Okay EFTPS They file federal taxes on their webstie. Fill out co info at login. This is in the early stages. Most hae the number to call the website. This is an ASP because the processing is likely outsourece.
3. Worst kcmo.org for zoning no login just searhc by individual item. AIS because it's just entered into tables which they do not use.