Bài giảng Introduction to MIS - Chapter 6: Transactions and Enterprise Resource Planning

Introduction to MISChapter 6Transactions and Enterprise Resource PlanningJerry PostTechnology Toolbox: Selecting an ERP SystemTechnology Toolbox: Designing an EISCases: Auto IndustryOutlineHow do you process the data from transactions and integrate the operations of the organization?How do you efficiently collect transaction data?What are the major elements and risks of a transaction?Why are transactions more difficult in an international environment?How do you track and compare the financial information of a firm?What are the transaction elements in the human resources management system?Can a company become more efficient and productive?How do businesses combine data from operations?How do you combine data across functional areas, including production, purchasing, marketing, and accounting?How do you make production more efficient?How do you keep track of all customer interactions? Who are your best customers?How can a manager handle all of the data in an ERP system?How does the CEO know that financial records are correct?Transactions and IntegrationCentral ComputerSales ReportsPOSCashRegistersCustomersEDISupplierBankProcess ControlAdditionalStoresStrategyTacticsOperationsWarehouse InventoryManagementCEO InformationData CaptureCollecting transaction data at the point of sale ensures accurate data, speeds transactions, and provides up-to-the-minute data to managers. SalesProcess ControlBanking and FinanceWorkersRadio Frequency Identification (RFID)Scanner from: collected energyTransistors: dataRFID tagSimple security tagRFID readerRadio/microwavesData:Alter the wavesQR Codes Two-dimensional code.Can hold thousands of characters or digits.Can be read by cell phone cameras.Initially used for packages.Now, often used for marketing, even billboards, museum and art pieces, and bus schedules.One of several Web sites to create free QR codes.Process ControlVarious Production machines: lathe, press, dryer, . ..Control TerminalProduction data: Quantity Quality Time Machine statusControl settingsand commandsElectronic Data InterchangeThe price of paper$30 to $40 for each purchase order$24 to $28 for suppliers to handleEDI$12 for orders0.32 for suppliersProprietary EDICommercial providers and standardsEDI: ProprietarySupplierCustomer 1Queries &OrdersInvoices &confirmationOrderDatabase& AccountsCustomer 2Firms must support multiple data formats and sometimes different computers for each contact.ProductionDatabase& AccountsConvertConvertEDI: StandardsSupplierCustomer 1ProductionDatabase& AccountsOrderDatabase& AccountsCustomer 2Bank/EDI consolidatorConvert toStandardRouteMessagesMessagesto/fromany customerConvert toStandardConvert toStandardEDI StandardsUN EdifactUS ANSI X12Segments for each areaDetail data formatsMessageSegmentComposite Data ElementData ElementCode ListsANSI X12 Segments104 - Air Shipment Information 110 - Air Freight Details and Invoice 125 - Multilevel Railcar Load Details 126 - Vehicle Application Advice 127 - Vehicle Buying Order 128 - Dealer Information 129 - Vehicle Carrier Rate Update 130 - Student Educational Record (Transcript) 131 - Student Educational Record (Transcript) Acknowledgment 135 - Student Loan Application 139 - Student Loan Guarantee Result 140 - Product Registration 141 - Product Service Claim Response 142 - Product Service Claim 143 - Product Service Notification 144 - Student Loan Transfer and Status Verification 146 - Request for Student Educational Record (Transcript) 147 - Response to Request for Student Ed. Record (Transcript) 148 - Report of Injury or Illness Partial List of segmentsDetailed specifications for each segment Data needed FormatEDI On The InternetAdvantagesLow cost.Anyone can connect.Worldwide reach.Many tools and standards.The InternetEdifact MessageExtensible Markup Language (XML)13/6/2004$33.54Need immediately.30Flea Collar-Dog-Medium208$4.4227Aquarium Filter & Pump8$24.65ExampleData is sent in a standard format that is easy for computers to parse and read.XML: eXtensible Markup LanguageUsed as a standard means to transfer data to machines with unknown capabilities.Most hardware and software can read and understand the data.The tags describe the content.Usually a separate schema file is used to describe the tags and the document structure. Extensible Business Reporting Language: XBRL Sample tag: Revenue6,863,545DataAttributesThe Securities and Exchange Commission is requiring XBRL filings as of June 2011. The goal is to standardize reporting data and make it accessible to automated systems.Date & TimeValueItemBuyerSellerItem_IdDescriptionLocation. . .TransactionsItemsBuyer_IdAddressPhoneSeller_IdAddressPhoneBuyersSellersTransaction ObjectsExample AttributesDate & timePriceQuantityItem NumberBuyerSellerExample MethodsStorePrintVerifyTransaction Riskspaymentproducts or servicesVendorCustomerGovernment1. Receive payment.2. Legitimate payment.3. Customer not repudiate sale.4. Government not invalidate sale.1. Receive product.2. Charged only as agreed.3. Seller not repudiate sale.4. Legal transaction.1. Transaction record.2. Tax records.3. Identify fraud.4. Track money for other cases (drugs).Credit card company accepts risks for a fee.Security and TrustSecurityEach transmission is encrypted.Prevent interception.Keys generated by certificate authority (e.g., Verisign).Security on individual servers is the responsibility of vendor.There have been some thefts of data (e.g., credit-card numbers.)Vendor is motivated to secure the server.Commercial software exists to provide secure sites.TrustIs the vendor legitimate?Consider: Internet gambling.What if offshore vendor refuses to pay off a bet?As long as Internet gambling is illegal (in the U.S.) consumer has no recourse.Otherwise, use credit cards and rely on banks.Secure certificates.Is the customer legitimate?Rely on credit card data.Some vendors will ship only to billing address.Certificate authority.International Transaction Issues and tariffsJurisdiction for disputesDifferent laws and systemsVerify seller and purchaserPayment methodsAccountingFinancial data and reportsWhat do things really cost?The accounting cycleInventoryChecks and balancesDouble-entrySeparation of dutiesAudit trailsSuppliersCustomersManagementShareholdersBanksandCreditorsDepartments& EmployeesSales &AccountsReceivableProduceManagementAccountingReportsProduceShareholderReportsSales & ReceivablesInventory ChangesPurchases &PayablesLoans & NotesExpensesEquityShareholderReportsManagementReportsProductInventoryOrders &Accounts PayableInventoryManagement,& Fixed Asset& Cost Acct.Payroll &EmployeeBenefitsCashManagement,Investments,ForeignExchangeSupply &In-processInventoryGovernmentsTaxFiling &PlanningStrategic& TacticalPlanningInventory ChangesPayablesCapital AcctSales TaxTax FilingsTax dataReceivablesInventory &AssetsPayrollPlanning ReportsPlanningDataAccountingAccounting SoftwareGeneral LedgerSample chart of accountsAutomatic postingAutomatic entry of vendorsFiscal yearsKeep past data books openPost to prior yearsAllocate department expensesAccounts ReceivableAutomatic early discountsInterest on late paymentsMultiple shipping addressesSales taxAutomatic reminder noticesAutomatic monthly feesKeep monthly detailsAccounts payableCheck reconciliationAutomatic recurring entriesMonitor payment discountsSelect bills from screenPay by item, not just total billGeneral FeaturesPrinter supportUse of preprinted formsCustom reportsCustom queriesSecurity controlsTechnical support costsThe Role of AccountingTransaction DataJournal entries—double entry: money and categoriesGeneral ledger—summary data by categoriesInformation is defined by the chart of accountsPurchases, Sales, Loans, and InvestmentsInventory ControlProcess and ControlsDouble-Entry SystemsSeparation of DutiesAudit TrailsException reportsHuman Resources ManagementManagementManagersEmployeesCustomersGovernmentProcessPayrollBenefitsVacationCompileMeritEvaluations& SalaryChangesJobApplicantsProduceManagementEmployeeReportsScreenJobs &ApplicationsProduceGovernmentReportsEmployee Data FilesEmployeeDataEvaluationsSalaryMerit &SalarySales Data &CommissionEmployeeDataMeritApplicant DataEmployeeSummariesJob &ApplicantDataEEO DataGovernmentReportsManagement ReportsProductionInformationSystemProduction ManagementBill of MaterialsCrank UL6500Pedals LK3500Stem UL6600Saddle SellePurchase OrdersCustomer OrderShippingReceivingProduction and AssemblyQualityQualityQualitySuppliersCustomersProduction Management IssuesfactoriesCustomers or storesMultiple factories produce many items that need to be distributed to multiple stores.How do you schedule efficient production?How do you ensure the right products go to the right locations?Ask Gitano Jeans in the 1980sDistribution CenterFactoriesCustomer or storesSplit the mass production shipments into smaller units and distribute to stores immediately—without holding inventory.Need to match orders exactly, and carefully schedule arrival time of shipments.Integrated Report Example1960s & 1970s MIS PiecesPurchasing:OrdersSales:OrdersProduction:MRPMarketing:ForecastsAccounting:Integrated DataSeparateReportsChangessalesdata3 reports(printed)weekly reports1970sSalesTerminalsSalesTerminalsCentralcomputer:create reportsManager:Integrate, graphanalyzeSecretary:type & reviseManagementsalesdata3 reports(printed)weekly reports1980sSalesTerminalsSalesTerminalsCentralcomputer:create reportsManager:Integrate, graphanalyzeManagementpersonal computersalesdata1990sSalesTerminalsSalesTerminalsDBMS:On-line dataPersonal ComputerWeekly reports &ad hoc queries(applications)ManagementquerydataIntegration in 2000ssalesdataSalesTerminalsSalesTerminalsDBMSExecutive InformationSystemPersonal ComputerOr PDAOr BrowserManagementquerydataSuppliersBanksProduction/ServiceEnterprise Resource PlanningERP IntegrationDatabaseHeadquarters(England)DatabaseSubsidiary(Spain)Financial dataGeneral ledgerPayroll ManufacturingProduct detailsInventory Use inventory item. Deduct quantity. Update inventory value.Check for reorder point. Order new item through EDI. Update Accounts payable.Project cost report.Daily production report.Weekly financial status.Cash flow.Budget versus actual cost.ERP Primary FunctionsAccountingAll transaction data and all financial statements in any currencyFinancePortfolio management and financial projectionsHuman Resources ManagementEmployee tracking from application to releaseProduction ManagementProduct design and manufacturing lifecycleLogistics/Supply Chain ManagementPurchasing, quality control, trackingCustomer Relationship ManagementContacts, orders, shipmentsEnterprise Resource PlanningIntegrated systemsExamplesSAPPeopleSoftOracle FinancialsBasic features includedAccountingPurchasingHRMInvestment managementInternational environmentMultiple currenciesMultiple languagesProcedures and practicesFollows local (national) rulesFollows consolidation rulesExampleU.S. firm with European subsidiaries.Data is entered onceEuropean reports are generated for subsidiaries following local rulesResults are converted and consolidated to U.S. firm following international and U.S. rulesSAPBased in Germany, now worldwideSupport for international transactions and multinational firmsRuns on multiple database and hardware platformsCan handle large and small companiesExpensive, but price is relative.FinancialsLogisticsHuman resource managementSAP FinancialsFinancial AccountingGeneral ledgerAccounts receivable/payableSpecial ledgersFixed assetsLegal consolidationInvestment ManagementInvestment planning/budgeting/controlDepreciation forecast/simulation/calculateControlsOverhead costActivity based costingProduct costProfitability analysisTreasuryCash managementTreasury managementMarket risk managementFunds managementEnterprise ControlExecutive information systemBusiness planning and budgetingProfit center accountingConsolidationSAP LogisticsPurchasingMaterials managementManufacturingWarehousingQuality managementPlant maintenanceService managementSalesDistributionProduct data managementMaster data managementDesign and change processProduct structureDevelopment projectsSales and distributionSales activitiesSales order managementShipping and transportationBillingSales information systemSAP LogisticsProduction planning and controlProduction planningMaterial requirements planningProduction control and capacity planningCostingOrder information systemShop floor information systemProject systemWork breakdown structuresNetwork planning techniques, milestonesCost, revenue, financial, schedule, and resource managementEarned value calculationProject information systemSAP LogisticsMaterials managementPurchasingInventory managementWarehouse managementInvoice verificationInventory controllingPurchasing information systemQuality managementQuality planningQuality inspectionsQuality controlQuality notifications and certificatesQuality management information systemPlant maintenanceStructuring technical systemsMaintenance resource planningMaintenance planningSystem for technical and cost accounting dataMaintenance information systemSAP LogisticsService managementCustomer installed base administrationService contract managementCall managementBillingService information systemIntegrationWhen the clerk enters a sale, bills are generated automatically (mail, fax, or EDI).Sales and revenue are instantly updated in financial and control modules.The sales information system and EIS provide various up-to-date views and reports.SAP HRMPersonnel managementHR master dataPersonnel administrationInformation systemsRecruitmentTravel managementBenefits administrationSalary administrationOrganizational managementOrganization structureStaffing schedulesJob descriptionsPlanning scenariosPersonnel cost planningPayroll accountingGross/net accountingHistory functionDialog capabilityMulti-currency capabilityInternational solutionsTime managementShift planningWork schedulesTime recordingAbsence determinationError handlingSAP HRMPersonnel developmentCareer and succession planningProfile comparisonsQualifications assessmentsAdditional training determinationTraining and event managementOther featuresSAP Business workflowInternet scenariosEmployee self-serviceSAP IntegrationFinancial general ledger holds all base totals.Sub-ledgers are defined for important accountsAccounts payableManufacturingUser-definedetc.All transactions automatically flow throughIncluding currency conversionsSpecial rules can be definedSimple exampleManufacturing uses an item from inventoryThe quantity on hand is updatedThe inventory value is automatically changedOn any sub-ledgersOn the general ledgerReports are generated in any currencyNew orders and payments can be generated through EFT.Supply Chain ManagementVendorsCustomersDesign &EngineeringMarketingDistributionManufacturingPurchasingAdministration & ManagementHRMAccountingFinanceMISJust-in-TimeQuality control & Custom ordersQuickResponseDesigns and QualityMassCustomizationDemand-pullDesign feasibility& production costsproduct planningpartnerships& jointdevelopmentpartnerships& jointdevelopmentplanning& monitoringplanning& monitoringPurchasing/LogisticsIdentify product featuresRequest for ProposalEvaluate suppliersNegotiate contractIdentify exact items and costsCorrect errorsReceive productsMatch receipts against orderReturn itemsPay supplierProvide product detailsNegotiate contractsVerify orders and timesCorrect errorsSchedule deliveryMonitor shipmentsHandle returnsMonitor paymentsBuyerSuppliersPeopleSoft SCM: Buyer/PlannerSupply Chain: PurchasingThe Role of XMLBuyerSupplierERP: OracleERP: SAPMessages and dataCustomer Relationship ManagementMultiple Contact PointsThe goal is to provide a single, integrated view of all customer activity, available to all employees who interact with the customer.Feedback, Individual Needs, and Cross SellingHaving better information enables workers to provide better service, meet the individual needs of each customer.CRM: Sales ManagementPeopleSoft CRM: Salesperson PerspectivePeopleSoft CRM: Customer PerspectiveERP: Summarizing DataAn ERP database can be gigantic.It would take time to evaluate every single transaction.Managers, particularly executives, need to begin with a summary of some basic conditions.The summary is usually graphical.Managers can then drill down and look at the detail.Digital Dashboard Example linksDigital Dashboard Examples Active, Silverlight examples from DundasExecutive IS: Drill-DownProductionDistributionSalesCentral ManagementExecutivesDataDataSalesProduction CostsDistribution CostsFixed CostsProduction CostsSouthNorthOverseasProduction: NorthItem# 1995 19941234 542.1 442.32938 631.3 153.57319 753.1 623.8Data for EISDataDataAudits and Sarbanes-OxleyFinancialStatementsBankCashInventorySalesCustomerInventorySome financial numbers are tied to the outside world.Validate these to anchor the statements.Cloud Computing and ERPSeveral companies provide online servicesNetSuite.comLawson, Oracle, and SAP provide some hosting optionsMany othersFew companies use accounting systems in the cloud.Security, privacy, and reliability concernsCustomization is needed in both cases and it can be expensiveVariable costs can be expensive over timeBrowser-based approach is relatively new and mobile networking has been expensive and slowCRM is popular onlineLargely Salesforce.comBut if it is not integrated with the ERP it is largely contact management.Technology Toolbox: Selecting an ERP SystemPlanning StageGoals and OutputsInitiationEstimate costs, establish objectives, select teamInitial PlanningInitial vendor list and basic features (hardware platform, fees, internationalization, vendor size and stability, industry-specific support and so on.)Requirements GatheringIdentify business requirements. Detailed list of specifications, unit goals, and critical features. Evaluation criteria.Demos and SelectionProduct demonstrations, ratings, and site visits.ImplementationCustomize applications, convert data, restructure company operations, define new processes and train employees.Quick Quiz: Selecting an ERP System1. Assume you work for a mid-size construction firm that does about 30 percent of its work internationally. Find at least three ERP vendors and outline the features they provide.2. Assume you work for a large retail clothing firm with stores in most U.S. states. Identify the specific accounting and financial features you would want in an ERP system.3. Assume you work for a regional manufacturer that makes parts for cars. Explain how you would select and evaluate an ERP system. Find an example of a system that would work. Technology Toolbox: Designing an EIS Quiz: Designing an EIS1. Assume you have been hired to help a regional law firm. What key elements might go on the main EIS screen?2. Assume you have bee hired to help an airplane manufacturer, design the main EIS screen.3. To help design an EIS for a retail video store chain, briefly describe the screens and steps needed to identify stores that are performing below par and find possible causes of the problems.Cases: Autos