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Ch02 Evolution of IS Models: Slide 1
Ch02 Evolution of IS Models: Slide 1
It's David, Sir Rob's electronic voice assistant. Today I am going to talk about the
evolution of information system models. The development in information system models is
inextricably linked to developments in Information Technology, particularly in
computer hardware capabilities, which allow for more robust and more sophisticated
computing implementations. In turn, the user’s clamor for functionalities that were then
unavailable drive the developments in Computing Hardware. Developments in
software on the other hand depend on the user requirements and are limited by the
capabilities that the hardware infrastructure imposes on software. Shown on the slide
are operators working on the computer Colossus. The Colossus was the first electronic
programmable computer developed by Tommy Flowers and was first demonstrated
in December 1943. The Colossus was created to help the British codebreakers read
encrypted German messages during World War II.
Slide 2.
Topics in this presentation:
IS Evolution Timeline
We will look at the different models arranged in an evolution timeline
in each of the evolution state, we will discuss the defining feature or
characteristic of the information system, the advantages and or
disadvantages and how they relate to the developments in
information technology and computers.
Manual or Traditional Model
which evidently was adopted first by the French particularly the
partnership of Giovanni Farolfi and Company a merchant
partnership based in nimes France.
Flat-file or Legacy Model
characterized by the absence of structures for indexing or
recognizing relationships between records.
Relational Database
which is the antithesis of the flat-file model.
REA and ERP
The REA or Resources, Events, and Agent's conceptual accounting model
and the Enterprise Resource Planning model combined to deliver solutions
to integrated management of mission critical business processes often in
real time.
Example REA/ERP Implementation
Then we will look at an example of the present-day implementation
of the REA/ERP model. And finally, we will look at the role of the
accountant related to information systems such as the AIS.
Slide 4.
1. Manual or Traditional Model
This early model of information system is synonymous to what you are
learning in the classrooms today. Recording transactions manually in physical
journal and ledgers, performing month-end tasks using a multiple-column
worksheet from which the financial statements take the data and then you also
manually prepare the formal financial statements from the worksheet. This
model is already eight centuries-old. As early as the 13th century evidences of
business bookkeeping reinforced by the invention of the double entry system
that evolved over time and religiously adapted by Amatino Manucci. Manucci
gave us the earliest extant record of accounting using the double entry system.
He kept the accounts for Giovanni Farolfi and Company, a merchant
partnership based in Nimes, France. Manucci was a partner for the salon France
branch. The writing, entirely in Manucci’s hand, is neat, legible and mostly well
preserved. Financial records from 1299 - 1300 survive that he kept for the firm's
branch in Salon, Provence. Although these records are incomplete, they show
enough detail to be identified as double-entry bookkeeping. These details
include the use of debits and credits and duality of entries. “No more is known of
Amatino Manucci than this ledger that he kept.” Manucci didn't invent the
double entry system, that was a 100-year process (perhaps a 9,000- year
process). If he didn't finish the process himself, it didn't occur long before
because it was clearly finished by the time he kept the books for his company.
Slide 5.
video I downloaded from the website of Gresham College from the link listed on
the last slide of this presentation. I trimmed the video to show only the relevant
lecture and uploaded it to my google channel- the link to which you can find in
the fb post. Other extant documents from the 13th century include:
1. One Bank Ledger fragments from 1211 in Florence, France
2. Ledgers of Reinieri Fini & Brothers (1296-1305)
3. Ledger of Giovanni Farolfi and Company (1299-1300)
Slide 6.
Industrial Revolution
Slide 7
This approach is most often associated with so-called legacy systems, which are large mainframe
systems such as the IBM 701 and IBM system 360 implemented in the late 1960s through the 1980s. “In
the 1990s. I saw one of these IBM monoliths in my work in PhilAm Plans Incorporated. It occupied half
of the sixth floor of our office building.”
Organizations today still use these systems extensively and accountants must
continue to deal with legacy system technologies. This model describes an environment
in which individual files are not related to other files. End users own their data files rather
than share them with other users. When multiple users need the same data for different
purposes, they must obtain separate data sets structured to their specific need.
Thus, stand-alone applications rather than integrated systems perform data
processing separate from each other.
The figure on the slide illustrates how customer sales data might be presented to
different users of a Service Company. The accounting function needs customer
sales data organized by account number and structure to show outstanding
balances. This is used for customer billing, AR, maintenance and financial
statement preparation. Marketing needs customer sales history data organized
by demographic keys. They use this for targeting new product promotions and
for selling product upgrades. The Product Services Group need
customer sales data organized by products and structure to show scheduled service
dates. Such information is used for making after sales contacts with customers to
schedule preventive maintenance and to solicit sales of service agreements. The
Customer Care also needs the customer data for accessing history of call- ins and call-
outs for customer inquiries and complaints. The data redundancy demonstrated in this
example contributes to three significant problems in the flat-file environment.
Slide 9.
1. Data Storage- because the databases are not related to nor shared with each other each department
keeps their own database, in contrast an efficient information system captures and stores data only once
and makes this source available to all users who need it. In this model this is not possible, to meet the
private data needs of users organization must incur the costs of both multiple collection and multiple
storage procedures. Some commonly used data may be duplicated dozens. hundreds or even thousands
of times. MORE THAN NECESSARY.
2. Data Updating- organizations have a great deal of data stored in files that require periodic updating to
reflect changes. For example, a change to a customer's name or address must be reflected in the
appropriate master files. When users keep separate files, all changes must be made separately for each
group of users. This adds significantly to the task and the cost of data management. DUPLICATE
INSTANCES ACROSS THE ORGANIZATION.
3. Currency of Information- in contrast to the problem of performing multiple updates is the problem of
failing to update all the user files affected by a change in status. If update information is not properly
disseminated, the change will not be reflected in some users’ data resulting in decisions based on
outdated information. MULTIPLE UPDATES TAKES TIME AND MAY NOT COMPLETELY UPDATE ALL
INSTANCES.
4. Task Data Dependency-user’s inability to obtain additional information as his or needs change is a big
challenge. The user's information set is constrained by the data that he or she possesses and controls.
Users act independently rather than as members of a user community, in such environment it is very
difficult to establish a mechanism for the formal sharing of data therefore new information needs tend to
be satisfied by procuring new data files. This takes time inhibits performance, adds to data redundancy
and drives data management costs even higher.
5. Flat-Files limit Data Integration. The flat file approach is a single view model. Files are structured,
formatted and arranged to suit the specific needs of the owner or primary user of the data. Such
structuring however may exclude data attributes that are useful to other users thus preventing
successful integration of data across the organization. For example, because the accounting
function is the primary user of accounting data, these data are often captured, formatted and
stored to accommodate financial reporting and Generally Accepted Accounting Principles or
GAAP, this structure however may be useless to the organization's other non-accounting users
of accounting data such as the marketing, finance production and engineering functions.
These users are presented with three options:
1. do not use accounting data to support decisions
2. manipulate and massage the existing data structure to suit their unique needs
3. obtain additional private sets of the data and incur the costs and operational problems
associated with data redundancy.
Slide 10.
The flat file arrow was uncontestably dominated by the tech company
International business machines or IBM. IBM nicknamed Big Blue is an American
multinational technology company headquartered in Armonk, New York with
operations in over 170 countries the company began in 1911 founded in Endicott New
York as the computing tabulating recording company. CTR was renamed International
Business Machines in 1924. By 1937, IBM was still using the tabulating equipment using
punch cards as input and data storage medium. The punch card may be considered
the first computerized flat file database as it presumably included no cards indexing
other cards or otherwise relating the individual records that is the individual cards to
one another.
By the 1940s, IBM had no computers. They were only selling business machines
and data management services. using the punch card technology led by its first
president Thomas Watson senior. IBM was not eager to jump into the enormously, costly
development of computers until the company was threatened into it by its customers
who were fed up by bulky punch cards, they threatened to cancel their IBM contracts
just as soon as they learned how to do data management using magnetic tapes
because their IBM data in punch cards which stores the customer accounts data were
occupying whole floors in their buildings.
So in 1952, IBM announced to the public its first commercial scientific
computer and its first series production mainframe computer- the IBM 701
electronic data processing machine. It was responsible for bringing
electronic computing to the world and for IBM's dominance in the
mainframe computer market during the 1960s and 1970s that continues
today. The series were IBM's high-end computers until the arrival of the IBM
system 360 in 1964. These machines are now referred to as part of the
legacy systems.
Slide 11.
Slide 12.
In spite of these inherent limitations many large organizations still use the
flag files for their general ledger and other financial systems most members of
the data processing community assumed that the end of the century would see
the end of legacy systems instead corporate America invested billions of dollars
making these systems year 2000 y2k compliant. Legacy Systems continue to exist
because they add value for their users and they will not be replaced until they
cease to add value. Students who may have to work with these systems in
practice should be aware of their key features while legacy is a term that may
indicate that some engineers may feel that a system is out of date. A legacy
system can continue to be used for a variety of reasons, it may simply be that
the system still provides for the user's needs as can be seen on the slide. In 2011,
MS-DOS was still used to run legacy applications, such as this US Navy food
service management system. Another example is an ATM being ran by a
windows xp operating system software.
Slide 13.
In addition the decision to keep an old system may be influenced by economic reasons
such as:
Return on investment challenges or vendor lock-in
The inherent challenges of change management or a variety of other
reasons other than functionality
Organizations can have other compelling reasons for keeping a legacy system
such as retraining on a new system would be costly in lost time and money
compared to the anticipated appreciable benefits of replacing it which may be
zero.
The system requires near constant availability so it cannot be taken out of service
and the cost of designing a new system with a similar availability level is high.
Examples include systems to handle customers’ accounts in banks computer
reservation systems, air traffic control energy distribution power, grids nuclear
power plants and military defense installations.
The way that the system works is not well understood such a situation can occur
when the designers of the system have left the organization and the system has
either not been fully documented or documentation has been lost.
The user expects that the system can easily be replaced when this becomes necessary.
Newer systems perform undesirable especially for individual or non-institutional
users’ secondary functions such as: A. Tracking and reporting of user activity and
or, B. Automatic updating that creates backdoor security vulnerabilities and
leaves end users dependent on the good faith and honesty of the vendor
providing the updates. This problem is especially acute when these secondary
functions of a newer system cannot be disabled.
Backward Compatibility such as the ability of newer systems to handle legacy file
formats and character encodings is a goal that software developers often
include in their work. (For a more recent and updated study on the present use
of legacy systems, you may read the the article
entitled Legacy Systems continue to have a place in the enterprise at computerweekly.com
Slide 14.
1980-present
MARKET SHARE
Slide 16.
SQL Term Relational Database Term Description
ROW Tuple or Record A data representing a single item
COLUMN Attribute or Field A labeled element of a tuple eg.
“address” or “date of birth”
TABLE Relation or Base Relvar A set of tuples sharing the same
attributes; a set of columns and
rows
VIEW OR RESULT SET Derived relvar Any set oof tuples; a data report
from the RDBMS in response to a
query
The table on the slide summarizes some of the most important relational
database terms and the corresponding SQL term.
In 1984, the first RDBMS for Macintosh began being developed codenamed
SILVERSURFER. It was later released in 1987 as fourth dimension and known today as 4D.
The most common definition of an RDBMS is a product that presents a view of data as a
collection of rows and columns even if it is not based strictly upon relational theory. By
this definition, RDBMS products typically implement some but not all of CODD’S 12 rules.
A relational database has become the predominant type of database. As of 2009,
most commercial relational DBMSS employ SQL as their query language.
Slide 17.
The problems associated with the flat file model is overcome by implementing
the database model to data management. The figure on the slide illustrates how this
approach centralizes the organization's data into a common database that is shared
by multiple users from different functional groups. With the organization's data in a
central location, all users have access to the data they need to achieve their
respective operational objectives. Access to the data resources is controlled by a
database management
system or DBMS, which we have discussed in Chapter 1. This additional element in the
structure is programmable to know which data elements each user is authorized to
access. If the user requests data that he or she is not authorized to access the request is
denied. Thus, in this model the organization's procedure for assigning user authority are
an important control issue for auditors to consider.
Slide 18.
DATABASE MODEL
The most striking difference between the database model and the flat file model
is the pooling of data into a common database that all organizational users share. With
access to the full domain of entity data changes in user information needs can be
satisfied without obtaining additional private data sets. Users are constrained only by
the limitations of the data available to the entity and the legitimacy of their need to
access it. The policy and parameters of which are integrated into the DBMS.
Slide 19.
Through data sharing, the following traditional problems associated
with the flat file approach may be overcome:
1. ELIMINATION OF DATA REDUNDANCY- each data element is stored only once, thereby
eliminating data redundancy and reducing data collection and storage costs. For
example, Customer data exist only once but is shared by accounting, marketing and
product services users. To accomplish this the data are stored in generic format that
supports multiple users.
2. SINGLE UPDATE- Because each data elements exists in only one place, it requires on a
single update procedure. This reduces the time and cost of keeping the database
current.
3. CURRENT VALUES- a single change to a database attribute such as a change in status or
address is automatically made available to all users of the attribute. immediately
reflected in the various user views.
Slide 20.
The relational database model or RDBMS made true integration possible.
This flexible database approach permits the design of integrated systems
applications, capable of supporting the information needs of multiple users from
a common set of integrated database tables. It should be noted however, that
RDBMS models merely permits integration to occur. integration is not
guaranteed. Poor systems design can occur under any model. In fact, most
organizations today that employ RDBMS's run applications that are traditional in
design and do not make full use of relational technology.
The two remaining related models to be discussed REA and ERP employ
relational database technology more effectively.
Slide 21.
Richard L. Fallon and Simon Polovina have however shown how REA can
also add value when modeling current ERP business processes by providing a
tool which increases the understanding of the implementation and underlying
data model. Description of the model, the REA model gets rid of many
accounting objects that are not necessary in the computer age, most visible of
these are debits and credits.
The double-entry bookkeeping disappears in an REA system. Many
general ledger accounts also disappear at least as persistent objects. For
example; accounts receivable or accounts payable, the computer can
generate these accounts in real time using source document records. REA treats
the accounting system as a virtual representation of the actual business. In other
words, it creates computer objects that directly represent real-world business
objects. In computer science terms, REA is an ontology. The real objects
included in the REA model are; goods, services or money that is RESOURCES,
business transactions or agreements that affect resources that is EVENTS, people
or other human agencies, other companies, etc. that is AGENTS. These objects
contrast with conventional accounting terms such as asset or liability which are
less directly tied to real-world objects. For example; a conventional accounting
asset such as Goodwill is not an REA resource, there is a separate REA model for
each business process in the company. A business process roughly corresponds
to a functional department or a function in Michel Porter’s value chain.
Examples of business processes would be sales, purchases, conversion or
manufacturing, human resources and financing. At the heart of each REA
model there is usually a pair of events linked by an exchange relationship
typically referred to as the DUALITY RELATION. One of these events usually
represents a resource being given away or lost while the other represents a
resource being received or gained.
For example; in the sales process, one event would be sales where goods
are given up and the other would be cash receipt where cash is received. These
two events are linked a cash receipt occurs in exchange for a sale and vice
versa. The duality relationship can be more complex. For example; in the
manufacturing process it would often involve more than two events. REA
systems have usually been modeled as relational databases with entity
relationship diagrams, though this is not compulsory. REA is a continuing
influence on the electronic commerce standard EBXML with McCarthy actively
involved in the standards committee. The competing XBR, XBRLGL standard
however is at odds with the REA concept as it closely mimics double entry
bookkeeping. REA is now recognized by the Open Group (OG) within the
TOGAF standard (an industry standard enterprise framework as one of the
modeling tools which is useful for modeling business processes).
Slide 22.
As the need for connectivity and consolidation between other business systems
increased, accounting information systems were merged with larger more centralized
systems known as Enterprise Resource Planning or ERP. Before, with separate
applications to manage different business functions, organizations had to develop
complex interfaces for the systems to communicate with each other. in ERP systems
such as accounting information system is built as a module integrated into a suite of
applications that can include manufacturing supply chain, human resources and a lot
more. These modules are integrated together and are able to access the same data
and execute complex business processes.
ERP is the integrated management of main or core business processes often in real time and
mediated by software and technology. it is usually referred to as a category of business management
software typically a suite of integrated applications that an organization can use to collect, store,
manage and interpret data from many business activities. It provides an integrated and continuously
updated view of core business processes using common databases maintained by a database
management system.
ERP systems track business resources, cash, raw materials, production capacity
and the status of business commitments such as orders, purchase orders and payroll.
The applications that make up the system share data across various departments,
manufacturing, purchasing, sales, accounting etc., that provide the data. It facilitates
information flow between all business functions and manages connections to outside
stakeholders. Enterprise System Software is a multi-billion dollar industry that produces
components supporting a variety of business functions. IT investments have as of 2011
become one of the largest categories of capital expenditure in United States-based
businesses. Though early ERP systems focused on large enterprises, smaller enterprises
increasingly use ERP systems.
The ERP system integrates varied organizational systems and facilitates error-free
transactions and production, thereby enhancing the organization's efficiency.
However, developing an ERP system differs from the traditional system development.
ERP systems run on a variety of computer hardware and network configurations,
typically using a database as an information repository.
Slide 23.
ORIGIN:
The Gartner Group first used the acronym ERP in the 1990s, to include the
capabilities of material requirements planning, MRP and the later manufacturing
resource planning MRP II, as well as computer integrated manufacturing. Without
replacing these terms, ERP came to represent a larger hole that reflected the evolution
of application integration beyond manufacturing. Not all ERP packages are developed
from a manufacturing core. ERP vendors variously began assembling their packages
with finance and accounting maintenance and human resource components.
EXPANSION:
ERP systems experienced rapid growth in the 1990s, because of the year 2000
problem many companies took the opportunity to replace their old systems with ERP.
ERP systems initially focused on automating back office functions that did not
directly affect customers and the public. Front office functions, such as Customer
Relationship Management (CRM) dealt directly with customers or e-business systems
such as e-commerce, e-government, e-telecom and e-finance.
ERP II systems are typically used to enable collaborative initiatives, such as Supply
Chain Management (SCM), Customer Relationship Management (CRM), and Business
Intelligence (BI) among business partner organizations through the use of various e-
business technologies, developers now make more effort to integrate mobile devices
with the ERP Systems. ERP vendors are extending ERP to these devices along with other
business applications. Technical stakes of modern ERP concern integration hardware,
applications, networking, supply chains. ERP now covers more functions and roles
including decision-making, stakeholders relationships, standardization, transparency,
globalization, etc.
Slide 25.
1. Integrated system
2. Operates in (or near) real time
3. Common database that supports all applications
4. Consistent look and feel across modules
5. Installation of the system with elaborate application/data integration by the
Information Technology (IT) department (provided the implementation is not
done in small steps)
6. Deployment options include: on-premises, cloud-hosted, or Software as a Service or
(SaaS)
Slide 26.
FUNCTIONAL AREAS: An ERP system covers the following functional areas. In
many ERP systems, these are called and grouped together as ERP modules.
1. Financial Accounting (General Ledger, Fixed Assets, Payables including vouchering,
matching and payment receivables and collections cash management, financial
consolidation)
2. Management Accounting (Budgeting, Costing, Cost Management, Activity-based Costing)
3. Human Resources (Recruiting, Training, Rostering, Payroll, Benefits, Retirement and
Pension plans, Diversity Management, Retirement Separation)
4. Manufacturing (Engineering, Bill of Materials, Work Orders, Scheduling, Capacity,
Workflow Management, Quality Control, Manufacturing Process, Manufacturing
Projects, Manufacturing Flow, Product Life Cycle Management)
5. Order Processing (Order to Cash, Order Entry, Credit Checking, Pricing, Available to
Promise, Inventory, Shipping, Sales Analysis And Reporting, Sales Commissioning)
6. Supply Chain Management (Supply Chain Planning, Supplier Scheduling, Product
Configurator, Order To Cash, Purchasing, Inventory, Claim Processing, Warehousing,
Receiving Put Away, Picking And Packing)
7. Project Management (Project Planning, Resource Planning, Project Costing, Work
Breakdown Structure, Billing Time And Expense, Performance Units, Activity
Management)
8. Customer Relationship Management (CRM), Sales And Marketing, Commissions, Service,
Customer Contact, Call Center Support) CRM systems are not always considered part of
ERP systems but rather Business Support Systems (BSS)
9. Data Services (various self-service interfaces for customers, suppliers and/or employees)
10. Management of School and Educational Institutes
Slide 27.
BEST PRACTICES: Most ERP systems incorporate best practices, this means the
software reflects the vendor's interpretation of the most effective way to perform
each business process. Systems vary in how conveniently the customer can
modify these practices, in addition, best practices reduced risk by 71%
compared to other software implementations. Use of best practices eases
compliance with requirements such as IFRS, Sarbanes-oxley or basel II, they can
also help comply with de facto industry standards such as electronic funds
transfer. This is because the procedure can be readily codified within the ERP
software and replicated with confidence across multiple businesses that share
that business requirement. The following are some best practices in an ERP
implementation:
1. Connectivity to plant floor information. ERP systems connect to real-time data and
transaction data in a variety of ways, these systems are typically configured by systems
integrators who bring unique knowledge on process, equipment and vendor solutions.
2. Direct Integration. ERP systems have connectivity, communications to plant floor
equipment as part of their product offering. This requires that the vendors offer specific
support for the plant floor equipment their customers operate.
3. Database Integration. ERP systems connect to plant floor data sources through staging
tables in a database. Plant floor systems deposit the necessary information into the
database. The ERP system reads the information in the table. The benefit of staging is
that ERP vendors do not need to master the complexities of equipment integration.
Connectivity becomes the responsibility of the system's integrator.
4. Enterprise Appliance Transaction Modules (EATMs). These devices communicate directly
with plant floor equipment and with the ERP system via method supported by the ERP
system. EATMs can employ a staging table web services or system specific program
interfaces or APIs. An EATMs offers the benefit of being an off-the-shelf solution.
5. Custom Integration Solution. Many systems integrators offer custom solutions, these
systems tend to have the highest level of initial integration cost and can have a higher
long-term maintenance and reliability costs. Long-term costs can be minimized through
careful system testing, and through documentation. Custom Integrated Solutions
typically run on workstation or server class computers.
Slide 28.
ADVANTAGES OF ERP
1. Integration of Business Processes- The most fundamental advantage of ERP is that the integration of a
myriad of business processes saves time and expense management can make decisions faster and with
fewer errors data becomes visible across the organization.
Tasks that benefit from this integration include sales forecasting which allows
inventory optimization chronological history of every transaction through relevant data
compilation in every area of operation order tracking from acceptance through fulfillment
revenue tracking from invoice through cash receipt matching purchase orders what was
ordered inventory receipts what arrived and costing what the vendor invoiced.
ERP system centralized business data which eliminates the need to synchronize
changes between multiple systems consolidation of finance marketing sales human resource
and manufacturing applications brings legitimacy and transparency to each bit of statistical
data facilitates standard product naming slash coding provides a comprehensive enterprise
view no islands of information making real-time information available to management
anywhere any time to make proper decisions protect sensitive data by consolidating
multiple security systems into a single structure
2. Makes Organizations more agile- ERP Creates A More Agile Company that adapts better to change it also
makes a company more flexible and less rigidly structured so organization components operate more
cohesively enhancing the business internally and externally
3. Improvement of Data Security- ERP can improve data security in a closed environment a common control
system such as the kind offered by ERP systems allows organizations the ability to more easily ensure key
company data is not compromised this change however with a more open environment requiring further
scrutiny of ERP security features and internal company policies regarding security.
4. Provides Increased Opportunities for Collaboration- ERP provides increased opportunities for
collaboration data takes many forms in the modern enterprise including documents files forms audio and
video and emails often each data medium has its own mechanism for allowing collaboration ERP provides
a collaborative platform that lets employees spend more time collaborating on content rather than
mastering the learning curve of communicating in various formats across distributed systems ERP offers
many benefits such as standardization of common processes one integrated system standardized
reporting improved key performance indicators or kpi and access
to common data one of the key benefits of ERP the concept of integrated
system is often misinterpreted by the business
ERP is a centralized system that provides tight integration with all major
enterprise functions be it hr planning procurement sales customer relations
finance or analytics as well as to other connected application functions in that
sense ERP could be described as centralized integrated enterprise system CIES.
Slide 30.
Dis
DISADVANTAGES
Customization Can Be Problematic
o Compared to the best of breed approach ERP can be seen as meeting
an organization's lowest common denominator needs forcing the
organization to find workarounds to meet unique demands.
Re-engineering business processes to fit the ERP system may damage competitiveness
or divert focus from other critical activities
ERP can cost more than less integrated or less comprehensive but equally
effective solutions,
High ERP switching costs can increase the ERP vendors negotiating power which can
increase support maintenance and upgrade expenses
Overcoming resistance to sharing sensitive information between departments can
divert management attention.
Integration of truly independent businesses can create unnecessary
dependencies
Extensive training requirements take resources from daily operations
Harmonization of ERP systems can be a mammoth task especially for big companies
and requires a lot of time planning and money.
Slide 31.
These examples emphasize the duality of effect concepts much like the
debit and credit concept in the traditional accounting framework.
Slide 33
Accountants are primarily involved in three ways as system users, designers, and auditors
As Users In most organizations the accounting function is the single largest user
of it all systems that process financial transactions impact the accounting
function in some way as end users accountants must provide a clear picture of
their needs to the professionals who design their systems for example the
account must specify accounting rules and techniques to be used internal
control requirements and special algorithms such as depreciation models the
accountant's participation in system development should be active rather than
passive the principal cause of design errors that result in system failure is the
absence of their involvement
Slide 36.
Slide 36.