Accounting Information Systems Midterm/Final
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Identify what ERP and AIS is and their relationships - (correct Answer) - AIS is often a part of a large ERP
system, ERP systems are much larger. AIS ultimate purpose is to assist in decision making (end product is
financial statements and report aid in decision making - internal/external documents). ERP solved the
issue of data silos in businesses
AIS is typically a module in ERP
•ERP is modular (so is AIS)
•AIS is typically the core or foundation of ERP (but not necessarily)
•One could have an ERP but only use the AIS component
•Ideally (?) you would have all modules in the same ERP
•Most ERP implementations begin with the AIS
What is the main purpose of software in AIS? - (correct Answer) - System parallel process: build a system
to support a process. The system supports making better decisions.
What is a system? - (correct Answer) - Inputs, (processing, Storage, Control), outputs. An AIS will support
a companies process. In most cases, the process of a company will not change, but a system might.
What are the AIS Processing Types? - (correct Answer) - Batch: Queues a bunch of commands that
initiate and process all at once.
- payroll or final grade system
- used for moving data from 1 system to another, this also uses middleware (a software that is configured
to connect multiple systems)
- usually runs over time when no one is using the system
,Real-time: databases are always current, they update automatically
What is an ERP system? - (correct Answer) - ERP systems, one massive application that pervades
throughout all functional areas, overcoming data silos
What is the history of Business Software? - (correct Answer) - Bottom Life Up From:
The pc revolution made businesses more efficient but also led to data silos - IBM lead the PC revolution
- each functional department had its own system which was disconnected from all other departments
Solution:
ERP systems, one massive application that pervades throughout all functional areas, overcoming data
silos
Issues with separated data:
- difficult to share data between systems
- data duplication
- data inconsistency
- inability for Applications to work with one another
- limited or lack of information
----- isolated decisions, leading to inefficiencies
- increased expense
What was predecessor of modern ERP systems? - (correct Answer) - Material requirements planning
(MRP) is an inventory management system that is completely operated digitally through a wide variety of
computer-based platforms.
Signs a company needs ERP - (correct Answer) - 1.You Have Lots of Different Software for Different
Processes
2.You Don't Have Easy Access to Information About Your Business
3.Accounting Takes Longer and Is More Difficult
4.Sales and the Customer Experience Are Suffering
5.Your IT Is Too Complex and Time-Consuming
What is the current state in the ERP market, Major vendors ... who own the market - (correct Answer) -
The ERP Market is highly fragmented. SAP 25% and Oracle 13% are the biggest player in the market, but
38% of the market is other smaller vendors
,How do we tailor ERP to meet an organizations needs? - (correct Answer) - 3 ways, best of breads, bolt-
on software, or single vendor
Single vendor: a single software application
- customization - the process of modifying original source code ( not recommended because of
compatibility issues for updated software, can cause problems as it's not tested by the ERP vendor)
- configuration- the process of making standard software fit your business (SAP has 8,000 configuration
decisions, setting the dials and levers)
Bolt-on software: a third part software solution that provides a discrete solution to a lack of functionality
in the main system
- software that sits on top of another software, these run at the same time. Must use middleware to
share data
Best of breeds: using different software for different functions in a business, but leads to disconnected
data and needs middleware
- COMPOSABLE ERP
What are the benefits and concerns/challenges of ERP systems - (correct Answer) - benefits:
information sharing across business departments, standardizes and improves processes, improves the
level of systems integration, and improves IT response, significantly reduces efforts invested in
management data/paperwork
concerns/challenges:
Very costly (2-3% of a companies revenue), high failure rate depending of definition, budget and
schedule overruns, availability of adequate sills, technical failures, and overall does not meet typical
expectations, also long implementation
Relationship between configuration and customization in software - (correct Answer) - Configuration is
editing the software using its internal controls and not editing the source code of the software.
Customization is obtaining the source code of the software and making changes in the code to better fit
a company
ERP- single vendor vs best of breeds approach - (correct Answer) - Single vendor, covers the entire ERP
, footprint with one software
- pros: functionality is well integrated and the client company can deal with issues with a single product
company
- cons: limits flexibility/ possible change company process in attempts to use a certain system
Best of Breeds, uses different software that best fits each business operation best
-pros: provides greater flexibility
-cons: integration and vendor relationships become complex, high cost of implementation and
disconnected data will need middleware to connect
--------- 60% of companies use best of breeds
What is middleware and why is it important, where does it lay - (correct Answer) - middleware connects
two or many different types of software to share data and work together. Middleware lies in the
application layer of an ERP software architecture
ERP software architecture, traditional three tier structure - (correct Answer) - Three tier structure
(software stack)
GUI (client pc): the software the user interacts with
- graphical users interface or web interface
Application (server): one or more, help distribute workload
Database (separate server): easy "back-end" access to the database can defeat internal controls
12,13,15,16: Understand the three data types in ERP, how they're different, and examples of each -
(correct Answer) - Configuration (or organizational) data
- rarely changed after go live, settings to define the business
- examples: fiscal year, chart of accounts, organizational structure
Master Data:
- data that is relatively stable or is used to describe (supplement) a transaction (journal entry)
- examples: inventory items, material, customers, vendors
Save
Identify what ERP and AIS is and their relationships - (correct Answer) - AIS is often a part of a large ERP
system, ERP systems are much larger. AIS ultimate purpose is to assist in decision making (end product is
financial statements and report aid in decision making - internal/external documents). ERP solved the
issue of data silos in businesses
AIS is typically a module in ERP
•ERP is modular (so is AIS)
•AIS is typically the core or foundation of ERP (but not necessarily)
•One could have an ERP but only use the AIS component
•Ideally (?) you would have all modules in the same ERP
•Most ERP implementations begin with the AIS
What is the main purpose of software in AIS? - (correct Answer) - System parallel process: build a system
to support a process. The system supports making better decisions.
What is a system? - (correct Answer) - Inputs, (processing, Storage, Control), outputs. An AIS will support
a companies process. In most cases, the process of a company will not change, but a system might.
What are the AIS Processing Types? - (correct Answer) - Batch: Queues a bunch of commands that
initiate and process all at once.
- payroll or final grade system
- used for moving data from 1 system to another, this also uses middleware (a software that is configured
to connect multiple systems)
- usually runs over time when no one is using the system
,Real-time: databases are always current, they update automatically
What is an ERP system? - (correct Answer) - ERP systems, one massive application that pervades
throughout all functional areas, overcoming data silos
What is the history of Business Software? - (correct Answer) - Bottom Life Up From:
The pc revolution made businesses more efficient but also led to data silos - IBM lead the PC revolution
- each functional department had its own system which was disconnected from all other departments
Solution:
ERP systems, one massive application that pervades throughout all functional areas, overcoming data
silos
Issues with separated data:
- difficult to share data between systems
- data duplication
- data inconsistency
- inability for Applications to work with one another
- limited or lack of information
----- isolated decisions, leading to inefficiencies
- increased expense
What was predecessor of modern ERP systems? - (correct Answer) - Material requirements planning
(MRP) is an inventory management system that is completely operated digitally through a wide variety of
computer-based platforms.
Signs a company needs ERP - (correct Answer) - 1.You Have Lots of Different Software for Different
Processes
2.You Don't Have Easy Access to Information About Your Business
3.Accounting Takes Longer and Is More Difficult
4.Sales and the Customer Experience Are Suffering
5.Your IT Is Too Complex and Time-Consuming
What is the current state in the ERP market, Major vendors ... who own the market - (correct Answer) -
The ERP Market is highly fragmented. SAP 25% and Oracle 13% are the biggest player in the market, but
38% of the market is other smaller vendors
,How do we tailor ERP to meet an organizations needs? - (correct Answer) - 3 ways, best of breads, bolt-
on software, or single vendor
Single vendor: a single software application
- customization - the process of modifying original source code ( not recommended because of
compatibility issues for updated software, can cause problems as it's not tested by the ERP vendor)
- configuration- the process of making standard software fit your business (SAP has 8,000 configuration
decisions, setting the dials and levers)
Bolt-on software: a third part software solution that provides a discrete solution to a lack of functionality
in the main system
- software that sits on top of another software, these run at the same time. Must use middleware to
share data
Best of breeds: using different software for different functions in a business, but leads to disconnected
data and needs middleware
- COMPOSABLE ERP
What are the benefits and concerns/challenges of ERP systems - (correct Answer) - benefits:
information sharing across business departments, standardizes and improves processes, improves the
level of systems integration, and improves IT response, significantly reduces efforts invested in
management data/paperwork
concerns/challenges:
Very costly (2-3% of a companies revenue), high failure rate depending of definition, budget and
schedule overruns, availability of adequate sills, technical failures, and overall does not meet typical
expectations, also long implementation
Relationship between configuration and customization in software - (correct Answer) - Configuration is
editing the software using its internal controls and not editing the source code of the software.
Customization is obtaining the source code of the software and making changes in the code to better fit
a company
ERP- single vendor vs best of breeds approach - (correct Answer) - Single vendor, covers the entire ERP
, footprint with one software
- pros: functionality is well integrated and the client company can deal with issues with a single product
company
- cons: limits flexibility/ possible change company process in attempts to use a certain system
Best of Breeds, uses different software that best fits each business operation best
-pros: provides greater flexibility
-cons: integration and vendor relationships become complex, high cost of implementation and
disconnected data will need middleware to connect
--------- 60% of companies use best of breeds
What is middleware and why is it important, where does it lay - (correct Answer) - middleware connects
two or many different types of software to share data and work together. Middleware lies in the
application layer of an ERP software architecture
ERP software architecture, traditional three tier structure - (correct Answer) - Three tier structure
(software stack)
GUI (client pc): the software the user interacts with
- graphical users interface or web interface
Application (server): one or more, help distribute workload
Database (separate server): easy "back-end" access to the database can defeat internal controls
12,13,15,16: Understand the three data types in ERP, how they're different, and examples of each -
(correct Answer) - Configuration (or organizational) data
- rarely changed after go live, settings to define the business
- examples: fiscal year, chart of accounts, organizational structure
Master Data:
- data that is relatively stable or is used to describe (supplement) a transaction (journal entry)
- examples: inventory items, material, customers, vendors
