CHAPTER 1 BUSINESS FUNCTIONS AND BUSINESS PROCESSES

Business Functions
- Functional areas are interdependent, each requiring data from the others
- With better integration of functional areas leads to improvements in communication, workflow and success
of company
- Decentralized all the process

Business Processes
- Collection of activities that takes one or more kinds of input and creates an output that is of value to the
customer
- Thinking in terms of business processes helps managers look at their organization from the customer’s
perspective
- Centralized all the process

Integrated Information Systems

- Enables data sharing by multiple functional areas of the organization
Benefit
1. Real Time Data
2. Better Communication
3. Reduced Risk of Errors
4. Greater Productivity
5. One Secure Location

Type of tangible and intangible benefit of ERP

Tangible benefits
1. Improves the productivity of process and personnel
2. Lowering the cost of products and services purchased
3. Paper and postage cost reductions
4. Inventory reduction
5. Lead time reduction
6. Reduced stock obsolescence
7. Faster product / service look-up and ordering saving time and money
8. Automated ordering and payment, lowering payment processing and paper costs

Intangible benefits
1. Increases organizational transparency and responsibility
2. Accurate and faster access to data for timely decisions
3. Can reach more vendors, producing more competitive bids
4. Improved customer response
5. Saves enormous time and effort in data entry
6. More controls thereby lowering the risk of mis-utilization of resources
7. Facilitates strategic planning
8. Uniform reporting according to global standards
CHAPTER 2 THE DEVELOPMENT OF ERP

Silos
Information systems configuration used until recently
Companies had un-integrated information system that supported only the activities of individual business
functional areas
Increase the chance for data entry errors
Rarely be up to date

Enterprise Resource Planning

Used by organizations looking to manage their business functions within a centralized and integrated system
Used by companies working within the supply chain to help keep track of all the moving parts of manufacturing
and distribution.
Core software programs used by companies to integrate and coordinate information in every area of the
business
Help organizations manage company-wide business processes, using a common database and shared
management reporting tools
Current ERP systems
The advancement of the hardware and software technology
The development of a vision of integrated information system
The reengineering of companies to shift from a functional focus to a business-process focus

The significance and benefits of ERP

1. ERP allows easier global integration. Barriers of currency exchange rates, language and culture can be
bridged automatically, so data can be integrated across international borders
2. ERP integrates people and data while eliminating the need to update and repair many separate computer
systems
3. ERP allows management to actually manage operations, not just monitor them
4. Reduce cost and improve operational efficiency

What return can a company expect from its ERP investment?

1. Reduce the cost/expenses
2. Can save personnel, suppliers, distributors, and customers much frustration
3. Provide real time data, improve external customer communications

Relationship between BPR and ERP

ERP provides a centralized way to streamline business within a corporation. It provides a consistency that has
lacked in previous decades. ERP is a tool that can be used to reengineer the business process. These two go
hand in hand by constantly striving to perfect both the ERP and the BPR the company must constantly audit
their processes and therefore the ERP is constantly changing because of it.
CHAPTER 3 MARKETING INFORMATION SYSTEM & SALES ORDER
PROCESS
What happened to the company when they don’t have IIS?
1. Decentralized all the process/system – different department they have different system
2. Do all the process manually
3. Cannot produces/store information in a real-time basis

What happened if they don’t have IIS in sales order process?

1. Incorrect pricing
2. Excessive calls to the customer for information
3. Delay in processing orders
4. Missed delivery dates
5. Mess up the pre-sales activities, sales order processing, inventory sourcing, delivery, billing, payment

How system help to overcome all issue?

1. Pre-sales activities – customer can get pricing information about the company’s products through an inquiry
or a price quotation
2. Sales order processing – series of activities that must take place to record a sales order; users can define
various pricing alternatives in the SAP
3. Inventory Sourcing – SAP checks company’s inventory records and production planning records to see
whether (1) requested material is available, (2) requested material can be delivered on the date the customer
desires
4. Delivery – SAP releasing the document that the warehouse uses to pick, pack and ship order; it allows
deliveries to be created so that the warehouse and shipping activities are carried out efficiently.
5. Billing – Sap creates an invoice by copying sales order data into invoice document
6. Payment – when the customer sends in a payment, it is automatically processed by SAP → Dr cash, Cr
Client Account

Master data
Data that remain fairly stable → maintained in the central database and available to all SAP
SAP allows the user to define various ways to group customers and salespeople
CHAPTER 5 ACCOUNTING IN ERP
How ERP helps accountant to do their work?
1. Un-integrated system = data sharing usually did not occur in real time → accounting’s data were often out of
date → out-of-date or inaccurate accounting data can cause problem when a company is making operational
decisions → spend considerable time doing additional research to create those reports
2. Centralized the database, avoids these problem → everyone uses the same database to record operating data
→ generate management reports, produce financial statement, and create budges
3. Easy record the transaction → input to general ledger occurs simultaneously with business transactions
4. Accurate the data in a real time basis → able to review an up-to-date accounts receivable balance when an
order comes in, and payments are received

Document Flow for Customer Service

1. With an ERP system, all transactions in all areas of a company get posted in a centralized database → allow
quick access to data
2. Each transaction in SAP will have their own unique document number that allows quick access to the data
3. Document numbers for related transactions are associated in the database.
4. Document Flow screen able to view the details of the event

Sarbanes-Oxley Act
Key Features
1. Encourage top management accountability in firms that are publicly trade
2. Title IX - Financial statements filed with the Securities and Exchange Commission must include a statement
signed by the chief executive officer and chief financial officer, certifying that the financial statement
complies with SEC rules
3. Title II – auditor independence, it limits the non-audit services that an auditor can provide to an audit client,
such as bookkeeping, financial information system design
4. Title IV – covers enhanced financial disclosures and it specifies more stringent requirements for financial
reporting
Implications
1. To meet the internal control report requirement, a company must document the controls that are in place and
then verify that they are not subject to error or manipulation.
2. Integrated information system provides the tools to implement internal controls, as long as the system is
configured and managed correctly
3. ERP relies on a central database with accurate information
4. ERP make it difficult to hide fraudulent dealing
5. Companies with ERP in place will have an easier time complying with the Sarbanes-Oxley Act

Accounting and management-reporting benefit that accrue from having ERP

1. ERP keep track of when data are created or changed
2. Data are removed from SAP only after they have been recorded to media for permanent storage
3. Hos sophisticated user administration tools that allow different levels of authorization management → ensure
that employees can perform only the transactions required for their jobs
4. ERP setting limits on the size of transaction an employee can process
5. ERP provide the ability to drill down from a report to the source documents that created it → makes it easier
for auditors to confirm the integrity of reports
6. With a properly configured and managed ERP, there are direct links between company’s financial statements
and individual transactions that make up the statement, where the fraud and abuse can detected more easily
CHAPTER 6 HUMAN RESOURCES PROCESSES
HR Department Responsibilities
1. Using effective process to review employee performance and determine salary increases and bonuses
2. Managing salary and benefits for each employee
3. Communicating changes in salaries, benefits or policies to employees
4. Supporting management plans for changes in organization
5. Ensuring proper education, training and certification for employees

Problem Occur if do it manually

1. Large number of HR processes (from hiring and firing to managing health benefits)
2. Lack of integration among all departments
3. Inaccurate, out-of-date and inconsistent information

Benefits while implementing ERP

1. Managing an organization’s roles and responsibilities
2. Definition
3. Personal employee information
4. Tasks related to time management, payroll, travel management and employee training
5. Distinguishes between task, job, position and person
CHAPTER 7 PROCESS MODELING, IMPROVEMENT, AND ERP
IMPLEMENTATION
Process Model
- Any abstract representation of a process
- Provide a way to describe a business process so that all participants can understand the process
- Provides a good starting point for analyzing a process so participants can design and implement
improvements
- Used to train employees who will support the business

Advantages of process models

- Graphical representations are usually easier to understand than written descriptions
- Provide a good starting point for analyzing a process → participants can design and implement
improvements
- Document the business process → easier to train employees to support the business process

Implementation Tools
CHAPTER 8 RFID, BI, MOBILE COMPUTING AND THE CLOUD
RFID
1. Becoming an increasingly efficient tool for tracking item through a supply chain
2. Can determine location of an item with an RFID tag
3. Emits radio waves and receives signals back from the tag
4. No expensive
5. Does not need this line of sight connection and can withstand most environment stresses
6. Provide with a unique identification number

Business Intelligence
1. A range of different applications and technologies used to extract and analyze large amounts of data to aid in
decision making
2. Includes data-mining tools and querying tools, which are often interactive and visual

Advantages of Using SaaS

1. Initial affordability - Lower cost to implement software provided through SaaS
2. Shorter implementation time - Implementation time usually shorter as the user does not have to worry about
technical issues
3. Lower support costs and complexity - Do not need to hire additional IT personnel to implement new systems
and applications

Disadvantages of Using SaaS

1. Security
2. Bandwidth/response time
3. Flexibility
4. No frills
5. Technical, not business focus