Chapter 11: Enterprise Resource Planning

Systems
Learning Objectives

After studying this chapter, you should:

 Understand the general functionality and key elements of ERP systems.

 Understand the various aspects of ERP configuration, including servers, databases, and the use
of bolt-on software.
 Understand the purpose of data warehousing as a strategic tool and recognize the issues related
to the design, maintenance, and operation of a data warehouse.
 Recognize the risks associated with ERP implementation.
 Be aware of the key considerations related to ERP implementation.
 Understand the internal control and auditing implications associated with ERPs.

What Is an ERP?
ERP CORE APPLICATIONS
ONLINE ANALYTICAL PROCESSING

ERP System Configurations

-SERVER CONFIGURATIONS
Two-Tier Model
Three-Tier Model
-OLTP VERSUS OLAP SERVERS
Consolidation
Drill-down
Slicing and dicing

-DATABASE CONFIGURATION
-BOLT-ON SOFTWARE
-Supply Chain Management
Data Warehousing
-MODELING DATA FOR THE DATA WAREHOUSE

Denormalized Data Warehouse

-EXTRACTING DATA FROM OPERATIONAL DATABASES

Extracting Snapshots versus Stabilized Data

-CLEANSING EXTRACTED DATA

-TRANSFORMING DATA INTO THE WAREHOUSE MODEL

-LOADING THE DATA INTO THE DATA WAREHOUSE DATABASE

Internal Efficiency
Integration of Legacy Systems
Consolidation of Global Data

-DECISIONS SUPPORTED BY THE DATA WAREHOUSE

-SUPPORTING SUPPLY CHAIN DECISIONS FROM THE DATA WAREHOUSE

Risks Associated with ERP Implementation

-BIG BANG VERSUS PHASED-IN IMPLEMENTATION
-OPPOSITION TO CHANGES IN THE BUSINESS’S CULTURE

-CHOOSING THE WRONG ERP

Goodness of Fit
System Scalability Issues

-CHOOSING THE WRONG CONSULTANT

-HIGH COST AND COST OVERRUNS

Develop Performance Measures

-DISRUPTIONS TO OPERATIONS
Implications for Internal Control and Auditing
-TRANSACTION AUTHORIZATION

-SEGREGATION OF DUTIES

-ACCOUNTING RECORDS

-INDEPENDENT VERIFICATION

-ACCESS CONTROLS

-INTERNAL CONTROL ISSUES RELATED TO ERP ROLES

-CONTINGENCY PLANNING