Post on 18-Jan-2015
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Introduction to MIS 1
Introduction to MIS
Transactions and Enterprise Resource Planning
Technology Toolbox: Creating EDI TransactionsTechnology Toolbox: Paying for TransactionsCases: Retail Sales
Introduction to MIS 2
Outline How 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?
Introduction to MIS 3
Transactions and Integration
Central Computer
Sales ReportsPOSCashRegisters
Customers
EDI
Supplier
Bank
Process Control
AdditionalStores Strategy
Tactics
Operations
Warehouse InventoryManagement
CEO Information
Introduction to MIS 4
Data Capture
Collecting transaction data at the point of sale ensures accurate data, speeds transactions, and provides up-to-the-minute data to managers.
Sales
Process Control
Banking and Finance
Workers
Introduction to MIS 5
Radio Frequency Identification (RFID)
Scanner from: http://www.rfidinc.com
CB
E
antenna
Capacitor: collected energy
Transistors: data
RFID tag
RFID reader
Radio/microwaves
Data:Alter the waves
Introduction to MIS 6
Process Control
Various Production machines: lathe, press, dryer, . ..
Control Terminal
Production data: Quantity Quality Time Machine status Control settings
and commands
Introduction to MIS 7
Electronic Data Interchange The price of paper
$30 to $40 for each purchase order $24 to $28 for suppliers to handle
EDI $12 for orders 0.32 for suppliers
Proprietary EDI Commercial providers and standards
Introduction to MIS 8
EDI: Proprietary
Supplier
Customer 1
Queries &Orders
Invoices &confirmation
OrderDatabase
& Accounts
Customer 2
Firms must support multiple data formats and sometimes different computers for each contact.
ProductionDatabase
& Accounts
Convert
Convert
Introduction to MIS 10
EDI Standards
Message
Segment
Composite Data Element
Data Element
Code Lists
UN Edifact US ANSI X12 Segments for each area Detail data formats
Introduction to MIS 11
EDI On The Internet
The Internet
Advantages Low cost. Anyone can connect. Worldwide reach. Many tools and standards.
Edifact Message
Introduction to MIS 13
Transaction Risks
payment
products or services
Vendor
Customer
Government
1. 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.
Introduction to MIS 14
Security and Trust Security
Each 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.
Trust Is 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.
Introduction to MIS 15
International Transaction Issues
http://worldwind.arc.nasa.gov
Shipping
Currencies
Languages
Customs and tariffs
Jurisdiction for disputes
Different laws and systems
Verify seller and purchaser
Payment methods
Introduction to MIS 16
Accounting Financial data and reports What do things really cost? The accounting cycle Inventory Checks and balances
Double-entry Separation of duties Audit trails
Introduction to MIS 17
Accounting
Suppliers
Customers
Management
Shareholders
Banksand
Creditors
Departments& Employees
Sales &Accounts
Receivable
ProduceManagementAccounting
Reports
ProduceShareholder
Reports
Sales & Receivables
Inventory ChangesPurchases &Payables
Loans & Notes
Expenses Equity
ShareholderReports
ManagementReports
ProductInventory
Orders &Accounts Payable
InventoryManagement,& Fixed Asset& Cost Acct.
Payroll &EmployeeBenefits
CashManagement,Investments,
ForeignExchange
Supply &In-processInventory
Governments
TaxFiling &
Planning
Strategic& TacticalPlanning
Inventory Changes
Payables
Capital Acct
Sales Tax
Tax Filings
Tax data
ReceivablesInventory &Assets
Payroll
Planning Reports
PlanningData
Introduction to MIS 18
Accounting Software General Ledger
Sample chart of accounts Automatic posting Automatic entry of vendors Fiscal years Keep past data books open Post to prior years Allocate department expenses
Accounts Receivable Automatic early discounts Interest on late payments Multiple shipping addresses Sales tax Automatic reminder notices Automatic monthly fees Keep monthly details
Accounts payable Check reconciliation Automatic recurring entries Monitor payment discounts Select bills from screen Pay by item, not just total bill
General Features Printer support Use of preprinted forms Custom reports Custom queries Security controls Technical support costs
Introduction to MIS 19
The Role of Accounting Transaction Data
Journal entries—double entry: money and categories General ledger—summary data by categories Information is defined by the chart of accounts
Purchases, Sales, Loans, and Investments Inventory Control Process and Controls
Double-Entry Systems Separation of Duties Audit Trails Exception reports
Introduction to MIS 20
Human Resources ManagementManagement
Managers
Employees
Customers
Government
ProcessPayrollBenefitsVacation
CompileMerit
Evaluations& SalaryChanges
JobApplicants
ProduceManagement
EmployeeReports
ScreenJobs &
Applications
ProduceGovernment
Reports
Employee Data Files
EmployeeData
Evaluations
Salary
Merit &Salary
Sales Data &Commission
EmployeeData
Merit
Applicant Data
EmployeeSummaries
Job &ApplicantData
EEO Data
GovernmentReports
Management Reports
Introduction to MIS 21
ProductionInformation
System
Production Management
Bill of MaterialsCrank UL6500Pedals LK3500Stem UL6600Saddle Selle…
Purchase Orders
Customer Order
Shipping
Receiving
Production and Assembly
Quality
Quality
Quality
Suppliers
Customers
Introduction to MIS 22
Production Management Issuesfactories
Customers or stores
Multiple 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 1980s
Introduction to MIS 23
Distribution Center
Factories
Customer or stores
Split 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.
Introduction to MIS 24
Integrated Report ExampleProduction
Plant Quantity Quality Costs Prior MonthBoise 260,721 9.6 $41,222,697 219,961 Decatur 171,371 8.75 $31,094,809 188,862 Yaounde 314,856 9.4 $29,119,967 406,859
746,948 9.25 $101,437,473 815,682 Wtd. Avg. 135.80
SalesRegion Quantity Avg.Price Sales Prior Sales Wtd. Cost NetUS East 225,091 $289.17 $65,965,373 $53,533,640 30,567,941 $35,397,432US West 204,725 $273.20 $56,217,470 $42,018,759 27,802,185 $28,415,285Canada 65,763 $192.00 $12,561,225 $12,327,456 8,930,786 $3,630,439South America 67,495 $133.50 $9,013,737 $11,281,515 9,165,996 ($152,259)Other 47,313 $169.00 $7,991,533 $8,120,900 6,425,228 $1,566,305
610,387 $211.37 $151,749,338 $127,282,270 82,892,136 $68,857,202
Sales
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
US East US West Canada South America Other
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
Sales
Prior Sales
Net
Introduction to MIS 26
Changes
salesdata
3 reports(printed) weekly reports
1970sSalesTerminals
SalesTerminals
Centralcomputer:
create reports
Manager:Integrate, graph
analyze Secretary:type & revise
Management
salesdata
3 reports(printed) weekly reports
1980sSalesTerminals
SalesTerminals
Centralcomputer:
create reports
Manager:Integrate, graph
analyze
Management
personal computer
salesdata
1990sSalesTerminals
SalesTerminals
DBMS:On-line data
Personal ComputerWeekly reports &ad hoc queries(applications)
Managementquery
data
Introduction to MIS 27
Integration in 2000s
salesdata
SalesTerminals
SalesTerminals
DBMS
Executive InformationSystem
Personal ComputerOr PDA
Or Browser
Management
query
data
Suppliers
Banks
Production/Service
Enterprise Resource Planning
Introduction to MIS 28
ERP Integration
Database
Headquarters(England)
Database
Subsidiary(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.
Introduction to MIS 29
ERP Primary Functions Accounting
All transaction data and all financial statements in any currency
Finance Portfolio management and financial projections
Human Resources Management Employee tracking from application to release
Production Management Product design and manufacturing lifecycle
Logistics/Supply Chain Management Purchasing, quality control, tracking
Customer Relationship Management Contacts, orders, shipments
Introduction to MIS 30
Enterprise Resource Planning Integrated systems Examples
SAP PeopleSoft Oracle Financials
Basic features included Accounting Purchasing HRM Investment management
International environment Multiple currencies Multiple languages Procedures and practices Follows local (national) rules Follows consolidation rules Example
U.S. firm with European subsidiaries.
Data is entered once European reports are
generated for subsidiaries following local rules
Results are converted and consolidated to U.S. firm following international and U.S. rules
Introduction to MIS 31
SAP Based in Germany, now
worldwide Support for international
transactions and multinational firms
Runs on multiple database and hardware platforms
Can handle large and small companies
Expensive, but price is relative.
Financials Logistics Human resource
management
Introduction to MIS 32
SAP Financials Treasury
Cash management Treasury management Market risk management Funds management
Enterprise Control Executive information
system Business planning and
budgeting Profit center accounting Consolidation
Financial Accounting General ledger Accounts receivable/payable Special ledgers Fixed assets Legal consolidation
Investment Management Investment
planning/budgeting/control Depreciation
forecast/simulation/calculate Controls
Overhead cost Activity based costing Product cost Profitability analysis
Introduction to MIS 33
SAP Logistics Purchasing Materials management Manufacturing Warehousing Quality management Plant maintenance Service management Sales Distribution
Product data management Master data management Design and change process Product structure Development projects
Sales and distribution Sales activities Sales order management Shipping and transportation Billing Sales information system
Introduction to MIS 34
SAP Logistics Production planning and
control Production planning Material requirements
planning Production control and
capacity planning Costing Order information system Shop floor information
system
Project system Work breakdown structures Network planning
techniques, milestones Cost, revenue, financial,
schedule, and resource management
Earned value calculation Project information system
Introduction to MIS 35
SAP Logistics Materials management Purchasing Inventory management Warehouse management Invoice verification Inventory controlling Purchasing information
system Quality management
Quality planning Quality inspections Quality control Quality notifications and
certificates Quality management
information system
Plant maintenance Structuring technical
systems Maintenance resource
planning Maintenance planning System for technical and
cost accounting data Maintenance information
system
Introduction to MIS 36
SAP Logistics Service management
Customer installed base administration
Service contract management
Call management Billing Service information system
Integration When 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.
Introduction to MIS 37
SAP HRM Personnel management
HR master data Personnel administration Information systems Recruitment Travel management Benefits administration Salary administration
Organizational management Organization structure Staffing schedules Job descriptions Planning scenarios Personnel cost planning
Payroll accounting Gross/net accounting History function Dialog capability Multi-currency capability International solutions
Time management Shift planning Work schedules Time recording Absence determination Error handling
Introduction to MIS 38
SAP HRM Personnel development
Career and succession planning
Profile comparisons Qualifications assessments Additional training
determination Training and event
management
Other features SAP Business workflow Internet scenarios Employee self-service
Introduction to MIS 39
SAP Integration Financial general ledger
holds all base totals. Sub-ledgers are defined for
important accounts Accounts payable Manufacturing User-defined etc.
All transactions automatically flow through Including currency
conversions Special rules can be defined
Simple example Manufacturing uses an item
from inventory The quantity on hand is
updated The inventory value is
automatically changed On any sub-ledgers On the general ledger
Reports are generated in any currency
New orders and payments can be generated through EFT.
Introduction to MIS 40
Supply Chain Management
Vendors Customers
Design &Engineering
Marketing
Distribution
Manufacturing
Purchasing
Administration & Management
HRM Accounting Finance MIS
Just-in-Time
Quality control & Custom orders
QuickResponse
Designs and Quality
MassCustomization
Demand-pull
Design feasibility& production costs
product planning
partnerships& jointdevelopment
partnerships& jointdevelopment
planning& monitoring
planning& monitoring
Introduction to MIS 41
Purchasing/Logistics
Buyer
Suppliers
Identify product features
Request for ProposalEvaluate suppliersNegotiate contractIdentify exact items and costs
Correct errors
Receive productsMatch receipts against orderReturn itemsPay supplier
Provide product details
Negotiate contracts
Verify orders and timesCorrect errorsSchedule deliveryMonitor shipments
Handle returnsMonitor payments
Introduction to MIS 43
Supply Chain: Purchasing
Introduction to MIS 44
The Role of XMLBuyer
Supplier
ERP: Oracle ERP: SAP
Messages and data
<xml><order>…</order></xml>
Introduction to MIS 45
Customer Relationship Management Multiple Contact Points
The 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 Selling Having better information enables workers to provide better
service, meet the individual needs of each customer.
Introduction to MIS 46
CRM: Sales Management
Introduction to MIS 48
PeopleSoft CRM: Customer Perspective
Introduction to MIS 49
ERP: Summarizing Data An 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.
Introduction to MIS 50
Digital Dashboard Example
http://www.corda.com/examples/go/ddash/front.cfm
ChartsGaugesIconsTickersExceptions
Drill-down links
Introduction to MIS 51
Digital Dashboard
http://www.microsoft.com/business/casestudies/dd/honeywell.asp
Stock market
Exceptions
Plant or management variables
Equipment details
Products
Quality control
Plant schedule
Introduction to MIS 53
Executive IS
ProductionDistribution
Sales
Central Management
Executives
DataData
SalesProduction CostsDistribution Costs
Fixed Costs
Production CostsSouthNorth
Overseas
0500
100015002000250030003500400045005000
1993 1994 1995 1996
South
North
Overseas
Production: NorthItem# 1995 1994
1234 542.1 442.32938 631.3 153.57319 753.1 623.8
Data for EIS
Data
Data
Introduction to MIS 54
Audits and Sarbanes-Oxley
FinancialStatements
Bank
CashInventorySales
Customer
Inventory
Some financial numbers are tied to the outside world.
Validate these to anchor the statements.
Introduction to MIS 55
Technology Toolbox: Selecting an ERP SystemPlanning Stage Goals and Outputs
Initiation Estimate costs, establish objectives, select team
Initial Planning Initial vendor list and basic features (hardware platform, fees, internationalization, vendor size and stability, industry-specific support and so on.)
Requirements Gathering
Identify business requirements. Detailed list of specifications, unit goals, and critical features. Evaluation criteria.
Demos and Selection Product demonstrations, ratings, and site visits.
Implementation Customize applications, convert data, restructure company operations, define new processes and train employees.
Introduction to MIS 56
Quick Quiz: Selecting an ERP System
1. 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.