The functional organizational structure
are divided into functions or departments, each of which is responsible for a set of closely related items
The silo effect
workers complete their tasks in their functional "silos" without regard to the consequences for the other components in the process
>delays in executing the process
>excess inventory
>lack of visibility across process
Enterprise systems
support processes across the entire organization rather than just parts of the process
>integrate all the functional parts of the process
Global Competition
-live in a global competitive environment
-need to share information
Knowledge worker
dependency on information
-create
-acquire
-process
-synthesize
-disseminate
-analyze
-use
Structured information
store it, retrieve it, replicate it
(inventory sales figures)
Semistructured information
some parts structured/unstructured
Unstructured information
ad hoc inform (can't use program to write)
(one time occurrance)
Internal sources
collected within the organization, usually by transaction processing systems
External sources
collected from a wide array of sources outside of the organization
Objective information
describes something thats known
Subjective information
describes something thats unknown (higher risk)
time dimension
is it timely?, latest info, availability
content dimension
quality of info, relevant, accuracy, completeness, dependable/reliable, keep it simple
form dimension
appearance, appropriate details, level of presentation, flexible/adapt
location dimension
security, accessibility, trust
horizontal flow
cross departmental
upward flow
lower level to higher level
downward flow
higher level to lower level
outward flow
share survey with customers
Business processes
set of tasks or activities that produce desired outcomes
Procurement
(buy) refers to all of the activities involved in buying or acquiring the materials used by an organization, such as raw materials needed to make products
Production
(make) involves the actual creating of the products within the organization
Fulfillment
(sell) consists of all the steps involved in selling and delivering the products to the organization's customers
Lifecycle data management
(design) supports the design and development of products from the initial product idea stage through the discontinuation of the product
Material planning
(plan) uses historical data and sales forecasts to plan which materials will be procured and produced and in what quantities
Inventory and warehouse management
(store) is used to store and track the materials
Asset management and customer service
(service) are used to maintain internal assets such as machinery and to deliver after-sales customer service such as repairs
Human capital management
(people) focus on the people within the organization and include functions such as recruiting, hiring, training, and benefits management
Project management
(projects) are used to plan and execute large projects such as the construction of a new factory or the production of complex products such as airplanes
Financial accounting
(track-external) track the financial impacts of process steps with the goal of meeting legal reporting requirements such as IRS or SEC
Management accounting or controlling
(track-internal) focus on internal reporting to manage costs and revenues
Enterprise systems
>complex and powerful information systems
>SAP enterprise resource planning (ERP) system is the world's most popular
Architecture of enterprise systems = Stand-alone Mainframe stage 1
complex, centralized, hard to manage
Architecture of enterprise systems = Client-Server stage 2
decentralized, sharing info and interacting with servers
layers of client-server
>Presentation layer: How you interact with the application (using menus, typing, and selecting)
>Application layer: What the application allows you to do (create formulas or charts, compose an essay)
>Data layer: Where the application stores your work (on
Architecture of enterprise systems = Service-Oriented stage 3
relates to the technical capabilities that allow systems to connect with one another through standardized interfaces called web services
Product Lifecycle Management (PLM)
help companies administer the processes of research, design and product management
Supplier Relationship Management (SRM)
typically manage the overall relationships with materials suppliers
Customer Relationship Management (CRM)
connect a company's ERP system to those of its customers
Supply Chain Management (SCM)
connects a company to other companies that supply the materials it needs to make its products
Transaction data
sales, purchase, production
>data that is the consequence of day-to-day transaction
Who, what, when, where, how, how much
>Sales: Customer, products, quantities, dates and times, location (shipping, delivery), sales person
>Purchase: Vendor, products, quantities, dates and times, location (delivery), sales person, requester
>Production: Materials, quantities, facilities, res
Master data
>defines key entities in an organization
>data changes occasionally
>material types
-raw materials (ROH)
-trading goods (HAWA)
-semi finished goods (HALB)
-finished goods (FERT)
Organizational data
>defines the organizational structure of the enterprise
>data rarely changes
>some material can be used differently by different organizational levels
Organizational data: Client
>highest org level
>represents an enterprise consisting of many companies/subsidiaries
Organizational data: Company code
>each company within the enterprise is represented by this
>each company code reps a legal entity, and its central organizational element in financial accounting
>account currency, tax-related data, field status groups, open item management, line item dis
Organizational data: Business area
internal division of an enterprise that are used to define areas of responsibility or to meet the external requirements of an enterprise segment
Financial accounting
>focus: external
>purpose: legal reporting (financial statements)
-tracking financial impact of processes
-communicate with investors
>external stakeholders: suppliers, society, government, creditors, shareholders, customers
Managerial accounting
>focus: internal
>purpose: managing the firm with regard to costs and revenues
>content: defined by management
>internal stakeholders: employees, managers, owners
chart of accounts
orderly listing of accounts that comprise a company's general ledger
-operative (COA)
-country - specific (COA)
-group (COA)
general ledger accounts
recording of all accounting - relevant business transactions occurs in a G/L account
-balance sheet
-income statement
-reconciliation account (G/L accounts that consolidate data from a group of related subledger accounts such as customers and vendors)
balance sheet
snapshot of the organization at a point in time (resources, equity or debt financing)
assets
what the company owns, such as cash, inventory, materials, land, buildings, and money owed to the company by its customers (receivables)
current assets
within a year
-accounts receivable: credit sales (exchange or transfer)
-supplies
-merchandise inventory: what your business is selling
-prepaid assets: company pays for something in advance (ex prepaid rent, insurance)
long term assets
fixed or capital assets over a year
-land, building, equipment, automobiles, machinery
-contra asset: accumulated depreciation
liabilities
are what the company owes to others, including money owed to vendors (payables) and loans from financial institutions
current liabilities
-accounts payable
-unearned revenue (deferred revenue): advance payment made by customer but haven't done the service yet
long term liabilities
notes payable: borrow money from bank, buy car
stockholder's equity
refers to the owner's share of the company
>capital stock: issue stock or sell stock to investors
>retained earnings
retained earnings
-dividends: money paid off to stock
-revenue: did an exchange (sales revenue)
-expenses: consumed, used up, incur to generate revenue
expenses
-COGS: adjustment to my inventory
-depreciation expense (LTA exempt land)
-supplies
-wages (salary)
-rent
-interest
-advertisement
-insurance
income statement
revenue and expenses
-revenues: are the monies the company earns by selling its products and services
-expenses: are the costs associated with creating and selling those products and services
accounting equation
assets = liabilities + equity
net income calculation
NI = revenue - expenses
cost center
-master data in controlling
-location where costs are incurred
>departments, individuals, special projects
-cost bucket used to accumulate costs
general ledger accounting
is based on the double entry accounting system, where every transaction has both a debit and credit entry
accounts payable
concerned with vendors
accounts receivable
concerned with customers
asset accounting
tangible assets = physical form intangible assets = nonphysical
Quiz - Procurement
1 create purchase requisition
2 create and send purchase order
3 receive materials
4 receive invoice + send payment
Quiz - Production
1 Request production
2 Authorize production
3 issue raw materials
4 create product
5 receive finished goods
Quiz - Fulfillment
1 receive customer purchase order + create sales order
2 prepare shipment (pick and pack) + send shipment (ship)
3 create and send invoice + receive payment
Quiz - customer service
a) 1 request maintenance + authorize maintenance + perform maintenance
2 settlement
b) 1 create service request + authorize service
2 perform service
3 settlement
Quiz - business processes
set of tasks or activities that produce desired outcomes
Quiz - earliest form in evolution of enterprise systems
stand along mainframe architecture
Quiz - latest stage in evolution of enterprise systems
service oriented architecture
Quiz - master data
customer, vendor, material, employee
Quiz - Organizational data
clients, companies, divisions, sales organization, purchasing organization, physical facilities, HR organization, profit center
Quiz - 3 tier client architecture
presentation, application, data
Quiz - would a credit sale increase the cash account
no, it would increase accounts receivable
Quiz - basic accounting equation
assets = liabilities + equity
Quiz - what type of account is accounts receivable
asset
Quiz - how would you record the cash purchase of supplies
debit supplies and credit cash
Quiz - managerial accounting would provide decision makers the following information:
cost of the expansion of a product line report to management