Accounting Information System

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Chapter 10
E-business and Enterprise
Resource Planning Systems

2. 10-2
Outline
• Learning objectives
• Nature & forms of e-business
• Enterprise resource planning systems
• Application service providers

3. 10-3
Learning objectives
1. Explain the nature of
e-business, comparing
and contrasting it with
traditional “brick-and-
mortar” organizations.
2. Discuss major forms
of e-business.
3. Describe the basic
nature, purpose, and
structure of enterprise
resource planning
systems.
4. Give examples and
analyze the causes of
ERP system failures.
5. List and discuss steps
associated with
successful ERP
implementations.
6. Discuss the role of
application service
providers in e-
business.

4. 10-4
Nature & forms of e-business
• Central feature
Business is transacted
over a network.
• Forms
– B 2 C
www.graze.com
– B 2 B
www.oracle.com
– G 2 C
www.irs.gov
– G 2 B
www.sba.gov
– C 2 C
www.eharmony.com

5. 10-5
Enterprise resource planning
systems
• Purpose
Providing comprehensive information for
decision making
• Nature
– Fundamentally, relational databases
– Modular organization
• Major companies
– Oracle (PeopleSoft)
– SAP

6. 10-6
Enterprise resource planning
systems
Table 10.1
Modular organization of ERP systems
Generic module
name
Primary stakeholder
group
Module components in
SAP
Customer
relationship
management (CRM) Customers Sales and distribution
Human resource
management (HRM) Employees Human resources
Supply chain
management (SCM) Vendors Materials management
Financial
management Stockholders Financial accounting

7. 10-7
Enterprise resource planning
systems
• Selected failure
causes
– Poor top management
leadership
– Unrealistic
expectations
– Inaccurate data in the
system
– Significant technical
difficulties
• Selected conditions
for success
– Obtain organizational
commitment.
– Communicate
strategic goals clearly.
– View ERP as an
enterprise-wide
venture.
Umble, E., and M. Umble. 2002. “Avoiding ERP Implementation
Failure.” Industrial Management, January/February, pp. 25–34.

8. 10-8
Application service providers
An organization that provides a
contractual service to deploy, host and
manage applications for customers
remotely from a centralized location.
Jaruzelski, Ribeiro and Lake (2014)

9. 10-9
Application service providers
• ASP types
– Enterprise
ERP systems
– Local / regional
Payroll services for
companies in Denver
– Specialist
Online diversity
compliance training
– Vertical market
Patient billing for
hospitals
– Volume business
Comprehensive human
resource services for mid-
range businesses in
Nashville

10. 10-10
Application service
providers
• Title
Reporting on Controls at
a Service Organization
• Three report types
– SOC 1
Financial reporting
– SOC 2
Security, confidentiality,
privacy and related areas
– SOC 3
Less detailed version of
SOC 2
• Using ASPs
involves risk.
• The risk can
complicate a
financial
statement audit.
• The AICPA issued
SSAE 16 to help
address that risk
in the context of
an audit.

11. 10-11