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Overview of ERP Systems and Transaction Processing

Learn about enterprise systems, ERP systems, data processing cycle, systems integration, major ERP modules, and the pros and cons of implementing enterprise systems.

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Overview of ERP Systems and Transaction Processing

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  1. Accounting Information System ACC 3320

  2. Topic 2 Overview of ERP Systems and Transaction Processing 2-2

  3. Learning Objectives • Describe enterprise systems and enterprise resources planning (ERP) systems. • Describe the four major steps in the data processing cycle. • Demonstrate the value of systems integration. • Describe how an enterprise system supports major business event processes. • Discuss the types of information that an AIS can provide. • Describe the Major ERP Modules. • Discuss the pros and cons of implementing enterprise systems.

  4. Data Processing Cycle Input Process Output Storage

  5. Enterprise Systems and ERPs • Enterprise systems: Integrate business processes and information from all of an organization's functional areas, such as marketing and sales, cash receipts, purchasing, cash disbursement and etc… • Enterprise Resource Planning (ERP) Systems: Software packages that can be used for the core systems necessary to support enterprise systems.

  6. Integrate Business Process Functionality When purchasing office equipment an enterprise system might: • Provide an electronic order form (purchase requisition). • Apply business rules. • Preparing purchase order and send it to a vendor. • Completing the business process

  7. ERP Systems

  8. Selected ERP Vendors

  9. Inefficient Customer Service • Source data is captured • In machine-readable form • At the time of the business activity • E.g., ATM’s; POS

  10. Customer Service Questions • Do you think that Sophia, the customer service representative, wants to keep the customer on the phone throughout this process? • Would you consider this to be good customer service?

  11. Solution to Inefficient Customer Service • Enterprise system establishes ATP (available to promise) by checking warehouses and scheduled manufacturing. • Enterprise systems uses the central database to automatically determine price and credit limit.

  12. Data Maintenance: Create Customer Record

  13. Business Event Data Processing:Enter Customer Order

  14. Using Stored Data for Decision Making

  15. Major ERP Modules • Sales and Distribution (SD) 1- Record customer orders 2- Shipping 3- Billing • Connections to:::::::::::::::::::::::::::::::: 1- Materials management module (MM) 2- Financial accounting module (FI) 3- Controlling module (CO)

  16. Major ERP Modules (cont’d) • Materials Management (MM) 1- Purchase order preparation 2- Receiving 3- Recording invoice • Interacts with:::::::::::::::::::::::::::::::: 1- Sales and distribution module (SD) 2- Financial accounting module (FI) 3- Controlling module (CO)/

  17. Major ERP Modules (cont’d) • Financial Accounting (FI) 1- Plays a central role in the SAP system. 2- Business events from other modules, such as SD and MM are incorporated into the general ledger accounts and included in the external financial statements. 3- The FI module also includes accounts receivable and accounts payable functions to record and manage that data directly and to complete events begun in the SD and MM modules.

  18. Major ERP Modules (cont’d) • Controlling (CO) 1- Often called Controlling and Profitability Analysis (CO/PA). 2- Handles internal accounting including:::: A// Cost center accounting B// Profitability analysis for sales C// Activity-based accounting D// Budgeting

  19. Major ERP Modules (cont’d) • Human Resources (HR) 1- Functions related to the management and administration of personnel 2- Payroll processing 3- Training and travel 4- Benefits 5- Reports

  20. Order‐to‐Cash Process

  21. SD Menu Options in the SAP System

  22. SD Audit Trail for Completion of Steps in the SAP Sales Process

  23. Purchase‐to‐Pay Process 2-22

  24. MM Menu Options in the SAP System 2-23

  25. Audit Trail for Completion of Steps in the SAP Purchase Process 2-24

  26. ERP Advantages Integration of an organization’s data and financial information. Data is captured once Greater management visibility, increased monitoring Better access controls Standardizes business operating procedures Improved customer service 2-25

  27. ERP Disadvantages Cost Time-consuming to implement Changes to an organization’s existing business processes can be disruptive Complex 2-26

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