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Module 5 Strategic Enterprise Management and Reporting Tools

Module 5 Strategic Enterprise Management and Reporting Tools. Important Points of the Assignment

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Module 5 Strategic Enterprise Management and Reporting Tools

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  1. Module 5Strategic Enterprise Management and Reporting Tools Important Points of the Assignment These slides are designed to introduce the students to the concepts involved in advanced reporting and analysis of financial and other data that is typically found in a data warehouse. Since most AIS textbooks do not pay very much attention to these concepts, this slide set is intended to cover the material in substantially more depth. Accounting Information Systems

  2. Slide Set Contents • 1. Learning Objectives • OLTP and OLAP Systems • The Role of the Data Warehouse • Data Warehousing Analysis Tools • Control Aspects of a Data Warehouse • The Data Warehouse Assignment Accounting Information Systems

  3. Primary Learning Objectives • Understanding the differences between an operational system (OLTP system) and a data warehousing system (OLAP system) • Understand the relationship between an ERP system (SAP ERP) and a data warehouse system (SAP BW) • Exposure to some of the tools used in a data warehouse environment • Look into the use of the balanced scorecard and the management cockpit in the SAP SEM system Accounting Information Systems

  4. Data Warehousing a Reporting and Analysis Platform • Reporting was traditionally done out of the operational system (Termed the online transaction processing system (OLTP)) • However, the operational system (such as SAP ERP) is used to run the day-to-day operations of the company • Performance of the operational system is extremely important since the performance of the system can significantly influence the performance of the entire organization • In fact, it is said with respect to the operational system “Performance is King”

  5. Data Warehousing a Reporting and Analysis Platform • The problem with operational systems is that because the way they are designed, the response time of the system degrades in a quadratic manner with the growth of the stored data • This means storing historical data in the operational system is not optimal • Removing inactive data from the operational system becomes a necessity • So the large majority of the historical data must be purged from the operational system • This data contains valuable information that cannot be simply “thrown away” • This has led most organizations to place this data into a data warehouse system this is separate from the OLTP system

  6. Data Warehousing a Reporting and Analysis Platform • The data warehouse system is referred to as the online analytical processing system (OLAP) • This system stores substantially more data than the operational system • The physical structure of the system is different than the OLTP system • While reducing data redundancy is a prime objective of the OLTP system, the data warehouse has substantial redundancy • Also, unlike the OLTP system the data warehouse does not store primarily transactional data, but instead stores summarized data • Data warehouses store substantially more data than an OLTP system (as much as 100 times the size) • However, performance is not as important as in the OLTP system and because of the different structure of the system, even though the system is large the performance is acceptable

  7. Data Warehousing a Reporting and Analysis Platform • While the operational system is designed to run the company on a day-to-day basis, the function of a data warehouse is to support medium and long term decision making • An example of a decision made on an operational system is whether to sell a customer goods on credit • The operational system can check the credit limit of the customer and the amount of the potential sale and can make the decision • The decisions made using data warehouse data rely much more on historical data analysis • An example of a decision made using this data is whether to build a new plant • In addition, because of the increased reporting requirements and the demand for more timely reports, the reporting function is moving from the operational system to the data warehouse

  8. Data Warehousing a Reporting and Analysis Platform • The question you may have asked when we were doing the SAP ERP exercises may have been: • Why do we need to deal with the complexity of an ERP system when there are many other accounting packages that are not as complex? • The answer is complex, but some reasons include: • Improved business processes • Increased internal controls • Much higher quality data • Most of the reasons are not readily obvious, but the analysis that we discuss when dealing with data warehousing is impossible without having an ERP system to feed the warehouse quality data

  9. Data Warehousing a Reporting and Analysis Platform • The data warehouse environment supports a wide range of tools that can be used for sophisticated data analysis • This includes • Multi-dimensional analysis • Digital dashboards • Balanced scorecards • Data mining

  10. Data Warehousing a Reporting and Analysis Platform • Multi-dimensional analysis • This is what Excel pivot tables enable us to do • A data warehouse provides these types of tools, but with massive amounts of data that has been thoroughly checked for quality and proper integration

  11. Data Warehousing a Reporting and Analysis Platform • Digit dashboards • These include a series of measures that can be used to indicate the performance of areas within the company • These are short to medium range indicators that are analogous to the instruments on your car • The theory is the company can be “tuned” based on these measures • SAP’s digital dashboard is called the management cockpit

  12. Data Warehousing a Reporting and Analysis Platform • Balanced scorecards • These are measures that can be used for developing medium to long range organizational goals • A scorecard will set a series of organizational objectives with respect to a group of goals • Performance can then be measured against those objectives • You probably discussed this in your managerial accounting course

  13. Data Warehousing a Reporting and Analysis Platform • Balanced scorecard usually has four different dimensions (also termed perspectives) including • Financial – the traditional financial and managerial accounting measures • Customer – Looks at customer relationships and satisfaction • Internal – Deals with the internal operations of the organization • Learning and Growth – Many times focuses on employees

  14. Data Warehousing a Reporting and Analysis Platform • The use of a balanced scorecard is designed to remove the more traditional focus on only financial measures to determine success • Aimed at developing long term strategies that will ensure success beyond the short term • Incentives can then be centered around these more balanced measures • Many companies have adopted this approach • A data warehouse is an enabler for using this tool

  15. Data Warehousing a Reporting and Analysis Platform • Data Mining • Sophisticated set of tools that can be used to determine patterns in data that are not logically apparent • Can result in very interesting and profitable situations • To many companies, this is currently an advanced approach, but with the heavier use of data warehousing, it will become more widely used

  16. Data Warehousing a Reporting and Analysis Platform • Note that all of the above analysis would not be possible using only the data from an operational system • The data warehouse drives this process • The data warehouse is rapidly changing from a tool that can be used as a competitive weapon to one that will become an absolute necessity

  17. Control in a Data Warehouse Environment • With respect to data warehousing, one of the biggest areas of concern is that the data rolling into the data warehouse is consistent and accurate • Due to the complexity of data loads, this is not a minor problem • Substantial testing must be done to guarantee that the data loads are being done properly • This can be partly the I.T. audit team’s responsibility

  18. Data Warehouse Assignment • The data warehousing assignment illustrates two of the tools discussed in this lecture • You will use the SAP BW data warehouse system and the SAP strategic enterprise management system (SEM) in this assignment • The SAP SEM system must be installed on top of the SAP BW data warehouse • The SEM system provides a series of tools that employ the data that is held in the BW system to do business analysis • Hence, BW can be a standalone system, but SEM cannot

  19. Data Warehouse Assignment • In the first part of the assignment you will analyze data within a balanced scorecard • In the second part of the assignment you will analyze data in a management cockpit

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