Problems on The REA Approach to Database Modeling.

Problems

1. DATA WAREHOUSE ACCESS CONTROL

You are the CEO of a large organization that implemented a data warehouse for internal analysis of corporate data. The operations manager has written you a memo advocating opening the data warehouse to your

suppliers and customers. Explain any merit to this proposal. What are the control issues, if any?

2. PROJECT IMPLEMENTATION

Your organization is planning to implement an ERP system. Some managers in the organization favor the

big bang approach. Others are advocating a phased-in approach. The CEO has asked you, as project leader, to write a memo summarizing the advantages and disadvantages of each approach and to make a recommendation. This is a traditional organization with a strong internal hierarchy. The company was acquired in a merger 2 years ago, and the ERP project is an effort on the part of the parent company to standardize business processes and reporting across the organization. Prior to this, the organization had been using a general ledger package that it acquired in 1979. Most of the transaction processing is a combination of manual and batch processing. Most employees think that the legacy system works well. At this point, the implementation project is behind schedule.

3. OLTP VERSUS OLAP SERVERS

For each of the following processes, state whether OLTP or OLAP is appropriate and why.

a. An order entry system that retrieves customer information, invoice information, and inventory information for local sales.

b. An order entry system that retrieves customer information, invoice information, inventory information, and several years of sales information about both the customer and the inventory items.

c. An order entry system that retrieves customer information, invoice information, inventory information, and information to compare the current sale to sales across several geographic regions.

d. An order entry system that retrieves customer information, invoice information, inventory information, and accounts receivable information for sales within one marketing region.

e. An insurance company requires a system that will allow it to determine total claims by region, deter- mine whether a relationship exists between claims and meteorological phenomenon, and why one region seems to be more profitable than another.

f. A manufacturing company has only one factory, but that factory employs several thousand people and has nearly $1 billion in revenue each year. The company has seen no reason to make comparisons about its operations from year to year or from process to process. Its information needs focus primarily on operations, but it has maintained backup of prior-year operations activities. Examination of prior-year financial reports have shown that the company, while profitable, is not growing and return on investment is decreasing. The owners are not satisfied with this situation.

4. SELECTING A CONSULTANT

You are the chief information officer for a midsized organization that has decided to implement an ERP sys- tem. The CEO has met with a consulting ERP firm based on a recommendation from a personal friend at his club. At the interview, the president of the consulting firm introduced the chief consultant, who was charming, personable, and seemed very knowledgeable. The CEO’s first instinct was to sign a contract with the consultant, but he decided to hold off until he had received your input.

Required

Write a memo to the CEO presenting the issues and the risks associated with consultants. Also, outline a set of procedures that could be used as a guide in selecting a consultant.

5. AUDITING ERP DATABASES

You are an independent auditor attending an engagement interview with the client. The client’s organization has recently implemented a data warehouse. Management is concerned that the audit tests that you perform will dis- rupt operations and suggests that instead of running tests against the live operational database, you draw the data for your analytical reviews and substantive tests of details from the data warehouse. Management points out that operational data are copied weekly into the ware- house and everything you need will be contained there. This will enable you to perform your tests without disrupting routine operations. You agree to give this some thought and get back to the client with your answer.

Required

Draft a memo to the client outlining your response to their proposal. Mention any concerns you might have.

6. BIG BANG VERSUS PHASED-IN APPROACH

The Nevada Department of Motor Vehicles (DMV) is the agency responsible for licensing both drivers and vehicles in the state of Nevada. Until recently, legacy systems were used for both licensing needs. The legacy system for driver’s licenses maintained the following in- formation about each licensed driver: name, age, address, violation, license classification, organ donation, and restrictions. The vehicle licensing system maintained information about each vehicle, including cost, taxes, vehicle identification number (VIN), weight, insurance, and ownership. In the summer of 1999, over a 3-day weekend, information from the two legacy

systems was transferred to a new ERP. The ERP and all new hardware were installed in every DMV across the state, and when employees returned from their long weekend, an entirely new system was in place.

The DMV employees were not well trained on the new system, and the system itself presented a few bugs. As a result of these obstacles, customers at the DMV faced excessively long lines and extended waiting times, and several of the employees simply quit their jobs because of frustrations with the system and difficulty dealing with irate customers. Knowing that the waiting times were so long, many drivers simply refused to renew licenses or obtain new licenses.

Assume that the ERP the DMV management selected was correctly configured and was capable of meeting all requirements of the DMV; consider data warehousing implications, business culture implications, and disruption to operations; and discuss the advantages and disadvantages associated with the deci- sion to implement the new system using the big bang approach versus the phased-in approach.

7. ERP FAILURE

When an ERP implementation fails, who is to blame? Is it the software manufacturer, the client firm, or the implementation strategy?

Required

Research this issue and write a brief paper outlining the key issues.

8. ERP MARKET GROWTH

Because many large corporations implemented ERP systems prior to 2000, what direction will growth of the ERP market take?

Required

Research this issue and write a brief paper outlining the key issues.

9. ERP CONSULTANTS

Do an Internet search of complaints about ERP consultants. Write a report about the most common complaints and cite examples.

10. ERP BOLT-ON SOFTWARE

Go to ten Web sites of companies that supply bolt-on software. Write a report containing URLs that briefly describe the software features and its compatibility with specific ERP systems.

11. SAP CASE

The Sports Car Factory is a SAP-based project that deals with transaction processing, master file maintenance, adequacy of role definitions, and internal control issues. Students may download the case materials from the student resources section of the text’s Web site (www.cengage.com/accounting/hall). These materials include screen-by-screen instructions for how to process key transactions in the Order-to-Cash and Purchase-to- Pay modules. Members of the SAP University Alliance who wish to supplement their course with hands-on SAP training may request the Sports Car Factory client from their SAP provider. For more on the SAP University Alliance please refer to http://www.sap.com/about/ citizenship/education/universityalliances.epx.