Summary of The REA Approach to Database Modeling.

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Summary

This chapter opened by comparing the function and data storage techniques of a traditional flat-file or database system with that of an ERP. An important distinction was drawn between OLTP and OLAP applications. Similarly, the differences between the ERP’s operational database and the data ware- house were discussed. Next, ERP configurations were examined related to servers, databases, and bolt-on software. We discussed SCM as an area of contention. ERP vendors are moving quickly to provide SCM functionality. Simultaneously, SCM vendors are encroaching on traditional ERP territory.

Data warehousing was the topic of the third section. A data warehouse is a relational or multidimensional database that supports OLAP. A number of data warehouse issues were discussed, including data modeling, data extraction from operational databases, data cleansing, data transformation, and data loading into the warehouse.

The fourth section examined common risks associated with ERP implementation. Among these are the risks associated with the big bang approach, internal opposition to changing the way a company does its business, choosing the wrong ERP model, choosing the wrong consultant, cost overrun issues, and disruptions to operations. Also presented were a number of issues to consider when implementing an ERP. These include selecting a system that is a good fit for the organization, understanding that the term scalability can mean different things to different people, potential problems associated with customizing the software, the need for assigning performance measures, and the need to control outside consultants. The chapter concluded with a review of the internal control and auditing issues related to ERPs.

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