BMGT326 Exam 1 Review (Ch. 1-3, 17)13 T/F, 47 multiple choiceChapter 1- Enterprise system: application of electronic networks to undertake business processes between individuals and organizations, integrate all processes and information from the organization’s functional areas, includes the interaction between back-office and front-office processes, provides virtual marketplaceso Enterprise resource planning (ERP) systems: software packages used to support enterprise systems, collect data about each business event and store in an enterprise database, standardize processes and systems- Internal control: process designed to provide reasonable assurance regarding achieving objectives, ensures that asset levels are correct and that operations are efficient/effective- Information system (IS): system of integrated computers and manual components that collect and store data and provide output information to users, directed at the processing of business eventso Accounting information system (AIS): subsystem of an IS that focuses on financial aspects of a business, hard to distinguish from IS with the integration of systems today (ie: ERP) Two functions: assist in daily operations, support managerial activities Accountants participate as users/business process owners – choose data and report design, ensure validity through audits and checking internal controls, but don’t actually program/code the system- Sarbanes-Oxley Act (SOX):o Section 404 – management must document/evaluate internal controls, auditors must report on the effectiveness of the organization’s internal controlso Section 409 – management must rapidly disclose to the public any material changes in the firm’s financial condition- Information: data presented in a form that is useful for decision-making and reduces uncertaintyo Qualities: Understandability – can perceive the information’s significance Consistency – same object/event collected each time Comparability – can identify similarities/differences among information Accuracy – agreement between information and actual event/object Completeness – includes data about every relevant object/event (only once) Verifiability – high degree of consensus about the information among measures Timeliness – available while still useful for decision-making- Relevance – capable of making a difference in decision-making by reducing uncertainty/increasing knowledge Components:- Predictive value – improve capacity to predict- Feedback value – improve capacity to confirm/correct earlier expectations- Timeliness – available while still useful for decision-making- Reliability – appropriate information for management to operate the entity’s responsibilities Components:- Accuracy – agreement between information and actual event/object- Completeness – includes data about every relevant object/event (only once)- Verifiability – high degree of consensus about the information among measures- Validity – actual, authorized events/objects- Neutrality – free from bias, information is objective, quality measurements- Data: facts or figures in raw measurement form, must be transformed into informationChapter 2- Primary goal of an ERP system: “allow companies to standardize systems across multiple locations and multiple divisions to link business processes and data in a consistent fashion and provide organization-wide data accessibility”- ERP Software Add-ons:o Customer Relationship Management (CRM): maintains a customer database (name, contact information), tracks purchases and suggests products, supports customer retention (ie: Amazon.com)o Customer Self-Service (CSS): extension of CRM that allows customers to perform tasks, troubleshoot problems, check order statuses, retail self-service optionso Supplier Relationship Management (SRM): manages interactions with organizations that supply goods/services (contract management), reduces product/production costso Product Life-Cycle Management (PLM): manages product data through a product’s life, integrates data across organizational unitso Sales Force Automation (SFA): automates sales tasks, used interchangeably with CRM (even though CRM doesn’t process orders)o Supply Chain Management (SCM): executes the steps on a supply chain, handles inventory- Middleware: generic term for a software product that connects 2+ separate applications/software modules, helps themback data back and fortho Enterprise Application Integration (EAI): approach that combines processes/hardware linking 2+ systems together (internally or externally), allows them to work as one – examples: CRM, ERP systemso Event-Driven Architecture (EDA): approach that is triggered by business events, events push/send the messages between 2+ different systems that are unaware of each other instead of waiting for the recipient to request Chapter 3- Types of Datao Master Data: relatively permanent data maintained over an extended period of time, contains data related to entities/places/thingso Standing Data: relatively permanent portions of master data- Data Updateso Transaction processing: information processing related to business events, adjusting entries due to new transactions occurring, updates the master datao Data maintenance: adding to, editing, deleting the standing data- Periodic mode: processing mode in which a delay exists between the various data processing steps, depends heavily onbatch processing (aggregation of several business events over some period of time for processing as a group)o Online Transaction Entry (OLTE): use computer to enter business event data online directly into the information system at the time/place of the event Advantages – low-cost means of improving efficiency, eliminates human error Disadvantages – data still processed in batch mode, periodic mode systems becoming less common- Immediate mode: data processing mode in which little/no delay occurs between any data processing steps, updates master data immediately at the time of each event (real-time processing)o Online Real-Time Processing (OLRT): gathers business event data at the time of the occurrence and updatesthe master data instantly, creating because of pressures for timely information flows and significant advances in information technology Advantages – eliminates the delay in accessing up-to-date information Disadvantages?- Back-Office v. Front-Office functionso Back-office: internal business