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Core Concepts of Accounting Information Systems, 13th Edition, by Simkin, Rose, and Norman
SM 12-1
Chapter 12
INTEGRATED ACCOUNTING AND ENTERPRISE SOFTWARE
Discussion Questions
12-1. Figure 12-1 of the text contains a list of the features provided by most integrated
accounting packages. Of these, the most important is the fact that the software integrates the
cloud computing—the availability of such useful features as offsite backup, multiuser access,
and automatic upgrades on hosted systems, (4) remote access to the system at any time and from
as needs or interest dictate.
12-2. Most of the features for the accounting software of small businesses listed in
currencies, (4) the ability to split commissions among multiple salespeople, and (5) the
rental agencies or charities.
12-3. Shopping for a new accounting package requires a careful assessment of business
needs in order to match such requirements with software features. As noted at the end of the
Yes, it is likely to make a difference if the organization is a not-for-profit. This is because a not-
for-profit concern such as a charity or government agency is likely to have specialized
12-4. The chapter lists five advantages of using cloud service providers: (1) anytime,
anywhere access to accounting information from a variety of Internet access devices, (2)
storage” are often mentioned as additional benefits.
Core Concepts of Accounting Information Systems, 13th Edition, by Simkin, Rose, and Norman
SM 12-2
possible lack of vendor support (for most businesses, 48-hour response time to emails is not
acceptable).
12-5. Actually the features available in low-end packages today are truly amazing, when
codes." These are extra fields that users can designate to meet the special needs of a particular
12-6. Traditional ERP systems were back-office systems that addressed the internal
strategic partners.
12-7. This question tests student understanding of what the term “integrated” really means.
Within the context of accounting packages, the term “integrated” refers to a cohesive set of
manufacturing, finance, and human resources.
Some of the basic features of an ERP are: a single database and integration across the enterprise
ERPs – that is, data are not shared across the many functions of the organization.
12-8. The four components of an ERP’s architecture are (1) the systems configuration (i.e.,
how the system is deployed), (2) a centralized database, (3) application interfaces, and (4)
typically independent databases maintained by separate accounting functions listed in the
problem statement.
SM 12-3
company personnel must manually rekey the outputs from one system as the inputs to a second
system—an amazingly inefficient process in this day and age. Finally, most ERP systems have
12-9. Perhaps the greatest benefit of an ERP’s centralized database is that it helps the
software integrate business functions. It does this by standardizing communications between the
information such as the price of a given product consistent among the various departments that
use it.
the data can lose its value as data integrity is lost. Finally, and although it is not mentioned in the
chapter, a centralized database is usually easier to administer, protect, and keep secure than the
multiple databases characteristic of silo business applications.
have been a 12 position numerical field. Combining the databases requires designers to choose
which to use in the new centralized database. These problems especially plague airlines when
passenger tickets.
12-10. Perhaps the best way to select an AIS is to hire a consultant or work with the
company’s CPA to get help identifying the best software for the new company. Even though a
A few companies might acquire an ERP package when they first start their businesses. This
enables them to begin with fully-integrated business functions, and avoids the trouble of
Core Concepts of Accounting Information Systems, 13th Edition, by Simkin, Rose, and Norman
SM 12-4
12-11. There are many articles available about enterprise-wide systems. Good sources for
these articles include the Wall Street Journal, Computerworld, Management Accounting, and
Business Week. Using an Internet search engine and a search term such as “successful ERP
implementations” often reveals vendor websites describing good (if self-glowing) accounts of
cost to only a few dollars.
Many of the articles concerning enterprise-wide information systems are written because an
organization must solve one or more current problems. These problems usually relate to cost
overruns, time delays, or the inability to easily perform needed processing or communication
Moving to an ERP represents a great deal of change for an enterprise. Most businesses are "silo-
ed." Each functional area is separate and keeps its own data. The ERP requires breaking down
the silos and integrating. An ERP represents new ways of doing things also because it typically
involves redesigning business processes. When you implement an ERP, you will not receive the
ERP.
Oddly it may be more difficult to select a low-end accounting package than an ERP. There are
very limited choices with ERP software and the packages have reached the point where all the
major ones have the capability to handle the basics. Specific vendors have staked out certain
choose the best fit.
12-12. A VAR will, by definition, have sales relationships with a set of software vendors.
For example, a VAR may be trained in Great Plains software. Therefore it is in the VAR's best
Students can use an Internet search engine to find sites for many accounting software programs
that are available for specific types of organizations. Using the terms “construction software,”
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12-13. There are many consequences in making a bad decision in acquiring a new
the worst case scenario, a company may have trouble managing its inventories, paying its bills,
payroll deadlines.
12-14. ERPs support and integrate business processes, and as such, incorporate “best
practices” for business processes. Thus, it is important for companies to align their business
Successful aspects for a BPR project include (from Figure 12-6):
Allocate appropriate time for the BPR project: approximately two-thirds of the time planning
a little over a year (13.8 months)
Engage a proven change management consultant, which is critical to meet or exceed project
objectives
for technical systems advice and expertise
12-15. A dashboard is a display screen that uses graphical images to depict items of interest
to managers—e.g., sales of selected products or sales by store or sales region. Refer to Figure 1-
4 in Chapter 1.
up-to-the-minute market yields on such issues obtained from outside sources. Similarly, a
mashup depicting both current manufacturing schedules and customer orders might enable a
Core Concepts of Accounting Information Systems, 13th Edition, by Simkin, Rose, and Norman
SM 12-6
Problems
12-16. Students might give a number of reasons for selecting specific software – like the
12-17. To find lists of vendors for low-end accounting and enterprise systems, suggest that
ranging from “low-end” to “middle-end.”
12-18. As defined in the chapter, scalability is the ability of software or hardware to
investment, i.e., the system will not have to be replaced when the company grows and expands –
the system can grow with the company.
12-19. Tom O’Neal
a. This question should get a lively discussion started among the students. Obviously, we have
an entrepreneur who started a business, took on a business partner to help him grow the bike
An investment in IT is really not the question to answer yet. It sounds like Steven and Tom
only have an accounting firm to do their annual financial statements. While that may have
Core Concepts of Accounting Information Systems, 13th Edition, by Simkin, Rose, and Norman
SM 12-7
too.
b. One way to find software for this company is to consider the “Top 7” Small Business
Accounting software options identified (and compared) by 2020 Software
(http://www.2020software.com). Certainly, the bicycle shop meets the criteria for this level
“accounting software for a bicycle shop.”
However, you might want to discuss the fact that the business is growing and might be at the
upper limit of the capabilities of a number of the software solutions in the “small business”
category. Perhaps the bicycle shop should consider the next higher level of software (mid-
two that the software is inadequate.
Steven and Tom might want to consider the following features: sales, payroll, inventory
control, purchasing, accounts payable, accounts receivable, etc. They should also ask
questions such as: What reports are available? Will we be able to query the system to get
have not thought about yet)?
c. There is no easy answer to this question. Frequently, students will say a consultant is
necessary and give very little thought to the cost of such services or whether the firm would
be financially able to do so. In the case of our bicycle shop, most likely a consultant would
size) and about any consulting firms they might choose.
Steven and Tom need to decide what they expect of the software and what they hope to
achieve by selecting an appropriate system. Several of the articles in the Recommended
Core Concepts of Accounting Information Systems, 13th Edition, by Simkin, Rose, and Norman
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business.
12-20. B&R, Inc.
a. B&R, Inc. may want to implement an ERP system. The company is concerned with reducing
expenses and a system such as SAP may be a way to accomplish that. Other benefits may be
b. Customers of ERP software are usually big companies—often Fortune 500 firms. However,
as we mentioned in the chapter, a number of software companies now offer smaller ERP
systems that can accommodate the needs of mid-sized companies unable to afford the
c. Figure 12-8 lists four examples of ERP failures involving millions of dollars. In general,
common problems concern cost overruns, disrupted business operations, unrealistic or
unfulfilled expectations, poor implementation, failure to meet reasonable expectations, or
prolonged implementation.
of the Wall Street Journal interactive web site can turn up some of these. One of the most
famous stories was Hershey’s failure to deliver Halloween candy on time – and the company
blamed it on the new ERP.
12-21. This problem requires students to visit a website such as www.top10ERP.org. This
choosing.
Case Analyses
12-22. Mar-Bal’s New ERP System (Analyzing an ERP Study and Implementation)
1. Indicators that a company may need a new or upgraded system:
