Recording / Financing Fixed Asset Acquisition Human Resources Purchasing Revenue Traditional files approach: separate systems (Legacy Systems) Expenditure Cycles Reporting & G/L Production

Problems with multiple systems  Coordination difficult because of lack of shared information Sales  inventory  production,… Scheduling  budgeting  operations,…  Multiple versions of the “truth” What is sales—per accounting, marketing, production??  Same information stored in multiple master files: Redundancy  higher costs, inefficient, inconsistency

Databases o Developed to address problems associated with multiple master file systems o Treats data as an organizational resource to be used and managed by the entire organization, not just one department. o Most new AISs implement a relational database approach. o Virtually all mainframe computer sites use database technology

Database Benefits  Data integration  Data sharing  Reporting flexibility  Minimal data redundancy and inconsistencies  Data independence  Cross-functional analysis

Enterprise Resource Planning (ERP) system  Means of collecting, processing and storing data about a business’ processes  Provide information reports designed for managers and external parties  Uses a centralized database to share information across business cycles  Provides for efficient and effective coordination of activities

ERPs  SAP, Oracle/PeopleSoft/JD Edwards, Lawson –Be sure to read ABCs of ERPs

Enterprise Resource Planning (ERP): An Integrated Solution Customer Order Processing Inventory Management Manufacturing Procurement Receiving Shipping Financial System Human Resources Equip. Ware- house Data about ALL of the various business processes

How do ERP’s provide integration? Common Database Sales HR A/R Materials Management Production A/P Cash Mgt Quality Control

Foundational units of Database Systems  Relational databases using either: Normalization rules Data modeling  Query languages

Relational Database Definitions  Primary key=attribute or combination of attributes that uniquely indentifies a specific row in a table (i.e. customer number, inventory item number, vendor number, GL account number, etc.)  Foreign key=attribute in one table that is a primary key in another table. Used to link tables together.  Vendor number is primary key in Vendor table, foreign key (link) in purchase table. In purchase table, the primary key is the Purchase Order #.

Relational database rules The following four constraints produce a well-structured (normalized) database in which data are consistent and redundancy is minimized and controlled:  Every table must have a unique primary key—cannot be null (blank)  Foreign keys must be null or have a value corresponding to the value of a primary key in another table  Each attribute must describe a characteristic of the object identified by the primary key—all attributes must relate to the primary key  Each column in a row must be single-valued—no repeated attributes In a normalized database:  No calculated fields  All related tables must be connected with foreign keys

Relational Data Bases Consider the transaction captured by this source document:

Relational Data Bases EVENTAGENTRESOURCE InventoryCustomerSale What entities are involved?

Relational Data Bases EVENTAGENTRESOURCE InventoryCustomerSale What tables are needed?

Relational Data Bases Is all information accounted for?

Relational Data Bases What database rule(s) are violated?

Relational Data Bases  We correct these problems by adding another table to create a “normalized” data base  Data duplication is minimized  Note the “concatenated” primary key in the Sales-Inventory table

Relational Data Bases We have created an efficient relational database that uses foreign keys to link the tables:

Normalization rules  Remove all fields with multiple values—the multiple-valued objects should be their own table  Remove all fields that do not depend upon the entire primary key—the fields belong to one of the connected tables  Remove all fields whose values can be unambiguously predicted by looking at the values of a non-primary key field—the fields should be in their own table As seen in last example.

Data modeling Definition: Process of defining a database so that it faithfully represents all aspects of the organization, including its interaction with the external environment.  Identify objects of interest  Identify relationships  Identify attributes of the objects Start with understanding of business and how processes work to begin model instead of starting with a mess of data and applying “normalization rules” to develop a set of tables

Query Languages  Allows database users to retrieve, sort, and presents subsets of the database information  Usually consists of a easy to use set of commands to enable users to retrieve their own information without programmer assistance