1. Module 5 Strategic Enterprise Management and Reporting Tools
Important Points of the Assignment
These slides are designed to introduce the students to the concepts involved in advanced reporting and analysis of financial and other data that is typically found in a data warehouse. Since most AIS textbooks do not pay very much attention to these concepts, this slide set is intended to cover the material in substantially more depth.
Accounting Information Systems

2. Accounting Information Systems
Slide Set Contents
1. Learning Objectives
OLTP and OLAP Systems
The Role of the Data Warehouse
Data Warehousing Analysis Tools
Control Aspects of a Data Warehouse
The Data Warehouse Assignment
Accounting Information Systems

3. Primary Learning Objectives
Understanding the differences between an operational system (OLTP system) and a data warehousing system (OLAP system)
Understand the relationship between an ERP system (SAP ERP) and a data warehouse system (SAP BW)
Exposure to some of the tools used in a data warehouse environment
Look into the use of the balanced scorecard and the management cockpit in the SAP SEM system
Accounting Information Systems

4. Data Warehousing a Reporting and Analysis Platform
Reporting was traditionally done out of the operational system (Termed the online transaction processing system (OLTP))
However, the operational system (such as SAP ERP) is used to run the day- to-day operations of the company
Performance of the operational system is extremely important since the performance of the system can significantly influence the performance of the entire organization
In fact, it is said with respect to the operational system “Performance is King”

5. Data Warehousing a Reporting and Analysis Platform
The problem with operational systems is that because the way they are designed, the response time of the system degrades in a quadratic manner with the growth of the stored data
This means storing historical data in the operational system is not optimal
Removing inactive data from the operational system becomes a necessity
So the large majority of the historical data must be purged from the operational system
This data contains valuable information that cannot be simply “thrown away”
This has led most organizations to place this data into a data warehouse system this is separate from the OLTP system

6. Data Warehousing a Reporting and Analysis Platform
The data warehouse system is referred to as the online analytical processing system (OLAP)
This system stores substantially more data than the operational system
The physical structure of the system is different than the OLTP system
While reducing data redundancy is a prime objective of the OLTP system, the data warehouse has substantial redundancy
Also, unlike the OLTP system the data warehouse does not store primarily transactional data, but instead stores summarized data
Data warehouses store substantially more data than an OLTP system (as much as 100 times the size)
However, performance is not as important as in the OLTP system and because of the different structure of the system, even though the system is large the performance is acceptable

7. Data Warehousing a Reporting and Analysis Platform
While the operational system is designed to run the company on a day-to- day basis, the function of a data warehouse is to support medium and long term decision making
An example of a decision made on an operational system is whether to sell a customer goods on credit
The operational system can check the credit limit of the customer and the amount of the potential sale and can make the decision
The decisions made using data warehouse data rely much more on historical data analysis
An example of a decision made using this data is whether to build a new plant
In addition, because of the increased reporting requirements and the demand for more timely reports, the reporting function is moving from the operational system to the data warehouse

8. Data Warehousing a Reporting and Analysis Platform
The question you may have asked when we were doing the SAP ERP exercises may have been:
Why do we need to deal with the complexity of an ERP system when there are many other accounting packages that are not as complex?
The answer is complex, but some reasons include:
Improved business processes
Increased internal controls
Much higher quality data
Most of the reasons are not readily obvious, but the analysis that we discuss when dealing with data warehousing is impossible without having an ERP system to feed the warehouse quality data

9. Data Warehousing a Reporting and Analysis Platform
The data warehouse environment supports a wide range of tools that can be used for sophisticated data analysis
This includes
Multi-dimensional analysis
Digital dashboards
Balanced scorecards
Data mining

10. Data Warehousing a Reporting and Analysis Platform
Multi-dimensional analysis
This is what Excel pivot tables enable us to do
A data warehouse provides these types of tools, but with massive amounts of data that has been thoroughly checked for quality and proper integration

11. Data Warehousing a Reporting and Analysis Platform
Digit dashboards
These include a series of measures that can be used to indicate the performance of areas within the company
These are short to medium range indicators that are analogous to the instruments on your car
The theory is that the company can be “tuned” based on these measures
SAP’s digital dashboard is called the management cockpit

12. Data Warehousing a Reporting and Analysis Platform
Balanced scorecards
These are measures that can be used for developing medium to long range organizational goals
A scorecard will set a series of organizational objectives with respect to a group of goals
Performance can then be measured against those objectives
You probably discussed this in your managerial accounting course

13. Data Warehousing a Reporting and Analysis Platform
Balanced scorecard usually has four different dimensions (also termed perspectives) including
Financial – the traditional financial and managerial accounting measures
Customer – Looks at customer relationships and satisfaction
Internal – Deals with the internal operations of the organization
Learning and Growth – Many times focuses on employees

14. Data Warehousing a Reporting and Analysis Platform
The use of a balanced scorecard is designed to remove the more traditional focus on only financial measures to determine success
Aimed at developing long term strategies that will ensure success beyond the short term
Incentives can then be centered around these more balanced measures
Many companies have adopted this approach
A data warehouse is an enabler for using this tool

15. Data Warehousing a Reporting and Analysis Platform
Data Mining
Sophisticated set of tools that can be used to determine patterns in data that are not logically apparent
Can result in very interesting and profitable situations
To many companies this presently is an advanced approach, but with the heavier use of data warehousing, it will become more widely used

16. Data Warehousing a Reporting and Analysis Platform
Note that all of the above analysis would not be possible using only the data from an operational system
The data warehouse drives this process
The data warehouse is rapidly changing from a tool that can be used as a competitive weapon to one that will become an absolute necessity

17. Control in a Data Warehouse Environment
With respect to data warehousing, one of the biggest areas of concern is that the data rolling into the data warehouse is consistent and accurate
Due to the complexity of data loads, this is not a minor problem
Substantial testing must be done to guarantee that the data loads are being done properly
This can be partly the I.T. audit team’s responsibility

18. Data Warehouse Assignment
The data warehousing assignment illustrates two of the tools discussed in this lecture
You will use the SAP BW data warehouse system and the SAP strategic enterprise management system (SEM) in this assignment
The SAP SEM system must be installed on top of the SAP BW data warehouse
The SEM system provides a series of tools that employ the data that is held in the BW system to do business analysis
Hence, BW can be a standalone system, but SEM cannot

19. Data Warehouse Assignment
In the first part of the assignment you will analyze data within a balanced scorecard
In the second part of the assignment you will analyze data in a management cockpit