Recording / Financing

Fixed AssetAcquisition

Human ResourcesPurchasing

Revenue

Traditional files approach: separate systems(Legacy Systems)

ExpenditureCycles

Reporting &G/L

Production

Problems with multiple systems

Coordination difficult because of lack of shared information Salesinventoryproduction,… Schedulingbudgetingoperations,…

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 OrderProcessing

InventoryManagement

Manufacturing

ProcurementReceiving

Shipping

Financial System

Hu

ma

n R

esource

s

Equip.

Ware-house

Data about ALL of the various business processes

How do ERP’s provide integration?

CommonDatabase

Sales

HRA/R Materials

Management

Production

A/P

CashMgt

QualityControl

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

00101

10-15-99

Item # Description Quantity Unit Price Extension

10 Television 2 $ 499.00 $ 998.0050 Microwave 1 449.00 449.00

$ 1,447.00

S & S Appliance Company

Total Sale

Sold To:D. Ainge123 Lotus LanePhoenix, AZ

Invoice No:

Invoice Date:

Consider the transaction captured by this source document:

Relational Data Bases

EVENT AGENTRESOURCE

Inventory CustomerSale

00101

10-15-99

Item # Description Quantity Unit Price Extension

10 Television 2 $ 499.00 $ 998.0050 Microwave 1 449.00 449.00

$ 1,447.00

S & S Appliance Company

Total Sale

Sold To:D. Ainge123 Lotus LanePhoenix, AZ

Invoice No:

Invoice Date:

What entities are involved?

Relational Data Bases

EVENT AGENTRESOURCE

Inventory CustomerSale

Customer # Name Address City State151 D. Ainge 123 Lotus Lane Phoenix AZ

Customer TableItem # Unit Price Description

10 499 Television50 449 Microwave

Inventory Table

Invoice # Customer # Date Item # Quantity Extension101 151 10-15-99 10 2 998101 151 10-15-99 50 1 449

Sales Table

What tables are needed?

Relational Data Bases

Customer # Name Address City State151 D. Ainge 123 Lotus Lane Phoenix AZ

Customer Table

Item # Unit Price Description10 499 Television50 449 Microwave

Inventory TableInvoice # Customer # Date Item # Quantity Extension

101 151 10-15-99 10 2 998101 151 10-15-99 50 1 449

Sales Table

Is all information accounted for?

Relational Data Bases

Customer # Name Address City State151 D. Ainge 123 Lotus Lane Phoenix AZ

Customer Table

Item # Unit Price Description10 499 Television50 449 Microwave

Inventory Table

Invoice # Customer # Date Item # Quantity Extension101 151 10-15-99 10 2 998101 151 10-15-99 50 1 449

Sales Table

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 BasesWe have created an efficient relational database

thatuses 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