Tiếng anh chuyên ngành kế toán part 57

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Making Key Strategic Decisions
materials. Lastly, some companies use EDI to transmit their invoices and then
to receive the subsequent payments. While industries use different versions of
EDI in different ways, their goals are always the same: minimize the processing
time and lower inventory costs and overhead expenses. An industry organization
in Washington, D.C., developed and maintains a standard format that dictates
how all transactions are sent, ensuring that all companies that wish to imple-
ment EDI can be assured that all vendors’ and customers’ computers will un-
derstand each others’ transactions, without requiring any custom programming.
EDI, while still used quite extensively, has been eclipsed by electronic com-
merce, which will be discussed later in this chapter.
The 1990s has also seen the advent of virtual organizations. Virtual orga-
nizations are formed when companies join together to create products or en-
terprises that they could not have created individually. In most cases,
information technology allows companies to create these partnerships and
share information as if they were one company. Using communications and
groupware products like Lotus Notes, the partners can share information with
each other about their individual progress to ensure the best possible success.
This will be discussed further in the section on IT strategy.
DATA BASE
The following scenario depicts what information systems looked like prior to
the use of database management systems. Imagine a physical office in which
each person has his or her own file cabinet. The information in the file cabinets
belongs to the people whose desks are closest to them. They decide what infor-
mation will be in their file cabinets and how it will be organized. For example,
sales might refer to gross sales in one worker’s cabinet and net sales in an-
other’s. Yet, the discrepancy would be unimportant, because there was actually
very little sharing of data.
Database management systems assume that information is a corporate
asset to be shared by all workers in the enterprise. Database technology, there-

fore, allows a company to have one integrated location for the storage of all
company data. These systems create a standard vocabulary, or data dictionary,
by which all references are consistent (e.g., sales always means net sales). They
also enable each user to have her own individual view of the data as if the in-
formation were still in the file cabinet next to her desk. Users need not concern
themselves with the physical location or physical order of the data either. Data-
base management systems are capable of presenting the data as necessary. In
fact, with distributed databases, the data does not even have to reside in the
same location or computer. It can be spread around the world if necessary.
Database systems are sufficiently intelligent and can find the data and process
it as if it were located directly on the user’s personal computer.
Most of the software that was developed in the earlier years relied on data
structures called flat files. While some companies utilized database tech
nology
Information Technology and the Firm
549
to store information, those database management systems were, in many cases,
unwieldy and very expensive to both acquire and maintain. They were usually
hierarchical or network database systems that, alone, cost in excess of $200,000
and frequently required special database administrators just to constantly fine-
tune the system.
Today’s database technology is based on a relational model, and, on a very
simplistic basis, it resembles a spreadsheet. In a relational database, there are a
series of tables or files. Similar to a spreadsheet table, each table has columns
with attributes and rows of data. The difference is that there is only one table
in a spreadsheet, whereas there can be an almost unlimited number of tables in
a database. In addition, there is a practical limit to the size of a spreadsheet,
but databases can contain thousands of columns and millions of rows of data.
In addition, databases also allow users to relate or connect tables that share
common columns of data.

Exhibit 16.6 is an example of a very simple portion of a payroll applica-
tion. There are two different tables. The employee table contains data about
each of the company’s employees: name, address, marital status, number of de-
pendents, and so on. The pay table contains data about every time each of the
employees is paid: their gross payroll, social security taxes, federal withholding,
state tax, and so forth.
First, notice the common column between the two tables, the employee
number. This column enables the database management system to relate the
two tables. It allows the system, for example, to print a payroll journal that has
both the weekly payroll information from the pay table and to access the em-
ployees’ names from the employee table. Why not combine all the data into one
table? Not only would the employees’ names, social security numbers, and
other information appear multiple times, requiring the unnecessary use of data
storage, but also multiple versions of the truth might occur. If one of the em-
ployees should happen to change his name or address (if address were included
in the employee table), the database would show one name for part of the year
and another for the rest of the year. Redundant data creates opportunities for
data corruption; just because data is changed in one table, that same data is not
necessarily changed in all tables. Prudent systems design eliminates data field
duplications wherever possible.
DATE WAREHOUSE
Data warehousing attempts to reconcile and live with past applications soft-
ware, while still benefiting from today’s newer technology. As mentioned
earlier, industry is rife with older legacy systems that are currently cost pro-
hibitive to replace. Most of these older systems are mission critical operational
control systems (see Exhibit 16.3) and satisfy most of the operational needs
of the company. However, they are built on technology that cannot support
the
kinds of decision support tools that management requires. Many of these
550

EXHIBIT 16.6 Database example.
EMPLOYEE TABLE
Social
Date of
Hourly
Employee
Security
Marital Number of Date of Date of D
ate of Last
or
Number First Name Initial Last Nam
e Number Status Dependents Birth Hi
re Termination Pay Raise Pay-Rate Salary
1 Mary E Smith 123456789
M
4 4/1/63 7/21/91
9/1/96 8.505 H
2 Tom T Day 234567890
M
3 3/2/55 11/15/91
1/15/96 750.000 S
3 Harry F Jones 345678901
S
1 11/30/71 1/15/92 9/24/96 11/6/94
12.500 H
4 Sally D Kraft 456789012
S
0 10/5/65 3/6/92
3/5/96 14.755 H
5 Charlie

Malt 567890123 S
1 6/6/80 6/2/93
6/17/96 900.000 S
6 John K Free 678901234
M
5 8/5/49 11/1/94
12/15/95 17.500 H
PAY TABLE
Number of Number of
Social
Federal
Employee
Regular Overtime
Security Medicare Withholding
Check
Number Date Hours Hours
Gross Payroll Tax Tax
Tax
Net Pay Number
1 1/7/96 40.0
4.0
391.23 24.26 5.67 101.1642534
21.52 238.62 1
2 1/7/96 40.0
0.0
750.00 46.50 10.88 193.935
41.25 457.44 2
3 1/7/96 40.0
0.0
500.00 31.00 7.25 129.29

27.50 304.96 3
4 1/7/96 40.0
4.0
678.73 42.08 9.84 175.5060034
37.33 413.97 4
5 1/7/96 40.0
0.0
900.00 55.80 13.05 232.722
49.50 548.93 5
6 1/7/96 40.0
2.5
765.63 47.47 11.10 197.9753125
42.11 466.97 6
1 1/14/96 40.0
12.0
493.29 30.58 7.15 127.5549282
27.13 300.87 7
2 1/14/96 40.0
0.0
750.00 46.50 10.88 193.935
41.25 457.44 8
3 1/14/96 40.0
8.0
650.00 40.30 9.43 168.077
35.75 396.45 9
4 1/14/96 40.0
7.9
765.05 47.43 11.09 197.8257886
42.08 466.62 10
5 1/14/96 40.0

0.0
900.00 55.80 13.05 232.722
49.50 548.93 11
6 1/14/96 40.0
0.0
700.00 43.40 10.15 181.006
38.50 426.94 12
1 1/21/96 40.0
0.0
340.20 21.09 4.93 87.968916
18.71 207.49 13
2 1/21/96 40.0
0.0
750.00 46.50 10.88 193.935
41.25 457.44 14
3 1/21/96 40.0
2.4
545.00 33.79 7.90 140.9261
29.98 332.41 15
4 1/21/96 40.0
6.7
738.49 45.79 10.71 190.9581624
40.62 450.42 16
5 1/21/96 40.0
0.0
900.00 55.80 13.05 232.722
49.50 548.93 17
6 1/21/96 40.0
5.0
831.25 51.54 12.05 214.944625

45.72 507.00 18
Information Technology and the Firm
551
systems use older file structures or obsolete database management systems and
are almost incapable of accessing and manipulating data.
As an alternative to replacing these systems, data warehousing provides a
state of the art database management system that is fed data from the older
legacy systems. However, data does get duplicated, which can potentially cause
a synchronization problem between the data in the warehouse and the data in
the older legacy systems. Consequently, IT management must put stringent
controls in place. Still, the benefits outweigh the potential problems, for the
data warehouse comes with all of the high tech tools that will enable manage-
ment to create a plethora of queries and reports. Most of the newer Decision
Support Tools and Executive Information Systems, which will be discussed
later, require a storage capability similar to the data warehouse.
CONTROLS
Because the initial software applications that were developed in the 1960s and
1970s were accounting oriented, data processing, which is what information
technology was then called, typically reported to the Chief Financial Officer,
creating a control atmosphere consistent with accounting controls. A central
group of trained data entry operators was responsible for entering and verify-
ing data. Access to the “glass house” was restricted, and in some cases access to
the data entry and report distribution areas was also restricted. Because every-
thing was self-contained, control was not a major issue.
In the late seventies and early eighties, online terminals began appearing
on users’ desks, outside of the glass house, allowing them access to data. Ini-
tially, these terminals were used for information inquiry. Yet, even this limited
function was tightly controlled by strict software access control and password
protection. While workers were getting additional capabilities, they were also
creating opportunities for lapses in control. This was just the beginning of the

Trojan horse. Eventually, data entry moved out of the glass house to the ware-
house receiving dock to be used for inventory receipts; the order entry desk to
be used for new orders; the purchasing department to be used for purchase
orders; and, in the case of retailing, on to the sales floor for point of sale pro-
cessing. No longer were trained data-entry operators responsible for the qual-
ity of the data; others were responsible for entering data, and it was just an
ancillary part of their job, for which they were not necessarily even trained.
The control environment was breaking down, and the introduction of the
personal computer only complicated the issue. No longer was control central-
ized. While access to data could be controlled, control over the use of data and
the content of reports was lost. For example, two people could each issue a re-
port on sales, and the numbers could easily be different. Yet, both reports
could be accurate. How is this possible? Simple. One of the reports may have
been about gross sales and the other about net sales, or one may have been
based on data through Friday and the other on data through Saturday.
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Making Key Strategic Decisions
When all programming was controlled by a small professional group, con-
trol was much easier. Because today’s spreadsheet programs are user friendly,
however, and software does not require programming knowledge, everybody is
his or her own programmer. Thus, it is difficult to control the consistency of
the information that is being distributed.
The problems only become more complicated. Now companies allow their
business partners, vendors, and even outsiders to access their computers, using
the Internet and EDI. Data is interchanged and moneys are exchanged elec-
tronically often without paper backup. While technology can prevent most
unauthorized access to data, as recent history has shown, even the U.S. De-
fense Department has not successfully prevented the best hackers from ac-
cessing its computers and wreaking havoc. What was relatively simple to
control before 1990 is now a nightmare. Accountants, systems professionals,

and auditors must remain forever vigilant against both inadvertent and inten-
tional unauthorized use and abuse of company data.
INFORMATION TECHNOLOGY STRATEGY
How do companies decide how to invest their IT money? What projects get
funded? Which projects are of higher priority? IT strategy is not created in a
vacuum. Rather, like all of the other operational departments within a corpo-
ration, IT must support the direction and goals of the company. The Chief In-
formation Officer’s job is to educate the rest of senior management about IT’s
ability to create opportunities for the company and help it move in directions
that make sense.
IT architecture is developed to support the IT and corporate strategy. If
additional networks, workstations, or data warehouses are required, they are
either acquired or developed.
In the late 1980s and early 1990s, Wal-Mart adopted an everyday low
pricing strategy. To accomplish this goal, Wal-Mart needed to change the man-
ner in which it both conducted business with its suppliers and managed the in-
bound logistics, warehousing, and distribution of merchandise to its stores. It
needed to abolish warehousing as much as possible and quicken the process by
which stores ordered and received merchandise. Also, Wal-Mart needed to
eliminate any unnecessary inventory in stores and allow stores to order mer-
chandise only as needed. Lastly, lags in its distribution centers needed to be
prevented, enabling goods to be received from their suppliers and immediately
shipped to stores.
As a result, Wal-Mart designed a systems and technology infrastructure
that, through EDI, enables the stores to order goods, as needed, from their
suppliers. Moreover, Wal-Mart permits manufacturers to access computer-
ized sales information directly from its computers, which, in turn, allows them
to gauge Wal-Mart’s demand and then stage production to match it. Wal-Mart
effectively shifted the burden of warehousing merchandise from its own