Management Accounting and Track for Internal Reporting
Order ID:89JHGSJE83839 Style:APA/MLA/Harvard/Chicago Pages:5-10 Instructions:
Management Accounting and Track for Internal Reporting
Whereas fi nancial accounting is concerned with external reporting that is man- dated by laws and regulations, management accounting, or controlling, is concerned with tracking costs and revenues for internal reporting that is intended to help management control costs and revenues and assess the profi tability of various products and market segments. Management creates these reports to support its decision making. Unlike fi nancial accounting reports, management
CH001.indd 14CH001.indd 14 31/01/11 1:03 PM31/01/11 1:03 PM
accounting reports are produced as needed and can contain any information that management deems necessary.
Among the major costs management accounting tracks are materials costs, labor costs, and overhead costs. Management takes these costs into account when it establishes prices for its products or services. It then combines these data with information concerning revenues to determine the profi tability of various products and services in different market segments. Ultimately, management utilizes all of this information to make key strategic decisions that affect the organization’s prod- ucts market mix as well as tactical decisions that infl uence day-to-day operations.
GLOBAL BIKE INCORPORATED (GBI) GLOBAL BIKE INC.
Throughout this book, we will use the case of Global Bike Incorporated (GBI) to illustrate important concepts, processes, and techniques. GBI is a fi ctional company, and its operations have been greatly simplifi ed to make its business processes and its SAP ERP system easier for you to work with. Although GBI might seem complex as you progress through the chapters of this textbook, rarely will the business operations of a real-world company be as simple as those found in GBI.
Much the data used in this textbook are based on GBI and represent the many aspects of its fi ctional suppliers, customers, employees, and materials. In addition, all of the hands-on exercises are intended to be completed in a func- tioning (live) SAP ERP system that is confi gured with GBI data. (Enterprise Resource Planning, or ERP, systems integrate a company’s various functional and cross-functional business processes. We explain ERP systems in greater detail in Chapter 2.) It is very important that you quickly become familiar with GBI and their business operations in order to master the key concepts in this course and to complete your course assignments.
The following paragraphs provide a brief overview of GBI. However, you must retrieve the detailed GBI Annual Report from the WileyPLUS course site (explained later) or the SAP University Alliances Community (SAP UAC) at http://uac.sap.com to learn the full story of how GBI came into existence and to familiarize yourself with the specifi cs of the company’s operations. The SAP UAC is a free site for all university students who are enrolled in an SAP course. The registration process is very simple and is free. In addition to the detailed GBI information on the SAP UAC site, you will also gain access to several SAP career services, including certifi cation information and internship and job opportunities. Your instructor can show you where to access the GBI Annual Report on the SAP UAC site once you have registered.
GBI was founded in 2001 following the merger of two bicycle manufac- turers, one based in the United Sates and the other in Germany. GBI has three lines of business: deluxe and professional touring bikes, men’s and women’s off-road bikes, and bike accessories. GBI sells its bikes to a network of spe- cialized dealers throughout the world, and it procures its raw materials from a variety of suppliers globally.
GBI has two manufacturing facilities, one in the United States and one in Germany. It also has three additional warehouses, two in the United States and one in Germany. GBI has more than 100 employees globally. The organization uses SAP ERP to support its processes. Figure 1-11 illustrates GBI’s enterprise structure.
Global Bike Incorporated (GBI) 15
CH001.indd 15CH001.indd 15 31/01/11 1:03 PM31/01/11 1:03 PM
16 CHAPTER 1 Introduction to Business Processes
HOW TO USE THIS BOOK This edition of Integrated Business Processes with ERP Systems does not cover all of the processes introduced in this chapter. Chapter 2 is an introduction to enterprise systems, and Chapter 3 discusses fi nancial accounting. Chapters 4-8 address the key logistics processes: procurement, fulfi llment, production, warehouse management, and material planning. Finally, a concluding chapter discusses all of these processes from an integrated perspective. In addition, the exercises and demonstrations included in this book are available online via WileyPLUS.
CHAPTER STRUCTURE
As the previous paragraph indicates, most chapters will focus on a specifi c process, such as procurement, fi nancial accounting, and production. Most of these chapters share a common structure. Each chapter begins with a review of the simple presentation of the process introduced earlier in this chapter. The chapter then segues to a detailed discussion of data, key concepts, and process steps. General concepts related to data—organizational data, master data, and transaction data—will be introduced in Chapter 2. Each subsequent chapter will focus on the specifi c concepts and data that are relevant to the process discussed in that chapter. Most chapters require you to understand a few fun- damental concepts, which are discussed next. Note that many of the concepts related to organizational and master data are relevant to more than one pro- cess. In such cases, we do not repeat the discussion of these concepts. Rather, we refer you to previous chapters where they were discussed.
The third main component of each chapter consists of a detailed discus- sion of the various steps involved in the process. Each process step will be discussed using the following framework:
- Triggers: the event(s) that cause(s) the process step to be initiated
- Tasks: the specifi c steps needed to complete the process step
Figure 1-11: GBI enterprise structure
CH001.indd 16CH001.indd 16 31/01/11 1:03 PM31/01/11 1:03 PM
How to use This Book 17
- Data: the information associated with each process step
- Outcomes: the specifi c products or consequences of the process step
The fourth component of each chapter is reporting. This section exam- ines how the data generated during the process steps are converted into meaningful information. It also provides examples of the types of reports that can help managers improve process performance.
Going further, each chapter employs three pedagogical tools— demonstrations, real-world cases, and exercises—to reinforce the material. Demonstrations illustrate either a particular concept or the execution of a pro- cess step in the SAP ERP system. These demonstrations are in the form of ani- mations that can be viewed multiple times. Real-world cases are vignettes from actual companies that illustrate a concept or demonstrate how that company executes a process. Exercises to be completed in an SAP system confi gured with GBI data provide a fi nal reinforcement of the chapter’s key concepts.
SAP SOFTWARE
SAP (pronounced by saying each letter individually, like IBM or ABC) is the pioneer in enterprise systems. SAP was the fi rst company to build a packaged enterprise system, which means that it designed a single piece of software that is used by many companies. Prior to that time, software developers had to cre- ate customized software for every company, which was prohibitively expensive.
SAP introduced the fi rst integrated, end-to-end enterprise system, called SAP® R/3, in 1992. The “R” in R/3 stands for “real time.” Prior to the develop- ment of enterprise systems, companies typically employed a number of differ- ent systems, each of which supported a single function or department. Thus, there were sales systems, accounting systems, manufacturing systems, and so on. These systems were not integrated, so sharing data between and among them was problematic. As you might expect, this architecture regularly expe- rienced delays in executing business processes because data had to be trans- ferred from one system to the next as the process was being performed.
SAP R/3 was designed to eliminate these ineffi ciencies by executing an entire process from start to fi nish and consolidating all of the process data in a single database. Consequently, regardless of which individuals were completing a step in the process, all of the data were available to them in real time. In addition, everyone else in the company could see the status of the process in real time as well. In today’s age of Twitter and RSS feeds, this development might seem trivial. At the time, however, it was a crucial innovation. SAP R/3 was quickly adopted by one major corporation after another, and it catapulted SAP software onto the “must do” list for nearly every large company. By 2010, SAP had more than 110,000 customers in over 120 countries, including nearly every Fortune 1000 company. In 2008, SAP’s market share in the ERP category was equivalent to the market share of the next four largest ERP vendors—combined.3, 4 Today, more than 75% of SAP’s customers are small and medium-sized businesses.
3 C. Pang, Y. Dharmasthira, C. Eschinger, and K. Motoyoshi, Market Share: ERP Software, Worldwide, 2008, July 2008, Gartner. 4 A. Pang, Worldwide ERP Applications 2009–2013 Forecast and 2008 Vendor Shares, October 2008, IDC.
CH001.indd 17CH001.indd 17 31/01/11 1:03 PM31/01/11 1:03 PM
18 CHAPTER 1 Introduction to Business Processes
Enterprises of every size, in every industry, all over the world use SAP software to manage their business operations. Regardless of where you live, nearly every major corporation, government entity, and nonprofi t organization you are famil- iar with runs the same SAP software that you will use in this course.
Before you start to think that this book is a marketing brochure for SAP, you should understand why we have explained SAP’s strategic importance in business and have selected SAP ERP as the reference system for this textbook. One of the most lucrative and rewarding careers in the IT industry for nearly 20 years has been that of an SAP consultant.5 Contrary to what you may have heard, most SAP consultants are not programmers. Rather, they are MIS and business majors who have developed a process perspective on business and have become competent in a specifi c capability of the SAP ERP system. However, even technical programmers who wish to work with SAP must have a deep understanding of how business works in order to program applications that enable business processes to operate more effi ciently. In other words, they are people just like you who have mastered the material in this textbook.
Integrated Business Processes with ERP Systems will incorporate a num- ber of demonstrations, examples, and hands-on exercises using SAP ERP. Several other companies offer enterprise systems that have similar capabili- ties, but it would be very diffi cult to explain how processes are executed in each of them. We have chosen to include the most prevalent and widely used ERP system that you are likely to encounter in your career. Although some of the concepts in this textbook are specifi c to SAP ERP, you can easily trans- fer nearly everything you learn to whichever system is used in the companies where you will work.
When SAP fi rst introduced R/3, almost anybody could claim to be an R/3 expert and thus become a highly paid consultant. Unfortunately, this practice led to quite a few well-publicized project failures. In response, SAP introduced certifi cations for the various modules and technical skills required to be a properly trained consultant. This arrangement enabled consultants who participated in SAP training programs and demonstrated a high degree of skill to distinguish themselves for potential employers. Today, SAP provides more than 100 certifi cation types, classifi ed by solution, focus area, and role. Each certifi cation type specifi es three levels of skill: associate, professional, and master. It can take many years and tens of thousands of dollars to progress up to master-level certification. SAP is very proud of the high level of knowl- edge and skills that are required to earn certifi cation. As you probably suspect by now, the SAP testing process is extremely rigorous. Because an SAP cer- tifi cation is such a highly valued credential, once you have earned one, SAP provides you with a certifi cation number that can be listed on your resume or CV and verifi ed by potential employers—the thousands of consulting com- panies that implement SAP software and the more than 110,000 (in 2010) companies that run SAP software.
As an added benefi t to students enrolled at universities or technical schools that are members of the SAP University Alliances Program, SAP offers special certifi cation academies on campuses around the world where students can earn the same certifi cation as professionals at a reduced cost. This textbook and the additional online materials are based on the content in the
5 J. Sahadi, Hot 6-fi gure jobs now, 2007 [Online], CNN/Money. http://money.cnn.com/galleries/ 2007/pf/0708/gallery.hot_six_fi g_jobs_now/index.html.
CH001.indd 18CH001.indd 18 31/01/11 1:03 PM31/01/11 1:03 PM
http://money.cnn.com/galleries/2007/pf/0708/gallery.hothot_six_fig_jobs_now/index.html
http://money.cnn.com/galleries/2007/pf/0708/gallery.hothot_six_fig_jobs_now/index.html
How to use This Book 19
SAP course, which results in an offi cial SAP Associate Application Consultant certifi cation and can be used as a supplement to the SAP course materials. Alternatively, students who master the concepts in this textbook and the additional online materials can take the SAP certifi cation exam at one of over 8,000 global testing centers without participating in a certifi cation academy.
Students who pass the exam will receive the same offi cial SAP certifi ca- tion as working professionals who complete an SAP-sponsored training pro- gram. Earning this certifi cation is the fi rst step toward a successful and perhaps lucrative career as an SAP application consultant. Speak with your instruc- tor, and consult the certifi cation information on the SAP University Alliances Community and WileyPLUS for more details.
WILEYPLUS
WileyPLUS is an important online supplement to this book. It includes four key components: hands-on exercises, SAP ERP system demonstrations, online chapters, and information about preparing for the SAP certifi cation exam.
The hands-on exercises found on the WileyPLUS companion site for this textbook will guide you through the execution of the process steps found in each chapter. You will complete these exercises in a live SAP ERP system based on Global Bike, Inc., which you will become very familiar with through- out the chapters. In essence, you will assume the role of the various employees of GBI and complete their tasks in the SAP ERP system, as if you were doing their job. In this way, you will see the processes executed from multiple view- points and thus further develop your “process perspective” of the fi rm. Your instructor will provide you with login information and the SAP interface to complete these exercises in the SAP ERP system. We anticipate that you will encounter some diffi culties while completing the exercises. Nearly every stu- dent does, so don’t become discouraged if this happens to you. Your instructor or lab assistant can provide some help if you are working in an on-campus lab. You can also seek help from fellow students in your class. One of the most valuable sources of assistance is the SAP University Alliances (SAP UAC) discussion forum for this textbook. Go to www.extrabandwidth.com/forum, which will redirect you to the SAP UAC forum, where you can ask questions about the text and the exercises. Students and professors around the world will quickly assist you. If you receive a helpful answer, you can award points to the person who helped you. Not only is this a nice form of recognition, but it helps the community reinforce its focus on mutual support and knowledge sharing.
Throughout each chapter you will see references to demonstrations that will illustrate how a particular concept, task, or data is presented in the SAP system. These demonstrations are meant to enhance your conceptual under- standing of the topic by providing you with a visual and physical represen- tation of how the system executes or displays a particular component of the process being discussed. We advise you to follow the demonstrations on the WileyPLUS website while reading and reviewing the chapter in the printed textbook. For the online version of the textbook on WileyPLUS, the demon- strations are linked directly from the references in the chapter for easy access. Going further, the demonstrations are very similar to the activities required in the exercises. Therefore, it will be helpful to review the demonstrations prior to attempting the exercises so as to familiarize yourself with the navigation, key data, and activities required to complete the process steps.
CH001.indd 19CH001.indd 19 31/01/11 1:03 PM31/01/11 1:03 PM
20 CHAPTER 1 Introduction to Business Processes
Asset management and customer service processes
Business process
Controlling
Enterprise systems (ES)
Financial accounting (FI) processes
Fulfi llment process
Functional structure
Global Bike Incorporated (GBI)
Human capital management (HCM) processes
Inventory and warehouse management (IWM) process
Lifecycle data management process
Management accounting or controlling (CO) processes
Material
Material planning process
Procurement process
Production process
Project
Project management processes
Silo effect
C H A P T E R S U M M A R Y
This chapter introduced the key concepts related to common business processes in organizations, the typical functional structure that companies employ to man- age their operations, and the benefi ts of adopting a holistic view of integrated business processes and their role in effectively translating corporate strategy into operational effi ciency.
Most companies are organized according to functional departments, which group together related activities and assets under specialized manage- ment controls. Although this approach enables companies to focus resources on specifi c activities, it also creates communication diffi culties and delays between the highly specialized groups. Business processes cut across the verti- cal barriers (silos) that characterize the functional structure. For this reason they require cross-functional communication and collaborative execution.
Enterprise systems allow companies to effectively manage business pro- cesses across functional areas and institutional boundaries. They perform this task by removing barriers to sharing and accessing information, thereby provid- ing a holistic platform to execute integrated business processes consistently and effi ciently. One of the key benefi ts to managing business processes with an integrated enterprise system is that process data are collected throughout the execution of each step of the process. Managers can then use these data to monitor and improve the organization’s processes. Enterprise systems enable companies to achieve operational effi ciency through transparency across func- tional areas, and they provide consistent information for managerial decision making. All business processes have an impact on the organization’s fi nancial status, and the real-time impact of process execution can be monitored and analyzed through the use of an integrated enterprise system.
K E Y T E R M S
CH001.indd 20CH001.indd 20 31/01/11 1:03 PM31/01/11 1:03 PM
Review Questions 21
R E V I E W Q U E S T I O N S
- Describe the functional organizational structure. Why do you think this structure is so widely used?
- What is the silo effect? Why does it exist? What problems does it create? How can an organization reduce or eliminate the silo effect?
- What is a business process? Why is adopting a process view of organiza- tions essential to becoming a successful manager?
- Briefl y describe the key business processes included in this chapter in terms of their key steps.
- Explain the interrelationships among the key processes included in this chapter. Why are these interrelationships important?
CH001.indd 21CH001.indd 21 31/01/11 1:03 PM31/01/11 1:03 PM
This page intentionally left blank
CHAPTER 4 The Procurement Process 23
23
LEARNING OBJECTIVES
After completing this chapter you will be able to:
- Discuss the evolution and key business benefi ts of enterprise systems.
- Explain the role of enterprise systems in supporting business processes.
- Differentiate the different categories of data within SAP® ERP.
- Identify and analyze the major options for reporting.
In Chapter 1 we discussed the key processes executed in organizations. We saw that there is a high degree of integration and interdependence among pro-cesses. Even within small organizations it is diffi cult to execute these processes effi ciently using manual techniques. Thus, organizations invariably rely on the use of enterprise systems to ensure that these processes are executed effi ciently and effectively. In this chapter we discuss key concepts in enterprise systems, par- ticularly SAP ERP. We begin by expanding on the introduction to enterprise systems and SAP ERP provided in Chapter 1. We follow this discussion with a brief history and evolution of SAP ERP. We then explore the different types of data utilized in SAP ERP. Finally, we conclude the chapter by examining various reporting options enabled by enterprise systems (ES).
ENTERPRISE SYSTEMS Enterprise systems are one of the most complex and powerful information systems in use today. As we explained in Chapter 1, this book will cover the world’s most popular ES—SAP ERP—in great depth. Although you might have studied enter- prise systems in a previous course, we provide a quick review of the key concepts to refresh your knowledge and to place these concepts in an appropriate context for the rest of this course. In this section we briefl y discuss the architecture of enter- prise systems, the SAP® Business Suite, SAP ERP, and the technology platform— SAP® Netweaver—that forms the foundation for these applications.
Introduction to Enterprise Systems
C H A P T E R 2C H A P T E R
CH002.indd 23CH002.indd 23 31/01/11 1:08 PM31/01/11 1:08 PM
Management Accounting and Track for Internal Reporting
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
You Can Also Place the Order at www.collegepaper.us/orders/ordernow or www.crucialessay.com/orders/ordernow