Lecture 5- Integrating information systems

Systems interface- A [blank_start]link[blank_end] between [blank_start]two[blank_end] information [blank_start]systems[blank_end]. The interface is likely to consist of [blank_start]hardware[blank_end] & [blank_start]software components[blank_end]

One systems interface design principle is [blank_start]simplicity[blank_end]. The interface should not be [blank_start]over-complicated[blank_end]

Another systems interface design principle is [blank_start]protocols[blank_end]. If there are any [blank_start]existing[blank_end] protocols for the interface to be designed, these should be [blank_start]used[blank_end]

Third systems interface design principle is [blank_start]control/verification[blank_end]. The interface should include some [blank_start]controls[blank_end]. For example, a check of the [blank_start]total number[blank_end] of entries sent or verification from one system to [blank_start]another[blank_end] that the received data has been [blank_start]processed[blank_end]

Fourth systems interface design principle is [blank_start]log files[blank_end]. A log of all data [blank_start]transmitted[blank_end] across the interface needs to be [blank_start]retained[blank_end], as well as logs of when data was [blank_start]received & sent[blank_end]

Fifth systems interface design principle is provide an [blank_start]application programming interface[blank_end]. An API as relevant to a systems interface is a [blank_start]specification[blank_end] which describes how a certain piece of software communicates with another

One type of control which should be considered for any system interface is [blank_start]full documentation[blank_end]. The [blank_start]technical[blank_end] details of the interface should be [blank_start]detailed[blank_end] & any protocols adopted should be [blank_start]clearly set out[blank_end]

Another type of control which should be considered for any system interface is [blank_start]verification & logging[blank_end]. A systems interface should be [blank_start]designed[blank_end] to provide a [blank_start]mechanism[blank_end] to verify that the data has been [blank_start]transferred correctly[blank_end]. Also, a log of all the events related to the interface should be kept

Third type of control which should be considered for any system interface is [blank_start]general controls[blank_end]. There may be considerations about [blank_start]user access[blank_end] to a systems interface &/ or [blank_start]security issue[blank_end]

Customer relationship management (CRM)- A [blank_start]business[blank_end] approach which aims to [blank_start]understand[blank_end], [blank_start]anticipate[blank_end] & [blank_start]respond[blank_end] to the needs of [blank_start]present[blank_end] & [blank_start]potential[blank_end] customers

Two advantages of systems integration are [blank_start]improved[blank_end] information [blank_start]visibility[blank_end] in an organisation & more [blank_start]efficient[blank_end] business [blank_start]processes[blank_end]

Three issues with lack of systems integration are [blank_start]reduces[blank_end] possible information [blank_start]outputs[blank_end] from systems, [blank_start]increases time[blank_end] needed by staff to enter [blank_start]data[blank_end] & [blank_start]increase errors[blank_end] as data needs to be in several systems

Systems integration is important because it ensures [blank_start]each[blank_end] function’s [blank_start]data[blank_end] is shared & [blank_start]communicated[blank_end] with other departments & [blank_start]prevents[blank_end] data silos

Information systems could be integrated through [blank_start]software interface[blank_end] ([blank_start]communication[blank_end] between [blank_start]two[blank_end] pieces of [blank_start]software[blank_end]). It can be [blank_start]customised[blank_end] or [blank_start]in-built[blank_end] protocol, [blank_start]agree[blank_end] what data is [blank_start]sent[blank_end] & detect [blank_start]error[blank_end]. The communications medium is most likely over [blank_start]LAN[blank_end] or [blank_start]WAN[blank_end]

Internal systems interface- Where [blank_start]two[blank_end] or [blank_start]more[blank_end] different information [blank_start]systems[blank_end] within [blank_start]same[blank_end] organisation are [blank_start]connected[blank_end] i.e. [blank_start]best-of-breed[blank_end]

External systems interface- Where [blank_start]two[blank_end] or [blank_start]more[blank_end] different information [blank_start]systems[blank_end] in [blank_start]different[blank_end] organisations are [blank_start]connected[blank_end]. Typically an organisation has [blank_start]little[blank_end] or [blank_start]no[blank_end] control over systems or data of [blank_start]other[blank_end] organisations

Application Programming Interface (API)- [blank_start]Specification[blank_end] which describes how [blank_start]certain[blank_end] piece of [blank_start]software[blank_end] communicates with another. It can be considered as [blank_start]implementation[blank_end] of [blank_start]protocol[blank_end]

Systems interfaces are supported by underlying [blank_start]operating system[blank_end] software, [blank_start]application[blank_end] software & by [blank_start]hardware[blank_end]. Exact configuration of hardware & software for any particular systems interface will [blank_start]vary[blank_end]. However, nowadays systems interface will involve use of [blank_start]networking hardware[blank_end]

Customer Relationship Management (CRM)- Process by which [blank_start]customer relationships[blank_end] are [blank_start]forged[blank_end] & [blank_start]maintained[blank_end]. From systems view this includes: [blank_start]data collection[blank_end] & [blank_start]data analysis[blank_end]. Also, it assists in managing [blank_start]future revenue streams[blank_end] of business which is of interest to [blank_start]accountants[blank_end]

Supply Chain Management (SCM)- [blank_start]Active[blank_end] management of [blank_start]supply chain[blank_end] activities to maximise [blank_start]customer value[blank_end] & sustain [blank_start]competitive advantage[blank_end]. It aims to forge [blank_start]relationships[blank_end] with [blank_start]suppliers[blank_end]. It is about both [blank_start]physical[blank_end] & [blank_start]information[blank_end] flows so all involved parties are [blank_start]coordinated[blank_end]

Degree of integration between organisation & suppliers depend on factors such as: [blank_start]nature[blank_end] of [blank_start]supplier/market[blank_end] relationship, level of [blank_start]technology[blank_end], [blank_start]strategic alliance[blank_end] (longer term relationship) & level of [blank_start]vertical integration[blank_end] (how much of upstream supply chain is owned by organisation)

Two main options in how accounting software & banks can integrate are: [blank_start]payment processing[blank_end] & [blank_start]automated bank reconciliation[blank_end]. SAP offers bank [blank_start]communications[blank_end] management application, which combines with its [blank_start]SWIFT integration[blank_end] package

According to Davenport & Harris (2007), data analytics is ‘[blank_start]extensive[blank_end] use of data, [blank_start]statistical[blank_end] & [blank_start]quantitative[blank_end] analysis, [blank_start]explanatory[blank_end] & [blank_start]predictive[blank_end] models, & [blank_start]fact-based[blank_end] management to drive [blank_start]decisions[blank_end] & [blank_start]actions[blank_end]’. According to Davenport (2012), [blank_start]human[blank_end] element of data analytics is important

Enterprise systems allow users to [blank_start]interrogate[blank_end] data in [blank_start]complex[blank_end] & [blank_start]multi-dimensional[blank_end] ([blank_start]multi-dimensional[blank_end] data refers to [blank_start]data[blank_end] which is broken down into several [blank_start]dimensions[blank_end] such as [blank_start]time[blank_end], [blank_start]product[blank_end] or [blank_start]location[blank_end]) ways. Such data may be stored in several [blank_start]locations[blank_end] within software system (often archived in [blank_start]data warehouse[blank_end])

Data warehouse- [blank_start]Historical[blank_end] data which is sourced from [blank_start]several[blank_end] organisational systems & is stored [blank_start]independent[blank_end] of operation data. It’s used for [blank_start]query[blank_end] & [blank_start]analysis[blank_end], rather than [blank_start]operational[blank_end] purposes

Online analytical processing (OLAP)- [blank_start]Software[blank_end] tool which allows users to [blank_start]query[blank_end] & [blank_start]analyse[blank_end] historical data, typically within [blank_start]data warehouse[blank_end] which is separate from [blank_start]operational[blank_end] data

Online transaction processing (OLTP)- Refers to how [blank_start]database[blank_end] is structured to [blank_start]retrieve[blank_end] operational data. OLTP [blank_start]databases[blank_end] are structured to optimise [blank_start]speed[blank_end] & [blank_start]data integrity[blank_end]

Issues with systems integration include: [blank_start]cost[blank_end] (if business is using particular system that isn’t connected to other systems, company might need to [blank_start]invest[blank_end] in other [blank_start]systems[blank_end] to enable such [blank_start]integration[blank_end]), [blank_start]security[blank_end] & [blank_start]agreeing protocols[blank_end] & standards (sometimes information or processing needs of organisation cannot be [blank_start]met[blank_end])

Benefits of systems integration include: greater [blank_start]integration possibilities[blank_end], [blank_start]reduced[blank_end] costs through more [blank_start]automated[blank_end] business processes, improves [blank_start]organisational links[blank_end] in areas such as JIT control/working capital management & external data sources may [blank_start]improve data analysis[blank_end]