HALL CHAP 9: DATABASE MANAGEMENT SYSTEMS

FLATFILE APPRAOCH vs DATABASE APPROACH

Computer processing: involves (1) DATA and (2) INSTRUCTIONS/PROGRAMS

File-oriented processing: flat file approach (legacy systems); 1 set of

data only per application; files are done by different users so update
is not posted to everyone (creates data redundancy)
Disadvantages or problems: (bad CUTS)
● Data Storage → excessive storage of paper documents
or magnetic form (redundant)
● Data Updating → changes must be performed multiple
times (bc per application)
● Lack Currency of Information → potential problem of
failing to update all affected files
● Task-Data Dependency → user’s inability to obtain
additional information as his or her needs change

Data-oriented processing: database approach; 1 set of data available

to numerous application; Solves flat-file problems
ADVANTAGES OF DATABASE (good CUTS)
● No data redundancy: Data is stored only once, eliminating
data redundancy and reducing storage costs.
● Single update: since data only in one place, requires only
a single update, reducing time and cost
● Current values: A change to the database made by any
user yields current data values for all other users.
● Task-data independence: As users’ information needs
expand, the new needs can be more easily satisfied than
under the flat-file approach.
**Disadvantages → costly, not always suitable, and users need to be trained

DATABASE MANAGEMENT SYSTEMS

Database Management system (DBMS)
Computer program that enables users to modify, create and utilize
database information efficiently
Stands between the database and the application, and database and
end users
Provides controlled environment to assist user access to database
● Commercial DBMS includes a database PLUS software to help
manage and generate reports
● DBMS has special software to know which data elements
each user is authorized to access and deny unauthorized
requests of data. (Look at access below in DBARQ)
Purpose: controlled access, monitoring and authorization of access

FEATURES: DBRAQ
Program Development - user created applications
Backup and Recovery - copies database
Database Usage Reporting - captures statistics on database usage (who, when, etc.)
Database Access - authorizes access to sections of the database
User Programs - makes the presence of the DBMS transparent to the user
Direct Query - allows authorized users to access data without programming

DBMS ELEMENTS (DDL, DML, QL)

Data Definition Language
Programming language used to define the physical database to the DBMS
It identifies the names and the relationship of all data elements that constitute the
database.
DDL defines the database on three viewing levels (UCI)
● User view (subschema) – the portion of the database each user views (many
individual views)
● Conceptual view (schema) – representation of database (1 view) all individual
views put into one view; logical and abstract representation
● Internal view – physical arrangement of records (1 view)

Data Manipulation Language (DML)

Proprietary programming language used to retrieve, process, and store to / from the
database.
Selected or Entire user programs may be written in the DML, or selected DML
commands can be inserted into universal programs, such as COBOL and FORTRAN (??)
Can be used to ‘patch’ third party applications to the DBMS??

Query Language
Programming language that permits end users and programmers to access data in the database without the need for
conventional programs.
● Can be an internal control issue since users may be making an ‘end run’ around the controls built into the
conventional programs?
• Structured Query Language (SQL)
4th generation languages emerged as the standard for all relational databases

Database Administrator
Does not exist in a flat file environment

DATABASE CONCEPTUAL MODELS

The particular method used to organize records in a database
Objective: EFFICIENCY so that data can be accessed quickly and easily
3 main models: (HNR)
● Hierarchical → follows predefined steps
● Network → follows nodes
 ● Relational → find what is similar.
*Relational model is most common.
*Some Legacy systems/flat file approach use network or hierarchical

Let’s focus on the Relational Model!

RELATIONAL MODEL
data in the form of two dimensional ‘tables’ called relations, with which tables may be linked to one another→ thus
related
● is based on the relational algebra functions of restrict, project, and join
● Restrict/Select: filter rows
● Project: filter columns
● Join: combine tables with common values to make new integrated table

Enity → Anything about which the organization wishes to capture data

Entity Relationship Diagram → graphical representation of the relationships between entities
Occurrence → describes the number of INSTANCES or RECORDS that pertain to a specific data

Association
the labeled line connecting two entities or tables in a data model, represented with a verb, such as ships, requests, or
receives
line describes nature of relationship
In picture: the labeled line “SUPPLIES”

Cardinality
the degree of association between two entities.
Describes the number of occurrences in one table that are associated with a single occurrence in a related table
Used to determine primary keys and foreign keys
In picture: (1:M) means 1 vendor can supply Multiple inventory.

Properly designed relational models must have:

- Each column must be uniquely named.
- Each row in the table must be unique in at least one attribute, which is the primary key (eg pwede ID no.)
- Tables are linked by embedding the primary key into the related table as a foreign key → primary key in one
table is the foreign key the related or other table
- Attribute values must all be of the same class or data type in any column eg under “name” should be alpha
only and under “number” should be numerical data only
- Tables must conform to the rules of normalization, i.e., free from structural dependencies or anomalies.
***primary key: unique key that identifies the rows
**foreign key: a key in one table that tracks back to the primary key of a related table , common key of 2 tables that
allows linkage

Advantages of Relational Model

- Removes all three anomalies
- Various items of interest (customers, inventory, sales) are stored in separate tables.
- Efficiently used space
- flexible – users can form ad hoc relationships

DATABASE ANOMALIES
Anomalies
Table that restrict user’s access to the info they need
Irregular, abnormality, peculiar, deviation
*Anomalies can be corrected by creating additional relational tables.
3 types of anomaly: (IDU)
● Insertion Anomaly → Cannot insert a new item without the presence of a particular attribute item. Eg cant add
a course unless we have at least one student enrolled. can result in unrecorded transactions and incomplete
audit trails.
● Deletion Anomaly → certain attributes are unintentionally lost because of deletion of other attributes. can
cause the loss of accounting records and the destruction of audit trails.
*the most serious anomaly of all 3.
● Update Anomaly → data inconsistency because not all attributes may be updated. Because there is redundant
data in tables, updater may not realize that to update one attribute, might have to update couple of times. can
generate conflicting and obsolete database values.

NORMALIZATION
Normalize = remove the abnormality/anomaly
A process which systematically splits unnormalized complex tables into smaller
tables to allow users to insert, delete, and update without creating problems
- Need to normalize in order to create foreign keys and link the tables!!!!
- User is responsible for normalization, accountant should be able to
determine whether a table is Normalized or not
*Splitting to eliminate anomalies

2 conditions for normalization:

- all non-key aka secondary attributes are independent of other non-key
attributes
- all non-key attributes in the table are dependent on the primary key

When unnormalized tables are split and reduced to third normal form (final normalized
form), they must then be linked together by foreign keys.
● 1st normal form: remove repeating groups
● 2nd normal form: remove partial dependencies
● 3rd and final normal form: remove transitive dependencies

Designing Relational Model

(Identify the model and her attributes, see if she a foreigner, make a table for her and
check IG views)
1. Identify entities
2. Construct a data model showing entity associations/relationships→ ERD
3. Add primary keys and attributes
- assign primary keys to all entities in the model to uniquely identify
records
- every attribute should appear in one or more user views
4. Normalize and add foreign keys
- remove repeating groups, partial and transitive dependencies
- assign foreign keys to be able to link tables
5. Construct the physical database
- create physical tables
- populate tables with data
6. Prepare the user views
- normalized tables should support all required views of system users
- user views restrict users from have access to unauthorized data
DATABASES IN A DISTRIBUTED ENVIRONMENT
Distributive Data Processing (DDP)
Data processing is organized around several remote locations or information processing units (IPUs) distributed
throughout the organization.
Each IPU is under the control of the end user,and is still connected to another via network.
● The actual processing happens at the IPU.
● Central database used for collecting all data lang
● typically uses a centralized database, just multiple locations/IPUs
Advantages
- Cost reductions in hardware and data entry tasks
- Improved cost control responsibility
- Improved user satisfaction since control is closer to the user level
- Backup of data can be improved through the use of multiple data storage sites
Disadvantages
- Loss of control → because user controls processing at IPU
- Mismanagement of resources
- Hardware and software incompatibility
- Redundant tasks and data
- Consolidating incompatible tasks
- Difficulty attracting qualified personnel
- Lack of standards

Centralized Database
Users send request to central site; central site processes the requests and transmits the data back to the users
Advantages
o reduction of storage costs
o elimination of multiple update procedures
o Establishment of data concurrency

Data Currency
The degree to which data is reflective of most updated or current info
During transaction processing, data will temporarily be inconsistent as records are read and updated
(eg may be reading the old version when it is in process of updating)

Partitioned Databases
Splits the central database into segments that are
distributed to their primary users
Basically, splitting the tables into smaller ones to increase
processing efficiency
● By splitting a large table into smaller, individual
tables, queries that access only a fraction of the
data can run faster because there is less data to
scan.
Advantages
- Increases users’ control by having data stored at
local sites
- Improved transaction processing response time
- Reduced volume of transmitted data
- reduced potential data loss from a disaster
*Partitioned database is an example of a distributed database.
Database Lockout
Method of control that locks other computers or transaction so that transmission or update of data in one computer is
not interrupted
Procedures necessary to keep IPUs from reading inconsistent data and from writing transactions written by another
IPU
● prevents simultaneous access of different IPUs to the same individual data
● Aims to control data concurrency

The Deadlock Phenomenon

The state where multiple records are locked and multiple IPUs are waiting for
each other, which prevents transaction processing
● Especially a problem with partitioned databases
Note: Phenomenon means its something that happens to you, so its not a
form of control.

Replicated Databases
The duplication of the entire database for multiple IPUs
● Effective for situations with a high degree of data sharing, but no primary user
● Supports read-only queries
● Data traffic between sites is reduced considerably.

Database Concurrency
The presence of complete and accurate data at all IPU sites
Currency→ reflects current info
● With replicated databases, maintaining current data at all locations is difficult.

Time Stamping
Used to serialize transactions. A non-lock control.
Prevents and resolves conflicts created by updating data at various IPUs.
- given two transactions that affect the same object, the operation of the transaction with the earlier timestamp
must execute before the operation of the transaction with the later timestamp. However, if the operation of
the wrong transaction is actually presented first, then it is aborted and the transaction must be restarted.
- SEQUENTIAL TRANSACTIONS
HALL CHAPTER 10 PPT: REA APPROACH TO BUSINESS PROCESS MODELING

R - Resources
E - Events
A – Agents

THE REA APPROACH

*Traditional Approaches
User View Orientation
When Information System design is too oriented towards the user view, problems are:
• Mutiple IS will cause data redundancy and duplication
• Restricted user views may lead to poor decision making
• Inability to support change

REA Model
is an accounting framework or approach to database design meant to overcome problems with traditional approaches:
- formalized data modeling and design of IS
- permits both accounting and non accounting data to be identified, captured and stored in centralized
database
- use of centralized database
- use of relational database structure
- collects detailed financial and non-financial data
- supports accounting and non-accounting analysis
- supports multiple user views supports enterprise-wide planning

ELEMENTS OF THE REA MODEL

RESOURCES
the ‘assets’ of the company
- things of economic value
- objects of economic exchanges able to generate revenue
- objects that are scarce and under the control of the organization
- can be tangible or intangible
- Does not include some traditional accounting assets: artifacts that can be generated from other primary data
for example, accounts receivables. AR is not but cash is.

EVENTS
Phenomena that effect changes in resources.
a source of detailed data in the REA approach to databases
- To R: each event should affect at least one resource
- To A: Each event should have at least 2 agents
Events fall into two groups:
- Economic – directly increases or decreases resources
- Support – control, planning, and other management activities; indirectly affect resources

AGENTS
individuals/ departments inside or outside of organization
- To E: Participate in events
- To R: Have discretionary power to use or dispose of resources
*Each economic event involves at least 1 internal and 1 external agent
*KEY FEATURE of the REA model is economic duality (for economic event, not support)
Events occur in pairs: Represent the give event and receive event of an economic exchange.
ERD versus REA Diagram
Classes of entities
- ERD– one class
- REA – three classes (resources, events, and agents)
Arrangement of entities
- ERD – determined by cardinality and readability
- REA – organized into constellations by class
Sequencing of events
- ERD– static picture
- REA– chronological sequence of business processes
Naming conventions
- ERD– all nouns
- REA– nouns (R’s and A’s) and verbs (E’s)

DEVELOPING A REA MODEL

View Modeling the REA Diagram
a multistep process for creating an individual REA
model.
RESULT: is a single view of the entire database. —>
like conceptual view
The four steps: Identify ERA then determine
associations
1. identify the event entities to be modeled
2. identify the resource entities changed by events
3. identify the agent entities participating in events
4. determine associations and cardinalities between entities

Step 1: Identify the Event Entities

Identify the events that are to be included in the model
- Economic duality: Include at least two economic events (give & take)
- May include support events
- Arrange events in chronological sequence (take order, ship product, receive cash)
- Focus on value chain events
- Do not include invalid events such as: bookkeeping tasks, analyzing customer’s credit

Step 2. Identify the Resource Entities

Identify the resources impacted by events identified in step 1
- Each event must be linked to at least one resource.
- Economic Events → DIRECTLY affects resources
- Support Events → INDIRECTLY affects resources

Step 3. Identify the Agent Entities

Each economic event is associated with at least two agent entities.
- One internal agent
- One external agent
*It is possible to have only an internal agent when no exchange occurs, as with certain ‘internal’ manufacturing
processes.

Step 4. Determine Associations and Cardinalities between Entities

● Recap: Association – the DESCRIPTIVE (NATURE) relationship between two entities, represented by the labeled
line connecting the entities (customer PURCHASES inventory)
 ● recap : Cardinality – the NUMERICAL degree of association between the entities (1 customer purchases
MULTIPLE inventory)
Cardinality reflects the business rules of a particular organization. (association is fixed naman eh bc everyone’s
duties are consistent for all orgs)

Many-to-Many Associations
CANNOT be directly implemented into relational databases.
require the creation of a new linking table or breakdown (bc too many)
Splits the M:M association into two 1:M associations.
The linking table requires a ‘composite primary key’.

Recap*primary key: unique identifies the rows

Composite primary key: a SET of key that unique identifies a record

View integration —> similar to steps in creating relational model

combining several individual REA diagrams into a single enterprise-wide model
**can only consolidate or link based on shared or common entities!!
3 steps:
1. consolidate the individual models
2. define primary keys, foreign keys, and attributes
3. construct physical database and produce user views

Step 1. Consolidate the Individual Models

- Requires thorough understanding of the business processes and entities involved in the models.
- Individual models are consolidated or linked together based on shared entities. For example, procurement
(expenditures) and sales (revenue) both use inventory and cash resource entities.

Step 2. Define Primary Keys, Foreign Keys, and Attributes

Implementation into a working relational database requires primary keys, foreign keys and attributes in tables.
- Primary key – uniquely identifies an instance of an entity (i.e., each row in the table)
- Foreign key – the primary key embedded in the related table so that the two tables can be linked
- Attribute – a characteristic of the entity to be recorded in the table

Assignment of foreign keys:

Primary key→ Foreign key: Relations are formed by an attribute that is common to both tables in the relation
● (1:1): either of the table’s primary key may be the foreign key
● (1:M): the primary key on one of the sides is embedded as the foreign key on the other side
● (m:m): create a separate linking table with a composite primary key
●
FINANCIAL: think: customer information relevant in AR or transaction
tracking
NONFINANCIAL: all others

Step 3. Construct Physical Database and Produce User Views

The database designer must create the physical relational tables
using software and must be filled in with data.
- Resource and Agent tables
- Event tables must wait for business transactions to occur
before data can be entered.
The resulting database should support the information needs of all
users.
 - SQL is used to generate reports, computer screens, and documents for user

Value Chain Analysis

Competitive advantages from the REA approach can be seen via
value chain analysis.
- Value chain analysis distinguishes between primary
activities (create value) and support activities (assist
performing primary activities).
- By applying value chain analysis, organizations can look
beyond itself and maximize its ability to create value
- REA provides a model for identifying and differentiating
between these activities.
- Prioritizing Strategy: Focus on primary activities;
eliminate or outsource support activities.

Competitive Advantages of the REA Model

Using REA can lead to more efficient operations.
- Helps managers identify non-value added activities that can be eliminated
- Increasing productivity and efficiency via elimination of non-value added activities generates excess
capacity
- Storing both financial and nonfinancial data in the same central database reduces multiple data collection,
data storage, and maintenance.
- Detailed financial and nonfinancial business data supports a wider range of management decisions
- supporting multiple user views (e.g., different perspectives on a problem)
- Provides managers with more relevant, timely, and accurate information.
- leading to better customer service, higher-quality products, and flexible production processes
HALL CHAP 11: ERP

NON ERP systems limits compatibility outside firm and communication WITHIN firm

Traditional IS Models: Closed Database Architecture

Similar to flat file because data can only be accessed thru specific
application (only has minimal technological advantage over flat
file)
Many ‘databases’ which can cause a high degree of data
redundancy and anomalies
Paper based
Each system has a separate database

Enterprise Resource Planning System

Multi-module application software that helps a company manage the important parts of its business in an integrated
fashion
KEY FEATURES include:
- smooth and seamless flow of information across organizational boundaries
- standardized environment with shared database independent of applications and integrated applications

ERP APPLICATIONS
2 MAIN ERP applications:
On-line Transaction Processing (OLTP)
- Core applications —> applications that support day to day operations
- Makes use of the OPERATIONAL DATABASE → which contains customers, production, vendor and inventory
data
- Pasok din dito ung TPS
- Eg for Business planning, sales and distribution

On-line Analytical Processing (OLAP)

- Business analysis applications; for decision support, modeling, info retrieval, ad hoc reports and what-if
analyses
- decision support tool for management-critical tasks through analytical investigation of complex data
associations
- supplies management with “real-time” information and permits timely decisions to improve performance and
achieve competitive advantage
- makes use of the DATA WAREHOUSE → database constructed for quick searching, retrieval, ad hoc queries and
ease of use.
- *ERP can exist without having a data warehouse; organizations that have not implemented ERP systems may
have a data warehouse
- Consolidation is the aggregation or roll-up of data. (gets more summarized)
- Drill-down allows the user to see data in selective increasing levels of detail (gets more specific)
- Slicing and Dicing enables the user to examine data from different viewpoints to uncover trends and
patterns.

ERP SYSTEM CONFIGURATIONS

Most ERP Systems are based on the CLIENT SERVER MODEL → form of network topology where user (client) accesses
ERP via a host computer called the server

Two Tier Model

1st layer: User Presentation Layer (individual computers)
2nd layer: Application and Database Layer (made of a server that handles both application and database duties)
 ● used especially in LANs

Three Tier Model

1st layer: User Presentation Layer (individual computers)
2nd layer: Application Layer
3rd layer: Database Layer
● Used especially in WANs because larger area so better to have 2 servers specifically for application and
database separated

Database Configuration
Configuration: arrangement of parts or elements
Selection of database tables in the thousands setting the switches in the system
Determining the switches requires understanding of the existing processes
May involve decisions to reengineer the company’s processes

Bolt-on Software
“Add on” feature to ERP system for additional specific functionality.
Provided or old by a third party
Less risky if bolt on software is recommended by erp vendor
- Supply Chain Management (SCM) links vendors, carriers, logistics companies, and IS providers; software that
supports the supply chain; can be linked to ERP for more efficient operations
- Supply chain → activities involved in moving goods from raw materials to the consumer

DATA WAREHOUSING
Data Mart
Data warehouse organized for a single department or function

Data Warehouse
A multi-dimensional database with large store of data, accumulated from a wide range of sources within a company
aka the operational databases, used to guide management decisions.
- Data are extracted periodically from operational databases or from public information services.
- A database constructed for quick searching, retrieval, ad-hoc queries, and ease of use
- Data contained are in a nonvolatile, stable state.
*Otherwise, management data analysis may result in pulling system resources away from operational use.
*Also, there are many sophisticated data-mining tools.

Operational database Data Warehouse Database

OLTP; operational OLAP: analysis processing

data contained represents current transactions data contained represents historical data

focuses on Data-In focuses on Information-Out

data updated regularly to reflect only current data is non-volatile or stable: when new data is added,
transactions the old data is not erased ; accumulation of data

gets data from transactions gets data from the operational database

operational views: virtual in nature with underlying base data warehouse views: physical tables.
tables ***OLAP permits users to construct virtual views
Data Warehouse Process
five stages: (MECTL)
1. Modeling data for the data warehouse
2. Extracting data from operational databases; collect
3. Cleansing extracted data; correct
4. Transforming data into the warehouse model; summarize
5. Loading data into the data warehouse database;

Stage 1 Modeling data from data warehouse

Because of the vast size of a data warehouse, the warehouse database consists of de-normalized data.
De-normalized kasi it will take a long time to normalize all of the data and nothing is gained if na-normalize siya.
Relational theory does not apply to a data warehousing system.
Normalized tables pertaining to selected events may be consolidated into de-normalized tables.

Stage 2 Extracting data from operational databases

Changed Data Capture → can dramatically reduce the extraction time by capturing only newly modified data.
collect data from operational databases, flat-files, archives, and external data sources.

Stage 3 Cleansing extracted data

filter/correct/repair any invalid data prior to being stored in the warehouse
- eg fixing computer program errors, misspelled names and blank fields
- Converting data into standard terms with standard data values (eg British date data DD/MM/YY to English
date data MM/DD/YY)

Stage 4 Transforming data into the warehouse model

data is put into summary or conceptual view before loaded to warehouse
*To reduce processing time → A data warehouse that contains most frequently requested summary views can reduce
processing time during data analysis
● *OLAP permits users to construct virtual views

Stage 5 Loading data into the data warehouse

Data warehouses must be created & maintained separately from the operational databases.
- Internal efficiency → impractical to keep both operational and archive data in a single database.
- integration of legacy systems
- consolidation of global data

RISKS ASSOCIATED WITH ERP IMPLEMENTATION

Pace of implementation
- ‘Big Bang’--switch operations to ERP in a single event; immediately and entirely
- ‘Phased-In’--installed over time, gradually
Opposition to change
- user reluctance and inertia
- need of upper management support
Choosing the wrong ERP
- goodness of fit: no one ERP product is best for all industries; make sure ERP chosen is right for the company
- scalability: system’s ability to grow
Choosing the wrong consultant
- common to use a third-party (the Big Four)
- thoroughly interview potential consultants
- establish explicit expectations
High cost and cost overruns
- Especially in training, testing, database conversion
Disruptions to operations
- ERP implementations usually involve business process reengineering (BPR)
- expect major changes in business processes

IMPLICATIONS FOR INTERNAL CONTROL AND AUDITING

Transaction authorization
- Controls are needed to validate transactions before they are accepted by other modules.
- ERPs are more dependent on programmed controls than on human intervention.
Segregation of duties
- Manual processes that normally require segregation of duties are often eliminated.
- User role: predefined roles with predefined access and permissions; grouping together users according to the
system resources they need to perform their assigned tasks.
Supervision
- Supervisors need to acquire a technical and operational understanding of the new system to help guide the
lower levels of organization
- Employee-empowered philosophy should not eliminate supervision.
Accounting records
- Corrupted data may be passed from external sources and from legacy systems.
- loss of paper audit trail
Access controls
- critical concern with confidentiality of information
- Who should have access to what?
Access to data warehouse
- Data warehouses often involve sharing information with suppliers and customers.
Contingency planning
- keeping a business going in case of disaster
- key role of servers requires backup plans: redundant servers or shared servers
Independent verification
- traditional verifications are meaningless
- need to shift from transaction level to overall performance level