Leonardo Galvão Cavalcanti
Juha Huuhtanen
Timo Pantsari
Jaakko Virevesi
This report is a follow-up to the AIS-case from last October. It carries on further to investigate and tackle the accounting- and communication-related problems associated with the two companies in question. For more detailed information about the companies (FERE OY and KATETUOTTO OY) and their current state please visit AIS CASE.
The objective of this report is to continue analyzing the relationship between the companies concerned and suggest improvements to the current systems in use. We will present different solutions for enhancement, among which a feasible solution may be picked (based on the willingness to invest time and money). The report will at first concentrate on less expensive, easy-to-implement technologies and proceed all the way to hard core XML-based futuristic information systems.
In this report we will give four alternative solutions for communication and accounting-related problems addressed in the report presented in the fall.
The first solution is the least expensive, easiest to implement and most realistic at this point in time for these two relatively small companies. It suggests Fere to buy a cheap bar code system and software to keep control of inventories in the boutique and the warehouse. For Katetuotto the most obvious and urgent matter to do would be to acquire new up-to-date accounting software to facilitate and improve their business processes.
The second solution is also feasible for these two companies. It suggests that in addition to the first solution Katetuotto would create a web interface to add value, by improving the services it provides to its customers. The accounting information, such as the sales volumes and inventories, would be retrieved from Fere’s system to Katetuotto’s accounting system by using communication channels such as email and web-forms. With these improvements Fere would have an opportunity to read up-to-date reports from the Internet .
The third solution presents a fifth-generation ERP system utilizing mySAP. This solution will not be feasible for these two companies and is shown only to demonstrate the magnitude of such an investment.
The fourth solution looks into the future and is not feasible to implement at this particular moment. It suggests a system based on the ebXML-standard. In addition to second solution all the information is exchanged through the Internet in XML format in real-time. This solution should be considered again in 5 years.
This solution is the least expensive, easiest to implement and most realistic at this point in time for these two relatively small companies. This solution would not change the communication processes between the two companies (i.e. the plastic bag format protocol still exists) because the suggested improvements are not related to each other.
This solution obliges Katetuotto for minor investments, which are in any case mandatory in the near future in order for the company to survive. These investments include the cost of implementing new accounting software.
The accounting software should be an open-source, client-server based system that utilizes cheap database technology (e.g. Postgres). Implementing such a system would be low cost due to the fact that it does not involve ownership fees, and does not take a long time for a summer trainee to actualize. The only costs associated with these implementations come from new hardware purchases, such as database server and new workstations as well as labor expenses.
We were able to find two possible free client server accounting software on the web:
Compiere: http://www.compiere.org/, which claims to be the largest open-source business application with 170.000 downloads. This might attest the quality of the software
Linux-Kontor: http://www.linux-kontor.de/en/, which is not 100% ready yet, but seems a promising product.
Both of these products are written in java, which provides good security (avoiding stack-overflow attacks) and code portability to different platforms. Besides they support JDBC, which means that they could in theory run on top of most commercial databases, even though differences in SQL implementation might hold this back.
By carrying out these changes the more efficient system would allow Katetuotto to increase their customer base and provide a number of new value-added services to the customers.
The following tasks should be performed to enhance Fere’s ability to control the critical information related to their business processes.
In order for Fere to achieve better control over their inventory in the boutique and warehouse a cheap bar code system and related software needs to be acquired. This system would also facilitate the work performed by the sales personnel. As Fere has already been planning to purchase such a system, it will not create unplanned expenses for the company. Fere would also need to acquire a database to maintain customers and vendors data to keep better track of sales and purchases.
There are a great number of advantages in using the World Wide Web for business, including lower costs and higher availability. The web can be accessed 24 hours a day seven days week; users are not restricted to commercial hours. We believe that katetuotto’s customers would greatly benefit if they could use to web for sending transaction data and retrieving reports.
Since an accounting system that is already web-enabled can be costly and might require heavy investments in hardware and supporting software, we would recommend Katetuotto to develop a web interface for their new client server database driven accounting software. The web interface would show interesting reports for Katetuotto’s customers on the web, read transaction data sent from the web through various channels and update katetuotto’s customers' transaction data preferably in real time. This can be done by directly updating records in the database that underlies the new accounting software or interfacing with the software, if it’s feasible. The ways in which Katetuotto’s customers could send their data would include e-mail, for its simplicity and widespread use, and web forms. Customers that are not technology-savvy, such as Fere, could use e-mail to send their transaction data in some agreed-upon format. The transport of data could be made with SSL and the authentication with simple passwords.
The development of this web-interface would not require significant technical expertise; it could be done using commonly used web technologies such as PHP or Perl. A temporary worker can be hired for that purpose. This worker should have sufficient knowledge of web-based technology such as the ones mentioned above as well as of databases (knowledge of SQL is a must). He or she should also preferably have some knowledge of accounting. It seems that PAFIS students would be a good choice for this task. The project would last for about three months. If any suspicion is raised about the reliability of the hired developer, a review of the code could be made by a consulting firm, even though some checks in the background of the person hired and referrals from trusted third parties would perhaps be more cost-effective.
The third suggested solution can be found from Timo Pantsari’s personal web-site.
By utilizing ebXML the companies would be able to exchange structured data, like the accounting information kept in databases, over the Internet in standard XML format. This would allow increased automization of exchanged information between the companies. Implementing ebXML does not necesserily require heavy investments as the standard itself is open source and is therefore a likely way of the future for small and medium-sized businesses such as Fere and Katetuotto.
The problems associated with ebXML involve the classical chicken-egg dilemma, lack of ebXML knowledge and technical difficulties. As ebXML is a relatively new standard, it is practically nonexisting outside the academic world. Nobody wants to take the first step to invenst in such a system because of heavy risks involved. Also, people, in general, are not well aware of the standard (particularly the owner’s of SM companies) and do not posses technical abilities to understand or implement such a standard. Therefore, our group does not recommend implementing ebXML at the moment, but to follow its development and consider its adaptation in the coming years (maybe in 5 years or so).