Open Source for Accountingand Enterprise Systems

Thomas TribunellaState University a New York at Oswego USA

James BaroodyRochester Institute at Technology LISA

ABSTRACT

This chapter introduces open source software (OSS) for accounting and enterprise information systems.

It covers the background. functions, maturity models, adoption issues, strategic considerations, and

future trends for small accounting systems as well as large-scale enterprise systems. The author hope

that understanding OSS for financial applications will not only inform readers of how to better analyze

accounting and enterprise information systems but will also assist in the understanding of relationships

among the various functions..

INTRODUCTION

This chapter will inform the readers about the

feasibility and potential applicability of open

source software (OSS) to the functional areas of

accounting and finance. Small and enterprise-scale systems will be examined. The chapter will

review background information and frameworks

for analyzing the business case related to financialapplications of OSS.

()SS systems can provide support to indi v id ual

business functions or integrated suites of func-

tions. For example. open sou rce enter prise systemsprovide an integrated set of business functions that

are organized around business processes.

In this chapter, we will address the concerns

of managers and educators who are interested

in learning more about open source business

systems. We studied available OSS accounting

and financial applications by reviewing available

documentation on Web sites. For a number of

enterprise applications we reviewed, the systemfunctionality and market positioning, downloaded

the systems and studied system requirements.

installed and set up the systems. and reviewed

the license agreements. Initially, the chapter will

review the current state of OSS business systemswith a focus on definitions and functional appli-

cations of small accounting systems and larger

enterprise systems. We will then address the

critical factors and decision frameworks relevantto the adoption OSS for accounting and financialapplications. In addition. we will explore futuretrends in ()SS financial reporting systems.

BACKGROUND OF OSSACCOUNTING ANDFINANCE APPLICATIONS

In this section, we will discuss the business issuesthat are a required background in order to have ageneral understanding of accounting and financialapplications with OSS. Open source is used to

describe "a software program or set of softwaretechnologies that are made widely available by anindividual or group in source code form for use.modification, and redistribution under a licenseagreement with having very few restrictions"(American Bar Association. 2006). The logic be-hind the open source philosophy is that users mustbe able to read. redistribute. and modify the sourcecode for a piece of open source soft ware. In contrast.a traditional software I icense is designed to protectthe intellectual property of the software developerand severely restricts reading. redistributing, andmodifying source code. Since an open sourcelicense gives broad rights to read, redistribute,and modify the source code for a piece of OSSusers constantly improve the OSS by adapting itto various applications and fixing bugs.

The intellectual and legal origin of most opensource license agreements can he traced to twosources: the GNU General Public License (GPI.)and the University of California BSD Unix licenseagreements(McGowan. 2001). These agreementsreflect the goal of creating a community environ-ment in which innovation and quality improve-ments are rapidly shared and distributed throughcommon ownership of intellectual propertyrather than through individual or organizationalownerships th rough copyrights (Kennedy. 2001).Improvements made by individuals are madepublicly available back to the community.

Statistics available from www.freshmeat.net(Freshmeat, 2006), a Web site described as oneof the largest indexes of Unix and cross-platformOSS, indicates that these two license forms (orclose revisions of them) account for almost 80%oft he license agreements used by projects trackedon the site. Since 20% of the projects utilize dif-ferent types of agreements, users must examinecarefully the license agreement of the systemthey want to use.

We downloaded and reviewed the licenseagreements for a number of enterprise. account-ing, and financial applications (see Tables I and2). For this sample. The GNU General PublicLicense was the most common agreement. it isimportant to note that as the target market for thesesystems moves toward large enterprises. coin me r-cial licenses and hosted licenses emerge (Tustena

CRM, 2006). Given the variations of licensingagreements demonstrated in this sample, usersmust carefully compare the license agreementwith the requirements of their organi zations.

The trade press and other publications em-phasize that OSS is about back-office technologysuch as servers and operating platforms. Therelevance of OSS to functional areas, includingaccounting, finance and enterprisesystems. is notwell understood. Historically, OSS has focusedon technology components such as the L inux

operating system and the Apache Web server.Open source business applications are beginningto emerge, the most familiar being OpenOffice,an OSS application office suite supporting wordprocessing, presentation, and spreadsheet ap-plications. Now available as OSS is a variety ofaccounting, financial and enterprise systems ap-pl ications. Reflecting the potential these offeringshave in the marketplace, venture capital is flowinginto open source business applications, which bean indicator that these OSS business applicationswill play a significant role in the future (Cook.2004; Marshall, 2005; Stein, 2005).

Finding operating systems and servers tosupport the various open source accounting and

finance (A&F) systems (except venture capital)is not a problem. Microsoft (MS) Windows,Timm (Red I Ian, Solaris (Sun).BSD. Mac OSX.and UNIX all have accounting applications thatrun on their platforms. OSS systems will run onmost popular servers such as Microsoft. Apache(the most popular server with more than 50% ofall installations), Sun, and so forth. Table I dis-plays sonic of the more well-known OSS smallaccounting systems and the operating systemsthey require (Sourceforge, 2006).

To compile Table 1, we went to SourceForgeand checked all software under the Topic menulisted as office/business -> financial -> account-ing. This identified more than 500 systems as ofJune 2006. We then identified all systems ratedas mat ure, stable. or production. Many systemsdisplay the term accounting under topics, but

we question whether some of these systems aretrue accounting systems. Therefore, we exam-ined company Web sites to determine throughproduct information if the systems were capableof most traditional accounting functions. In ad-dition. we checked to determine if the companywas still actively operating and if the softwarewas current. We also reviewed recent journalarticles on the subject to see- if the companieswere cited. We understand that this market isin a continual state of change and many newproducts arc appearing. We feel that we havehighlighted most of the more well-known sys-tems. but we may have missed a few. Certainly,the OSS accounting market would benefit fromsome consolidation.

In addition to small accounting applications.there are other business applications available

in the form of OSS systems. For example. func-tions such as personal financial management.e-commerce, office suites (e.g.. spreadsheet.word processing. database, graphical presenta-tion). Web browsers. R DIM (relational databasemanagement). c-mailing clients, and strategicplanning are all as ailable in OSS. The enter-prise scale accounting systems usually interfacewith a relational database as well as with otherapplications. Table 2 displays some of the more

well-known OSS enterprise scale accountingsystems and summarizes the target market ap-plications. database, and license requirements ofeach system (Compicre. 2006: GNUCash. 2006:Sourceforge 2006: Ti R P. 2006; Tustena CR M.

2006; WebERP, 2006).Most open source accounting and finance

(A&F) systems work very well with relationaldatabase systems. As a matter of fact. sonic opensource systems run on open source RDBM sys-tems. For example. Compiere runs on MySQL,a mature and stable open source RDBM system.Even though there are many related applicationsthat work with A&F systems. this chapter willfocus mainly on the financial applications ofthese systems. However, we will briefly discussclosely related applications since they interfacewith A&F applications.

MAIN FOCUS OF FINANCIAL OSSSYSTEMS: FUNCTIONS ANDADOPTION CONSIDERATIONS

In this sect ion. we first will describe the functionsof small and enterprise-scale A&F systems. andthen we will discuss the frameworks as well asthe considerations used to evaluate these systems.Evaluation criteria w ill include quantitative finan-cial models and qualitative maturity and strategic

considerations.

Small-Scale Business Systems

A&F systems can be viewed as a functional setof application modules that can be mixed andcombined. Traditional OSS modules support func-tions such as general ledger, accounts receivable.accounts payable. purchase orders, sale orders.inventor) management. and fixed assets. OSSmodules that are based on the same operatingsystems are often mixed and combined with thehelp of consultants who program the patchi andmake the code publicly available. Most proprietarysystems do not operate well with OSS modules atthe functional application level. Table 3 displaysthe typical accounting modules that come with astandard small business OSS package (Romney.2006).

Enterprise-Scale Business Systems

There are many small business OSS packages,but one can ask if open source systems supportenterprise-level applications such as support forinventory and manufacturing operations. Theanswer is clearly yes. as a few OSS systemsoperate at the enterprise level. For example.Compiere can handle enterprise-level applica-tions with integrated business processes such as

quote-to-cash, requisition-to-pay, CRM (customerrelationship management). PR M (partner relation-ship management), supply chain management.performance measurement, and a Web store. Table4 displays the typical business process modulesthat should come with an enterprise-level OSSpackage (Davenport, 1998; The ER P Fan Cluband User Forum. 2006: O'Leary. 2000: Stein.2006: Sumner, 2005).

In order for OSS business systems to have asignificant impact on the market in the future,they will have to reach enterprise scale. The termenterprise system has a broad definition. Onedefinition focuses on the capacity, robustness,and scalability of the underlying technology: Anenterprise system is an information system thatoffers a high quality of service and can supportthe large volumes of processing and data typicalof a large organization. Such systems typicallyrequire independent server hardware and a dedi-cated administration. When the term enterprisesystem is applied to business applications. it hasa more restricted definition. An enterprise systemnot only provides the quality and capacity to sup-port a large organization as described previously,but its business functionality is broader than whatis required for a specific workgroup, department.or small business. An enterprise system providescross-functional capability to support multiplebusiness operations such as accounting. finance.production. sales, and marketing (Davenport, 1998).Fable 5 shows examples of the advanced applicationfeatures of some enterprise systems that achieve

cross-functional integration among various de pan-ments in a large Organization (e-consultancy, 1999;Swanton, 2004; Techtarget, 2006).

As can be seen in Table 5, open source A&Fsystems usually support and interface with Web-based applications such as online transactions,CRM systems. Internet catalogs, and electronicbanking. The underlying infrastructure of opensource operating systems. open source databasesystems, and Open source Web servers has a

demonstrated record of stability and reliability.For example, a high percentage of Web serv-ers are based on open source platforms such asApache servers.

What are the implications for open sourceA&F systems? Open source A&F systems mustbe stable, reliable, and able to process transactionswith multiple simultaneous users. The larger en-terprise systems must handle large groups of users.One view. as discussed by Wheeler (2005), is thatthe open source process with many developershaving access to and contributing to the sourcecode inherently produces system software thatruns with higher stabilit y and has less down time

than proprietary systems such as Windows-basedsystems ( Wheeler. 20051-

There is other research and testing that dem-onstrates different conclusions. Zhao and Elbaum(2003) compare the development process for OSSand proprietary software. While the open sourceprocess does involve more developers and shouldhave more testing performed in parallel. this resultsin improved detection of defects, not necessarilyimproved debugg ing and correction of defects(Zhao & Elbaum. 2003). Paulson (2004) and Sta-melos (2002) also present findings that questionthe superior reliability of open source software.

Collectively, this research is ambiguous anddoes not provide clear-cut direction to decision-makers regarding the quality and reliability ofopen source A&F applications. The open sourcemodel does enable organ Mat ions considering theadoption of open source A&F applications theability to download and rigorously evaluate theapplication. However, to fully test the applica-tion using samples of an organization's data andprocesses involves much of the work to actuallyimplement the system. so ihis benefit may not beas positive as it first seems.

Another advanced application of enterprisesystems arc built-in security and audit modules.In theory the audit risk associated with A&Fsystems is not greater with OSS than with pro-prietary systems. Since the code is freely avail-able. the OSS community finds weaknesses inthe program that could violate system security.Since the systems are open. they arc patched bya wide variety of users at a very rapid rate. Thosepatches become open and available to other usersin the community. Therefore, a well-maintainedOSS should be a low-risk system from a security.point of s kw. There are very few reports of opensource A&F systems having been hacked Themore widely used proprietary systems base auditmodules that support the work of external auditorssuch as CPA firms and governmental regulators.()SS systems are lagging in this arca. However.Tiny ER P does have an audit module.

Maturity and Stability Frameworksfor Understanding OSS Systems

That are several maturity models. such as thegenerally recognized as mature (GRAM) .A ) andi gener-ally recognized as safe (GRAS) models Wheeler.2006). Maturity and safety are important consid-erations in OSS because immature systems willnot have a critical mass of support. consulting_training. senders. and users. The GRAM andGRAS models are conceptual. More quantitativemodels am the business readiness rating (BRR)developed at Carnegie Mellon (Center for OpenSource I inv estigation. 2005), open source maturitymodel (OSMM). and CapGemini OSMM (Cap--Gemini ini. 2006). The quantitative models employa rating system in which important attributes andgoals of the system are rated and then weightedproportionately. Then a score is calculated, andthe OSS systems are ranked in order of maturityand acceptabiIity. Table 6 displays the frameworktar the open source maturity model (OSMM)(Golden. 2006).

Notice in Table 6 that software elements arclisted on the left side of the model. Then eachelement is scored based on its maturity. Next.each element is given a weighting factor basedon its importance to the organization. In the nextphase of the analysis, the element maturity scansarc multiplied by the weighting factor to generateelement-weighted scores. In the final phase of theanalysis. the element-weighted scores arc totaledto produce a product maturity score. The variousproduct maturity scores arc then compared todetermine the best OSS system. A well-designedmaturity model should help amassers understandthe development and stability level of an OSSproduct.

Sourceforge.net identified more than 500 OSSaccounting projects as ofearly 2006. The vast ma-jority of these products is neither mature note readyfor commercial applications. Sourceforge.netranks OSS in the following seven categories:

• 7: I nactive• 6: Mature• 5: Production/Stable• 4: Beta• 3: Alpha• 2: Pre-Alpha•10: Planning

Examples of major OSS producers with ma-ture or stable systems are Complete. GnuCash.TurboCash. Traverse (MS compatible), OSAS(NT. Linux. Unix). Lazy 8 Ledger. NOLA. Ne-Accounts. SQL- Ledger. PHPBalanceSheet.

WebERP, OpenAccounting, Quasar, CentraView,

and TinyBA. There are also many systems underdevelopment (Sourceforge. 2006).Getting support and training, for an open sourceA&F system can be difficult if the system is notmature. Very mature systems that are industryleaders have a support infrastructure equivalent tothe I n frast r uctu re provided by mature proprietarysoftware vendors, including the following:

• Call center and help-desk support• Online assistance such as demonstrations.

documentation, and forums• Consulting services• Training seminars and conferences

However there is a contrast between these ser-vices for open source A&F and the offerings fromproprietary software vendors. The services froma proprietary- software application vendor focuson providing support to customers %bile they arcmaking their purchase decisions and then

providing support while customers install, configure, andoperate the application. The consultant for opensource AM applications expand their support toaddress the needs of software developers withtechnical documentation and recommendationduring the development process.

An organization considering the use of opensource A&F applications must look carefully atthe vendors' services and support, determine thebalance between support for development and

operational usage, and evaluate whether the of-ferings of the vendor meet its needs. In addition.the revenue model for support vendors in opensource is different from the proprietary softwaremodel. An implication of this is that an organization using open source may receive its supportfrom a network of suppliers. These suppliers mayinclude support from the core organization leadingthe open source AM: development. operationalsupport from independent consultants, patchesand improvements from partners. and value-addedresellers (VAR) who address various aspects ofthe support value chain.

Accordingly:, organizations adopting opensource A& I : most likely do not have the one-stopalternatives that exist for proprietary software.Adopting organizations will need to assess theircapabilities to be actively engaged in selectingconsultants and managing their support.

Financial Frameworks for

Understanding OSS Systems

There are several frameworks that can help usunderstand the cost and value MOSS i n ton mat ionsystems and that can he applied to accounting

applications. For example, the total cost of owner-ship (TCO) as well as capital budgeting modelssuch as return on investment (RO1), net presentvalue (NPV). payback period (PB), and internalrate of return (IRR) can shed light on the valueof these systems.

Costs for an information system fall into anumber of categories: purchase cost for newsoftware. hardware, and working i technologies:resourcecosts to install, set up, and configure thehardware and software: and ongoing administra-tion and maintenance costs. The primary savingsfor an organization adopting open source A&Fwill be the purchase cost. Generally, an OSS isavailable free or at a very low cost. Therefore, theinitial software (SW) cost is very low. Hardwarerequirements for Linux- and Unix-based operat-ing systems are very low since these systemsrun very efficiently and can operate very wellon used equipment. The most common model forcategorizing costs related to information systems

is the TCO (David. 2002). The TCO model isdisplayed in Table 7.

TCO includes all expenses associated withowning and maintaining work stations withinan organization. It is a holistic view of IT-related

costs at an enterprise level. TCO includes acqui-sition costs, control costs. and operation costs.Acquisition costs account for approximately 20%of the total costs. It has been posited that invest-ing in control will reduce man) operational costs(David. 2002).

ConsuIting, training, and change managementare usually very expensive when an organiza-tion converts to an OSS or to any other system.Ongoing adminstrative costs will likely he thesame for various open source A&F systems.Finally. maintenance costs arc also impactedsince frequent updates. corrections, extensions.and patches are frequently released by the opensource community.

An additional dimension of cost and time af-fected by open source systems is the request forproposal (REP) cycle. Much of the REP processis invested in analyzing the licensing proposalsfrom each potential vendor, assessing the pay-back from the investment, and negotiating theterms and conditions of acquiring the software.Organizations utilizing OSS business applicationsshould see this process shortened and reduced incomplexity. since the software is usually free andlicense agreements follow standard models.

Table 8 displays the most common financialmodels for judging in limitation technology (IT)projects. The percentage of use was reported bya CIO magazine research report in which 256 ITprofessionals reported the metric they used tomeasure IT initiatives (CIO. 2001).

Following is a summary of the IT budgetingand measurement tools in Table 8 (Romney &Steinbart, 2006; Williams. I laka. (Bettner, &Meigs: 2005):

• ROI: Compares the annual cash now withthe initial investment to produce a return oninvestment percentage. If the cash flow isunequal over the life of the project. managerscan use the average annual cash flow. ROIdoes not consider the time value of money,which is a significant flaw in the method forlon g-term projects.

• IRR: Calculates the effective interest ratethat would result. assuming a net presentvalue of zero for the project. In other words,IRR isthediscount rate that makes the NPVof an investment (or project) equal to zero.Using this method, managers will selectprojects with higher I RRs.

• ROA: Determines the return on the bookvalue of the average assets related to thesystem.

• NPV: Calculates and sums the discountedfuture cash flows of the benefits minus thecosts. NPV discounts all cash flows on aninvestment back to present value using arequired ROI. Accordingly, the analyst triesto determine if the present value of futurecash flows (revenues or savings) from thesystem is greater than the cu rrent investmentrequired to finance the system. Under thismethod, managers will select projects withhigher positive NPV.

• PUP: Calculates the number of years beforethe new savings from the project equal theinitial cost of the investment. The methodcalculates the time it will take to recoup aninvestment in terms of nominal dollars. Itdoes not consider the time value of money.which is a significant flaw in the method.Under this method, managers will selectprojects with shorter payback periods.

• ARR: Calculates the percentage increasein operating income from an investment innominal dollars. ARR does not consider thetime value of money, which is a significantflaw in the method. It does consider depre-ciation, which is a method to allocate thecost of an asset to accounting periods in asystematic and rational manner required bygenerally accepted accounting principles.

• BEU: With break-even 13E) analysis. we

can determine how many units we need tosell (or savings we need to gain) in order tobreak even on an IT project. Furthermore,we can calculate forcasted and projectedlevels of profits analysis. The analysis gen-erates understandable income statementsand graphical presentations of potential ITproject results and is a popular techniquein the MIS industry. It explains how costdrivers affect cost behavior and allows forsensitivity analysis. It shows how changes

in cost-driver activity levels affect variableand fixed costs. The tool is easy to quantifyand calculate break-evert sales volume intotal dollars and total units. BEU provides avisual representation of project performanceby creating a cost volume-profit graph andhelps to supply information for forecasts andprojections. It also calculates sales volume intotal dollars and total units to reach a targetprofit.

• Residual Income (RI): Determines the netincome of a division less the cost of capitalon the division's capital investment.

These measures should be improved with theimplementation of OSS syste,s if those systemsare less expensive and have the same functional-ity. Accordingly, chief financial officers (CFOs)should look favorably on OSS systems.

Strategic Factors Related to

OSS Financial Systems

The decision regarding implementing an OSSenterprise system includes additional factors. Inorder to address the business processes withinan individual organization. enterprise systemsrequire a significant amount of customizationto the specific requirements of the organization.Before adopting an OSS enterprise system, anorganization must analyze the capability of thecandidate software to support this customiza-tion. Does the candidate software meet the needsof the organization as delivered? If not, thenwhat tools and processes are defined to supportcustomizing the enterprise system? Proprietarysystems such as SAP R/3 and Oracle Applica-tions enable eon I'm mat ion, which customizes theapplication to the business requirements withoutwriting software. If configuration capability isnot supported. then the organization must assessthe adoption and extension the soft ware needs tomeet the organizations requirements.

Closely aligned with customization is a stra-tegic question. The open source model generallyrequires that changes to the software be sharedwith the open source development community:.Frequently. the specialization of business pro-cesses within an organization is a source ofcompetitive advantage. Typically, OSS licenseagreements enable organizations to modify thesource code and freely use the modificationsinternally as long as the software containing themodifications is not distributed publicly. Organi-zations using OSS systems must carefully reviewthe license agreemems and be sure that their plansare supported.

FUTURE TRENDS

In the future, most M ; systems will supportmarkup standards such as NMI. (extensiblemarkup language) and XBRI. (extensible busi-ness reporting language). The hypertext markuplanguage (HTML) is a standard that defines theformat of information exchanged between Webbrowsers and Web servers. However it has a fixedset of in formation types that it can exchange. X MI.language is a standard created to overcome therestrictions of HIM': by providing mechanismsto extend, in an application-specific manner, thetypes of information that are exchanged.

X BRL is a specific standardized set of ex-tensions created using XML for financial ap-plications. It is the markup language used to tagfinancial information for the U.S. Securities andExchange Commission's (SEC's) EDGAR (Elec-tronic Data Gathering and Retrieval) database.In the short run. XBRL, will soon he used by theSEC to accept financial reports that contain datain XBRL-compliant form. XI3RL is voluntary fornow, but in the future. given the current trend ofgovernment regulation of the financial markets.it may become required (Debreceny, 2005). Thecreation of languages such as X BR I, will allow

for the rapid communication of data among or-ganizations, systems, and networks.XBRL allows users to increase the speed ofthe financial reporting process and may lead toa continuous reporting process in the future.In an environment of continuous reporting, ac-countants and auditors will have to transitionfrom periodic reviews of hatches of financialinformation to a constant monitoring of a flow offinancial inhumation. The security and control ofthese online, real-time systems will create newchallenges and opportunities for accountants andauditors (Debreceny, 2005). Furthermore, sinceX BR L-based lags can be used to identify grainsof data for financial applications, new ways ofunderstanding the financial reporting processand testing data quality will have to be developed(Tribunella. 2005).

Organizations and companies in Europe andAsia have emphasized de facto standards more

than U.S. companies. which tend to focus more oninnovation and rapid technology migration. Howwill these factors affect 055 financial systems?Standards are emphasized because of the vendorindependence they provide. In the technologydomain. 055 has exploited standards to offertechnologies that support standards at a lower cost.The role of standards in A&F systems domains ismuch smaller. It is too early to tell whether a t rendfor standardization will he driven by Europeanand Asian governments and organizations.

CONCLUSION

The adopt ion of OSS accounting and financialsystems is not widespread. Proprietary systemssuch as Quick Books. Peachtree, and CougarMountain have a majority of the market share ofsmall business systems. Closed source systemssuch as SAP. Oracle, and Microsoft dominate theenterprise systems market. I lowever. Compiere(an 055) reports 930,000 downloads of its en-

terprise system and is supported by 44 partnerswith worldwide locations.

Open source A&F systems are in a state ofrapid evolution. They are not well developed atthe enterprise level. but there are many smallbusiness accounting systems with a complete setof standard modules. However, only a few olithesystems are mature with a network of vendorsthat support and train users as well as provideconsulting and installation. The lack of supportshould change as more venture capital flows intothe OSS industry. Given the low cost and stabilityof an ()SS system for A& F applications, one canmake a strong business case for its implementation.Accordingly, we believe these systems will gaingreater acceptance in the business communityin the future.

The bottom-line questions that an organizationmust answer are whether the applications meet itsneeds and whether the costs are affordable. Sinceopen source A&F systems are in their infancy thecurrent answer is yes in a minority of cases. Butfor those organizations that choose to employ OSSs> stems, the next questions whether the structureof pricing. support. and maintenance cost is lessthan the proprietary alternative. Given the businesscriticality of these applications and the potentialneed to customize them, the jury is still out.

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KEY TERMS

Accounting Information System (AIS ): Asubset of the management information systemscomposed of the people. processes, and assetsthat are responsible Mr the financial informationof an organization. The AIS collects transactiondata. monitors internal controls. and producesaccounting information such as financial state-ments and budgets.

Auditing : An independent objective reviewand assessment of an organization's financialprocesses and information to validate that ap-

propriate internal control processes are followed,that the information resulting from these processesis valid, and that risks are being monitored andresponded to appropriately.

Cross-Functional Integration : The processof combining the various functional businessactivities within an organization by bridging theboundaries and enabling the flow of'inlormatiorlamong the various organizational functions.

Database Management System (DBMS) :A specialized software package that serves asthe repository of an organization's data. IheDBMS organizes and manages the data so theyare available to applications programs such as the

accounting information system.

eXtensible Business Reporting Language(XBRI.) : X RR I. is a specification for the report-ing and communication of ft nancial informa-tion. X BR L is an extension of extended markuplanguage (XML). Financial information is de-

scribed by a set of tags that is standardized forrepresenting financial information and enablingits communication between information systemsusing the Internet.

InternaI Control: The set of management pro-cedures, either manually performed or automatedby information systems. hal are utilized to assurethat an organization's management policies andprocedures are adhered to and that the objectivesof the organization are being achieved. Internalcontrols processes include monitoring risks andmonitoring the reliability and quality of informa-tion within the organization.

Relational Data Model: A model in whichdata are viewed by users as Iwo-dimensionaltables. Each table represents an entity type suchas a customer. Rows are instances of an entity.and columns are attributes of the entity. Thetables relate or link to each other through sharedattributes.

Request for Proposal (RFP) : Art REP is adocument utilized in the acquisition process forthe purchase of software and services. An REPdocuments the needs of the acquiring organiza-tion and defines all specific requirements that theacquiring organization has related to functionality,delivery time. post-acquisition support. additionalservices, and so forth. The RFP also defines spe-cific requirements for vendors responding to therequest. including information that is required intheir requests. the deadline for responses, finan-cial disclosure. security and intellectual propertyrights. and so forth.

Strategic Planning : A plan created by topmanagement to achieve the general long-rangevision and mission of the organization. This planmay include multi-year goals related to technologyinfrastructure. large capital projects, governancepolicies, financial budgets. and market shareobjectives.