Information Technology and the Firm 551systems use older file structures or obsolete database management systems and
are almost incapable of accessing and manipulating data.
As an alternative to replacing these systems, data warehousing provides a
state of the art database management system that is fed data from the older
legacy systems. However, data does get duplicated, which can potentially cause
a synchronization problem between the data in the warehouse and the data in
the older legacy systems. Consequently, IT management must put stringent
controls in place. Still, the benefits outweigh the potential problems, for the
data warehouse comes with all of the high tech tools that will enable manage-
ment to create a plethora of queries and reports. Most of the newer Decision
Support Tools and Executive Information Systems, which will be discussed
later, require a storage capability similar to the data warehouse.
CONTROLS
Because the initial software applications that were developed in the 1960s and
1970s were accounting oriented, data processing, which is what information
technology was then called, typically reported to the Chief Financial Officer,
creating a control atmosphere consistent with accounting controls. A central
group of trained data entry operators was responsible for entering and verify-
ing data. Access to the “glass house” was restricted, and in some cases access to
the data entry and report distribution areas was also restricted. Because every-
thing was self-contained, control was not a major issue.
In the late seventies and early eighties, online terminals began appearing
on users’ desks, outside of the glass house, allowing them access to data. Ini-
tially, these terminals were used for information inquiry. Yet, even this limited
function was tightly controlled by strict software access control and password
protection. While workers were getting additional capabilities, they were also
creating opportunities for lapses in control. This was just the beginning of the
Trojan horse. Eventually, data entry moved out of the glass house to the ware-
house receiving dock to be used for inventory receipts; the order entry desk to
be used for new orders; the purchasing department to be used for purchase
orders; and, in the case of retailing, on to the sales f loor for point of sale pro-
cessing. No longer were trained data-entry operators responsible for the qual-
ity of the data; others were responsible for entering data, and it was just an
ancillary part of their job, for which they were not necessarily even trained.
The control environment was breaking down, and the introduction of the
personal computer only complicated the issue. No longer was control central-
ized. While access to data could be controlled, control over the use of data and
the content of reports was lost. For example, two people could each issue a re-
port on sales, and the numbers could easily be different. Yet, both reports
could be accurate. How is this possible? Simple. One of the reports may have
been about gross sales and the other about net sales, or one may have been
based on data through Friday and the other on data through Saturday.