AIM 4343 – Accounting Information for Decision Analysis

Spring 2005

Instructor

Dr. Ram Natarajan

Office: SOM 4.809
Ph: 972-883-2739
Fax: 972-883-6811
E-Mail: nataraj@utdallas.edu
Office Hours: Mondays 1 PM to 3 PM and by appointment on other days.
TA and Office Hours: Rong Huang, rxh012600@utdallas.edu
Office Hours: Wednesdays 3 PM – 5 PM, SOM 4.232; Ph: 972-883-2334

Course Objectives

This course emphasizes quantitative techniques used to characterize costs, benefits and
risks and the use of accounting information for managerial decision making in technology
settings. The use of information systems (IS) and technology presents unique
opportunities and challenges for managers of modern enterprises. Understanding the
costs, benefits, risks and accounting implications of information systems and technology
for their organizations would help managers effectively initiate, plan, control and
evaluate IS and technology projects.

Many issues and decisions surrounding the management of information systems and
technology can be effectively analyzed using a quantitative approach. Traditional
analytical tools such as cost-benefit analysis, quantitative risk assessment, scenario
analysis, regression, cost-volume-profit analysis, discounted cash flow analysis, etc., can
be effectively adapted towards this purpose. This course is intended to help students
apply these quantitative methods towards managerial decision- making in settings
involving information systems and technology.

Two aspects of the course that will be particularly emphasized to enhance the learning
experience include: (1) numerical assignments, which provide ample opportunities for
detailed discussions about solution techniques, and (2) case study approach, which
presents real-world settings involving information systems and technology. The purpose
of such a two-tiered course structure is to help students develop both broadened
perspectives and specialized hands-on knowledge and skills.

Instruction Method

The course will rely on problem solving as the main pedagogical tool. It will be
supplemented with the case method for some topics. A typical class session will involve
a lecture and discussion about the topic under consideration, a description of the
accounting and other methodological issues involved, hands on problem solving of the
numerical exercise assigned for the session and a preview of the subsequent topic.
You are expected to come to class fully prepared to discuss the day’s assignments,
readings and cases. Being prepared to discuss the assignments means having read the
assignment in detail and making a preliminary attempt at organizing the data provided
and understanding the decision context. Being prepared to discuss the readings and cases
means having read the readings, cases and exhibits personally and having organized a set
of notes you can draw on during the class. Regular class attendance is absolutely
essential and will form a substantial portion of the class participation grade. I will take
attendance starting from the class of 1/24/05.

Students who want to do well in this course should, throughout the semester on a
consistent basis, assiduously follow the routine of reading (before class), listening and
participating (during class) and reflecting (on the material after class). It has been my
experience that students who have followed such a routine on a consistent basis have
always performed significantly better than those who did not adopt a systematic
approach.

During the semester, I will supplement the cases and readings with additional notes and
exercises. These additional notes and exercises will be posted in WebCT. School of
Management prohibits the distribution of handouts in class. It is your responsibility to
download and print these notes and extra problems and bring them to class.
It is absolutely necessary that you periodically check WebCT so that you are up to date
with all the course materials posted on the web.

Required Materials:

A coursepack containing cases and readings is available from the University bookstore/
Off campus Books.

Grading:

Quizzes (5x5) 25%

Attendance/Class Participation 10%
Homework Assignments 15%
Exam 1 25%
Exam 2 25%

Quizzes:

There will be six quizzes. The best five scores out of these six will be used in the
determination of the final grade. The primary objective behind the quizzes is to ensure
that you are working on the course material on a consistent basis throughout the semester.
No makeup quizzes will be given. Each quiz will be about 20-30 minutes in duration.
Attendance/Class Participation:

Regular class attendance and participation is essential for you to have a rewarding
learning experience in this course. The class participation grade will be based on
attendance, preparation, familiarity with the cases and reading materials, relevance and
insight reflected in classroom questions and commentary. An important criterion is your
contribution to the creation of a positive learning environment.

Homework Assignments:

I will provide these assignments to you two weeks before they are due. You can form
groups not exceeding three members for this purpose. Your submissions should be typed
or word-processed.

Exams:

There will be two exams, a mid-course exam and an end-of-term exam. Please note the
exam dates and make your travel/vacation/wedding plans accordingly. The exams
are not cumulative and they will each be about 120-150 minutes long. They will test
your knowledge of the material covered in the lectures, assignments, readings and cases.
No make- up exams will be given except under extenuating circumstances arising from
medical or family emergencies.

Academic Honesty:

All students are expected to behave in accordance with academic integrity. Strict
adherence to the Policy on Cheating as stated in the Regents’ Rules and Regulations, part
One, Chapter VI, Section 3, Subsection 3.2, subdivision 3.22 is expected. This policy
reads:

Students are expected to be above reproach in all scholastic activities. Students who
engage in scholastic dishonesty are subject to disciplinary penalties, including the
possibility of failure in the course and dismissal from the university. Scholastic
dishonesty includes but is not limited to cheating, plagiarism, collusion, submission for
credit of any work or materials that are attributable in whole or in part to another person,
taking an examination for another person, any act designed to give unfair advantage to a
student or the attempt to commit such acts.

About the Instructor:

Ram Natarajan has over 20 years of work, research and teaching experience in
managerial accounting. He has a Ph.D. in accounting from the Wharton School of
University of Pennsylvania and is an Associate of the Institute of Cost and Works
Accountants of India. He worked in various managerial positions with the Indian
subsidiary of Chesebrough Pond's Inc. between 1982 and 1987. Prior to joining UTD in
Fall 1998, he taught managerial accounting to BBA and Full/part-time MBA students at
the University of Michigan Business School and at Southern Methodist University. He
was a nominee for the Chancellor’s council outstanding teaching award at UTD in Spring
2001.

Ram's research examines the use of accounting information in top management

performance evaluation, benchmarking, productivity and efficiency analysis. His
research has been published in the The Accounting Review, Management Science,
Journal of Accounting, Auditing and Finance, Journal of Accounting and Public Policy,
Journal of Productivity Analysis, European Journal of Operational Research and
Managerial Finance. He has presented his research papers in many universities and
academic conferences. His academic honors include a Dean's Fellowship of
Distinguished Merit from the Wharton School, a research Fellowship from Ernst &
Young, an Outstanding Doctoral Dissertation Award from the American Accounting
Association and a Teaching and Research Junior Faculty Fellowship from Arthur
Andersen.

Course Schedule:

The class schedule for the course is provided in the next few pages.
 Class Schedule and Teaching Plan

(CP – Available in Coursepack; WEB – should be downloaded from WebCT)

Module 1 (1/10/05)

Lecture:
Cost Benefit Analysis for Technology Management -Introduction to course (WEB)

Should be ready to discuss:

1) Atlantic Insurance Group (WEB)
2) Tax-on-Web (WEB)

Module 2 (1/24/05)

Lecture:
Product recall decisions (WEB)

Should be ready to discuss:

The Intel Pentium Chip Controversy (A) (CP)

Module 3 (1/31/05)

Lecture:
Accounting for software development costs (FASB No. 86) and Adventurous Computer
Games Case (WEB)

Should be ready to discuss:

Adventurous Computer Games (CP)

Quiz I

Module 4 (2/7/05)

Lecture:
Evaluating an IT outsourcing decision— Prestige Telephone Company (WEB)

Should be ready to discuss:

Prestige Telephones (CP)

Quiz II

Module 5 (2/14/05)

Lecture:
Quantifying benefits from high quality cost management systems (WEB)

Should be ready to discuss:

Sandeesk (WEB)

Supplementary readings:
1) Instructions for simple regression ZIP file (WEB)
2) Instructions for multiple regression Word document (WEB)

Module 6 (2/21/05)

Lecture:
Quantifying benefits from investing in forecasting systems (WEB)

Should be ready to discuss:

Dell Call Center (WEB)

Quiz III

Module 7 (2/28/05)

Exam 1

Module 8 (3/14/05)

Lecture:
Evaluating the impact of Enterprise Resources Planning (ERP) systems (WEB)

Should be ready to discuss:

Cisco Systems, Inc: Implementing ERP (CP)
Tektronix (WEB)

Supplementary readings:
ERP article (WEB)

Module 9 (3/21/05)

Lecture:
Quantifying benefits from supply chain management systems (WEB)

Should be ready to discuss:

Snap First (WEB)

Module 10 (3/28/05)

Lecture:
Quantifying value of expert information (WEB)

Should be ready to discuss:

Decision Analysis: HBS 9-894-004 (CP)
Supplementary exercises (WEB)

Quiz IV

Module 11 (4/4/05)

Lecture:
Quantifying value of expert information (WEB)

Should be ready to discuss:

ZipZap Corporation (WEB)

Quiz V

Module 12 (4/11/05 and 4/18/05)

Lecture:
Justifying investments in technology and IT assets (WEB)

Should be ready to discuss:

Rosen Manufacturing (WEB)
Vignette (WEB)
Wells Fargo Online Financial Services (B) (CP)

Module 13 (4/18/05 and 4/25/05)

Lecture:
Valuation of entrepreneurial technology firms (WEB)

Should be ready to discuss:

Digital Everywhere, Inc. (CP)

Quiz VI (4/18/05)

Exam 2 – 5/2/05
 AIM 4343 – Accounting Information for Decision Analysis

Cousepack Details

Cases:

1) The Intel Pentium Chip Controversy (A): HBS Case 9-196-091

2) Adventurous Computer Games, Inc: HBS Case 9-199-020
3) Prestige Telephone Company: HBS Case 9-197-097
4) Cisco Systems -- Implementing ERP: HBS Case 9-699-022
5) Wells Fargo Online Financial Services (B): HBS Case 9-199-019
6) Digital Everywhere, Inc: HBS Case 9-298-099

Readings:

1) Decision Analysis: HBS 9-894-004