Determining Requirements and Specifications of Enterprise Information Systems for Profitability

A company’s profits may be defined as the positive difference between its income revenues and operational costs. Today, most companies use traditional costing methods and/or traditional Activity-Based Costing (ABC) to determine their operational costs with a view to direct operational and business process changes so that profits are realized. A tripartite approach is presented towards determining requirements and specifications of enterprise information systems for profitability (EISP). In the first part, an understanding of the nuances of traditional costing and ABC as is currently practiced in enterprises is presented to point the shortcomings of these current costing practices. The second part provides a case study that vividly demonstrates the problems in the current costing methods and clearly points their inadequacies towards profitability. The third part presents a framework for the specifications of enterprise information systems for profitability through ontology-based enterprise modeling, EABEM and Temporal-ABC for the attainment of improved knowledge about costs. 1 EABEM is a trademark of Nulogy Corporation. 2 Temporal-ABC is a trademark Nulogy Corporation.