The accounting subject is classified into two categorizations: fiscal and direction accounting. These two categorizations have their ain activities undertaken in guaranting that effectual corporate administration of companies is being practiced. With the coming of engineering, the SAP ERP package was created in order to turn to the concerns of corporate administration particularly the streamlining of the finance facets of direction. This package has several characteristics and maps that help the company accomplish its ends. An ERP solution is designed in bettering the fiscal system every bit good as streamlining the concern procedure and to upgrade the engineering substructure of an organisation. Therefore, it helps adding value to the employees every bit good as stakeholders of an organisation.
The Sarbane Oxley Act reformed the fiscal ordinances of many states worldwide by supplying deductions that are necessary for effectual and crystalline fiscal coverage. The shapers of SAP ERP are confident that with their package ‘s characteristics and maps, these deductions are met for the satisfaction of the company ‘s stockholders. However, there are assorted instance surveies, both successful and failure that were conducted in order to estimate the effectivity of such. This study shall discourse all of these and farther researches and studies are encouraged.
Introduction
This paper shall discourse four inquiries. The first inquiry is the categorization of Financial and Management Accounting. These two categorizations will be explained and how the current SAP package meets the demands of these two categorizations. The 2nd inquiry trades with the research of the assorted characteristics of the SAP package such as recognition direction, catering of subordinates, currency interlingual rendition, transporting out of intercompany minutess every bit good as study coevals utilizing different linguistic communications. The 3rd inquiry shall discourse the alterations brought approximately by the Sarbane-Oxley Act which include activities such as archiving, mandate, tolerance degrees, and financial transparence among others. Finally, the last inquiry shall discourse success and failure narratives from companies that have used the SAP ERP.
Categorization of Accounting
The first categorization of accounting is fiscal accounting. The focal point of this categorization is the fiscal statement being distributed to the company ‘s shareholders, fiscal analysts, and loaners. The general accounting rules are the activities of this categorization which are needed to be reported as a consequence of the company ‘s past minutess in its balance sheet, statement of income, hard currency slow statement, and statement sing the shareholders ‘ alteration in equity ( Averkamp 2010 ) .
The 2nd categorization of accounting is managerial accounting. This categorization has its focal point in supplying the company with information so that the direction can hold its operation efficaciously. This categorizations every bit good as cost accounting provide necessary instructions on how to calculate the cost of merchandises on houses like fabrication. The costs computed will so be used in statements generated for the external use of the company. Other activities involve in this categorization are behaviour of costs, break-even point, planning of net income, operational budgeting, capital budgeting, costs that are relevant in determination devising, bing that is activity based, and standard costing ( Averkamp 2010 ) .
An ERP solution is designed in bettering the fiscal system every bit good as streamlining the concern procedure and to upgrade the engineering substructure of an organisation. Therefore, it helps adding value to the employees every bit good as stakeholders of an organisation.
The execution of an ERP bundle shall assist an organisation in accomplishing its ends and aims. Among the chief characteristics of the bundle is the betterment of the Financial System which is done though greatly heightening the ability in describing accurate outgos and on clip Fiscal Statements ( FS ) .
Another great characteristic of an ERP solution is the streamlining of the concern procedure. This is done through the riddance of activities that add no value such as keying and informations rapprochement. It besides makes information readily available as deem appropriate.
Finally, the ERP bundle simplifies and integrates an organisation ‘s nucleus system substructure. This is done through capturing and doing the needed information available. This is really of import to efficaciously pull off plans so that success can be measured afterwards. Information that is frequently difficult to entree, out of day of the month, inaccurate or unavailable, can now be easy retrieved.
SAP Features
Features and maps that are being offered by SAP ERP on fiscal and direction accounting vary. On the fiscal accounting side, SAP ERP is offering companies the control and integrating of fiscal information that is available for the full company. These are really indispensable to the company ‘s determination devising. The package enables the company in centrally tracking informations within an international model of assorted companies, currencies, linguistic communications every bit good as charts of histories. The cardinal characteristics and maps that are included are: accrual, bank, fixes assets, stock list, diary, revenue enhancement accounting, histories collectible and receivables ; fiscal statements ; fast close maps ; parallel ratings and maestro informations administration.
On the managerial side of accounting, SAP ERP enables the company in the recording and rating of fiscal informations. This is non merely for fiscal coverage but besides for the footing of all coverage that are cost and gross related. The consequence of this chief characteristic is that the company ‘s fiscal analysts and directors can work with the indistinguishable basic informations as that being used of the company ‘s comptroller. The cardinal characteristics and maps that are included are: net income centre ; undertaking ; profitableness ; cost and gross planning ; merchandise cost ; administration of maestro informations and reassign pricing.
The package besides supports assorted linguistic communications and currencies, every bit good as the international criterions of fiscal coverage and other regulative demands.
Another great characteristic of an ERP solution is the streamlining of the concern procedure. This is done through the riddance of activities that add no value such as keying and informations rapprochement. It besides makes information readily available as deem appropriate.
Finally, the ERP bundle simplifies and integrates an organisation ‘s nucleus system substructure. This is done through capturing and doing the needed information available. This is really of import to efficaciously pull off plans so that success can be measured afterwards. Information that is frequently difficult to entree, out of day of the month, inaccurate or unavailable, can now be easy retrieved.
Assorted features define the ERP database. The information base is frequently centralised and as it goes with multiple users, the package allows flexibleness, customization every bit good as constellation. The procedures are frequently in existent clip through on-line minutess while the databases are being input through minimum entry of informations ; nevertheless, it is still coincident. The controls in input are frequently dependent on the proof and credence of pre informations entries and is trusting on the reconciliation of dealing, whereas controls that are times tested are no longer relevant on this characteristic. Minutess are frequently stored in common databases therefore the different faculties are accessible to everyone.
ERP execution involves broader organisational transmutation processes affecting concern procedures, with important deductions to the organisation ‘s direction theoretical account, organisation construction, direction manner and civilization, peculiar to people ( Wood & A ; Caldas, 2001. )
Sarbanes-Oxley Act
The act came into statute law in the twelvemonth 2002. It introduced major alterations to the fiscal pattern ordinance of fiscal pattern every bit good as corporate administration. It was named after its major writers, Representative Michael Oxley and Senator Paul Sarbanes. This was enacted for statute law on the said twelvemonth in response to major fiscal dirts.
The most of import deduction of the act, particularly for developing states is that because of the act ‘s increased ordinances, the stockholder value besides increases. Besides, these ordinances are exhaustively enforced ; hence, corporate administration is effectual. These results are achieved because of the infliction of pecuniary and condemnable countenances for fiscal statements that are misdirecting every bit good as fraudulently act uponing the external hearers. Significant lacks in fiscal coverage, stuff failing in internal control every bit good as fraud were minimized, if non eradicated due to the duty of the direction in to the full unwraping all information with the audit commission and external hearers ( Bautista 2004 ) .
SAP ERP is confident that these deductions are met because of its comprehensive characteristics that cater the demands of both the company ‘s direction every bit good as the hearers. It besides adheres to all international criterions of coverage and accounting ordinances.
Success and Failure of ERP Implementation
Lo, Tsai and Li ( 2005 ) conducted a instance survey sing the execution of the ERP system in T-Opto Electronics Company in Taiwan. The instance survey focused in measuring following three facets: ( 1 ) how to measure appropriate ERP package and the pertinence of ERP package to endeavors in Taiwan ; ( 2 ) ERP system execution scheme and methodological analysis ; and ( 3 ) jobs that may be encountered during execution procedure and the solutions.
Based on this instance survey, Enterprise resource integrating involves a broad scope of activities including choice of ERP supplier, communicating equipment, resource direction planning, system execution, senior direction ‘s vision, human resource coordination, system passage, and uninterrupted redevelopment, which are all determiners of the success of implementing endeavor resource planning system. Hence, the rating before execution is instead of import. Due to the consideration of industrial features, graduated table, grade of urgency, and package pertinence, non many endeavors have presently officially implemented ERP package, among which, the bulks are from information/semi-conductor industry. However, without complete readying beforehand, the immense investing of money, clip, and human resource normally can non bring forth the expected consequences because ERP system execution involves excessively many resources and parties, is really time-consuming and capital-intensive.
Sivunen ( 2005 ) conducted a instance survey sing the impact on organisational civilization of ERP execution in China. The survey look into the success factors that are critical in the execution of ERP in a Chinese concern context, in order to measure whether organisational civilization affect the CSFs, and how organisational civilization affect ERP execution patterns in China. The research is based on the cross case-study of the ERP undertakings deployed by two different types of company in China, state-owned company and foreign invested company.
It is found in the instance surveies that teamwork outlook should be encouraged in the ERP execution in China, particularly in state-owned companies where employees are non used to work in teamwork environment, since teamwork is decidedly a value built-in to the success of ERP execution. It was discussed before that a more ‘traditional ‘ direction system, which is typical in the Chinese state-owned companies, characterized by seniority-based determination devising through the steering commission and centralised determination devising, is associated with more negative execution consequences ( Reimers, 2002 ) . However, it is found in the instance survey that seniority-based direction manner really has positive impact in ERP execution in some instances.
It ‘s besides found that concern procedure re-engineering and package alteration should be considered at the same time in ERP execution in Chinese companies. Furthermore, the findings besides imply that a good apprehension of ERP system, holding a clear concern program, sufficient forces resources, every bit good as instruction and preparation are all indispensable and of import in ERP execution in China.
Iskanius ( 2009 ) have conducted a survey sing the critical hazards of the ERP undertakings through instances of companies that are considered to be from the little to medium endeavors ( SME ‘s ) . First, by utilizing company-specific hazard analysis method, the critical hazards of the ERP undertakings have been identified and assessed. Second, by utilizing features analysis method, the recommendations of how to split the ERP undertakings into manageable sub undertakings have been given.
This survey presents experiences that are obtained in instance surveies in which three SME companies were drawn an ERP undertaking hazard analysis and features analysis. The instance companies considered both of the methods as good tools ; they forced the company to believe of the possible hazards that might travel off at the different phases of the ERP undertaking, whether these hazards had to make with the proficient and functional features of the system itself, or with the expertness and committedness of the staff, top direction or ERP system seller. The RAM nowadayss hazards in a signifier and linguistic communication that is apprehensible, because the analysis have been done in the company context. As negative facet of this RAM is that it requires a important sum of work, and besides aid from external experts. The CAM helped the instance companies in spliting their ERP undertaking into manageable entities and provided them with recommendations on what leadership/management aspects they should give particular attending to. The CAM besides showed insufficiencies in the Fieldss of direction and leading that the execution of an ERP system causes in companies.
Kumar et Al ( 2003 ) conducted a instance survey sing the probe of issues in critical direction issues in the execution of ERP. The survey focused in the groundss from organisations in Canada. The survey investigated on the choice procedure being conducted in the execution of the system. These procedures involve the choice of the sellers, members of the undertaking squad, the undertaking director and others.
The research identifies a figure of critical direction challenges in the ERP execution activities, such as preparation, upgrading substructure, undertaking direction and stabilising ERP systems. Organizational schemes in proving and quality confidence, run intoing mutual exclusivenesss ‘ between organisational demands and the ERP systems, increasing user credence, and deciding challenges in shakedown are besides documented. A figure of avenues can be recognized for future detailed research, based on organisational concerns found in this survey. For illustration a elaborate survey on preparation, one major organisational concern identified, would determine how effectual ERP preparation can be carried out. Another natural extension of this survey could be to research the organisations which have stabilized their ERP systems and have moved to the onwards and upwards phase, a phase where the organisation realizes concern benefits.
Decision
An ERP solution is designed in bettering the fiscal system every bit good as streamlining the concern procedure and to upgrade the engineering substructure of an organisation. Therefore, it helps adding value to the employees every bit good as stakeholders of an organisation. This paper aimed in discoursing the procedure of execution of the system every bit good as the hazards that are involved in such. Case surveies were presented for agencies of treatments.
An ERP execution undertaking is different from other systems development undertakings. The anterior literature had identified important hazard factors that included technological alteration, organisational alteration and undertaking complexness. These factors are the trademarks of most ( if non all ) ERP executions. Consequently, it is of import to understand how these hazard factors can be mitigated. In this paper, controls required to minimise five types of hazards that organisations must command in an ERP system execution were identified. The consequences of this research supply support for the proposition that the success of an ERP system execution is dependent, in the first case, on placing the major concern hazards and the controls that need to be put in topographic point to minimise those hazards.
The sensed benefit for the execution of ERP undertakings is the betterment of fiscal system every bit good as the streamlining of the concern procedure and upgrading the engineering and substructure of the organisation. It is viewed by the undertaking members in adding value for the employees every bit good as to the stakeholders.
From the instances discussed in this paper, it is of import to observe that the success or failure of an ERP execution is human resource. Unless the chief director of an ERP undertaking execution has existent power in the determination doing procedure of the company, every bit good as holding a basic cognition of the rules of ERP, and being nonsubjective, even the most perfect ERP package every bit good as the cardinal advisers can non guarantee a perfect execution of such.
Finally, the Sarbanes Oxley Act implies effectual corporate administration. These results are achieved because of the infliction of pecuniary and condemnable countenances for fiscal statements that are misdirecting every bit good as fraudulently act uponing the external hearers. Significant lacks in fiscal coverage, stuff failing in internal control every bit good as fraud were minimized, if non eradicated due to the duty of the direction in to the full unwraping all information with the audit commission and external hearers ( Bautista 2004 ) .
SAP ERP is confident that these deductions are met because of its comprehensive characteristics that cater the demands of both the company ‘s direction every bit good as the hearers. It besides adheres to all international criterions of coverage and accounting ordinances.
