Processes of Selecting an AIS/ERP

Question: Discuss about the Processes of Selecting an AIS/ERP. Answer: Introduction Nowadays organizations are shifting their interest when it comes to a flexibility, savings as well as efficiency to win or maybe survive in the market. Having a sound Accounting program is considered a vital factor for the success, which enables an organization to gain competitive advantage as well as perform business reengineering (Al-Ghofaili and Al-Mashari, 2014). Accounting Information System is used for the collection, processing and the storage of accounting or the financial data that could be used for the decision-making purposes. It is essentially a computer-based information system, which is used for recording of the accounting activities and communicates the required data to the parties interested. The system is usually designed in order to perform all the accounting activities as well as functions such as financing accounting, reporting and taxation. In the business world business, the business software usually plays a major support role to the activities of the business ( Amrollahi, Ghapanchi and Najaftorkaman, 2014). Although the business software gives these benefits, it could bring a major implication for the enterprise when the firm decides to implement on the various types of software. Investment in AIS, more consequently the ERP techniques might be substantial since they might require money, time, and individual alterations to the business. You should need to cautiously analyse on the effect on the company efficiency before adopting on the system. Within this paper, it is going to discuss the function and the reason for the Accounting Information System (AIS) for the Disk4U Company, who are selling CDs and Vinyl Records. The company want to improve on their manual processes of accounting and the business reporting (Arvidsson, Holmstrm and Lyytinen, 2014). The process of selecting an ERP system for the organization it is important to look at the following elements; vision, criteria, budget, selection and commit (Al-Ghofaili and Al-Mashari, 2014) . The vision of the Disk4U is to sell CDs and Vinyl Records to the across Sydney Metropolis but they aim at expanding this small business globally. They have adopted an online channel to help them reach more customers. The budget that has been set aside for implementing an ERP system should not exceed one hundred and fifty thousand for the company (Bai, Koveos and Liu, 2016). The company should be keen in selecting on the best strategy and commit in the development of all the requirements. The elements for the selection of the ERP system have been elaborated in details in the report. Additionally, the report would discuss on how the technology could be used to improve on the operations of the company through the benefits associated with adopting the ERP systems. ERP systems The ERP methods are the software tools, which use the relational of the database technological expertise to be able to incorporate the numerous units of a company information program (Cassidy, 2016). They are able to offer numerous individual, but incorporated components that are set up as the packages for a company. The ERP system is capable of integrate separate information systems and outcomes to more data reliability and processing efficiency (Cardos, 2014). The ERP technique is capable of simplify on the company transaction processing, eradicating work, which add little, or perhaps no value, and might simultaneously develop on the customer service. The usage of the ERP program in Disk4U Business might assist develop on the data processing quality thus helping the management decision associated with the company operations. SAP R/3 that was unveiled in 1992, continues to be the most used ERP system globally (Chang, 2016). The R/3 software program has been produced to enable busine ss to efficiently along with effectively operate by means of a number of enterprise techniques within one integrated information program. The software could be modified employing SAP proprietary programming language. It is often built to be the most effective ERP system in areas for example financial, supply chain management, marketing and the human resource (Dameri, Garelli and Ricciardi, 2013). Additionally, the usage of the program it will be a global product and it fulfils on the local fiscal, language, and the requirements of tax. As business worldwide are converting on their own into data dependent competition , their capability in exploiting intangible assets they have turn out to be a much more conclusive as compared to their capability to invest and management of the physical assets . With the enhanced usage of information technologies, the intention of the AIS is improved from offering the formal and financial data to including a wide range of data. The usage of ERP has tr iggered the embracement of the use of this recent objective (Johnson, 2014). According to Alshawi (2004), an ERP generate an integrated product, which manage many of the procedures in the group. The exclusive feature of ERP systems it integrate all the features by creating of a single unified program, instead of separate applications. The focus of the ERP software has won strategic function in business nowadays. Numerous organizations are devoted to the ERP projects in order to develop on the overall performance of the business. It is important to evaluate on the past performance, the current and the future, to judge regardless of whether these investments are lucrative for the company (Galliers and Leidner, 2014). Disk4U adopt the information technology on large scale in order to cater for their process of accounting, supply chains and business reporting (Galliers and Leidner, 2014). They can achieve this by installing of the ERP system to accomplish their transaction and the data processing needs. The company referred to as SAP Aktiengesellschaft is the current world market and technology leader in the provision of the ERP systems. Technological and Accounting issues Employing R/3 system is incredibly important which is a lengthy process and an expensive one. The substantial scale and intricate Enterprise resource planning designs might often require a lot more than 12-18 months to be installed and operating. The cost that are needed for consultation to modifying the system are very high , with the rate ranging from one fifty to two hundred dollars per hour ( Dwivedi , Wastell , Laumer , Henriksen , Myers , M .D . , Bunker , Elbanna , Ravishankar and Srivastava , 2015 ) . Additionally, SAP AG provides an expert learning program to instruct individuals on the method of execution and installing all the version of the ERP systems to be able to enhance the supply of the necessary competent programmers. The cost of acquiring and implementing effectively an ERP system reveals that needs useful for the long-term investment by means of careful planning to obtain the advantages of the enhanced information processing. Implementation of the SAP software will require Disk4U company technique to re-engineer. The reason being the ERP package is structured by the company techniques of monetary, supply chain management, and marketing instead of the conventional function parts of the production and sales (Katerattanakul, Lee and Hong, 2014). The company need to implement the SAP R/3 to reorganize itself to be able to agree with the parts of the software or maybe modify the software to be able to adhere to the present business requirements of the business. The structure of the R/3 package is extremely complicated rather than versatile therefore as an issue with altering the software it might unfavourably influence the performance across the entire system or even done well. The software was not designed for application to every organization , rather was designed for the businesses , that have comparable business processes ( Malhotra , Melville and Watson , 2013 ) . It is shrewd to invest considerable time and effort when it comes to assessing any ERP system in order to know the right for the company. Careful planning of the R/3 system is important since problems could occur during and after the implementation. Development of the performance measures, and close control of the ERP consultant is important to know that installation has been a success. Business process of the ERP system The information technology issues The key factor to be looked at when choosing an ERP program are functionality, hardware platforms, installed base as well as cost. The piece of functionality relates to the accessibility and the convenience of installation of the new components and up-to-date programs (Menkhoff, Wah and Loh, 2016). The set up base is important element in selecting an ERP program since the system needs to be proficiently applied and cost retrieved by way of improved and efficient operations (Johnson, 2014). The recuperation of the cost necessitate several years and business must have resources to invest in an ERP system that are not necessary for other facets of the operations. Application of Accounting functions in ERP system The financial as well as the mmanagerial accounting features of SAP R/3 are found in the financial accounting as well as control modules. The capabilities module in the financial accounting offers comprehensive record on all the details, which is required for the external finance reporting (Nwankpa, 2015). The accounting information is comprehensive as well as precise because the program will completely integrates on all the transactions of the company , that were entered from the operational regions of Disk4U Organization . The areas of function for the operation for the business are supply chain management, marketing and sales, and accounting and finance. The business processes involves the collection of the activities, which takes one or perhaps more kinds of the input and create an output that is of value to the customer. The customers of the business can either traditional external or the internal customers (sterle, 2013). The Disk4U Company their current main business is to sell to the customers through the physical shop, mail, phone order and their new online channel through EBay. When the business think in terms of the business process, it would help them to look at their organization in the perspective of the customers (Oztaysi, 2014). The business should always consider on the viewpoint of the customer in any transaction. The marketing, and supply chain management of the organization for sales forecast could use the use of the data from the accounting and the finance (Oztaysi, 2014). Moreover, the sales forecast could be used in making staffing decisions and the production planning as well as to monitor the overall credit granting policy. When the company is purchasing the Information Technology solution, it is significant for the business to be clear about what they need the solution to support the business development and the delivery of the products and services. Disk4U Company needs a business solution to improve on the operations of the business on their accounting and business reporting ( Powell, Alfnes, Strandhagen and Dreyer, 2013). The business requirement of this business is to have an ERP system that is able to handle business operations and their accounting since they have expanded on their operations. Having an IT solution will help them to clarify and document on the needs of their stakeholders, setting and managing of their expectation in regards to what will be or not be delivered (Oztaysi, 2014). Additionally, it would enable different products to be compared when the customers are buying off the products either at the front shop or perhaps online, and inform on the cost and the product pricing decisi ons. Based on the stakeholders they have project not to exceed more than one fifty thousand dollars for the purchase (sterle, 2013). SAP system can be easily be purchased and customized based on the requirements needs of the organization especially since they want to improve on their operations on the areas of accounting and reporting of the business. No. Requirement Priority ORDER PROCESSING 1.1 Ability to support pricing and discount categories for different customers Critical 1.2 Provide option to automatically place orders on hold when order is over credit limit Critical BILL OF MATERIALS 2.1 Unlimited level Bill of products Critical 2.2 System needs to support revisions of products Critical 2.3 Attach routings to job sheets Non Critical CUS TOMER SERVICE 3.1 Document and monitor sales leads/opportunities Critical 3.2 Generate revenue forecasts based on pipeline data Critical 3.3 Support for email marketing and mail merge Non Critical Table 1: The table shows the requirement categorized based on the system to the developed. System requirement of ERP R/3 All the companies currently are looking at implementation of the SAP ERP system. The implementation of this system helps in the streamlining of the operation of the business and SAP system has picked up due to its features and the flexibility (Shapiro and Varian, 2013). The minimum system requirement for the program should be known and decided before its installation. The hardware and the software requirements are vital and they should be looked into before the installation of this system (Reich and Benbasat, 2013). The SAP software is the client server architecture, and it usually runs on the server these client needs to connect to the server. There is installation of the interface for the end users that could be on a desktop or perhaps a laptop. The number of the customer who are running on the server are the one who decides the capacity of the server to be used. The hardware requirement for the system are as follows: presence of CPU that is Intel Pentium three 500 MHz, hard disk o f more than 30 GB, RAM of 256 MB, as the minimum but the recommended should be above 512 MB (Oztaysi, 2014). Further requirements are NIC, which is the Intel Compatible Ethernet card. The requirements for the SAP R/3 system are as follows; a report Data CD, an export CDs, and the SAP GUI. One should make sure that these minimum systems are met before installation of the SAP ERP or else it would not run successfully. The guideline should be carefully followed and be able to shoot on the errors which occur during the process of installation (Rajnoha, Kdrov, Sujov and Kdr, 2014). The company should make sure there is a high configuration system to install the SAP since it takes a lot of space for all the modules and no application should be run where the system is installed since its prone to virus attack. Software selection and vendor selection of ERP system for the company The ERP software for the company will be tailored based on the number of the users, revenue, and the processes utilized. When considering on the software it is important to know the vendor. For the ERP the SAP solutions are for all kinds of industries and for every major market (Nwankpa, 2015). Some of the products are mySAP, Business Suite and solutions for the small midsize organization such as the SAP Business one. The ERP software has vendors such as Oracle, which that Acquired the PeopleSoft in 2004 and it provides on the solution based on the industry category. Vendor analysis and the elimination The office staff of the company would need to evaluate on the functionality. Nevertheless, the Information technology individuals should evaluate on the requirement of the technology (Menkhoff, Wah and Loh, 2016). There are no vendors who will meet on the requirements, thus they should discuss and negotiate and focus on the best fit for the needs of the business. The company should also develop and analyze on the total cost of ownership. Reasons for acquiring the ERP system The important reason for any business to implement the ERP system could be solve the Y2K problem. Additionally, other reason could be to integrate the financial information, integrate the customer order information, standardize and speed up the process of operation of the business, reduce the inventory level and standardize on the human resource information in the business. Based on Wallace (2001) operating a business is changing rapidly in the competitive environment (Johnson, 2014). The cost of implementing of the ERP SAP system could be time consuming and costly but the benefits associated with it are worthy (Galliers and Leidner, 2014). Through careful planning as well as selection of the right ERP, system for the business the company could gain sufficient benefits such as increase in the responsiveness, productivity, quality problems and the inventories. Reasons why the ERP system could fail If Disk4U implement the new SAP, system does not guarantee successful results. There are few ERP implementation projects, which could result to the success in the first time, while others could fail significantly (Cassidy, 2016). The reason as to why some fail is the employees resistance to the new system rather than embracing on it. The success and the failure of the new system does not always depend on the quality of the hardware and the software of the ERP system, but rather on the training as well as education. When dealing with the new system is not based majorly on the technology, but on the planning and the commitment (Chang, 2016). The organization should focus on the planning in deciding to implement the ERP system. Conclusion Employing technological innovation to increase on the enterprise efficiency creates the program to recognize on the company results for the business. The usage of the company software program guarantees that the company have the applications to get over the issues of business operations and accounting. The improvement in the company productivity might be traced to the automation of the techniques that allows a faster communication approach, and increase on the time spent on the strategic priorities. The use of the ERP accounting system would help create an open communicative environment. This is achieved through centrally locating the performance of the data appraisal within the formal online framework, and the managers of the business would be able to communicate more effectively and create goals that are measurable for the workers to support the overall objectives of the company. The technology been adopted would help to analyze performance of the business. The implementation of th e ERP software would enhance business reporting and analysis capability in order to help them gain a deep understanding of their performance, preferences of customers and the trends in the market. The executives as well as the managers can access the performance metrics and the analytical reports and use this kind of data in order to work together to set. The use of the ERP software for this organization would help to monitor on the business productivity and the progress of the goals of the employees. The use of the online business software solution is an ideal program for this kind of business. The managers can easily track the progress every phase of completion of the goals and offer any reinforcement to keep the performance on the business operations and accounting issues. References Al-Ghofaili, A.A. and Al-Mashari, M.A., 2014, August. ERP system adoption traditional ERP systems vs. cloud-based ERP systems. In Innovative Computing Technology (INTECH), 2014 Fourth International Conference on (pp. 135-139). IEEE. Amrollahi, A., Ghapanchi, A.H. and Najaftorkaman, M., 2014, December. A Generic Framework for Developing Strategic Information System Plans: Insights from Past Three Decades. In PACIS (p. 332). Arvidsson, V., Holmstrm, J. and Lyytinen, K., 2014. Information systems use as strategy practice: A multi-dimensional view of strategic information system implementation and use. The Journal of Strategic Information Systems, 23(1), pp.45-61. Bai, L., Koveos, P. and Liu, M., 2016. Applying an ontology-augmenting XBRL model to accounting information system for business integration. Asia-Pacific Journal of Accounting Economics, pp.1-23. Cassidy, A., 2016. A practical guide to information systems strategic planning. CRC press. Cardo?, V.D. and Cardo?, I.R., 2014. Information Systems Audit Curricula Content Matching. SEA-Practical Application of Science, (5), pp.11-16. Chang, J.F., 2016. Business process management systems: strategy and implementation. CRC Press. Dameri, R.P., Garelli, R. and Ricciardi, F., 2013. The didactic challenge of accounting information systems and ERPs for business schools: a proposal for the Italian Universities. In Accounting Information Systems for Decision Making (pp. 337-349). Springer Berlin Heidelberg. Dwivedi, Y.K., Wastell, D., Laumer, S., Henriksen, H.Z., Myers, M.D., Bunker, D., Elbanna, A., Ravishankar, M.N. and Srivastava, S.C., 2015. Research on information systems failures and successes: Status update and future directions. Information Systems Frontiers, 17(1), pp.143-157. Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge. Johnson, P.F., 2014. Purchasing and supply management. McGraw-Hill Higher Education. Katerattanakul, P., J. Lee, J. and Hong, S., 2014. Effect of business characteristics and ERP implementation on business outcomes: An exploratory study of Korean manufacturing firms. Management Research Review, 37(2), pp.186-206. Malhotra, A., Melville, N.P. and Watson, R.T., 2013. Spurring impactful research on information systems for environmental sustainability. MIS Quarterly, 37(4), pp.1265-1274. Menkhoff, T., Wah, C.Y. and Loh, B., 2016. Notes from an'Intelligent Island': Towards Strategic Knowledge Management in Singapore's Small Business Sector. Internationales Asienforum, 35(1-2), pp.85-99. Nwankpa, J.K., 2015. ERP system usage and benefit: A model of antecedents and outcomes. Computers in Human Behavior, 45, pp.335-344. Rajnoha, R., Kdrov, J., Sujov, A. and Kdr, G., 2014. Business information systems: research study and methodological proposals for ERP implementation process improvement. Procedia-social and behavioral sciences, 109, pp.165-170. Reich, B.H. and Benbasat, I., 2013. 10 Measuring the Information SystemsBusiness Strategy Relationship. Strategic Information Management, p.265. Shapiro, C. and Varian, H.R., 2013. Information rules: a strategic guide to the network economy. Harvard Business Press. sterle, H., 2013. Business in the information age: heading for new processes. Springer Science Business Media. Oztaysi, B., 2014. A decision model for information technology selection using AHP integrated TOPSIS-Grey: The case of content management systems. Knowledge-Based Systems, 70, pp.44-54. Powell, D., Alfnes, E., Strandhagen, J.O. and Dreyer, H., 2013. The concurrent application of lean production and ERP: Towards an ERP-based lean implementation process. Computers in Industry, 64(3), pp.324-335.