Discuss about the Strategy Information System for Resource Planning.
Enterprise resource planning system is business process management software that allows an entity to use the system of integrated applications to manage the business and automate many functions related to technology. The enterprise planning system is characterized by an integrated system that operates in real time, a common database that supports all applications, a consistent look and feel across modules and data integration by the information technology department. (Monk et al. 2009)
Currently, the use of Enterprise Resource Planning has become commonly used by business organizations. And the reasons behind the adoption of the system by most business organizations can be attributed to the need for efficiency and effectiveness desired for realizing both the short and long-term business objectives. The system gained familiarity after scholars practically conducted research in determining the contribution of the ERP on the performance and administration of the organization. The common finding was that the system has more benefits to the organization as compared to the shortcomings. Also, the system incorporates the use of information technology at a low cost. Above all, the system centralizes the entire organization activities into one and has the ability to hold the information ranging from the Human resource functions to Accounting and reporting. (Ranganathan et al.2013). Because of this reason, the team recommended the Enterprise Resource Planning system instead of the Accounting Information System.
The paper aimed to establish how technologies could be used to improve the company’s operations. The main focus was establishing the use of technology in the accounting and reporting for Disk4U and Sungate at a budget of $150, 000 respectively. Unlike Disk4U Company primarily uses the technology in the execution of most of its activities, Sungate still relies on archaic methods in recording and compiling of financial reports. It is recommendable for the two organizations to adopt ERP that performs other functions besides accounting and financial reporting.
In addition, the software has a wide range of benefits as it simply tasks that could take about three days to one day. Most importantly, the ERP system touches the entire organization where the installation will enable the organization to centralize the business data at one area. The centralization of the data was projected to eliminate the need for synchronizing changes between multiple organization systems, bring legitimacy and transparency on the data, facilitation of standard product coding, and protection of sensitive by configuring security systems into single structures. (Shaul et al. 2013)
Besides the benefits of centralization of the data, the Enterprise Resource Planning will be instrumental to Disk4U and Sungate in improving the quality and efficiency of the business. Also, the quality and efficiency will be observed through the manufactured products and service delivery. Secondly, the installation of the software will assist in providing information to the management for decision making. Since all the organization information and data is centralized at a common place, the management will found it cheap to access relevant data for the analysis and decision making. It will be a relief for Sungate as the company will be in a position to solve on the delay it has experienced in making decisions.
Thirdly, the system will create flexibility in the organization systems. The flexibility will enable the organizations to respond to changes that will be required to align with the strategic plans. Data security is another key element that is desired by most organizations. To meet the desire, the system will improve the security of the data. The common control system will ensure that general data and accounting information, transactions, entries, and projections are not compromised. (Rumelt 2014, p. 87-90)
However, the proposal will be limited to the analysis of the contributions of the Enterprise Resource Planning modules to financial and management accounting. Under financial accounting, the paper aims to unearth the applicability of the information technology in recording, monitoring, evaluation and analysis of the general ledger, fixed assets, payables, receivables including cash application and collections, cash management, and financial consolidation (Mabert et al. 2013). The projected software has the ability to timely compiling data. For instance, the software is instrumental in helping the management in budgeting, costing and cost management. (Mabert et al. 2013)
Therefore, the report has concisely explored the ERP software, the business processes, the business requirements, the system requirements, the software selection, and vendor selection. These subtopics were instrumental for the formulation of the report on the need for adopting ERP software by Disk4U Limited and Sungate Limited.
A business process refers to a collection of linked tasks that result in the delivery of a service or a product to a customer (O’Brien 2011, p. 150-161). The processes are designed to achieve organizational objectives. In relation to accounting, technology has eased the recording, the analysis and the interpretation of reports for the management. The outputs majorly depend on the effectiveness of the process. As a matter of fact, the system has a great impact on larger firms. This is because larger firms normally have interconnections of various business processes. Both the tasks are structured in a way to facilitate the achievement of the business objectives. (Shaul et al. 2013)
Accounting processes are grouped into two broader categories. And the groups include management and financial accounting. To facilitate the achievement of efficiency in data storage, analysis, comparison, simulation, and computation, the operational management and information technology teams, links a particular process to a corresponding desired objective (Gupta 2010, p. 548-573). Basically, the execution of the processes is scheduled to occur according to time. For instance, with the introduction of online ordering by customers, the ERP usually records the transactions as a sale once payment is made. At the same time, the ERP system will reduce the value of inventories that remains in the store of the company. Furthermore, the ERP system will automatically alert the store manager of the inventory level once it falls below the optimal level. Generally, the linking of the tasks enhances the access to information at once by the management resulting in efficiency and time saving.
Since the business has discovered the need for incorporating information technology in the accounting system, the software to be installed should conform to the organizational objectives. Among the business requirements includes but not limited to the following; simplicity, accuracy, efficacy, cost cutting and technological incorporation. (Lee et al. 2012)
To start with, the Enterprise Resource Planning software should be simple to be used by the employees. Also, the system should reduce complexities in recording, posting of transactions and others. If the system is hard and cumbersome to be incorporated by the employees, they may relent in supporting the initiative. Therefore, the business will require a simple but up to date ERP system.
Secondly, the business requires a system that is capable of processing accurate information. Since most of the data is processed by the use of technology, basically the “computers”, accuracy will be the basic aspect that the management will be looking for. The accuracy will assure the management that the accounting reports processed are real, and reflects the true state of the organization. Therefore, with no accuracy, the information, and data processed with lack the desired value and the investment will be useless. (Markus et al 2011)
Thirdly, the system should be effective and efficient. This aspect can be satisfied through the convenience the system creates with the business processes. It will be great if the system creates a symbiotic relationship with organizational processes than working in isolation. In addition, the aspect majorly rhymes to most organizational purposes where efficiency and effectiveness are essential in enhancing achievement of total quality. Thus, it is just imperative that the system incorporates the element of efficiency and effectiveness. (Beretta 2012, p. 78-80)
Fourthly, the system should be implemented at a lower cost. Therefore, the benefits should exceed the costs. Simply, the system should offset all the weaknesses that were on the old and manual system. Currently, the technology has brought in new and current techniques that centralize all the accounting information to one point. The advantage of the technological advancements has created the efficiency in execution of business processes. Also, the reduction in paper works has contributed to the reduced number of employees hired for making of journal entries and others. This aspect has also facilitated standards in the products product and service delivery at a lower cost. (Lee et al. 2012)
Lastly but not least, the system should incorporate the current technology. Further, there should be flexibility in the system to enhance inclusion of new and up to date technology. Since the main aim for the need for the changes in the system for storage, processing, reporting and dissemination of accounting information in a central place, technology becomes an essential requisite that cannot be watered. Therefore, it is crucial for the management to ensure the Enterprise Resource Planning system is up to date to eliminate the fear of obsoleteness in the near future. (Dehning et al. 2012)
To sum up, these requisites includes the basic business requirement in the ERP system. It does not depict that the report is final but there is room for adjustment if any need arise. But the changes must align with the organization strategic long and short term plans.
Accounting systems refer to accounting methods, procedures, and controls established by an organized to gather, record, classify, and interpret accounting and financial data to the management to enable them to make informed decisions. An effective accounting system should be one that saves time. That is one takes as little time as possible while using the system. Additionally, the system should save effort .In that; the individuals using the system should apply little effort in applying the relevant system. At the long run, a good system should reduce the money through a reduction of employees who carry out accounting duties. (Grant et al. 2006)
Accounting software entails a comprehensive application that is designed to record and process accounting transactions .The transactions may include those of account payables or the accounting receivables. Before choosing accounting software the management for Disk 4 U and Sungate Foods should ensure they check out to ensure the software is efficient in running the day to day operations of the organizations .The accounting software will also produce useful reports to enable management to arrive at informed decisions regarding organization functions, Improve co-operation among the business departments and enhance business reporting. (Benson et al. 2007)
Hence, from the word go the management for the Disk 4 U and the Sungate Foods should get its acts right to avoid situations where they purchase a software that will not be compatible with their functions. This will lead to the organization spending more in converting the system to the organization requirements. The whole cost of acquiring suitable accounting software is majorly pegged on the range of activities it can be able to perform. The cost of an accounting and an impeded payroll system will cost Disk 4 U and Sungate Foods an average of $ 140,000 respectively. (Lee et al. 2012)
Factors to consider before selecting accounting software to include the following;
Scope of the business
This is the most vital factor that both Disk 4 and Sungate Foods should put into consideration when planning to acquire an accounting software. The system to be procured should be in a position to carry out the existing organization tasks. This will include the basic accounting functions in day to day activities. (Grant et al. 2006)
Other functions can be integrated into the system to make it more useful .This may include one that covers the inventory requirements and also that of payroll. The organization should have the factor of business expansion in mind before effecting the acquisition of the software. Both Disk 4 U and Sungate entities should be in opposition to visualize on where they plan to be in the near future so that they can get an accounting software that puts into consideration all these and avoids instances of purchasing a new one after a short period of time. (Dehning et al. 2012)
Modules to be included
After the scope to be covered is clearly spelled out the next step in line will be an evaluation on the set of modules that comprise the accounting software. The entities should find out about the base price of the system and any other additional costs. In some instances, organizations have ended up buying incomplete systems and later forced to purchase other modules on top. That is cases where the organization failed to carry out an adequate check on the composition of the software before the acquisition. An evaluation of the entire cost of the system is vital to enable the Disk 4 U and Sungate foods to make a comparison on the costs with rival service providers. (Benson et al. 2007)
Accessibility and Portability
The accounting software purchased should be one that is easily accessible by the employees. This should include those staff who may be working away from the physical head office for instance field officers selling disks on behalf of Disk 4U Company. Hence, the organization should take into consideration the range of the area the system covers. The entity should have a system that can be easily carried from one point to another in the case of the necessity change of location. A system that will give a little challenge to transfer will be the best. For an entity that allows individuals to work from home and a wide range of places, and then it must source for internet-based accounting software. (Costa et al. 2016)
You can have the best accounting software but it ends up adding no value to the entity if the employees in the organization fail to know how to use it. Hence, both Disk for U and Sungate Foods need to factor in the level of education of their staff. An effective system will be one that poses little challenges to the workers who are using it. The organizations should use minimum resources in training the staff on how to use if it is simple. (Benson et al. 2007)
Cost
The initial acquisition cost of the system should be analyzed in detail before the purchase of the system. Moreover, there is a range of costs that follow to operationalise the use of the system. This includes the set-up costs, licensing and the support costs .The entities should find out if the initial costs consist of that cost of installation and system upgrade costs before making the purchase. (Bradford et al. 2013)
Data protection
Ideal accounting software should be able to protect the very vital accounting and financial information of the entity. Both Disk for U and Sungate Foods have a duty of keeping client information concealed from unauthorized individuals. Hence, an entity must acquire software that guarantees total data protection. (Allen et al. 2014)
For an accounting system to be efficient and effective it must be connected with the banks it transacts within a cloud base. This will enable the organization to have accurate and efficient records. (Benson et al. 2007)
All the activities in an entity are destined to improve customer service delivery. Hence, an appropriate system should have a package, for instance, inform of tutorials to enable them to understand how it works. (Allen et al. 2014)
Both Disk 4 U and Sungate Foods should first and foremost figure out their needs and business requirements. Before questioning any software vendor, they need to consider if the software will be in line with the organization needs. Additionally, it needs to know from the vendor if it’s possible to return the system if it fails to perform the agreed tasks. The entities should carry out an extensive background of the vendor. (Bradford et al. 2013)
Disk 4 U and Sungate Foods need to have a clear knowledge of the capabilities of the service provider. This can be analyzed from the other entities the firm has provided services to. The executive should convince the management of Disk 4 U and Sungate Foods that can get what they require from the set of accounting software.
The entities should next issue a request for proposal to the various accounting firms interested. Here, there may inquire on the issues relating to the cost of the system, customer lists the deal with and finally the technology the accounting firm is using.
Disk 4 U and Sungate Foods should request for a demonstration from the various providers. This will enable the entities to ask questions on the status of the system and confirm if it’s possible for the service providers to come up with a customized one.
Moreover, the entities need to study in detail the project management documents of the potential service providers. This entails the period the software providing company has been in place, the period the given product has been on the market and finally the market coverage and profitability levels. Given that there are many accounting software service providers, Disk 4 U and Sungate Foods should negotiate with them so that they can get one that supplies them within their budget line of $150000.
Disk 4 U and Sungate Foods should allocate and the budget with the different entities. The costs should include license fee, support services, implementation, technical costs networking and even communication costs. The costs vary between the various service providers. Hence, comparison will enable both Disk 4 U and Sungate Foods get the best service provider at a fair cost
Conclusions
In conclusion, the research discovered that for an organization to achieve immeasurable success, it must accept change. Currently, technology is the heart of success in accounting and preparation of reports. The ERP system will be the most efficient, effective and appropriate system to meet the organizations short and long term objectives. The team proposed that; the two companies should prefer the acquisition of ERP system that incorporates all of the organization processes. (Allen et al. 2014). In addition, the system should conform to the existing business processes, should meet business requirements, and the software should fit the organizational demands. Most importantly, the system should be flexible to allow changes and addition of new aspects as the technology may require. Above all, the accounting system should support the strategic plans laid in place by the management.
References
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