Enterprise resources planning (ERP) systems can be regarded as one of the most innovative developments in information technology (IT). With the increasing interest of many organizations in moving to process-based IT infrastructure from functional, in the future the ERP systems will become most widespread IT solutions.
A critical research issue one in the fields of management and accounting decision-making on key issues of research questions the accounting information system (AIS) with the organizational requirements for information communication and control. AIS is defined a processes financial information and supports decision everyday jobs to manage of organizational activities and context of coordination as a computer-based system.
The main objectives of the study were to analyses the role and purpose of Enterprise Resource Planning (ERP) Systems and Accounting Information Systems (AIS). The study also found that the benefits and drawbacks for companies implementing ERPs and the major implications were identified for AISs as well as how AISs was affected by after the implementation of the full ERP system.
Role and purpose of Enterprise Resource Planning (ERP) systems
In this world, many organizations were using Enterprise resource planning (ERP) systems. This is because Enterprise Resource Planning (ERP) software is available for any business. Normally the most company are considering to use the ERP system into their business because within company in different it helps to communicate all information. It simplifies a business process and automates the business process. It makes it easier to achieve the objective. When a company is growing up, it needs a software package to make it easy to control the business. And the ERP software is suitable for it because it link together the disparate functions for example sales and marketing, human resources, and finance and accounting, into a single system environment. A company can make a right decision in a short time .It is very easy for you to keep track whatever where you are at which areas. ERP software for you to keep going, it makes it simple and easy understanding, so that a business can run the process with smoothly and efficiently.
At the organization level, ERP's effective role to ensure accountability. This will make one know that ERP is not just meant to simplicity enterprise operations but take part in a major role in general development of an organization.
Perceived benefits and drawbacks for companies of implementing ERPs
ERP system will help you to produce a better product and reduce the costs, notice what's happening in all area of your business, make smarter decision, get the right customer at night time, keep the promises you make to the customer.
ERP system will help to improve the accuracy of information, facilitates communication within firms, save time and lower costs. Thus ERP systems applications enable companies to increase their productivity and efficiency. The move to enterprise resources planning has given a company a strong foundation for excellence in its core business functions and the support it need for its overall growth strategy as it continues to expand internationally.
ERP system will provide accurate information for the user. For example when a customer places an order it can easily reach the other part which is affected by the order. This application helps as a result businesses to easily manage their day to day operations.
The supply chain management systems are another useful systems application which helps businesses to manage relationship with their suppliers. These systems help provide accurate information between suppliers and companies. It also helps companies to get the right amount of product and take it to place of consumption with no much time and most importantly at a very low cost.
The ERP software needed to achieve strategic insight, increase productivity, and respond flexibly to change markets to compete improved. The raise in automation of accounting, consolidation and reporting, and working capital management processes has eliminate redundant systems for financial reporting. ERP supports financial, workforce and operations analytics, as well as consolidated financial and statutory reporting; planning, budgeting, and forecasting, strategy management and scorecards, and risk management. The employees can complete all their job functions effectively and efficiently with access the critical data, applications, and analytical tools. For instance, Deloitte management is required to analysis the performance of the company on weekly basis. The reports required for management's usage are such as project acquisition, engagement management, incident management and service-level agreement management. the person in charge in finance department only need to click a few buttons in order to produce those reports subsequent to the customization of SAP function to the need of the respective professional service provider to minimize the time in producing the required reports.
The usage of SAP has improved the performance management of the company Employees are required to do carrier planning by SAP online prior commencement of the each financial period. Goals are sets and expectations from company are clearly delivered to employee. With SAP
performance management module, employees are also required to perform engagement evaluation after completion of each engagement. The record is maintained online for evaluation purpose. Evaluation will be done at the end of the financial period. Assessment of the results of evaluation of the staff is restricted to the respective staff; her counselor and the engagement manager for tracking purpose. With the prompt communication and monitor of the employee's progress, the management is able to improve the performance of the staff and subsequently, the performance of the professional service firm.
Drawback of ERP
Purchase and implementing ERP will be very expensive and time-consuming, with many high profile examples of issues with projects going significantly over budget or time, or both. The major players in the market have developed a status for needing huge resources including external consultants to implement an ERP system and get it functioning, not to mention the cost of make changes to the system or only maintaining it.(sources : http://www.unit4.com/erp-systems)
For example, based on according to 'As One' strategy, Deloitte Malaysia has to spend a lot of money to implement an ERP system. The ERP usually is luxurious; a small company can not to afford the cost. It needs to take more than one year to implement it they can also take long time to install and can even contribute to a loss of jobs. The size of the company and the ERP systems such as SAP, the costs of new ERP systems could range from $50 million to $100 million depending on chosen.
By the way, the internal control for ERP will be more make tighter than previous accounting information system. It will be very complex and not flexible. Any customization or revision must be done by ERP consultants instead of Information Technology department. Thus, any amendment would incur additional cost for the company.
Role and purpose of Accounting Information Systems (AIS)
Understanding of how AISs may be affected by the implementation of a full ERP system Identification of major implications for AISs
The world of finance and accounting is radically changing, such as convergence of accounting standards and greater expectation for transparency. One must be really accurate with every decision and efficient, while complying with regulatory requirements. In the organization everyone needs entrance to the right information at the right time in order to achieve a competitive edge and make sure better control of business operations.