The Advantages And Disadvantages Of ERP
|✅ Paper Type: Free Essay||✅ Subject: Information Technology|
|✅ Wordcount: 2352 words||✅ Published: 4th May 2017|
An enterprise resource planning (ERP) system is an integrated computer-based application to control internal and external resources including tangible assets, financial resources, materials, and human resources.
Before accounting systems that performed manually but today is help by computer. So, information technology facilitated to improve the cost and management accounting procedure. Therefore, IT play an important role of accounting as like weapon to support object which must increase money for IT because IT investment to their total budget higher.
2.0 The role and purposes of Enterprise Resource Planning Systems in organizations
Face threatening that arrival of the information age, position on unrestrained direction to encourage of a high speed development, we hold the information technology having a great influence or authority on the hand to power of the leading way in the information war. Usually, every enterprise pursues for interests and benefit in the economical activity of organizing. Particularly, on one occasion only that organization belonging in a big structure, its information management that cannot be done without the need of development in the information era. In truth, enterprise could grow faster and more efficiently than ever, when the essential factor to put into the correct position whether the outcome of one enterprise information management has already considered about something in specified way. ERP (Enterprise Resource Planning) can help an enterprise to complete successfully of the revolution of its development as the most powerful weapon.
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Another that no one seems to know much about but those buzzwords that everyone talks of. ERP (Enterprise Resource Planning) are more about how the several kinds of division in Enterprise functions, it not just about planning resources. It aims to provide single software which will combine all the divisions in organization planning, manufacturing, sales, marketing, finance, human resources but at the same time fulfil each division information and planning needs by an ERP solution. The purpose of this article is to provide further insights through the enterprise resource planning (ERP) systems and influence in an organisational performance. It point to challenge existing claims of ERP vendors with regard of the benefits for their products to provide chain management to supply evidence of the benefits of bundling ERPS.
2.1 Critical elements for a successful enterprise resource planning implementation in small-and medium-sized enterprises
For the last few years, small and medium-sized enterprises (SMEs) have been increasing promptly of body research relating to the implementation of enterprise resource planning (ERP) system. Especially for SMEs, want successful in ERP implementation is very important in this situation. In SMEs, they aim to look carefully the critical elements which establish a successful ERP implementation by research. Constituent within the critical elements is to recognize to an objective Research if want in a successful ERP implementation that necessary critical elements and management at each stages of implementation. In SMEs, the consequence if want to improve success rate of ERP implementation must aims by provide researchers and practitioners with guidelines.
2.2 The Advantages and Disadvantages of ERP
Enterprise Resource Planning having a strong power in benefit. In the past, it used to solve a numeral problem that have plagued in the large organization. Sometime, it also has disadvantages. If this solution thoroughly needs, it being able to weigh of the both company to decide it.
Firstly, it should observe that companies which is unsuccessful to utilize system as ERP may generates when using various software packages that can’t function well by each other. Therefore, the company will get the less efficient than it should for the long run.
There have many of processes which company may be combination together. Design engineering is the one of processes. Designing product is in produce or creating it is important in the ultimately consequence. ERP is the best because it can help a company to find the good quality of design process. Another part of ERP is order tracking. When company receives product in order that also can help the company to track and get detailed information to the customers and marketing strategies. The data is not correspond when people using the different software package.
Accounting application can made combination of the cost, profit and revenue information of sales and also can granular way in a manner. Nevertheless, Enterprise Resource Planning can change how a product is manufactured. It is important because it permits the company to keep better product and produced the good quality in higher level. ERP is the secure tool that can prevent against crime in company such as embezzlement or industrial espionage.
Whatever, there also have some disadvantages. Possibly in technology one of the biggest disadvantages is the cost. Large enterprise only can really get benefit which offered by this technology at this moment. Many researches that show the biggest challenges in companies will face implement ERP deals with investment. It is important for companies make sure the integrity of the data is defended so that employees must know how to use it and trained non-stop. ERP has many of limitations. This system can successful is fully relied of the workers understand how to use it. That why the company must train them properly but some companies have attempted to save money to reduce the cost of training. Even the company has much money to implement EPR but impossible successfully to use it because they don’t have enough money trained their workers how to use it on the process. The biggest disadvantage of ERP is difficult to customize. Not much company can utilize effectively of ERP out of the box. It must change slightly to suit their needs and to process but both of this so expensive and tiresome. In the beginning, the company doesn’t change system what the limited they can do.
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Most ERP vendors will not permit the structure of the software usage of change. ERP of one advantage is that making changes to use it that possibly will make a company reduce competitive in the market. Beside that, the costs involved implemented ERP and training the workers to utilize that ERP vendors may charge extra license fees, put some energy on companies to pay them if don’t have sufficient resources. Therefore, the technical support of ERP departments afraid get the trouble arise due to security so they must give some information to the technology support them.
ERP & Cyclical structure
2.3 Role and purpose of Accounting Information Systems (AIS)
Part of which may incorporate information technology and collects of mutual relation parts that is accounting information system. The purpose of AIS is to gather data, process it becomes information to make decision and that can use by internal and external. It creates and maintains a professional identity by researches and professionals, and educators. Members can through between communications and interaction. Private sectors, bodies in government provide something interest or activity contact in education that influence and control the nature information system. IS field and profession create a vision for the future. So, to publish books, journals, and other materials, to do together with organizations interested for further and practice of information systems, to function research; to support high professional standards, to support the information systems when growth, and to improve the quality of professional in every part of the world by AIS intends.
In the economy, accountants play important role of significant. Business not having the ability to evaluate their cost and profit position, gauge product or business unit performance, or to plan future financial success, if accountant without expert knowledge or skill. Now accountant, use of computer software by increasing that automates to help creating and designing AIS to serve as more efficient management in hand. In companies required a sizeable investment and maintenance cost in accounting system position. Thus, installing the system that companies has detail objective are the function of management, management decision making and dad-to-day operations of the firm support by AIS.
2.4 On the ERP system, the impact of accounting information system
The most famous international business management at the present is ERP. Economy for today Chinese enterprises of knowledge-based, we must increase core of competitiveness and using the most recent management result and strengthen into business operation and management.
Nowadays, it establish on the base of information technology to management systematic thinking and worker for business decision-making tools for decision-making operation management platform. ERP systems development, it has point on information technology and advanced management ideas in one through the Development and improvement until today, the various departments of the enterprise, such as procurement management, sales and consignment, inventory management, financial systems, production management, quality management, human resources management, supply chain management, linked together to become a modern enterprise running mode of the combination of information technology. In the ERP system, reveal every information of enterprises in the corporate LAN, distributed in several kind of regions of the Enterprise Management personnel with the range of the default through by their own particular account and password of Internet and self-management data and information relevant of responsibilities to address of exchange information in the company and having effective of delivery problems. In the ERP system of accountancy, we fully realized that the accounting model to comprehensive transformation in managerial. Therefore, ERP system is a logistics, capital flow, information flow combination that embodies the system management and control of a clearly ideology, example, sales and accounts receivable system, the user can set credit limits for personal customers, credit period, sales can get discounts and cash discounts, it usually charge of a higher settings. Must enter customer orders, the system will automatically make sure the availability of the customer’s arrears for more than credit period, a original amount owed plus the availability of the order greater than its credit limit, over the limit order should special marked ERP system automatically until the customers refund the money that can having a particular delegate authority in order to delivery. Customer’s order must examination, the system was permitted an open up sales of single-notification warehouse shipping, warehouse shipments and should be based on sales alone. Sometimes, Sales and accounts receivable system in a manner that it consistent with confirmed delivery of sales orders and already make sure that sales price for each product in sales invoices out automatically through the system based on value-added tax rate pre-prepared and auto-transfer certificate as accounts receivable, loans charge by business income; payable, tax payable-payable VAT; sales an output tax.
2.5 Major of implications for AIS
Reporting is to summary, timely information used by decision-making and financial reporting in accurately in a major tool of organizations. So that, pulls data from the centralized database, processes and transforms is the accounting information system. Eventually, it can occurs a summary by data as information and easy for consumed from today and analyzed in business analysts, managers or other decision makers. These systems to ensure that the reports occurring immediately so decision-makers are not act or irrelevant information and rather can act quickly and effectively based on report. Consolidation is the greatest hallmarks in reporting because people no need to get through the largest number of transactions. For example, end of the month, the financial accounts consolidates are paid vouchers by running the system in the reporting. The systemââ‚¬â„¢s application of the data from database and support the report with total amount paid to vendors for particular month. Nevertheless, to generate large volumes of transaction data, running reports that AIS can spend days or even weeks make report to large corporation. In the large companies as Tyco International, Enron and WorldCom, important to emphasis was put on enforcing public companies to implement strong internal controls of their transaction-based systems. So, this was made in law of the Sarbanes Oxley Act of 2002 regulation that companies was generate of internal control report who is responsible for an organization’s internal control and outlines of the overall effectiveness of the control. From scandals were rooted in the companies’ accounting practices, the most to emphasis of Sarbanes Oxley was put on computer-based accounting information systems. Nowadays, AIS vendors tout of their governance, risk management, and obedience features which ensure business processes are protected and organization’s assets are in secured.
The results will get what you might expect from ERP system. Few months, the considerable gains in productivity, efficiency and visibility become obvious and you can rise operational quality even reduce your human resourcing intensity because have not much repetitive tasks need to do and concentrate on higher added-value work through adopted Open ERP. For the past, accounting information systems focused on recording, summarizing and validating of data about business financial transactions. The results revealed which is hug gap between what AIS and what should be.
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