SAP is treated as the fourth largest software and is a great solution to the financial needs, logistics, as well as distribution. There are two main modules for SAP that is the functional and the technical module.
FICO – it stands for financial accounting and controlling. It is a vital part of ERP and financial data that pertains to the transaction are stored. For example, SAP enables the creation of vendor group.
It helps in procurement, as well as the occurrence of the inventory function in the regular course of business. It helps in activities such as purchase of goods, receipt of goods, quality management, plant maintenance, etc. further it helps in maintenance of quotations
It takes care of the process and thereby helps in achievement of the delivery needs. SAP SD takes control of all the activities relating to pre-sales, receipt, and management of sales order, delivery of products, etc.
It is a strong tool when it comes to planning, as well as management of the projects. The presence of various tools in it helps the organization to undertake the procedure of planning with ease and flexibility (Fowler, 2010).
On completing of system requirements analysis designing of the system takes place to find out the most appropriate and economic option, which is evaluated by management. Shane failed to understand the methods of designing the system which will make the transition phase very smooth.
The testing of the system must have been done so as to make out any loopholes that might have been present in the system and could have been removed in the very initial stage of project development. Shane could have made the company save a lot of money by doing a rigorous testing by seeing user needs.
System Implementation and maintenance:
Proper implementation documentation and the selection of proper strategy could have saved a lot of time and cost of extra personnel appointed.
Principles of Internal Control: The predefined procedures and principles set by the management to ensure that the assets of the company are safeguarded. These are the set of principles set so as to ensure that the assets are used in the best interest of the company.
The principles of internal controls mainly include:
- Proper authorisation of activities and events
- Separation of duties
- Proper project development and its acquisition
- Changing the controls exercised by the management
- The usage and safeguard of documents and there records.
- Safeguarding the assets, its records & data of the company.
- Checking the performance independently.
During the implementation of the Accounting Information System (AIS) the main principles that were violated by Shane can be elaborated as follows:
- Proper authorization of transaction and activities:
Shane sent the new AIS to the departments that deals with accounting, production, inventory and HR aspect but failed to categorise regarding the responsibility of the person who shall be responsible to report the requirement of the users to the system developers (Evan et. al, 2014). So such decisions taken were the same which were taken without getting his co-workers in confidence.
Separation of duties:
A sound internal control makes no single employee responsible for all the duties of the company this will help in keeping a check on the transaction and also no single person shall be in the dominant position to influence the decision.
Here Shane had all the controls and responsibilities in his hand which made him over burdened. Shane makes all the AIS decisions, including the screening of the areas like payroll, inventory control, receivables, cash deposits, and payables which is not his area of control. Such situation gives rise to low morale among the employees and the people within the organization as they are not involved in decision-making process.
Project development and its control:
It is important to have documented methodologies to govern the development, implementation, and maintenance of the information systems. Proper personnel’s must be hired and committees must be formed to have a smooth development and implementation of the system. Steering committees must be formed to have an involvement of the organization peoples.
Weaknesses in Shane’s approach to implementing the new AIS.
System Implementation: This is the main process involved in the setting up of the new AIS in order to finally launch or implement the new system in the live environment are large number of activities are undertaken. Properly documented system is required to judge the output of this phase. Activities involved in this phase are as follows:
- Proper conversion of data as per new system;
- Proper training of the final users;
- A complete documentation of the user;
- Changeover from one system to other;and
- Evaluating the system on regular basis.
Systems Implementation is the process of completely making the system operational and later make it live in the hands of end users. Implementation also includes the activity of system change over. The new system can be completely new, a replacement of a current manual or automatic system or major modification of the existing system (Fryling, 2017). The success failure of the system depends on the successful implementation of the system. Shane’s approach showed the following weaknesses in the implementation process:
Site Preparation, Install, and Test Hardware:
Choosing the site: Appropriate location/ambiance as identified and the required equipments must be availed
Installation of procured Hardware / Software: The procured hardware and software must be properly installed
Checking the hardware: The proper checking of the selected hardware must be done in live environment.
Where Shane failed to provide proper software installation which resulted in the failed strategy.
Training the end users:
A system can succeed or fail by the operating and user conditions. Therefore, the proper training of the end user is very much required as it helps or hinders the proper implementation of AIS. So, training plays a important role in systems implementation. When a new system is acquired, it require some training for both users and professional to settle upon it (Gill, 2011). This system is absent in Shane’s model as he wanted the learn the employees as and when the system is implemented and switched.
System Change Over Strategy:
Conversion or changeover is the method of changing over from one IS to other that may be the manual system or computer to the new system. It requires proper work to judge which approach is to be used to make the change by keeping the operations and assets at least risk (Gill, 2011).
As users become familiar with the newly implemented system it becomes very easy and routine for all as the established schedules must be in conjunction with departmental managers of operational units using the new systems (Nagaruni, 2007). Schedule must be set in a manner which provides sufficient time to handle all required processing.
Shane has been left behind in the system documentation of the system which has led to increased manpower requirement and the increased manpower costs.
Documentation help in proper implementation and training of personnel’s and includes operation schedules and a system description.
Overcoming the weakness mentioned above
- Site Preparation, Install and Test Hardware:
The necessary hardware must be ordered in time by the in charge. Checklist must be developed as per the advice of vendor and the AIS development team set up (Sap ERP, 2016). It must be planned in such a manner so that it gives adequate time for each and every activity and allows proper installation of the systems and equipments.
- Training Personnel:
Training must be provided to both users and computer professionals as all the systems are new for them and they are not used to it. This type of training is often provided by the vendors by seminars or workshops which gives users chance to work on new IS in the live environment (Sap ERP, 2016_). Such training structure should be highly formalized and be based business process executions with actual data.
System Change-Over Strategies:
- Direct Implementation / Abrupt Change-Over: With this strategy, the changeover is done in one shot where new system replaces the old system in one shot completely ignoring the old system.
- Phased Changeover: With this strategy, implementation is done in phased manner by using old system in some areas and new system in remaning.
- Pilot Changeover: With thisstrategy, the new system is implemented in small areas while the old system dominates the operations.
- ParallelChangeover: Both old and new systems go hand in hand as they run parallel for some time. It is considered the most secure method as user can judge and analyse the end results.
A proper selection of strategy as per the companies requirement can help in overcoming the disadvantages of system changeover and its strategies. A good strategy helps in the smooth transition of the system (Payne, 2016).
Documentation must be done at each and every step of the program development and implementation as and when it occurs. It helps in the proper planning and a provides an evidence regarding the presence of written policy It help in proper implementation and training of personnel’s and includes operation schedules (Payne, 2016).
Evan, F 2014, The 5 W’s of Information Security, viewed 19 May 2017, <https://www.frsecure.com/the-5-ws-of-information-security/>.
Fowler, M 2010, Patterns of Enterprise Application Architecture, Addison Wesley.
Fryling, M 2010, Estimating the impact of enterprise resource planning project management decisions on post-implementation maintenance costs: a case study using simulation modeling’, Enterprise Information Systems, vol.4, no. 4, pp. 391–421.
Gargeya, VB 2005, ‘Success and failure factors of adopting SAP in ERP system implementation’, Business Process Management Journal, Vol.11, No.5, pp501–516,
Gill, R 2011, ‘The rise of two-tier ERP’, Strategic Finance, vol. 93, no. 5, pp.35-40
Grant, D; Richard H; Nick W & Christopher W 2006, ‘The false promise of technological determinism: the case of enterprise resource planning systems’, New Technology, Work & Employment, vol. 21, no.1, pp. 2–15
Malhorta, A & Temponi, C 2010, ‘Critical decisions for ERP integration: Small business issues’, International’, Journal of Information Management, Vol. 30, Issue No.1, Pages 28–37,
Nagaruni, S 2017, What is SAP SD- Sales and Distribution Module,, viewed 19 May 2016 https://wiki.scn.sap.com/wiki/display/ABAP/What+is+SAP+SD-+Sales+and+Distribution+Module
Payne, T, Roets, C Schlanderer, D, Akhtar, J & Daniel, D, SAP, viewed 19 May 2016 https://searchsap.techtarget.com/definition/SAP
Sap ERP 2016, SAP ERP Software, viewed 19 May 2016 https://www.softwareadvice.com/erp/sap-software-brand/