KAMPALA INTERNATIONAL UNIVERSITY

COLLEGE ECONOMICS AND MANAGEMENT

COURSE UNIT : COMPUTERISED ACCOUNTING

COURSE : BBA

YEAR : TWO

SEMESTER : TWO

SESSION : DAY

LECTURER : MR. KASOZI GEOFREY

GROUP MEMBERS

NO. NAME REG NUMBER COURSE SIGN

1. NANKANJA LILIAN 2021-08-05385
2. MUSASIZI BETTY 2021-08-05986
3. NAMPEERA RUTH 2021-08-05692
4. NAMULINDA LILIAN 2021-08-05085
5. NABWIRE SUZAN 2021-08-05233
6. NAIRUBA RACHEAL 2021-08-06342
7. KUNIHIRA TEDDY 2019-08-08504

QUESTION
3
5
 QUESTION THREE

A REPORT ON HOW TO SHIFT AWAY FROM THE MANUAL

ACCOUNTING TO A COMPUTERISED SYSTEM

Introduction
A manual accounting system is a bookkeeping system for recording business activity
transactions, where financial records are kept without using a computer system with
specialized accounting software.

Computerised Accounting Systems is based on the concept of database. It is an accounting

information system that processes the financial transactions and events in accordance to the
Generally Accepted Accounting Principles (GAAP) to produce reports as per the
requirements of the users.

Therefore, as the Director of finance of Pride Micro finance a financial institution,

Switching from manual to computerized accounting will be a step-by-step process that can be
accomplished easily and efficiently. For example I will start with the beginning of the new
fiscal year because there is no need to input data from prior periods, except for the year-end
financial statements.

Contextual perspective of a computerized accounting system.

Installing New Accounting Software

The first step to convert from a manual accounting system to a computerized accounting
system is to install the accounting system onto your company's computer. Before you decide
on the accounting software that is right for your business, research different software
packages to determine which meets your business needs, then download the purchased
software onto the computer where the accounting work will occur.

Finalizing Data in the Manual System

The second step to convert from a manual accounting system to a computerized accounting
system requires you to finalize all the data contained in the manual system, thus you will be
sure all transactions appear in the accounting records and that all calculations appear correct.

Transfer Balances to Your New Computerized System

With final account numbers recorded in the manual system you can now transfer the ending
balances to the computerized system. Start by entering an account name, the type of account
and the beginning balance. After entering each balance, compare the balances to the manual
system balances to verify that all data is entered in the system accurately.

Run Parallel Systems Testing

The fourth step requires you to use both the manual system and the computerized system for
a temporary period of time. This will ensure that the new computerized system operates as
expected.

Discontinue Manual System

At the end of the parallel testing you can discontinue the manual system once everything on
the computerized end is working properly. All of the records from the manual system
should be packed up and stored as archives.

However, In order to shift from the manual to computerized accounting efficiently, I

will consider the following steps ;

Step 1.

I will first research and decide on the computer equipment that I may need for my
computerized accounting system. Most PCs today have the capacity for an off-the-shelf
accounting package for a small business. I will make sure that my computer has a hard drive
with several gigabytes of storage space. As time goes on your computerized records will
grow and you want the computer to last a few years. I will also want word processing and
spreadsheet programs, as well as Internet and email capability.
STEP 2.
I will also Set up my computer equipment and establish my Internet connection. This step is
important because all accounting software packages will have online help available if you run
into a problem. Also as part of my computer setup I will establish a means of backing up my
files. I should backup my data every day or even more often when my work on something
critical. Files can be easily backed up on portable drives. It is important to realize that an
accounting system is a database from which information is retrieved when needed.
STEP 3.
Research and decide which accounting software package is best for a financial institution.
Most small companies do fine with an out-of-the-box software package, such as QuickBooks
or Peachtree.
STEP 4.
I will Set up the software package by following the built-in menus. Establish a chart of
accounts for your general ledger. I will Set up my bank accounts and add any necessary
information about my vendors and the customers.
STEP 5.
I will enter the detailed transaction data necessary to bring the computerized books up to date.
I will need to enter the end-of-year financial statements from the prior year as your beginning
balances for the current year. Then key in the detailed transaction data for each month of the
current year until you are up to date. If it is the end of the year, simply set up the beginning
balances for the new year and work forward, entering accounting data as transactions and
events occur. I will now be operating on a computerized accounting system.
STEP 6.
I will decide if I want prior year financial statements entered into the system. In order to
provide history in the computerized records, you can add the financial statements from prior
years. I can do this monthly, quarterly or annually going back several years. There is no need
to add the detailed transaction data to the history but there should be a trail going back to the
manual records.

However, the computerized accounting system entails the following threats and
challenges
Installation costs.
This is a major hindrance as to why organizations do have computers. Accounting systems
costs have decreased substantially, but they still can be costly, not only to purchase, but to
maintain them as well. Extra costs for training new employees in the system should be
considered along with ongoing customer service. Charges for customizing reports and other
processes can pose limitations on small and medium-sized businesses that cannot afford these
services. Other program costs to consider include new version upgrades and even hardware
that may be required as technology progresses. If businesses can't afford these costs, they will
be left behind.
Power Failure
When dealing with accounting programs, you should consider electrical power as a major
limitation of the system. Without electricity, most small-business accounting systems are
useless -- no data can be input or reports generated. Any electrical fluctuation can have a
negative impact on accounting data, deleting information and creating confusion. Another
consideration that limits the usage of accounting systems is the network where the program
may reside -- if the computer network is not properly set up, the software cannot be accessed
and cannot be utilized. Most organizations are faced with frequent power failure that slows
the rate at which operations are executed in organizations. This leads to loss of data hence
taking more time to be retrieved

Computer Virus:
The major stressing challenges in the whole world are the problem of computer viruses. S.
NORA (Computerization of Society 1981), affirm that computer viruses usually infect
systems introduced via external storage devices which have already been infected. This has
led to loss of data most of which is very costly to get back as it will need experts who are
invited to install and design new packages. System security concerns can pose limitations on
accounting software. Besides worrying about viruses and worms, small-business owners also
should be concerned with unauthorized access of computerized accounting data. IDs and
passwords are common minimum security measures businesses can use to protect the
accounting software against intrusion, but they may not be enough. According to Kiplinger
magazine, hacking is very common with small businesses; however, only one in five small
firms owns antiviral software and over half don't use encryption on wireless connections.

Computer Hacking S. NORA (Computerization of Society 1981), goes ahead to refer this as
to when individuals make unauthorized access to computerized systems especially via dial-
in-lines or across computer networks. This leads to loss of data and inconveniences to the
individual affected by the hackers.
Theft of Computer Time:
Information created by one person may be easily copied by another person who can claim
that the data is his own and he is the actual creator. In computers there is nothing like original
copy and duplicate copy.

Manipulation of Programs:
An intruder, rival or competitor can manipulate, modify or delete one or more programs of a
company making the complete software unusable.

Theft of Data:
Data stored in a computer can be copied into floppies and could be delivered to competitors.
With modern communication networks available, insiders of the company may send
confidential information of a company to another. Hackers can connect to network and steal
data.

Stealing Software:
This is the most commonly committed crime in computers. An employee of the company
may copy the software purchased by a company and copy it in his home computer.
Precautions and controls can be employed for protecting hardware and software from
illegitimate use.

Controlling Access:
Controlling of hardware and software should be the first system security. The system should
be under lock and key to prevent hardware theft. Physical and electronic access control
techniques including keyboard locks, automatic logs, restricted access to systems and limited
after-hour use.

Passwords:
Passwords should be provided at all levels of system. They should be changed frequently or
as and when needed so that unauthorized users cannot enter into the system.
Backup Copies:
It is necessary to take frequent backups of all software and keep them separate from the usual
media. Backups are often taken on tapes and are used to restore data when the primary data
from the system fails. Software programs should also be taken if necessary.

Security for Backup:

Backups should be kept in secure place. Loss of backups means disaster for the company.
Protection of backups includes fireproof containers and away from the computer installation
site to avoid any natural disaster.

PRECAUTIONS

Use a firewall.

Windows and macOS have built-in firewalls – software designed to create a barrier between
your information and the outside world. Firewalls prevent unauthorized access to your
business network and alert you to any intrusion attempts.

Make sure the firewall is enabled before you go online. You can also purchase a hardware
firewall from companies such as Cisco, Sophos or Fortinet, depending on your broadband
router, which also has a built-in firewall that protects your network. If you have a larger
business, you can purchase an additional business networking firewall.

Install antivirus software.

Computer viruses and malware are everywhere. Antivirus programs such as
Bitdefender, Panda Free Antivirus, Malwarebytes and Avast protect your computer against
unauthorized code or software that may threaten your operating system. Viruses may have
easy-to-spot effects – for example, they might slow your computer or delete key files – or
they may be less conspicuous.

Antivirus software plays a major role in protecting your system by detecting real-time threats
to ensure your data is safe. Some advanced antivirus programs provide automatic updates,
further protecting your machine from the new viruses that emerge every day. After you install
an antivirus program, don’t forget to use it. Run or schedule regular virus scans to keep your
computer virus-free.
Install an anti-spyware package.

Spyware is a special kind of software that secretly monitors and collects personal or
organizational information. It is designed to be hard to detect and difficult to remove and
tends to deliver unwanted ads or search results that are intended to direct you to certain (often
malicious) websites.

Some spyware records every keystroke to gain access to passwords and other financial
information. Anti-spyware concentrates exclusively on this threat, but it is often included in
major antivirus packages, like those from Webroot, McAfee and Norton. Anti-spyware
packages provide real-time protection by scanning all incoming information and blocking
threats.

Use complex passwords.

Using secure passwords is the most important way to prevent network intrusions. The more
secure your passwords are, the harder it is for a hacker to invade your system.

More secure often means longer and more complex. Use a password that has at least eight
characters and a combination of numbers, uppercase and lowercase letters, and computer
symbols. Hackers have an arsenal of tools to break short, easy passwords in minutes.

Don’t use recognizable words or combinations that represent birthdays or other information
that can be connected to you. Don’t reuse passwords, either. If you have too many passwords
to remember, consider using a password manager, such as Dashlane, Sticky
Password, LastPass or Password Boss. [See related article: How to Create a Strong
Password]

Keep your OS, apps and browser up-to-date.

Always install new updates to your operating systems. Most updates include security fixes
that prevent hackers from accessing and exploiting your data. The same goes for apps.
Today’s web browsers are increasingly sophisticated, especially in privacy and security. Be
sure to review your browser security settings in addition to installing all new updates. For
example, you can use your browser to prevent websites from tracking your movements,
which increases your online privacy. Or, use one of these private web browsers.
Ignore spam.

Beware of email messages from unknown parties, and never click on links or open
attachments that accompany them. Inbox spam filters have gotten pretty good at catching the
most conspicuous spam. But more sophisticated phishing emails that mimic your friends,
associates and trusted businesses (like your bank) have become common, so keep your eyes
open for anything that looks or sounds suspicious.

Back up your computer.

If your business is not already backing up your hard drive, you should begin doing so
immediately. Backing up your information is critical in case hackers do succeed in getting
through and trashing your system.

Conclusion

Therefore, a manual accounting system is a bookkeeping system for recording business
activity transactions, where financial records are kept without using a computer system with
specialized accounting software. Computerised Accounting Systems is based on the concept
of database. It is an accounting information system that processes the financial transactions
and events in accordance to the Generally Accepted Accounting Principles (GAAP) to
produce reports as per the requirements of the users.
QUESTION 5

Integrated Financial Management System (IFMS): It is an IT-based budgeting and

accounting system that manages spending, payment processing, budgeting and reporting for
governments and other entities.

IFMS Modules

The IFMS is based on the Oracle E-Business suite IT package. It automates processes
required by the Public Finance and Accountability Act 2003 and the Local Government Act
1997.

The modules currently in operation by oracle are:

1) Oracle Public Sector Financials/General ledger module:

This module is used to; enter and post journals, budget inquiries, opening of budget year,
funds inquiries, others Issuance of a Grant of Credit by the Auditor General, Issuance of the
Ministers Warrant by the Accountant General, Issuance of Cash limits by the Budget
Directorate, Preparation of the Accounting Warrants by the Votes, Initiation and Approval of
virements or re-allocations and generation of management reports.

2)Receivables module:

This module is used to; Enter customers, enter and approve invoices and to enter receipts. It
also used to enter bank charges and bank transfers and the generation of receivables reports.

3)Purchasing module:

This module is used to create suppliers on the system, prepare purchase requisitions, and
approve purchase requisitions, enter and approve purchase orders and finally enter purchase
receipts.

4)Payables module:

This module is used to; create supplier invoices from supplier information, approve invoices,
make payments, make prepayments ( to employees or suppliers) and generate payables
reports
5)Cash management module:

This module is used to; create bank accounts, it also used to enter/ upload bank statements
and to perform automatic bank account reconciliations

Benefits of Integrated Financial Management System

Integrated Financial Management System (IFMS): Provides advanced financial

reporting and decision-making procedures for evaluating the merits or shortcomings of the
operational and strategic approaches to service delivery. Implementation of IFMS enhances
scheduling and forecasting capacity of an entity. This enables administrators to allocate
financial resources effectively and set realistic performance targets

An entity stands to achieve greater efficiency in financial operations and reporting

procedures when using IFMS applications. These systems entrench the controls an entity
require to eliminate misuse of financial resources, but also the mitigation measures to employ
to protect an entity against the occurrence of expected and unexpected risks. The control
measures also provide the historical evidence of performance needed to regulate the current
and future activities of the entity.

IFMS provides an entity with a framework for integrating functional processes and
financial resources. This accelerates the processing of transactions and conveyance of
financial information, in addition to eliminating duplicate activities and responsibilities along
the entity’s chain of command. Systems integration also provides greater leverage for
centralizing shared services so as to reduce operational costs associated with running multiple
operational units for the shared services.

Adoption of IFMS applications elevates the performance of the entity in service

delivery. Indeed, the strategic value of information technology is extremely important in the
advancement of citizens’ satisfaction and growth of efficiency and effectiveness in service
delivery. It enables the government departments to respond appropriately to changes in target
population.

Integrated Financial Management System (IFMS) is an information system that tracks

financial events and summarizes financial information. In its basic form, an IFMS is little
more than an accounting system configured to operate according to the needs and
specifications of the environment in which it is installed.

In the government realm, IFMIS refers more specifically to the computerization of

public financial management (PFM) processes, from budget preparation and execution to
accounting and reporting, with the help of an integrated system for financial management of
line ministries, spending agencies and other public sector operations (MFPED, 2015)

In Uganda for example, implementation of the IFMS has enabled the Government to
address many of the fiduciary issues faced prior to 2003. This has led to: greater expenditure
control and discipline in budget management as a result of improved oversight and
enforcement of internal controls; a reduction in the time taken to process payments;
improvement in account reconciliation; and more accurate and reliable financial reporting

How the IFMs can be integrated

IFMS Implementation Strategy

The IFMS has been implemented in a phased manner to ensure success and to provide GOU
with a process of effectively and efficiently managing the transition from the current state to
the future desired state. Some of the key Principles applied are:

i.              Central Acquisition of the system adopted

ii.             Central Management of the system agreed on

iii.            Decentralised ownership of data

iv.           A Turnkey Concept was adopted

Pilot implementation was conducted in 6 ministries and 4 local governments between

February 2003 and October 2004. Rollout implementation has since progressed to another 12
Ministries and 6 Local Governments and will conclude December 2006.

In the Pilot and on-going Rollout implementation phases, the IFMS has focused on key
Expenditure Management Systems that include the:

i.              Accounting and Reporting (General Ledger),

ii.             Budgeting, Purchasing and Commitment Accounting,

iii.            Payments,

iv.           Cash Management and Revenue Receipting/Accounts Receivable.

v.            Purchasing

vi.           Public Sector Budgeting including Activity Based Costing and OFA

The Fixed Asset Management, Inventory Control and Debt Management modules will be
implemented at a later stage. Government recognises the need for increased efforts in revenue
collection activities for Local Governments. Plans for the acquisition of a Local Government
Revenue Module (LGRM) are under review.

THE SYSTEMS DEVELOPMENT LIFE CYCLE

The system development life cycle is the overall process of developing, implementing, and
retiring information systems through a multistep process from initiation, analysis, design,
implementation, and maintenance to disposal. There are many different SDLC models and
methodologies, but each generally consists of a series of defined steps or phases. For any
SDLC model that is used, information security must be integrated into the SDLC to ensure
appropriate protection for the information that the system will transmit, process, and store.

SYSTEMS INVESTIGATION
Systems investigation involves gaining a clear understanding of the existing problem and
finding solutions to the problem. The problem can be identified by carrying out a feasibility
study where the information needs of prospective users and the resource requirements, costs
and benefits can be determined. The feasibility study also involves determining whether there
exists the technology to solve the existing problem, the economic viability among others.
Systems investigation answers the following questions:
 What problem might a new or enhanced system solve?
 What opportunities might be provided?
 What are the associated risks?
 Is it feasible?
In the case of Uganda, before the implementation of the IFMIS in government institutions,
the Government in the 1980s’ recognized that availability of information was a prerequisite
for economic and financial management improvement. The major problems faced were the;
inaccurate, untimely and inappropriate budget and accounting information. These were
characterized by; manual and partially automated systems, no systems for independent and
decentralized local governments, weak capacity in implementation and inspection, inadequate
systems for collection and tracking of revenue, backlog of un-reconciled bank accounts,
lackof a uniform Chart of Accounts that complied with Government Finance Statistics
(GFS),endemic budget overruns, Ad-hoc and uncoordinated IT acquisitions; and non-
compliance with international public sector accounting standards. Therefore the IFMIS was
intended to:
1.To improve fiscal management in order to achieve more timely, and accurate information
for both local and central government.
2. To ensure transparency and accountability in the handling and use of public resources.
3. To strengthen the Government financial management processes and provide better
expenditure controls.
4. To enhance operational effectiveness by improving quality of data and making it available
for use and sharing.
5. To standardize and automate Government financial management processes to reduce
redundant and unnecessary tasks and activities
6. To maximize the cost effectiveness of the expenditure of public funds.
7. To improve revenue management.

SYSTEMS ANALYSIS
Systems analysis is a process of collecting factual data, understand the processes involved,
identifying problems and recommending feasible suggestions for improving the system
functioning. This involves studying the business processes, gathering operational data,
understand the information flow, finding out bottlenecks and evolving solutions for
overcoming the weaknesses of the system so as to achieve the organizational goals. System
Analysis also includes subdividing of complex process involving the entire system,
identification of data store and manual processes.
The major objectives of systems analysis are to find answers for each business process: What
is being done, How is it being done, Who is doing it, When is he doing it, Why is it being
done and How can it be improved? It is more of a thinking process and involves the creative
skills of the System Analyst. It attempts to give birth to a new efficient system that satisfies
the current needs of the user and has scope for future growth within the organizational
constraints. The result of this process is a logical system design. Systems analysis is an
iterative process that continues until a preferred and acceptable solution emerges.
Government of Uganda commissioned a Fiscal Management Systems Study (FMS) that took
place between October 2001 and April 2002. Ernst & Young Consultants undertook the FMS
study. The study aimed at developing a framework of the principles and standards for the
introduction of government wide IT based Fiscal Management Systems that would meet
current and future needs. The consultants prepared and submitted an Information Technology
Architecture and Plan (ITAP) report detailing the recommended business and information
processes as well as the User Requirements Specifications and proposed technology options.

SYSTEMS DESIGN
Based on the user requirements and the detailed analysis of the existing system, the new
system must be designed. This is the phase of system designing. It is the most crucial phase
in the developments of a system. The logical system design arrived at as a result of systems
analysis is converted into physical system design. Normally, the design proceeds in two
stages: Preliminary or General Design and Structured or Detailed Design
In the preliminary or general design, the features of the new system are specified. The costs
of implementing these features and the benefits to be derived are estimated. If the project is
still considered to be feasible, we move to the detailed design stage. In the detailed design
stage, computer oriented work begins in earnest. At this stage, the design of the system
becomes more structured. Structure design is a blueprint of a computer system solution to a
given problem having the same components and inter-relationships among the same
components as the original problem. Input, output, databases, forms, codification schemes
and processing specifications are drawn up in detail. In the design stage, the programming
language and the hardware and software platform in which the new system will run are also
decided.
The system design involves:
i. Defining precisely the required system output
ii. Determining the data requirement for producing the output
iii. Determining the medium and format of files and databases
iv. Devising processing methods and use of software to produce out put
v. Determine the methods of data capture and data input
vi. Designing Input forms
vii. Designing Codification Schemes
viii. Detailed manual procedures
ix. Documenting the Design
There are several tools and techniques used for describing the system design of the system.
These tools and techniques are: Flowchart, Data flow diagram (DFD), Data dictionary,
Decision table, Decision tree etc.
The design of IFMS was based on a centralized architecture that enables central processing
and storage of financial transactions at a server held at the data centre at the MFPED.

SYSTEMS IMPLEMENTATION
In the implementation phase, the organization configures and enables system security
features, tests the functionality of these features, installs or implements the system, and
obtains a formal authorization to operate the system. Design reviews and system tests should
be performed before placing the system into operation to ensure that it meets all required
security specifications. In addition, if new controls are added to the application or the support
system, additional acceptance tests of those new controls must be performed. This approach
ensures that new controls meet security specifications and do not conflict with or invalidate
existing controls. The results of the design reviews and system tests should be fully
documented, updated as new reviews or tests are performed, and maintained in the
organization’s official records. It is at this point that the system is put into operation for the
end-users and the users take over the system for use and evaluate its performance.
Implementation involves a number of activities including user training, software
modification, acquisition of hardware, software, testing systems conversions and data
conversion (Sonny et al.). The conversion strategies that can be used in the implementation
stage include, Direct change over: where the old system is abandoned and a new system is
put in place,
Parallel conversion: where both the new and old systems are used concurrently until the new
system is capable of functioning properly,
Phased conversion: in this case, a new system is brought in as a series of functional
components and the volume of transactions handled by the new system gradually increases as
the system is phased in.
M/s Hewlett Packard International Trade BV (HP) was contracted to implement the IFMS.HP
was responsible for the supply, installation, integration, testing, and commissioning of the
IFMIS
HP was assisted by a number of sub-contractors but government of Uganda held one supplier
(HP) responsible and accountable for all the deliverables including those of the sub-
contractors
The IFMIS adopted the phased implementation approach. The implementation commenced
with the pilot phase covering six (6) Ministries and four (4) Local Governments on 1st July
2003. Following the successful implementation of the pilot phase, Government of Uganda in
April 2005 formally signed off the pilot phase and consequently entered into contract with
HP to extend the implementation to the remaining 12 Ministries, additional 9 Local
governments and a Disaster Recovery Centre. Currently, 89 MDAs (63 Central Governments,
14 Local Governments and 8 Donor Funded Projects) are transacting in real-time mode on
IFMS. IFMS initial focus was on key Expenditure Management processes that include the
Accounting and Reporting (General Ledger), Budgeting, Purchasing and Commitment,
accounting, Payments, Cash Management and Revenue Receipting/Accounts Receivable.
SYSTEMS MAINTENANCE
Systems maintenance is a continuous process that occurs when the system has been installed.
The system should be kept up to date by upgrading the software, hardware etc. maintenance
activities include:
 changing programs procedures, or documentation to ensure correct system
performance.
 Adapting the system to changing requirements and making the system operate more
efficiently.
These are met by corrective, adaptive, perfective, and preventive maintenance.
Preventive maintenance reduces the possibility of future system failure, perfective
maintenance improves efficiency, adaptive maintenance adds new capability and
enhancements whereas corrective maintenance is performed to fix errors.
IFMS has service level agreements for maintenance of all core equipment. In addition, there
is a recurrent budget line item for all IFMS votes to cater for maintenance of IFMAS related
equipment. There is also systems upgrades. M/s Hewlett Packard International Trade BV
(HP)was responsible for providing the related support services for the IFMIS solution under
the arrangement.
Success and Sustainability
An IFMS Module Team (IMT) which comprises a core team of mainstream civil servants
across Ministries and Local Governments has been put in place. These will henceforth focus
on knowledge and skills transfer in order to ensure smooth operations of the IFMS, now and
even after the end of the project support available from EFMP II or the proposed FINMAP.
Staff are being accorded specialised training using Boot Camp both within and abroad.

The medium term strategy is to have these undergo exposure to specialized skills and
knowledge required to support the application.

Change Management and Communication

One inherent misconception in many projects involving IT is a tendency to perceive such

projects as IT projects other than business projects. The IFMS change management strategy
seeks to ensure that there is adequate information flow between the project and business areas
that will be the eventual owners and users of the system.

Suffice it to note that a reform of this magnitude involves significant levels of business
change, affecting not only in methods of work but also in attitude and values. It therefore
calls for cultivation of commitment to implementation of change. Accordingly, change
management will continue to be a main feature of on-going implementation. It entails
establishing the information and communication needs of the stakeholders, availing the
needed information in a timely manner and providing status reporting, progress measurement
and forecasting.
Enterprise Resource Planning (ERP) is an integrated enterprise – wide information system.
It integrates the information system of an organization and automates most of its field of
operation business functions.

Enterprise resource planning (ERP) integrates internal and external management

information across an entire organization, embracing finance/accounting, manufacturing,
sales and service, customer relationship management, etc. ERP systems automate this activity
with an integrated software application.

In order for Enterprise Resource Planning to be integrated in private enterprises, the

following steps can be undertaken;

Choosing an ERP system that meets your specific requirements will enable a smoother ERP
implementation. If that software suits your industry and niche, you won’t have to custom
design and adapt an application. One of top reasons ERP implementation often fails is
because of inconsistency with business requirements. However, purchasing an ERP is only
half the deal. In any ERP implementation process, there are certain mandatory stages, want it
or not.

1. ERP selection – write down critical features, analyze, study and compare, negotiate.

2. Management changes – as one has to re-orient and persuade employees to work

within totally new environment.

3. Data preparation and migration – reviewing how compatible your data are with a new
ERP, decide on what could (and could not) be eliminated, data transition.

4. ERP deployment – installing, configuring and optimizing the system.

5. Testing – checking if every aspect works properly, fixing errors.

6. Customization – adjusting ERP’s critical elements in accordance with company’s

workflow and business processes.

7. User training – teach every employee working with the application how to use it
efficiently.

8. Launch and maintenance – ERP activation throughout all departments, post-launch

ongoing support, maintenance, updates, etc.
How to measure success of ERP implementation

What ERP implementation metrics are out there? Would you accept just asking employees
how many of them are really using the new ERP system? Let’s hope not. Though you should
be asking whether converting to ERP went without business disruption and impacting
customers. And some more specific and accurate metrics to measure the success of ERP
implementation project are as follows:

1. Measure a cycle time (time to deliver products to a customer from the moment of
incoming invoice)

2. Check system forecast accuracy (requires some time and data collection)

3. Measure customer satisfaction

4. Measure employee acceptance rates

5. Estimate sales transaction times

6. Check system downtimes (the lower number, the better)

7. Measure strategic benefits (quick decision making, reports, cost-savings, etc.)

Benefits of ERP System Implementation to Company

An ERP is an information system able to centralize and unify data from different business
departments facilitating the flow of information. Both managers and middle managers, they
will have unified real-time information that will facilitate the process of decision making.

1. Improve the decision-making process.

As overtook the beginning of the article, ERP systems can create a shared database with more
and higher quality that those responsible be displayed on your screen in real time
streamlining and improving the process of decision making.

2. Planning realistic future scenarios.

By having better information can make realistic estimates and forecasts anticipating future
scenarios.
3. The minimum duplication.

Companies that do not yet have an ERP solution is easy to see that its departments operate
somewhat independently of each other, so they end up creating duplicate records and reports.
Integrating ERP, accounting for drastically reducing enable these duplications.

4. ERP systems are modular.

ERP is formed by modules. This way you can implement modules your company needs at all
times. If in the future your company evolves and grows with your ERP will do it if you
incorporate new features.

5. Total adaptation to the needs of your company.

All companies are different. Therefore, the provider of your ERP system should perform a
preliminary analysis of the needs of your organization to ensure that the application is
perfectly suited to it. The ERP solution must fit your business, not vice versa. Read ERP
System A Complete Guide.

CONCLUSION

Therefore as the environment, technology, and competition change, an information system

must continually undergo changes, ranging from minor adjustments to major overhauls. If a
major change to a system is needed, a new project may have to be set up to carry out the
change. The new project will then proceed through all the above life cycle phases.