sample essay of AFX5330

this is the second assessment of AFX5330, and i got a reasonable marks on this one, 14 or 13.5 out of 20, i think. this was a case study, the case was so long...

here are the requirements

1. What does the proposal document provided in the appendix tell you about the organizational issues that must be managed during the project?


Referring to the readings for this subject, explain the significance of each issue mentioned. (3 marks)

2. What additional information is required before Accenture can decide whether or not to make a bid on the project?

Refer to relevant research to support your answer. (3 marks)

3. Do you think that Accenture should present a bid? Why, or why not? (3 marks)

4. How much should the bank expect to pay for an ERP-based solution?

Describe separately the costs likely to be associated with the initial implementation as well as the ongoing maintenance of an enterprise system. (2 marks)

5. Irrespective of whether an ERP solution is within the project budget, describe an SAP-based software solution that will meet the business needs of NBSC. Be specific about the industry solution, modules and sub-modules that must be implemented, and why each is required.

For example, the bank will require the FI (Financial Accounting) module. Within that module, the bank will probably also need FI-GL (General Ledger), FI-AP (Accounts Payable), FI-AR (Accounts Receivable), FI-BL (Bank Accounting), FI-AA (Asset Accounting), and FI-FM (Funds Management). (4 marks)


essay is here:

Acknowledgements

First and foremost, we would like to show our deepest gratitude to our lecturer, Dr. Stephen Smith, a respectable, responsible and resourceful scholar, who has provided us with valuable guidance in writing of this report.

We shall extend our thanks to Mr. Ren for all his help, encouragement and support.

In addition, we are highly thankful to NBSC Financial Group for the supply of materials applies in the writing.

Abstract


The report is to assess the organisation problems of NBSC and determine whether the chosen enterprise application system, ERP system, is suitable to solve the problem through the case of Strategic IT Project at NBSC. By analysing the project proposal provided by NBSC, the report initially describes the organisational issues faced by NBSC. Then it considers the additional information and suitability before Accenture presented the bid with the help of ERP system, as well as the costs to implementation ERP. It is concluded that though ERP system is powerful, it is not suitable for NBSC’s project. In such case, Accenture should not present the bid. Alternatively, NBSC can implement SAP for banking, and choose FI module including some sub-modules to increase competitive advantages.


1. Introduction

ERP is more powerful than traditional technology for organising the company. But it is imperative for a business to analyse its own business strategy, organisation, culture and operation before choosing an ERP approach. (Monk & Wagener, 2009, p34). This report analyses NBSC’s case, and recommends whether Accenture should present a bid for NBSC’s project. Also, it analyses which SAP-based solution can meet NBSC’s need.

2. Discussions

2.1 The NBSC’s organisational issues

Accounting to Harris Kern & Randy Johnson (2009), the main three kinds of organizational issues are “people”, “process” and “technology”. “People” means culture, training, HR and so on. “Process” is some issues about problem management, capacity planning and production acceptance. Architecture, system management tools are relating “technology”.

For “people” aspect, Monk and Wagner (2009, p201) state that managing people is the key challenge to make sure that the ERP investment pays off in increased profitability. In the proposal, there are so many people involving in the project, so how to organise these people to work together in an efficient and effective way is a big issue for the project. Furthermore, after ERP implement, training people is an important sector.

For “process” aspect, a common problem in ERP implementations is scope creep, which is the unplanned expansion of the project’s goals and objectives. Scope creep always causes the project failure. Defining the project’s scope ahead of time helps prevent this problem. (Monk & Wagner, 2009, p202). In the proposal, it defines “project deliverables” and “within scope”, these can be treated as guide of project to avoid the scope creep.

For “technology” aspect, in the proposal, it states that it project deliverables should involve “recommendation of the optimal technology architecture to support CCG”. To achieve this goal, many tools are available to help manage implementation projects. Process mapping is perhaps the most critical. For an ERP implementation to go smoothly and provide value, it is critical that a company understand both its current processes and the state of process after implementation. (Monk & Wagner, 2009, p201)

2.2 Supplementary information required

Accenture should consider other information before deciding to make a bid on the project. The additional information included three categories.

2.2.1 Profitability of the project

It could be estimated that the project would affect the achievement of the profit targets. In other words, Accenture might make a loss as a result of the bid. In such case, the precise budget was need, so that whether the bid would bring the company a profit or loss could be identified. Moreover, if there was a loss, Accenture would observe the amount of loss and its future influence on the ongoing operation. When the loss was found too extreme to accept, Accenture had to cease the bid.

2.2.2 The specialties of the management involved

As this project was relevant to both the technology issue and business issue, the particular specialties of the management involved in the project should be recognised. For one thing, it helped to ensure all the management had both the technology and business skills. For another thing, it would be convenient to know with whom to communicate in some particular issues. Otherwise, the improved technology structure could not support the business effectively. In the project proposal, it just shows each person’s position without background. Accenture needed more information about it to make sure the project can be run smoothly.

2.2.3 The details of current technology

To decide what kind of technology which Accenture focused on was appropriate for the project, some other details of current technology of NBSC had to be known, such as the capacity of the computer hardware and the compatibility of the software. For example, if the ERP system was promoted, the computer must be powerful enough to operate ERP system. In addition, according to Monk and Wagner (2009), relational database software which provided the ability of storage, retrieval and analysis of large volumes of data played an important role in implementing ERP system. Generally, the advancement of hardware and software need to be identified. If they were not suitable for the technology which Accenture was good at, the bid should not be made.

2.3 Whether to present a bid

Based on the information in the proposal and the background of NBSC, the ERP system was the appropriate option for the project. Therefore, Accenture should not present bid. As Monk and Wagner (2009) said, “a large company, one with over 1000 employees, is likely to spend $50 million to $500 million. Even a midsized company with fewer than 1000 employees might spend $10 million to $20 million”. While CCG within NBSC just allocated a budget of $4 million which was much less than required amount. The ERP would not be successfully implemented with such small amount of investment. That was why Accenture had better not present a bid.

Someone might argue that this bid would help Accenture gain worthwhile clients, said banks, and future opportunity in IT industry. However, the global economic depression had influenced banks a lot. Hutcherson (2008) stated huge banks, such as Citi Bank, were in bad situation and could not recover until the finish of the economic crisis. In addition, because of the competitive of banking, Adelaide Bank and Bendigo Bank completed a merger. The situation fraught with uncertainty of banks might get Accenture in trouble. As such, the corporation with banks was not such a good idea.

2.4 The cost to implement ERP system

Basically, in accordance with Trattning and Uhink (2005), the costs of the implementation of ERP system were associated with the initial implementation and ongoing operation. As could be seen from Table I in Appendices, implementation fees and operations fees occupied 39% and 61% of total costs respectively. In particular, as illustrated in Table II & III, the initial implementation fees included 22% software costs, 16% hardware costs, 27% external service costs, such as consulting fees, and 35% internal service costs, for instance, managers and employees training fees. Meanwhile, ongoing operation fees were composed of 15% software maintenance costs, 20% hardware maintenance costs, and 65% support costs.

In this case, NBSC had 52,000 employees, which meant it was a definitely large company in terms of the number users of ERP system. Hence, the estimated total costs were estimated to a sum up of $300 million. Consequently, the initial operation fees and ongoing operation fees were $117 million and $183 millions. In details, the software costs would be $25.74 million. The hardware costs would be $18.72 million. The external service costs would be $31.59 million. And the internal service costs would be $40.95 million. The costs of each component of ongoing costs would be $27.45 million of software maintenance costs, $36.6 million of hardware maintenance costs, and $118.95 million of support costs.


2.5 SAP- based solution for NBSC

An ERP system can dramatically reduce costs and improve operational efficiency. NBSC can choose SAP for banking which can meet the business needs of it. On the SAP website (2009), it list several benefits after the bank chooses SAP for banking, for example it can improve understanding of the profitability of distribution channels, organizational units, products, clients, and more. Also SAP for banking can faster and more cost-efficient real-time processing of financial transactions.

For NBSC, it can choose following module and sub- modules:

2.5.1 The Financial Accounting (FI) module

This module records transactions in the general ledger accounts. This module generates financial statements for external reporting purposes. (Monk, E & Wagner, B, 2009) NBSC is a big company which process countless transactions, it need a system to record and analyse these transactions. FI module can meet this purpose. There are some sub- modules need to be implemented.

2.5.2 FI-GL

General Ledger is fully integrated with the other SAP Modules. It is within the General Ledger that all accounting postings are recorded. These postings are displayed in real-time providing up-to-date visibility of the financial accounts. This is the fundamental module for NBSC, it can help NBSC to trace and analyse the day- to- day transaction well.

2.5.3 FI-AP

Accounts Payable records account postings generated as a result of vendor purchasing activity. For banking, customers’ saving or loan from government are the main sources of accounts payable. There are thousands of existing or potential customers of NBSC, if it wants to keep and increase its market share, it should handle accounts payable well

2.5.4 FI-BA

Bank Accounting allows for management of bank transactions in the system including cash management. Cash has the high liquidity, so it is hard to control, especial for banking, a lot of cash withdraw of deposit from ATM or bank branches every day. Also, cash is the main component of asset for NBSC which really needs to be managed.

3. Conclusion

To sum up, based on the case study and the analysis above, technology, process and people in NBSC should be managed during the project. Before Accenture made a bid, the profitability of the bid, the management of NBSC involved in the project, and some other particular details of current technology of NBSC, for example, the capacity of computer hardware and the compatibility of the software, should be collected. However, because of the lack of enough money and the influence of economic crisis on banks, the bid should not be accepted. If NBSC really wanted to implement ERP system, future issues should be recognized, including the total costs, and the necessary modules and sub-modules.

4. Recommendation

Because the budget of NBSC may not meet the cost for the project, and NBSC’s future is unclear, it is recommended that Accenture should not present a bid for NBSC’s project. Generally, it cost $300 million to implement and maintain an ERP-based solution for NBSC’s business size. For NBSC, it can choose SAP for banking package, and choose FI module (including its sub-modules) as its fundamental module to make the business running in an effective and efficient way.


5. Bibliography

Hutcherson, M. (2008, January 12), Is Citibank In Financial Trouble, China/Kuwait Rush Cash?, Retrieved September 28, 2009, from



Kern H. & Johnson R.(2009), What are the most common IT organizational problems?, Retrieved September 28, 2009, from



Monks, E.F. & Wagner, B.J. (2009), Concepts in Enterprise Resource Planning, Boston: Course Technology Cengage Learning.

SAP for Banking – Business Benefits, 2009, Retrieved September 28, 2009, from

< http://www.sap.com/industries/banking/businessbenefits/index.epx>

Trattnig, W. & Uhink, H.J. (2005, October 5), SAP Financing–An innovative financing approach to enable a "pay-as-you-use" business model, Retrieved September 28, 2009, from

http://www.sap.com/australia/industries/professionalservices/pdf/fin_SAP_Financing_White_Paper.pdf

What is the SAP FI Module?, 2007, Retrieved September 28, 2009, from http://www.thespot4sap.com/IntroTo/SAP_FI_Module_Introduction.asp