Sap for Atlam

Topics: Net present value, Internal rate of return, Discounted cash flow Pages: 5 (1692 words) Published: October 16, 2012
Main Issues
Akademi Teknikal Laut Malaysia (ATLAM) is a wholly owned organization of MICT Berhad. The management of ATLAM had been asked to upgrade its accounting system with the PETRA group-wide SAP system. The person who is responsible to the changes of the accounting software is Zulkifli Osman, the Finance Manager of ATLAM. He had to severely assess the risks associated with the decision. The main problem arises is not on the cost of implementing SAP or Systems, Applications and Products in ATLAM but rather on the acceptance of the new system by the ATLAM’s staff. The conversation between Zulkifli and Sani, the Project Manager; Gopal, the User Project Manager; Lim, User Representative; and Kamal, the Functional Analyst has come to the several issues to be considered. Most of the issues arise are from Lim such as SAP is more suitable for manufacturing industry not education industry. Other issue is ATLAM is lack of equipment and facilities. According to Lim, the department does not have enough personal computers and if they have they do not have enough space available for the personal computer in their department. Time constraint also one of the issue arise in the conversation. The management had decided to schedule the phases of proposed SAP on 1st of April 2002. They are now on third week of January. The time needed for implementing the new system usually takes number of months to be implemented. Lim also raises the issue of the resistance of staff to change to the new system. When people are more comfortable with some technology, they are likely to oppose changes. The reason of the resistance of staff perhaps because of fear the unknown and the uncertainty accompanying change such as losing their job and failure. The other issue is costs of implementing the SAP system that can be consider as higher than the accounting package, ACCPAC. It consists of the annual license fee, training costs, customization work and hardware. The cost-benefit analysis has been done to ensure that the benefits of implementing SAP will be higher than ACCPAC.

Analysis of the issues
Zulkifli had decided to perform a feasibility study or business case which is prepared during the systems analysis. There are five important aspects to be considered during a feasibility study that consist of economic feasibility, technical feasibility, legal feasibility, scheduling feasibility and operational feasibility. Economic feasibility is defined as the dimension of feasibility concerned with whether the benefits of a proposed system will exceed the costs. This is proved by calculating the after-tax cash flow from Year 1 to Year 6. From the calculation, the benefits of the SAP system exceed the costs to implement it. The net savings from Year 1 to Year 5 is increasing and start to decline in the Year 6 because of the increasing in the saving and costs. Technical feasibility concerned on the development of the proposed system given the available technology. The SAP systems can possibly be implemented in ATLAM because of it is PETRA’s group-wide system and it had in-house support from SBS team of PETRA group. On the other hand, legal feasibility determines if there will be any conflicts between the system under consideration and the organisation’s ability to discharge its legal obligations. The implementation of SAP system in the management of ATLAM complies with the regulation sets by the management and it also supported with the PETRA group system. Scheduling feasibility only concerned on time taken to develop and the implementation of the proposed system in time allotted. There are two techniques for scheduling and monitoring systems development activities which are PERT (program evaluation and review techniques) and Gantt chart. In this case study, Gantt chart is used to determine the time taken to implement the SAP system. Gantt chart is a bar chart with project activities listed on the left-hand side and units of time which is days or weeks across...
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