SAP Report

Topics: Net present value, Investment, Internal rate of return Pages: 5 (1278 words) Published: March 23, 2015
INTRODUCTION

Issue 5: Problem on SAP Software
Another issue arising from the implementation of SAP is regarding to the software itself. From the case study, ATLAM aware that the implementation of SAP involved unique risks and challenges especially on the security issue. They have to ensure that the access to the software is in a tight security protection. Therefore, in order to do that ATLAM need to allocate each user with one ID per user per task for the use of internal control and audit purposes. However, Lim as a User Representative mentioned that the security issue will cost a lot and they will have to cut a lot of cost in many aspects. Apart from that, SAP database also centralised across all PETRA subsidiaries where there is a problem in dealing with centralised data in that massive volumes of data. As a result, it might like to a traffic jams with the thousands of users using the system at the same time. Due to this problem, there’s also a possibility of losing data when all transactions going on at one time. Gopal as User Project Manager worried that the system will crash if there is no back-up plan made. Zulkifli agreed with Gopal’s opinion and will take this matter into consideration later.

Initial Investment
Initial investment also called as initial outlay is an immediate cash outflows that required by company to start a project. Calculation of initial investment is important to determine how much cost is needed to run a new project. The following are the calculation of initial investment that will be incur by ATLAM in the implementation of SAP as obtained in the case study:

CASH OUTFLOWS:
RM
Hardware
2,000,000
Initial software license
1,000,000
Training costs
1,271,550
Customisation work
72,840
Initial Outlay
4,344,390

The initial investment that will be incurred by ATLAM for the implementation of SAP is RM4,344,390. The investment cost is much higher and expensive than the implementation of ACCPAC. From the observation, although the implementation cost of SAP is huge but it gives a lot of cost saving in term of accountant’s time and efficiency cost, technical expertise cost, process and procedures cost as well as saving in working capital.

HOW TO OVERCOME THE STAFF RESISTANCE
Solution to Issue 4: Provide Sufficient Facilities
If the implementation of SAP system is to be made, ATLAM need to provide sufficient facilities for the users by buying more Personal Computers which is used for the installation of the software. However, the number of computers provided should be limited to the number of selected users only because of not all staff will be allowed to access the system for the security purposes. Other than that, the availability of spaces also need to be considered in buying new personal computers. Therefore, ATLAM can provide few computers in order to get the computers enough to be placed in the particular room or space. This will be a good idea since ATLAM does not want to incur extra cost to build a new room. Solution to Issue 5: Introducing New Policy

In order to ensure the implementation of SAP going smoothly, Zulkifli as Finance and Accounts Manager must come out with many ways on how to overcome the problems regarding SAP software. Before implementing the system, Zulkifli must plan and introduce a new policy to all users and staff before they start working with the system. One of the new policy that Zulkifli can introduce is by allocating the users with a user ID in order to get access to the system. However, only the selected and trusted users can obtained the user ID and all users must undergo staff training to get the ID. The manager has to limit the number of user in order to cut cost and also for the security purposes. They do not require too many users to use the system since the facilities are also...
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