Research Paper on "Internal Controls and ERP Systems"

Research Paper 5 pages (1427 words) Sources: 5

[EXCERPT] . . . .

Internal Controls and ERP Systems

Organizations are increasingly turning to their ERP systems to coordinate, manage and control their supply chain systems and strategies globally. One of the primary catalysts of this is the fact that ERP systems are now most commonly integrated to business strategies so that real-time data can be used to make entire organizations more customer-centric and demand-driven. The greater the level of coordination and control through data and process integration between an organizations' supply chains and ERP systems, the greater the potential for increased revenue and profitability (Bhagwat, Sharma, 669, 670). It is the intent of this analysis to explain how organizations that rely on their ERP systems to generate supply chain metrics of performance are able to stay more customer-centric, more demand-driven and therefore attain greater levels of financial and operational performance as a result. The supply chain metrics used as part of the internal controls within organizations are also presented and analyzed.

How Organizations Are Using Supply Chain Metrics as Internal Controls

In addition to the financial reporting functions that ERP systems provide, they play a critical role in synchronizing suppliers, logistics providers and manufacturing operations to get customers' orders built to their specifications and delivered on time (Forslund, 351). Of the many internal controls as represented by key performance indicators (KPIs) shown in Figure 1, AMR Research Hierarchy of Supply Chain Metrics (Barrett, et.al.) studies indicate that three are the most critical for assessing the health of an ERP systems' impact on supply chain pe

Continue scrolling to

download full paper ⤓

rformance. These three metrics are demand forecast accuracy, perfect order fulfillment and supply chain cost. Organizations are attaining quantifiable levels of demand forecast accuracy improvement as a result of using the metrics shown in Figure 1. The entire range of metrics shown in Figure 1 is often included in Balanced Scorecards (BSC) that are used for internal controls of supply chain costs, determining supply chain collaboration investments, and defining corrective action for supply chain strategies that may be lagging in performance (Meade, Kumar, White, 879, 880). The Perfect Order metric is widely used in manufacturing organizations whose business models rely on tight synchronization of suppliers, manufacturing capacity and logistics to deliver products and services to customers on the delivery date needed (Barrett, 16, 17). ERP systems are the data and systems intelligence hubs or catalysts making the measurement and optimization of The Perfect Order possible. As a result, inventory turns can be optimized, costs per unit can be reduced and Days Sales Outstanding (DSO) reduced as customer pay their invoices faster as they receive their products on time or early. This level of operational performance would not be possible without ERP systems acting as the data intelligence hub of the organization, using KPIs shown in Figure 1 as the internal controls.

Internal controls measured and orchestrated by ERP systems are also segmented by operational effectiveness strategies, including root cause analysis and specific strategies aimed at increasing supplier quality, managing purchasing costs, managing Work-in-Process (WIP) and Finished Goods (FG) inventories to optimal levels. ERP systems are used for orchestrating internal costs to supplier costs to mitigate the risk of cost overruns in managing the supplier network. Internal controls for managing the cash-to-cash process include Days Payable Outstanding (DPO), Inventory Totals Including Inventory Turns, and Days Sales Outstanding (DSO). ERP systems are used for continually managing these as internal controls as they relate to supply chain efficiency and costs and are also reported on Balanced Scorecards to Chief Financial Officers, Accounting and Finance Directors, and supply chain managers (Yang, Su, et.al.). Financial managers in organizations are continually looking for how these internal controls or metrics can trim time from internal processes and costs. Findings from studies completed by AMR Research suggest that the greater the level of collaboration within a supply chain the greater the level of internal process improvement with the result being reduced costs (Barrett, 14 -- 20). Internal controls that track the business process improvements over time provide financial managers of organizations insights into how to better organize their cash-to-cash processes for maximum profitability for example. Figure 1, AMR Research Hierarchy of Supply Chain Metrics is shown below.

Figure 1: AMR Research Hierarchy of Supply Chain Metrics

Source: (Barrett, et.lal.)

Successes and Failures of ERP-based Internal Controls to Manage Supply Chains… READ MORE

Download Full Paper

Write a New Paper for Me

Quoted Instructions for "Internal Controls and ERP Systems" Assignment:

“

Format

o 5 pages in length (excluding title page, table of contents, bibliography, and exhibits).

o Title page should include at minimum the Title, the class, your name, my name.

o No greater than 12 pt font, no less than 10 pt font.

o Can be double spaced.

o Must be prepared in an MS Word document.

Topic I want the topic to be about the internal controls in ERP systems and business processes. Show both successes and falures of internal controls and give citation to back up successes and failures. i would like a couple of Quotes to add to the paper

Tips

- Re-read the grading criteria in the Syllabus.

Grading of Term Papers

Below are some guidelines for the grading format of the term papers.

o 20%, Visual appeal, format, uniformity & consistency

o 10%, Spelling, grammar, following instructions

o 20 %, Scope/organization/ & thoroughness

o 40%, current and creative

o 100%, Total

- Be creative, imaginative and use your own original thought process whether you are comparing, contrasting, describing, discussing, analyzing, or summarizing the sides of your topic. A paper which is just a regurgitation of research will likely have mediocre scoring at best.

- Do not write on a topic that is too broad since you only have 5 pages to make your points.

- Pick a topic that is fun and interesting to you...current information from outside sources are always welcomed.

How to Reference "Internal Controls and ERP Systems" Research Paper in a Bibliography

“Internal Controls and ERP Systems.” A1-TermPaper.com, 2010, https://www.a1-termpaper.com/topics/essay/internal-controls-erp-systems/838468. Accessed 3 Jul 2024.

Internal Controls and ERP Systems (2010). Retrieved from https://www.a1-termpaper.com/topics/essay/internal-controls-erp-systems/838468

A1-TermPaper.com. (2010). Internal Controls and ERP Systems. [online] Available at: https://www.a1-termpaper.com/topics/essay/internal-controls-erp-systems/838468 [Accessed 3 Jul, 2024].

”Internal Controls and ERP Systems” 2010. A1-TermPaper.com. https://www.a1-termpaper.com/topics/essay/internal-controls-erp-systems/838468.

”Internal Controls and ERP Systems” A1-TermPaper.com, Last modified 2024. https://www.a1-termpaper.com/topics/essay/internal-controls-erp-systems/838468.

[1] ”Internal Controls and ERP Systems”, A1-TermPaper.com, 2010. [Online]. Available: https://www.a1-termpaper.com/topics/essay/internal-controls-erp-systems/838468. [Accessed: 3-Jul-2024].

1. Internal Controls and ERP Systems [Internet]. A1-TermPaper.com. 2010 [cited 3 July 2024]. Available from: https://www.a1-termpaper.com/topics/essay/internal-controls-erp-systems/838468

1. Internal Controls and ERP Systems. A1-TermPaper.com. https://www.a1-termpaper.com/topics/essay/internal-controls-erp-systems/838468. Published 2010. Accessed July 3, 2024.

Related Research Papers: