Management information system
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itm_paper-1.docRunning head: FIXED ASSETS 1
FIXED ASSETS 16
Fixed Assets
Executive Summary
The aim of the paper is to compare the SAP ECC ERP 6.0 platform with Microsoft Dynamic GP10 platform. The business area selected was fixed assets. First, the paper explains in depth software platforms particularly SAP ERP and Microsoft Dynamic. Special attention is given to the types of Microsoft Dynamic’s applications, which are Dynamics SL, Dynamics NAV, Dynamics GP, and Dynamics AX. However, the focus of the paper was on Dynamic GP. Next, one of the business areas was chosen for further analysis. The business are selected was fixed Assets. Both Microsoft Dynamics GP10 and SAP ECC 6.0 platforms integrate fixed asset management their system. Then, comparison between SAP ECC 6.0 and Microsoft Dynamic GP was carried out. Similarities and differences between SAP and Oracle ERP were principally on their features/modules and functionality. The two platforms have almost similar modules and features but differ in some of their functions. The key similarities between the two companies are application support like Finance, manufacturing, project, and inventor. Some of the differences found between SAP ECC 6.0 and Microsoft Dynamic GP10 are integration with office tools, creation of functions, reports, market share, interface, financial accounting reporting, their technical strength, and total cost of ownership. Finally, factors managers should consider when deciding which system should best support a given business environment were discussed in detail. The major factors described were cost, nature, or culture of the business, strategy, and interconnectivity. This paper will utilize system documentation and online documentation to compare and contrast the use of SAP ECC 6.0 Microsoft Dynamic GP ERPs in fixed asset management.
Table of Contents
5 Microsoft Dynamics GP 10 platform
6 System, Applications and Products in Data Processioning (SAP)
SAP ERP Human Capital Management 6
Microsoft Dynamics GP, Fixed assets 7
Table 1: Comparison of systems 9
12 Factors Affecting ERP Implementation
12 Costs
12 Nature or Culture of a Business
13 Strategy
13 Conclusion
Fixed Assets
Introduction
Looking for ways to increase efficiency, reduce costs, improve product quality, and increase customer satisfaction and shareholder value, organizations have realized that the source of success in this area lies in the performance of their processes. It turned out that it is not enough to look at an organization in terms of its functional structure, but also as a network of interrelated business processes. This has led to various businesses incorporating ERP solutions in their system.
ERP can be defined as an integral information system used to support businesses in carrying out different activities in different departments. Microsoft, SAP, and Oracle are the vastly known ERP providers. ERP packages are made in a way that they fulfill the needs of a business and its legacy structures. Special tools and standard programming language are used to personalize ERP modules. The paper is the comparative analysis of Microsoft GP 10 platform and SAP ECC ERP 6.0 platform. The paper will specifically focus on Fixed Asset.
Software Solutions
Microsoft Dynamics GP 10 platform
The acquiring of Navision by Microsoft in 1984 marked the foundation of ERP for Microsoft. Microsoft Dynamics has various products, which carry out different functions in business. The software aids business managers to make well-versed decisions, gain inordinate control of operations and inventory, and have better management of their financials. The products are Dynamics SL, Dynamics NAV, Dynamics GP, and Dynamics AX.
Microsoft Dynamics GP
More than 41,000 customers throughout the world use the system discussed in this paper. Like NAV, it moves beyond basic financials and operations functions, and is a complete ERP solution. According to Microsoft (2011), this system as requiring lower implementation and long term maintenance costs, than similar SAP or Oracle products. Dynamics GP offers financial, human resources, project management, supply chain, sales and marketing, manufacturing, and services information functionalities (Microsoft, 2011). It also offers basic business intelligence reporting. Microsoft Dynamics GP10 is the 2010 release of this line of Microsoft’s ERP system.
Microsoft Dynamics AX
It is the complete ERP solution for larger corporations. It is tailored for global corporations, as well as state of the art manufacturing firms, and several other industries. Businesses use Microsoft Dynamics AX accounting and finance solutions to track and evaluate business data. Cash flow, bank reconciliations, fixed assets, receivables, payables, sales processes, inventory, collections, analytical accounting, and purchasing are managed using this application.
Dynamics SL
Dynamics SL is the ERP offering that handles basic project management and accounting across multiple divisions of a firm. It is targeted specifically to government contractors, distribution firms, and construction management corporations (Microsoft, 2011).
Dynamics NAV
Dynamics NAV is a comprehensive ERP suite that is targeted at mid-size companies. It incorporates more than just the basic PM and accounting functions that SL offers, but is most cost effective for the mid-sized company that needs an ERP solution (Microsoft, 2011).
System, Applications and Products in Data Processioning (SAP)
SAP is not only one of the biggest companies known for software production, but also the chief provider of Enterprise Resource Planning (ERP) solution software. Five IBM workers founded SAP in 1972. Its first product was financial accounting software. It later grew and developed a set of applications for other functions in the enterprise like customer relationship management (CRM), supply chain management (SCM), product life-cycle management (PLM), and supplier relationship management (SRM). The approximate number of companies using SAP software is 41, 200. SAP core product is SAP ERP, which was initially called SAP R/3. The initiation of ERP Central Component (ECC) later on replaced SAP R/3. SAP ERP is software specifically designed to optimize business functions of companies. The SAP ERP is divided into modules. The modules are Financials, Human Capital Management, Corporate Service, Performance management, End-user service delivery, and Operations (SAP, 2011).
SAP ERP Financials
Financial module controls the businesses’ financial transactions. Both big and small companies can incorporate the module to obtain present financial place of the industry in the market (SAP, 2011).
SAP ERP Human Capital Management
Human Capital Management (HCM) helps the company in handling HR process like hiring, evaluation of employees, compensations, and payroll management.
SAP ERP Corporate Services
Corporate Service chief function is to be in full control of company’s assets, for example, environmental health and safety, real estate, and project portfolios.
SAP ERP Operations
Operations module performs sales and distribution, materials management, and production planning of the firm (SAP, 2011).
End-user service delivery
The application ensures that employees effectively and efficiently access critical data analytical tools, applications. The model also supports a shared-services organizational model for finances and human resources (SAP, 2011). Moreover, it offers role-based access, employee interaction center support, employee self-service, employee interaction support center, and self-service services. Additionally, it has SAP Mobile Time and Travels that enables employees in the field to report expenses offline.
Performance management
The module supports the whole life cycle of performance management and delivers real-time. In addition, personalized measurements and metrics to improve business insight and decision-making are supported. SAP ERP supports financial analytics, operations analytics, and workforce analytics, as well as consolidated financial and statutory reporting; planning, budgeting, and forecasting, strategy management and scorecards, and risk management.
Business Area: Fixed assets
Fixed assets, also known as tangible assets are assets held with the intent of being used for providing services and goods, for administrative purposes, or for rentals. They are supposed to serve a business for a long period. Therefore, their economic value is achieved in the long term. Examples of fixed assets are vehicles, machines, buildings, furniture, computers, electronic equipment, and land.
Fixed asset cost fluctuates with time due to factors like price alterations, changes in duties, and exchange alterations. Fixed asset cost includes the asset acquisition price, which includes levies, non-refundable taxes, import duties, and other directly attributable cost of bringing the asset to its functioning condition. Examples of attributable cost are professional fees, installation cost, site preparation, and initial handling and delivery costs. However, any refunds and discounts are subtracted from the assets’ cost. If a fixed is obtained by use of another asset, determination of its cost is usually by reference to the fair market. Also, when a fixed asset is obtained in exchange for company’s share or other securities, then it must be documented at fair market value of the securities given, or the assets’ its fair market value.
Fixed asset is under finance department. The department role in an organization is to use, maintain, and protect all the business’s fixed assets. The managers classify and register all fixed assets and controlled items in the suitable asset management system. In addition, cost by funding source should be recorded with each asset record. Capital leases, donations, constructions, improvements, purchases, eminent domain, and annexation are fixed assets that must be recorded regardless of the type of procurement. The managers are also accountable for transferring and receiving of fixed assets. Furthermore, the managers will identify and record fixed assets that are removed from service, retired, and disposed of. Retired assets are all assets that are exchanged, sold, stolen, cannibalized, and worn beyond utilization hence removed from service (Edinburg Consolidated Independent School District, 2015).
Fixed assets are vital in the presentation of organization financial position since they encompass a substantial percentage of the total asset of a business. Accuracy in controlling depreciating and tracking fixed assets is important for any organization. Therefore, it is paramount for businesses to put in place solutions that offer inclusive depreciation calculations, thorough asset inventory tracking and reconciliation, and easy personalized reporting (ECISD, 2015).
Microsoft Dynamics GP, Fixed assets
Microsoft Dynamic GP has Fixed Asset Management module integrated in it that has various features and tools. The module aids managers to deploy, analyze, and track fixed assets to meet precise requirements of a business (Pitcher, 2014).
1. Easy Asset Setup
Managers are able to create and manage copious number of books of asset for businesses; federal tax, alternative minimum tax, and corporate tax are also easy to manage.
2. Intuitive interface
One can easily access critical information like fixed asset maintenance, lease, book, and insure using intuitive graphical user interface.
3. Customized setup
Managers can use the module to personalize information to meet the customers and business needs. One can hide or display fields, set defaults and format information. Moreover, managers can add up to 15 user-defined fields to control specific information of a company (Pitcher, 2014).
4. Asset Tracking
The module has the capability of tracking inclusive data on fixed assets using asset component like asset suffix or ID number.
5. Asset classes
Managers are able to set defaults for set of fixed assets. Additionally, characteristics like asset retirement and depreciation for numerous assets can be set at one time (Pitcher, 2014).
6. Averaging Convections
According to Pitcher (2014), Businesses can manage assets using averaging convections. Assets can be averaged to full year, full month, mid quarter and half year.
7. Depreciation Management
The module provides various deprecation methods like amortization, remaining life, and straight line, which are used in predicting depreciation expenses for monetary work. Data entry accuracy and speedy can be enhanced by setting up Class ID’s (Pitcher, 2014).
8. Asset Review
Managers can view and evaluate detailed information on user data, lease, insurance, and asset account.
9. Reporting
Users are enabled to share data using various standard reports like inventory list, asset retirement, property transfer, and depreciation ledgers. Users can also create personalized reports using Reporter Writer, Crystal Reports, and SmartLists (Pitcher, 2014).
10. Property management
Reconciliation of physical location of an asset to the recorded physical location can easily be done using location IDs.
11. Integration
Fixed Asset management tool helps businesses to update their General Ledger and incorporate with asset data from other Microsoft Dynamics GP modules like Payable modules and Purchase Order.
SAP, Fixed Assets
Fixed assets are supervised and managed by the Asset Accounting component incorporated in SAP ECC 6.0 platform. Incorporation of the component in the SAP system results in Asset Accounting transferring information to other Sap components and receives information from other components. For example, managers can pass on information on interest and depreciation directly to other Sap components like Controlling and Financial modules. Asset accounting module has the following features:
1. Traditional asset accounting
Traditional asset accounting entails initial procurement of the fixed asset to its retirement or the asset’s whole lifetime from purchase order. The module calculates the value for depreciation, insurance, and interest between these two periods. It then makes the result available to users in different forms using information system (SAP, n.d.).
2. Processing leased assets
Asset accounting module offers functions for assets under construction and leased assets. One is allowed to use diverse types of valuation in managing values in corresponding currencies (SAP, n.d.).
3. Preparation for consolidation
With these feature, the process of preparing for partnership of multi-national group is simplified.
4. Depreciation component
This module aids in managing automatically calculated depreciation types and those that are manually planned. Managers have the capacity to change depreciation keys and define their way of calculating asset values (SAP, n.d.).
5. Special valuation
Special valuation module helps managers to calculate asset values for particular purposes like insurance contracts (SAP, n.d.).
6. Acquisitions
The procurement of assets is the chief business process of any company. Therefore, acquisition module aids business in handling assets under construction, direct capitalization, and budget monitoring using WBS elements or statistical orders (SAP, n.d.).
7. Information System
Information System Module helps businesses to alter the ASS Accounting Information System to achieve their requirements (SAP, n.d.).
8. Legacy Data Transfer
This feature enhances transfer of present information from a former system, which includes transferring major transactions and records from the beginning of the company’s fiscal year (SAP, n.d.).
The fundamental processes of Asset Accounting are asset acquisition from purchase with vendor, procurement with automatic offsetting, retirement with revenue, asset sale without customer, post-capitalization, writes-ups, assets under construction, depreciation posting run, and depreciation simulation.
Comparison
The similarities between Microsoft gp10 and SAP ECC 6.0 are principally on their features and modules. Both SAP and Microsoft systems target market small and mid-sized businesses. Furthermore, they contain components like manufacturing, project, purchasing, inventory, and financials. SAP and Microsoft are collaborating with one another to improve their application support. For example, SAP is collaborating with Microsoft in order to make use of Microsoft’s office components. The collaboration not only benefits SAP but also improves the public image of both companies. However, the two systems differ in most of their functions.
Table 1: Comparison of systems
|
|
Microsoft GP10 |
SAP ECC 6.0 |
|
Integration with office tools |
Users need minimum training since the setup is very easy to use. Menus pull up immediately when one clicks on a certain functionality. |
In SAP, one needs to understand how the applications work beforehand. Therefore, more training is needed before using the set up. |
|
Creation of functions |
Most information tends to pop up in the first window. Therefore, users will not be required to open other windows or processes to get different information. |
Creation of functions in Microsoft is a systematic procedure. |
|
Reports |
No transitional system is required to export reports to various file types since it transfers directly to MS office |
The system uses crystal reports to transfer files like excel and word. |
|
Market share |
Has a market share of 10 percent and is ranked third globally in software production. |
SAP is more recognized than Microsoft. It has a market share of approximately 20 percent and ranked first in ERP production. |
|
Interface |
The system is customized with task centric proficiencies |
It is very traditional |
|
Financial accounting reporting |
Cubes found in Microsoft SQL server is used to analyze accounting data |
For analytical and reporting utilities to be effectual, ISV tools must be used. |
|
Technical strength |
The modules are easy to personalize to meet the business needs. It is easy to integrate with other tools like office and excel. User interface is easy and more familiar. Its multicurrency and localization competences are robust. Tracking of physical data in financial transactions and inventory is easy aided by dimension of data. Its trade competencies are much easier. |
The system has resilient accounts reporting functionality. Its cash management ability is strong. The system has visible and clear goods in transfer orders. Its accounts reporting functionality is strong. For its analytical and reporting functions to be effective, ISV tools are needed. |
|
Total cost of ownership |
Has lower total cost of ownership. |
Has higher total cost of ownership. |
Interpretation
When researching on Microsoft Dynamics GP and SAP, one thing that was clear is that, the two systems have very similar features and modules. However, the systems functionality extremely differs from one another. According to Stackey (2009), Microsoft Dynamics is ranked third in the ERO market with a market share of 10% while SAP is first with a market share of 20%. Some of the differences between SAP and Microsoft Dynamics GP10 are discussed below in details.
1. Enhanced data analysis
Microsoft Dynamics GP has cubes within Microsoft SQL Server Analysis services that help managers to evaluate information from various perspectives. Furthermore, the system has Excel Report Builder, SmartList Builder, direct integration with SharePoint, and Business Portal that enhances data collaboration and evaluation. SAP depends on ISV solutions to carry out analytic and reporting functions (Stackey, 2009).
2. Works like and with office
Microsoft Dynamics works like office products. It also collaborates with office products like excel and word. Incorporation of the system with office products leads to provision of all-in-one products to users. Furthermore, since users know how to use office products, it will be easy for them to understand Microsoft Dynamic GP (Stackey, 2009). Therefore, less training of users on the software will be required. On the other hand, SAP Company has collaborated with Microsoft Company to develop their amalgamation to office.
3. Role based home pages
Microsoft dynamics GP has the customizable role templates and information views applications. As a result, the users of the system can each get a personalized, task-centric experience. Additionally, the system has role-based home pages that have specific data that is relevant to them saving users a lot energy and time. The application also reorganizes the way data flows in the business, protects information, and enhances efficiency. On the contrary, SAP offers its users a traditional user interface with instant access to all the systems features (Stackey, 2009).
4. Total cost of ownership
The improved Microsoft Dynamic GP functionally leads to the system low cost of ownership while few SAP functionality results in high cost of ownership (Stackey, 2009).
Factors Affecting ERP Implementation
As described earlier, both Oracle ERP and SAP ERP can fulfill the needs of any type of business. However, various factors are to be put in place when implementing an ERP system: cost, nature, or culture of the business, strategy, and interconnectivity.
Costs
Cost is the key factor to be reflected on when one wants to implement a system. Long-term maintenance cost, training cost, licensing cost and execution cost must be reviewed. Execution processes is a tiring and time-consuming process. Additionally, it requires programmers, consultants, and internal work force that need to be included in the budget. Companies frequently search for assistance from external experts when they are having problems with a highly centralized organization structure or lack of experience (Nguyen, 2014). In a highly centralized structure organization, the top management often do not recognize or is not familiar with the real operational process therefore consultants and IT vendors role is to remove knowledge barrier between various level of management within a company.
Consultants can help in information system requirement analysis by assisting companies in making blueprint of their business process from the bottom level until the top management, consultants also can recommend which hardware and software that is most suitable, and assist companies in implementation management. A close working relationship between consultants and companies’ project team can lead to valuable knowledge transfer in both directions. Managers should also budget for licensing that is charged by software companies like Microsoft, SAP, and Oracle. Employees who are supposed to use the system and make any required changes like system upgrade or storing data must be trained. Long-term maintenance cost, which is a percentage of the total cost of the application software, must also be considered. After a certain length of time, the software purchased needs to be upgraded; hence, money is needed to purchase the software again (Gunson, 2014). However, some companies include upgrade in the cost as a way of attracting customers to sign a contract. Since ERP execution and maintenance is quite expensive, manager must first cogitate if they can afford it and if it will be of benefit to the business.
Nature or Culture of a Business
Culture can be defined as the collective programming of the people in an environment and is categorized into consultants, vendors, cultural diversity among sellers, effective communication, and organizational culture. How a company carries out their business and its values is a critical feature to consider when one wants implement ERP system. When two companies implement the exact same ERP package, the results sometimes are different. This is due to the different cultures of the companies. According to Gunson (2014), investigating technical problems and solving the can be carried by computers and experts, but human factors are not easy to be handled only by codes or programs. ERP systems greatly functions on the best practices methodologies of a company. However, if a certain business has obtained a key differentiator or a competitive advantage through their business methodologies, then the best practices methodologies may not work. Therefore, industries have to assess the extent to which personalization of the ERP system will be required to obtain a system that allows the business to maintain their own best practices. Cataclysms may occur during the implementation process if the nature of the business is not put in mind (Gunson, 2014).
Strategy
ERP strategy shows the type of ERP packages to be procured and the length of time the implementation process will take. It includes implementation time and minimum customization.
Implementation time states when and how long the installation process will take. Managers should match with competitors that have already installed the software. However, hastening implementing process may lead to huge and long-term complications. Therefore, each business should put in mind its organizational resources and business repercussions, and make a realistic schedule of execution plan (Gunson, 2014). ERP customization is the configuration of packages by a business to suit its needs. If personalization process is long, implementation process also takes long. Therefore, minimal personalization is required for successful implementation.
Interconnectivity
A business should cogitate on ERP systems that can easily communicate with other systems that the company has. Likewise, ERP system to be implemented should easily be modified or have bolt-on programs added. Several executions do not encompass the full roll out of features found in ERP package. Legacy systems may remain intact, therefore, ERP system would need to be adjusted to feed data into and pull data from the existing systems (Gunson, 2014). Modification may not only increase the implementation cost but also increase upgrade and maintained cost. This is because most software manufactures classically do not encourage customizations.
Conclusion
Microsoft Dynamics GP provides business solutions particularly accounting solutions. The integration of fixed asset management component in the system resulted in various benefits. Companies can now quickly and accurately record, track, analyze, and depreciate its assets with little effort and incredible flexibility using powerful reporting tools and multiple features. Additionally, asset’s applications are easy and quick to set up. Managers can also set classes and accounts group to default and make necessary modifications like depreciation to huge numbers of assets at ago. Getting critical information like purchase, lease, asset maintenance, and book data, that user’s need has been made easy with an intuitive graphical user interface. Furthermore, depreciation process has been made easy with the provision of 16 deprecation methods. The methods can be used to recalculate deprecation, add additional deprecation, back depreciation out, or project it ahead. Finally, fixed assets management component can be combined with other Microsoft Dynamics GP modules leading to accuracy of data while at the same time decreasing redundant data entry. The Asset Accounting module is used to manage and supervise fixed assets with the SAP ECC 6.0 system. The module serves as a subsidiary ledger to the General Ledger hence offering detailed data on transactions involved fixed assets. Benefits of Asset Accounting to a business are to calculate values for depreciation and interest. Moreover, the module provides deprecation forecast. The component provides information on the whole lifetime of the asset from purchase order or the initial procurement through its retirement.
SAP ECC 6.0 and Microsoft Dynamics GP have similarities in their modules, which entail finance, manufacturing, inventory, purchasing, and many more. Their major differences are in their functionalities. Major factors that businesses should consider before implementing a certain ERP system is interconnectivity, ERP strategy, culture of the business and cost. While the discussed factors in this paper do not encompass a comprehensive list, they are the greatest imperative factors that a business manager should put in mind when implementing an ERP system.
References
Edinburg Consolidated Independent School District (ECISD). (2015). Fixed Assets Department. Edinburg Consolidated Independent School District. Retrieved from http://edinburg.schooldesk.net/Departments/FixedAssetsDepartment/tabid/29452/Default.aspx
Gunson, J. (2014). ERP (Enterprise Resource Planning) implementation key success factors. Saarbrücken: Scholars' Press.
Microsoft. (2011). Facts about Microsoft. Microsoft. Retrieved from
http://www.microsoft.com/presspass/inside_ms.mspx
Nguyen, I. (2014, August 27). Quality for ERP Oracle Process Manufacturing. Training and Consulting ICT. Retrieved from http://ictroi.net/quality-for-erp-oracle-process-manufacturing/
Pitcher, D. (2014). Dynamics GP Fixed Assets. Microsoft Dynamics GP Community. Retrieved from https://community.dynamics.com/gp/b/gprosesolutions/archive/2012/01/10/dynamics-gp-fixed-assets
SAP. (n.d.). Legacy Data Transfer - Asset Accounting (FI-AA). SAP Library. Retrieved from http://help.sap.com/saphelp_46c/helpdata/en/01/dfd83705c0c931e10000009b38f842/content.htm
Stankey, J. (2009, October 28). Looking Beyond Features to Functionality: Microsoft Dynamics GP vs. SAP Business One. Socius. Retrieved from http://www.socius1.com/looking-beyond-features-to-functionality-microsoft-dynamics-gp-vs-sap-business-one/
Appendix
Fixed Assets Lifecycle (Edinburg I.S.D., 2015).
General Asset Information Window
SAP
Microsoft
Creating Multiple Units of Inventory
SAP
Microsoft
Depreciation Process Information
Microsoft
SAP
