ERP AND

SAP
Assignment #1

Submitted by: Talha Tayyab

I.D:

14555

Q) What is an ERP?
Enterprise resource planning (ERP) is business management software,
typically a group of integrated applications; that a company can use to
collect, store, manage and interpret data from many business activities,
including: Product planning, cost Manufacturing or service delivery
Marketing and sale Inventory management Shipping and payment.
ERP systems track business resources; cash, raw materials, production
capacity; and the status of business commitments: orders, purchase orders,
and payroll. ERP facilitates information flow between all business functions,
and manages connections to outside stakeholders.

Q) What is SAP?

Systems Applications Products audit is an audit of a computer system

from SAP to check its security and data integrity. SAP is the acronym for
Systems, Applications, and Products. It is a system that provides users with a
soft real-time business application. It contains a user interface and is
considered extremely flexible. In an SAP audit the two main areas of concern
are security and data integrity.
It allows businesses to track customer and business interactions. SAP is
especially well-known for its Enterprise Resource Planning (ERP) and data
management programs.

Q) ERP in an Organization?
Enterprise Resource Planning (ERP) is the latest high end software solution,
Information Technology has lent to the world of business application. An ERP
software solution seeks to streamline and integrate operations, processes
and information flows in an enterprise, to synergize the resources of an
organization namely men, material, money and machine.

In other words, ERP systems integrate all data and processes of an

organization into a unified system.

A typical ERP will use multiple components of computer software and

hardware to achieve the integration. A key ingredient of most ERP
systems is the use of a unified database to store data for the various
system modules.

The finance tools allow companies to successfully maintain their

financial information like that of the assets, accounts, budgets and
cash. ERP can also assist a company in managing internal as well as
external factors affecting it.

Enterprise Resource Planning is instrumental in getting rid of time

consuming activities as paper management. A company is able to
study their processes, earnings, and performance by merging their
operational information with their financial information.

In addition to finance and business processes, it is also important to

look at materials maintenance. Enterprise Resource Planning will allow
a company to successfully automate the process of buying materials
and maintaining them.

It also becomes possible for a company to predict the demand of the

market based on history, economic statistics, and data from their
employees. They can even decide when a product should be produced,
and they can do this based on the raw material that is available.

Q) Pros and Cons of ERP?

Advantages:
1. ERP systems have many software components included within it which
helps in forecasting data. Forecasting cant be done more efficiently
with other software. Since ERP includes many software which tracks
past history of information, forecasting is done in simple way. This also
helps in efficiently managing the inventory and thus the productivity of
the company increases automatically.
2. Different business units should have proper communication. Proper
communication ensures good productivity and efficiency. ERP software

acts as a medium through which proper communication is made

between the business units.
3. Using ERP helps in making design engineering better. It helps in
shaping the product better.
4. Tracking the order and fulfilling the customer needs is also a main task
of the company. ERP provides this service with simple user interfaces.
Orders are tracked efficiently and delivery is also monitored for the
fulfillment of the customer.
5. ERP tracks every financial data starting from the invoice to the cash
receipts. So, using ERP software makes it easier to track the revenue
cycle.
6. The inter dependencies between the different materials in the process
of making the product can be best managed by ERP.
7. Matching of costs of the product, inventory and order purchasing can
be easily managed by ERP.

Disadvantages:
One of the common problems which ERP implemented companies now face
are the inadequate funding required in providing training for using the ERP.
Other than these, some of its disadvantages are discussed here:
1. The customizations options available in the ERP software are limited.
2. ERP systems are expensive.
3. After implementation, migration of the system might become
expensive.
4. Sensitive information regarding a company cant be shared efficiently
with ERP.