The Role and Importance of the SAP Software System in Supply Chain Management and Cost Accounting

Topics: Cost Accounting

Work related processes can be a big challenge for business organizations particularly in ensuring the efficiency of the various operations within the company. The previously used methods such as direct recording of data such as the pen and paper method or the excel sheet application have exhibited numerous flaws with respect to efficiency of operations. In this regards, the SAP system will ensure that the company’s processes are run in the effective way particularly in ensuring correct handling of the necessities provided by the company to the employees.

In addition to this, the new system will help in the management of other company’s undertakings such as financial management, cost accounting, production management and in general ease the process of managing human resource.

In the implementation of any business strategy or idea, strategic management is very important. This process focuses on specifying the objectives of an organization, developing policies and plans to achieve these objectives and allocating resources in order to facilitate implementation of plans.

In this regards, it is a fundamental fact that the company must evaluate the objectives or the benefits that come along with adopting the new System software (SAP). From the article on strategic management we learn that the overall corporate strategy has one objective of putting the organization into a position of carrying out its mission efficiently and effectively. An effective corporate strategy therefore has realistic goals that are achievable within the set timeframe and those that will impact positively on the business. A new System software (SAP) will therefore be required to reduce the overall cost incurred by the company due to loss of the essentials provided to the personnel.

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Moreover, the company will generally acquire competitive advantage over rival companies operating in the same industry.

The article on supply chain management details out the importance of a well structured supply chain. This is with respect to the fact that supply chain can either be simple or complex in nature depending on both internal and external factors affecting a business. The adoption of new technology whether directly or indirectly into the supply chain will undoubtedly increase the efficiency of the supply chain. In this case, despite the fact that the new System software is not directly related to the supplies department, the efficiency that will come as a result of adopting the technology will spill over to the other departments of the company. Keeping in mind that the subject company is an oil company that is in the industry that is mostly associated with pollution, the adoption of this new system will enhance recycling of products and therefore increase customer’s loyalty and recognition for the efforts put to conserve the environment.

The article on the core competence of the corporation sets to analyze the components of core competencies going by the fact that diversified companies that have dominated on the market have always considered themselves as portfolios of core competencies in order to create a unique, integrated system and technological skills that cannot be copied by the competitors. In addition, companies only try to develop the core competencies that help them to acquire competitive advantage over the key players in the industry. This article is very helpful in showing just how proper application of core competencies can impact positively on the business. To ensure a steady growth of a business, a company should discover ways of prevailing in global competition if it identifies, cultivate and exploit the core competencies that will enhance its growth.

In the world today, the main idea behind any business is to make profit. The article on the five competitive forces that shape strategy gives a detailed account on why identifying and exploiting game-changing trends is essential in order to sustain a long-term profitability in a competitive market. The various factors analyzed in the article as the five competitive forces can help a business in understanding the dynamics behind profit or loss making in a company. Before embarking in any organizational strategy, the main question behind the application of a new strategy is whether there is a balance between the costs incurred in the implementation of the strategy and the overall profits from the strategy. In addition, the world is becoming more technology oriented and business organizations are adopting more complex techniques in both the internal and external business environment. It is therefore accurate to state that the new System software (SAP) will put the company in line with technological advances in the business world.

There are various models used in business to shift the balance by placing customers at the helm of the business. The article on the Delta model illustrates the model which places the customer at the centre of management by scrutinizing the available primary options that can establish customer bonding and prescribe ways of linking strategies with execution through the alignment of adaptive processes. Such models are used to help managers to develop business strategies that are easily implementable. In addition, such models place business entities at a better position as compared to rival companies in the same industry. With the implementation of a new System software comes the need to relay business strategy in accordance to the change that is likely to occur as a result of this change. This is the main basis behind the formation of strategic options and why business managers put so much into business operations models.

The article on qualitative case study methodology is meant to provide the researchers with tools for studying complex phenomena within their contexts by using a variety of data sources. This article is destined to guide novice researchers in identifying the key elements that design and implement qualitative case study research projects. With regards to this project, the implementation of a new system or strategy is considered as a part of business risk going by the fact that one cannot guarantee the outcome. However, a well researched on strategy always has a greater percentage of success as compared to what is considered as instant strategies. The System software (SAP) has been very successful in many organizations where it is used to carry out financial management, cost accounting, production management as well as other key business operations.

Al Futtaim Group – SAP Customer Success Story article is a clear indication that the adoption of the System software (SAP) may lead to significant strategic options depending on how the system is applied. The Al Futtaim Company is described to have grown tremendously since its establishment in 1930. The company’s headquarter is based in Dubai, United Arab Emirates. By consolidating its HR practices, AI Futtaim Company has been able to mitigate expenses associated with managing its human resource operations. Moreover, the software has been a great source of motivation to the personnel, since it is efficient. Consequently, the company has registered a significant growth within the few months it has been using the centralized system. This is a clear indication that the effective application of the System software (SAP) will increase the efficiency of the company as well as placing the company in line with global competitors. The article on Renault-Nissan on the other hand displays how the company undertook strategic move of reducing costs across the enterprise by establishing a shared service centre to increase efficiency by managing HR requests. The incorporation of SAP into the company’s strategies helped the company to become one of the global leaders in the automotive industry of today.

All these articles articulate that both the internal and external factors affecting business are very dynamic. It is therefore essential for managers to have a follow up plan and ensure that organizational goals and objectives are achieved at minimal cost and maximum efficiency. These articles are very essential with respect to this project in the sense that it is not just about initiating the System software (SAP), the real challenge lies in the continuous process that requires reassessment and reformation to ensure that the System software achieves the set goals and objectives.

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The Role and Importance of the SAP Software System in Supply Chain Management and Cost Accounting. (2023, Apr 30). Retrieved from

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