ERP System Read Case Study 12-22 Mar-Bal’s New ERP System (Analyzing an ERP Study and Implementation) on p. 383 in Core Concepts of Accounting Information

ERP System Read Case Study 12-22 Mar-Bal’s New ERP System (Analyzing an ERP Study and Implementation) on p. 383 in Core Concepts of Accounting Information Systems.

Write a 90- to 175-word response for each of the four questions.

12-22. Mar-Bal’s New ERP System (Analyzing an ERP Study and Implementation)

Access the full case story of Mar-Bal Company (the AIS-at-Work for this chapter) at Then, respond to each of the following requirements:


Review the items in Figure 12-10, (attached) which lists indicators that a company may need a new or upgraded processing system. For each item, provide a specific example from the case description. If the case does not address a particular item or it does not seem to apply, simply state “NA.”
Review the items listed in Figure 12-9, (attached) which lists possible measures of the value of an ERP. For each item, provide a specific example from the case description. If the case does not address a particular item or it does not seem to apply, simply state “NA.”
What are some of the intangible benefits Mar-Bal appears to enjoy from its new ERP system? Create a list with brief explanations.
Mal-Bar’s case does not explicitly address the issue of business process engineering (BPR) that often happens when organizations install new ERP systems. Would you guess that none took place, or would you argue the opposite? Defend your answer. FIGURE 12-10 Indicators that a company needs a new (or upgraded) AIS.
When a business owner or manager recognizes that it is time to purchase new (or more powerful)
software, the next question is, “Which software should I select?” Here are some ideas.
Selecting the Right Accounting Software
Shopping-mall software retailers rarely sell mid-range or high-end accounting software packages.
Instead, business owners and managers working in larger firms are more likely to purchase them from a
value-added reseller (VAR) or a qualified installer. These companies or individuals make special
arrangements with software vendors to sell their programs. They also provide buyers with services such
as installation, customization, and training—services necessitated by the complexity of the software. A
VAR offers a broader array of services for more software programs than a qualified installer.
The approach to buying accounting software varies with the complexity of the business and the
software. For small businesses, the selection process is obviously much quicker and less expensive than
when a big company needs an ERP system. Chapter 6 elaborates on this selection process and discusses
some tools available to help make such decisions.
Large organizations with specialized processing needs may decide to build a customized AIS from
scratch. While custom systems are difficult and expensive to develop, they are becoming less expensive
with advances in object-oriented programming, client/server computing, and database technology.
Custom systems are often more costly and take longer to develop than management anticipates, which
is why most firms retain consultants to help with the selection and implementation of AISs.
Today’s accounting software is easy to use and feature-rich. Consultants usually find that packaged
software can handle about 80% of a client’s processing needs. A company can ignore the other 20%,
meet its needs with other vendor software, or develop its own modules to complete its system. Internet
research and discussions with other business owners in a similar industry may be enough to help a
business owner select a software package. Three helpful Internet sites are (1), (2), and (3), each of which lists important software features,
describes these items in detail, and allows individuals to compare software packages. These sites also
offer software demos, make software recommendations, and provide detailed online software reviews.
Finally, because ERP systems can cost millions of dollars and take years to fully implement, it is always
advisable to get the help of an expert when choosing one. Consultants can conduct a thorough analysis
of an organization’s needs and determine which software vendor has the best solution and what
customization the buyer might need. Companies should know that some consultants are independent,
some work for specific vendors, and some are professionals who work in IT consulting firms or are
specialists within large accounting firms. The best way to choose a consultant is to look for someone
who has experience with your industry and who is familiar with more than one package. As you would
expect, vendor consultants are unlikely to suggest solutions other than the ones offered by their
FIGURE 12-9 Methodology for measuring the value of an ERP.
12.4 Selecting A Software Package
An organization has many choices when selecting accounting information systems. In this section we
briefly discuss how managers and owners can recognize when they might benefit from a new system
and how they might go about selecting one. Chapter 6 describes the general processes of developing
new systems and selecting hardware and software in more detail.
When Is a New AIS Needed?
Believe it or not, many small businesses still keep their accounting records in a shoebox, filing cabinet, or
similar storage, and their “accounting system” is really their tax preparer. But manual accounting
systems do not allow business owners to analyze their data very much, guard against input or clerical
errors, automatically generate financial statements or operating reports, or identify trends or
opportunities to reduce costs or increase sales. For such businesses, a computerized system has much
For those already using computerized AISs, there are many signals to business owners or managers that
a new accounting software package, or an upgrade in software, might be a good idea. One example
might be new regulations or legislation that requires new reporting documents. Another reason might
be the need to comply with new rules or laws. A third reason might be pressures from competitors.
Figure 12-10 lists 10 such signals.
Late payment of vendor invoices, which means late fees and lost cash discounts.
Late deliveries to customers.
Growth in inventories, accompanied by an increase in stockouts.
Slowdown in inventory turnover.
Increased time in collecting receivables.
Late periodic reports.
Increasing length of time to close out books at the end of a period.
Managers concerned about cash flows and financial picture of organization.
Manager complaints about lack of information needed for decision-making.
Owner worries about cash flows, taxes, and profitability.

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