Foreign Literature

The term ERP was coined by the Gartner Group in 1990, although the philosophy of ERP preexisted in many MRP II implementation cases. The first synthetic E stems from the word
Enterprise to underline that this new kind of software applies to all the departments of a
company, thus it is an enterprise-wide solution. Before the advent of ERP systems, every
department in a company had its own, customized computer system. Subsequently,
communication problems between departments had been pretty common. Gaps and differences
in the data of the departments had been resulting in inaccuracies, especially in the field of sales
forecasting. The need for integration had been more than evident.
According to Behl (2009), ERP systems, as introduced by Gartner, have three main properties:
hey are multifunctional. ERP systems treat a number of activities such as manufacturing and
human resources, sales, procurement, financial results, etc. They favor integration by nature.
For instance, when theprocurement department places an order, data in the financial department
will be updated automatically. They are structured modularly and can be used in parts (modules)
or resoundingly.
As market leader in enterprise application software, SAP helps companies of all sizes and
industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile
device SAP empowers people and organizations to work together more efficiently and use
business insight more effectively to stay ahead of the competition. SAP applications and services
enable more than 109,000 customers to operate profitably, adapt continuously, and grow
sustainably (SAP News 2011)

The financial benefits provided by an ERP system can be difficult to calculate because
sometimes ERP increases revenue and decreases expenses in ways that are difficult to measure.
In addition, some changes take place over such a long period of time that they are difficult to
track. Finally, the old information system may not be able to provide good data on the
performance of the company before the ERP implementation, making comparison difficult. Still,
the return on an ERP investment can be measured and interpreted in many ways: Because ERP
eliminates redundant effort and duplicated data, it can generate savings in operations expense.
And because an ERP system can help a company produce goods and services more quickly, more
sales can be generated every month. In some instances, a company that does not implement an
ERP system might be forced out of business by competitors that have an ERP systemhow do
you calculate the monetary advantage of remaining in business? A smoothly running ERP
system can save a companys personnel, suppliers, distributors, and customers much frustration
a benefit that is real, but difficult to quantify. Because both cost savings and increased
revenue occur over many years, it is difficult to put an exact dollar figure to the amount accrued
from the original ERP investment. Because ERP implementations take time, there may be other
business factors affecting the companys costs and profitability, making it difficult to isolate the
impact of the ERP system alone. ERP systems provide real-time data, allowing companies to
improve external customer communications, which can improve customer relationships and
increase sales.
SAPs goal was to develop a standard software product that could be configured to meet the
needs of each company. According to founder Dietmar Hopp, SAPs concept from the beginning
was to set standards in information technology. In addition, the founders wanted data in real

time, and they wanted users to work on a computer screen rather than with voluminous printed
output (Monk & Wagner 2013).
Sad reality is that for almost every business, version-lock is the Achilles heel of their onpremise ERP. Customizations to an ERP that seemed so innocuous at the beginning of an
implementation years ago have built up over time like silicon plaque. Gradually, your ERP
becomes hardened to change because an upgrade to on-premise technology means reimplementing and testing those custom schema changes, integrations, workflows and reports.
Faced with outsized risk, cost and resource requirements for what may seem like an incremental
upgrade, your company can be effectively forced into version-lock, with an aging ERP system
thats increasingly out of alignment with the needs of the business. Your users begin working
around your system with unproductive manual processes and spreadsheets to fill in the functional
gaps that have grown over time. With businesses already spending an average of 5 percent of
their revenue on IT operating and capital budgets, theres little appetite to further erode margin
by growing the IT budget without delivering sustained transformational value and real
competitive advantage.
Does running an aging, out-of-date ERP really damage your business? Does it matter if your
ERP is version-locked? After all, isnt it simply automating the same old accounting processes
that havent changed in decades? The reality is that the damage is real, and while your ERP has
your business stuck in quicksand, your competitors are not standing still. Your business needs
ERP that supports real transformation, and that outdated ERP system youre running simply isnt
aligned with the business environment in which you and your competitors operate (NetSuite
2015).

Local Literature
Developing a technology for the companies/countries productivity should be the main concern of
the developer. As stated, the state shall give priority to research and development, invention,
innovation, and their utilization; and to science and technology education, training, and services.
It shall support indigenous, appropriate, and self-reliant scientific and technological capabilities,
and their application to the country's productive systems and national life (Article XIV Section
10, Science and Technology, 1986).
Innovation of technologies to all potential sources must benefit not only the company but also
the country. According to Article XIV Section 12, Science and Technology, (1986), The State
shall regulate the transfer and promote the adaptation of technology from all sources for the
national benefit. It shall encourage the widest participation of private groups, local governments,
and community-based organizations in the generation and utilization of skill and expertise.

According to Aquino (2005), importance of computer application is increasing day by day. In the
latest decades of the millennium winning organization are those which are willing to integrate
business strategy and computer information technology in plying their respective trades. The use
of computer information technology results for them to be able to develop products fast and
make decisions fast, ability to have fluid organizations structures, able to cope with the
demanding work force and external environment by the rapid development of innovative
approaches and lastly using information system confirms the companys mission vision.

Schools use information systems in the way of implementing and enrollment system. This results
for them to attract enrollees and earn an income. Enrollees are attracted because the use of the
said system makes the transaction faster and easier.
Technology innovation had influenced mans work from data processing, business transaction,
research, planning, monitoring and even in medical operation on human anatomy are now
entrusted to computer technology. Web applications are popular due to ubiquity of its
applications.
The ability to update and maintain web applications without distributing and installing software
on potentially thousands of client computers are key reasons for its popularity. A significant
advantage of building web applications to support a standard browser feature is the ability to
perform as specified, regardless of the operating system installed on a given client (Bacala &
Reanno, 2009).
According to the Republic Act No. 10175 known as the Cybercrime Law (2012); The State
recognizes the importance of providing an environment conducive to the development,
acceleration, and rational application and exploitation of information and communications
technology (ICT) to attain free, easy, and intelligible access to exchange and/or delivery of
information; and the need to protect and safeguard the integrity of computer, computer and
communications systems, networks, and databases, and the confidentiality, integrity, and
availability of information and data stored therein, from all forms of misuse, abuse, and illegal
access by making punishable under the law such conduct or conducts.

FOREIGN STUDIES

According to the study of Yingyu Wang (2013), there are many positive impacts of
SAP on management accounting. To start with, the SAP system changed the original
management and improved the integration, cooperation between different
departments. The purchasing, logistics and sales departments are linking together,
working at the same platform. This characteristic removes much manual work which
should be done by management accountants. Once the data is input into the system by
first-line employees, it will automatically transfer to every process throughout the
business. In the transformation, the data keeps consistency and acquirable by staffs.
From another perspective, this function guarantees the accuracy and transparency of
data and provides more reliable information for management accountants.
https://publications.theseus.fi/bitstream/handle/10024/58320/Wang%20_Yingyu.pdf?
sequence=1
In study made by Xun Liu (2013), the users of SAP application today do know how to
use it. When introducing any whole new and ambitious graphic interfaces to the users,
the acceptance of theirs must be taken a serious consideration. Transforming the
interface step by step seems to be a better approach. And the user should be given the
right to choose as well.
Applying a usability project to a system like SAP is a massive work. It will take a
very long period to harvest. The next phase for this project is to involve a small group
of end user testing the new technologies. A clear communication with SAP AG is
necessary.
http://www.diva-portal.org/smash/get/diva2:689215/FULLTEXT01.pdf

SAP ERPs highly integration enables FI module to provide real-time data to

information users and the configurable and based on best practices enable FI module
to provide correct data to Company Vendor Accountings Warehouse Purchase
Function Receives Order Creates purchase order for Vendor in System Shipment to
Cronus Send invoices to Cornus (Vendor Invoice No.555101 ) Receives payment
Receives shipment from vendor Receives Invoice from vendor Creates purchase
invoice with reference invoice No. 555101 Pays vendor invoice Consistent with
receipt & order information? Yes Checking information with warehouse,& purchase
No Records into system 44 information users. Meanwhile the versatile analysis and
reporting tools supported by the SAP information technology present comprehensive
and multidimensional analysis results to users, and SAP FI module provides a
platform to visualize the business transactions in operating layer and results in a
higher transparent and quicker accounting process. Therefore the finding of this thesis
is that SAP FI module optimizes financial accounting performances through
providing precise and real-time data and presenting comprehensive and
multidimensional analysis results to information users and decision-makers
Furthermore, SAP FI module provides competitive advantage for the SAP FI users
through accelerating accounting process (Study of Yu Zhang, 2012).
Zhang, Y. (2012). SAP FI optimizes Financial Accounting Performance. Retrieved
July

12

from

the

world

wide

web.

https://www.scribd.com/document/146615144/SAP-FI
The benets of SAP NetWeaver on SAP customers is believed to be high however
there would be some minor drawbacks. 1 SAP NetWeaver effects on SAP developers

are smaller than on customers as the tools used for the development of new
applications are basically the same with the addition of enriched functionality.

According to SAP specialists the impact of SAP NetWeaver on SAP consultants is the
least among the three analysed business partners. (Studies of Diana Gold Oguzhan
Osman Erim,2009)
Gold, D. & Erim, O. (2009) SAP NetWeaver influence on development of further
SAP business solutions. Unpublished Masteral Thesis. Stochholm University,
Sweden.
According to the study made by Daryna Barsukova (2013), the results of
research showed the variety of attitudes largely dependent on the particular
project experience and interviewees role in it. The methodology is seen as
good framework to work in a structured way. Though, once mastered it goes a
bit to the background. What makes a difference then is a set of other issues
related to change management and project management. Implementation
comes with a stress to the organisation so the client has to be prepared to cope
with extremely complex project.
Consultants share some of attitudes. Namely, all of the respondents are willing to
have enough of competent and devoted people to the project team. Another
requirement for them is to have enough of power to make motivated decisions
quickly and effectively. Train the trainers concept is largely used to the education of
the users where consultants educate super-users and they in turn educate all the rest of
end users. Consultants do seem to avoid system customizations and think that
packaged solution incorporates all necessary functionality. Other attitudes are

different depending on the type of consultant, size and profile of projects they are
working on. The differences are also related to activities that consultant attaches
importance to ranging from communication, change management to active
participation from client and scope control.
Basukova, D. (2013). Implementation of Enterprise Resource Planning Systems:
Point of View of Consultants. Unpublished Undergraduate Thesis. Chalmers
University of Technology, Sweden.
LOCAL STUDIES
Almost all aspects of the SAP utilization have significant influence on the
plants perceived operation efficiency except for production order. There is a
very strong association between transactional process and the plants
perceived operational efficiency. Through simple regression analysis, it is
learned that there is significant influence between perceived operational
efficiency of Holcim Philippines, Davao plant and production, transactional
process, inventory management, work order, and purchasing process. Through
multiple regression analysis, the transactional process alone is the strongest
influencing factor to the plants perceived operational efficiency (Servando
Nudas,2008).
Nudas, S.P. Jr. (2013, February). Utilization of System Application and
Product (SAP) and the perceived Operational Efficiency of Holcim
Philippines, Davao Plant. Unpublished Undergraduate Thesis. University of
Southeastern Philippines, Davao.

Accoding to Flordeliza Poncio (2013), the current setup of the sales and
distribution data are manually posted into both the front-end and back-end
systems that may cause data discrepancies that the systems used are not fully
utilized due to insufficient training to the main SAP users.
Poncio, F.P. (2013, February). Configuration and Implementation of the SAP
ERP ECC 6.0 Sales and Distribution Module of the University of Cordilleras.
Unpublished Masteral Thesis. University of Cordilleras, Central Luzon.
Enterprise resource planning system is a complex and integrated systmen
which management regards as a strategic tool to make improvement. Owing to
its defined processes and integrated nature, organizations are usually required
to make some changes to adopt the systems. The perception of high failure
rate in ERP implementation motivates researchers to study critical success
factors which are expected to help organization implement ERP systems
successfully, although critical success factors in ERP implementation have
been quite well studied. It is still one of the popular topics in the field (Chuen
2010).
Chuen, J. (2010). Critical success factors in enterprise resource planning
system implementation. Unpublished Doctoral Dissertation. Bulacan State
University, Philippines.
It is determined that both SAP ERP and Oracle ERP software provides ease in
adaptation, provides ease in data sharing and the terms of the system are not
complicated.

Based on the respondents perception on features of SAP ERP and Oracle ERP,
the method of data storage can be considered independently of the programs
that access the database. It also ensures integrity constraints are enforced on
the database and takes the ability to swiftly recover from crashes and errors,
including restorability and recoverability. It also helps in accomplishing every
task by integrating the information system and provides accurate, relevant and
timeliness of information. On the other hand, it acquires answer on any query
by its powerful query and filtering facility and provides information updated
and on real time. ( Ecal, Mariano, Millares, Rodrigues, Romblon, 2015)
Ecal, M.J.E ( September, 2015) Magnifying SAP versus Oracle in the
Philippines as perceived by the accounting professionals of Jollibee
Corporation. Unpublished Undergraduate Thesis. Polytechnic University of
the Philippines
According to the study of Salvador & Villamor (2007), ERP can be viewed as
valuable resources that can provide various capabilities to companies that use
it. It can be a source of competitive advantage for a firm. However, the
successful adaptation of ERP, especially in developing countries like
Philippines, will require culture modification within a firm as if involves
revolutionary changes in the way people will be doing things, especially in
developing countries like Philippines. This modification raises some issues
which point to the viability of ERPs use in the Philippine context.

Salvador, D. & Villamor, J. (2007) Computer Allied Instruction for Operating

Systems (OPERASY. Unpublished Undergraduate Thesis. De La Salle
University.
SYNTHESIS
The literature and studies collected and presented in this chapter helped the
researchers in steering the study to a clear direction in the conduct of the research.
The relevant citation helped in the formulation of analyses and interpretation by
confirming facts, concepts and principles.
The research of Mr. Servando Nudas help us check that one way of confirming that
efficiency is an advantage of System application and product software. He also
mention that Almost all aspects of the SAP utilization have significant influence on
the plants perceived operation efficiency except for production order. It helps the
researchers to completely analyse that SAP software supports all aspects.
The researchers also found out that System Application Software is a complex
type. It needs a sufficient time of training, updated systems, and advanced
technology that is appropriate for the SAP software to function effectively.
Daryna Barsukova stated that Consultants share some of attitudes. Namely,
all of the respondents are willing to have enough of competent and devoted
people to the project team. Another requirement for them is to have enough of
power to make motivated decisions quickly and effectively. Therefore, the
researchers conclude that to make the software function well they need to find
a devoted and competent people that is willing to learn the complex software.

The researchers also confirm that having computerized accounting systems brings the
company to have a competitive advantage against other competitors. It is supported
by the statement in the study of Gary Hadler B. Ec the introduction of computerized
accounting systems provide major advantages such as speed and accuracy of
operation, and, perhaps most importantly, the ability to see the real-time state of the
companys financial position.
Implementing system application product (SAP) software makes it more easy to the
management to compile, edit, observe, measure, and analyse the data that are
necessary for the financial statements needed. It also lessens their work due to the
help of the accounting software it is supported by the study of Jojo Balagosa. These
are the advantages according to him.
Elimination of possible human errors
Eliminate the larger store room requirements (to stock the financial documents)
Quick response to their customers (internal and external) In the older hard copy method,
retrieving documents is a daunting task. But with proper organization of files via accounting
software it is just a click away
Efficient and reliable accounting information system for company.