19 November 2007
ERP Careers for Chartered Accountants
Article Details : There is a revolution taking place out there, it spans across countries, businesses and organisations, and that revolution is in the use of information as a tool to run businesses and to win over competitors. The need for information has always been there, but with the abundance of data available everywhere, need for availability of right and timely information could not be overemphasised. It is being increasingly and widely recognised that the 21st century will be the century of Information Technology. When we generally hear the word ‘IT’, the first things which comes to mind is that it is only for engineers. It is a myth that IT is only for technicians. In the IT industry, there are a lot of opportunities not only for technicians and engineers, but also for functional consultants and business analysts. We as Chartered Accountants consider ‘IT’ outside our domain expertise of finance, audit and tax. But friends, can we survive in this ‘Information Age’ without being equipped with proper tools ? Here in this article, I will focus on the emerging opportunities for Chartered Accountants in the field of IT in the Enterprise Resource Planning (ERP). Overview of ERP : Enterprise Resource Planning means software solution that addresses the enterprise needs to take the process view of the organisation to meet the organisational goals tightly integrating all functions of an enterprise. A more technical definition of an ERP system is an integrated solution, sharing a centralised database with all ‘users’ . . . . Human Resources/Payroll/Benefits, e-procurement, Accounting, Budgets, etc. . . . . being served by the same database through one point of entry. Data need only be entered or updated once, reducing errors, time and labour for reports, analysis, planning and program management. The basic goal and idea behind ERP is customer-focused, dynamically balanced enterprise through asset optimisation and real-time transaction processing. Ultimately, time and resources are shifted to innovating, problem solving and direct service to customers. With the ERP, organisations can streamline their functions, consolidate data management, or can venture in e-business activities. Management concepts like JIT or ‘just in time’ have been made possible only with the implementation of supply chain management which is a part of ERP. Production department can plan the manufacturing schedule through computer on their shop floor and materials department can check the status of raw material. Sales office, which might be located miles away from the works, is also linked through computer with the material, design or production departments. Similarly, accounts as well as warehouse are also linked with others for speedy transfer of data from manufacturing shop to sales depot. The key consideration while going in for an ERP solution is that it involves a huge investment, not only in terms of money, but also the time of senior management. Therefore, the key factors for a successful implementation are Return on Investment (ROI), process improvements and better reporting. The various benefits of deploying ERP are : • System Integration — Facilitates process standardisation and best industry practices. • Data Integration — Single-source data facilitating easy and correct access of information. • Saves enormous time and effort in data entry and report production. • Through web access, allows statutory authorities, investors, directors, managers and employees to view information in time. • Links the finance system to budget, payroll, accounting, personnel departments, allowing nearly instant data exchange and ensuring such information and is uniform across the board. • Provides easy access to trend data — financial information from years past is quickly combined and is up-to-date. • Empowers departments to more closely measure program performance and results. • Significant paper and postage cost reduction as part of the yearly savings. • What-If-Analysis — Improved planning and analysis. Wherever applied duly, ERP has been able to considerably reduce the response time by transferring information swiftly all over the organisation. It has worked wonders by totally transforming the business activities in several companies. The major focus is on customer satisfaction through improved performance. Some other benefits of implementing ERP packages are that, it helps in reducing inventory cost by better communication between vendors, purchase and material departments. It also provides control over business operations by faster communication between customer, marketing and production departments. All this helps in increased productivity at lesser cost, thus raising the profit margins. Manufacturing software systems have evolved in functionality over the years. The early systems were designated MRP (Manufacturing Resource Planning) systems. MRP systems had basic functionality for inventory control, bill of material processing and elementary scheduling. As more scheduling functionality was added, newer software generations were called MRP II. MRP II systems were eventually replaced with ERP (Enterprise Resource Planning) systems which added more applications like order processing, project management, maintenance, human resources, Customer Relationship Management (CRM) and Supply Chain Management (SCM). Today, no manufacturing software vendor would designate his system as anything other than an ERP system. Major Players and Services : The big players are SAP, Oracle, PeopleSoft, JD Edward and Baan. The market is consolidating with SSA Global taking over Baan, then PeopleSoft taking over JD Edward and now recently Oracle acquired PeopleSoft in a hostile bid. Oracle CEO Lary Elison has already announced big launch of Oracle Fusion in 2008, which will incorporate features of PeopleSoft. The Indian product Ramco is also doing very well and making its place globally. There is also a huge potential in small and medium enterprise (SME) market and the key players are Microsoft Navision, SSA Global, Lawson and IFS. All the big IT companies are having strategic partnerships and alliances with the product vendors and provide services including implementation, upgrade, testing and support. Chartered Accountants (CAs) are playing a key role as functional consultants in providing these services. Implementation : Fresh deployment of ERP packages. Methodology discussed later in detail. Upgrades : Moving to new versions of ERP having new and improved functionalities. Support : Post-implementation maintenance of ERP. Most of the global support projects are 24 x 7 supports and highly customer oriented. Testing : Verifying the behavior of the system in various business scenarios in a test environment and includes integration testing. Product Development : Product vendor companies like SAP and Oracle continuously work on enhancing the functionalities of the product on the basis of feedback about new requirements from the consulting companies and customers. It also includes localisation features catering to local requirements of different countries. The updated versions of the products are released in the market after sufficient testing. Due to cost efficiencies, most of the projects now work on an Onsite-Offshore Model which is designed keeping in view the requirements of the project. Basically the Onsite team works from the client’s place for requirement gathering, whereas the offshore team supports them from India. Roles of CAs : There has been a steady increase in the demand for skilled ERP contract consultants to augment an ERP implementation at the company site. A functional consultant is an expert in a functional area of the business. The consultant’s role entails analysis of business requirements, mapping data from existing systems to the new system, fit gap analysis, data conversion and testing and building and reviewing prototypes. A technical consultant, on the other hand, is responsible for any customisations that involve code revision and changes, generating customised reports, developing interfaces and upgrades. To be a functional consultant, a candidate should have experience in functional areas like human resources, financial management, sales and distribution or manufacturing. With the emergence of the ERP functional consultant, established professionals such as Chartered Accountants, Cost and Management Accountants and Company Secretaries have also begun to invest considerable time and money on ERP training. People with the right technical and functional background are very highly paid, and as a techno-functional consultant, it has bright career prospects. Quite a large number of CAs are making a significant mark and success in ERP career for last many years. Chartered Accountants with good industry experience are preferred for their business understanding. Every year many IT companies like TCS, Infosys and Satyam are recruiting fresh CAs from the Institute (ICAI) campus. In fact, they are the biggest recruiters in past few years. The CAs are hired as functional consultants for financial domain of ERP because of their expertise in Accounts and Finance. They are given cross-functional training on the product including financials and supply chain. CAs have proved themselves in IT over a period of time and have become indispensable part in this industry. As a functional consultant, CAs are continuously adding value in organisations with the use of their expertise in finance. An example can be taken of Oracle E-Business Suite which has following financial modules : General Ledger : Central Repository, Organisation Structure, Global Consolidation. Accounts Receivables : Revenue recognition and Credit Management. Accounts Payable : Supplier payment efficiency. Fixed Assets : Asset Management. Cash Management and Treasury : Cash Flow Analysis and Forecasting. Internal Control Manager : SOX and Corporate Governance Compliance. Enterprise Planning and Budgeting : Flexible Budgeting requirements and what-if analysis. I Expenses : Allow employees to claim expenses through Web. Broadly, there are two business cycles in ERP i.e., Quote to Cash (Q to C) and Procure to Pay (P to P). Q to C starts with sending a quote to the customer, then getting order, invoicing and then finally receiving the amount. Whereas P to P starts with sending request for quotations to the supplier, then finalising PO, receiving invoice and finally, making the payment. Basically, a CA’s role is to study and understand the business processes and financial structure and design the most appropriate solution adhering to the regulations, compliances and reporting requirement. As a business consultant, he studies an organisation’s current business processes and matches them to the corresponding processes in the ERP system, thus ‘configuring’ the ERP system to the organisation’s needs. CA’s role spans throughout the lifecycle of implementation which includes stages like current business process study, solution design, solution build, data migration, user training and post-production support. We will now discuss each of the steps involved in more detail : Initiation and Internal Planning : Defining the scope of the project. Deliverables for this phase include a general outline of the implementation schedule and basic project milestones. Business Process Analysis : Studying the existing process and identifying key business areas. It includes understanding and documentation of process workflows and identifying the areas for automation. Now workflow technology has matured; it is the process itself that is automated. A work item or data set is created, and is processed and changed in stages at a number of processing points to meet business goals. Most workflow engines can now handle very complex series of processes. Any condition that can be expressed mathematically can be managed by a workflow system. Solution Design : Details how the product and processes will be aligned to achieve the desired objectives. It involves iterative process re-engineering and finalising the future business processes. Solution Build : The goal of this phase is to build, test, assess, and refine the initial prototype. The deliverable for this phase is a prototype demonstration for the executive sponsor, steering committee and key users. Acceptance Testing : The Company’s core team receives a greater degree of training in the software’s architecture and technology, capabilities, maintenance, and usage. Transition : Once the prototype has been refined and accepted, it’s expanded and built to full production scale. Documentation also plays an important role for smooth transition of the new system and maintaining the same in future. Most of the companies follow standard policies of documentation generally outlined by the ERP vendors. A good and detailed documentation helps in a great way in successful implementation and streamlining the processes. CAs are also playing an active role in pre-sales activities and helping the companies to choose the right ERP vendor for them. Skill required : Because of the consulting profile, it requires much more than good academic knowledge and domain experience. • Soft skills : Good communication, presentation skills, Persuasive skills. • Analytical skills : High degree of analytical, problem-solving skills, creative thinking, questioning the status quo. • Team skills : Relationships skills, cooperation, networking, handling disagreement. • Project management skills : Organising and prioritising work. • Customer orientation : Commitment for customer satisfaction. • Fast learners : Require quick grasping of product functionalities, processes of different industries and continuous updating with new technologies. ERP as a Career : Enterprise Resource Planning is the new wave for a challenging and lucrative career in the high-tech industry. ERP is also a highly remunerating career. This is a unique opportunity for CAs who are not inclined towards more conservative profiles like accounts, audit or banking and are looking for a career in consulting. As accounting profession is getting complicated and sensitive, this field gives you technical edge over others. It also improves the overall business understanding of various industries and also develops you for business consulting types of profiles. The project assignments require consultants to travel frequently, both domestically as well as internationally. Companies in India are providing ERP services all across the globe covering US, Europe and Asia pacific. The savings involved are also tremendous in onsite opportunities and such opportunities are available in plenty. Career in ERP is a truly global career because there is large demand for ERP professionals all over the world and this scenario is expected to increase as more and more companies are coming on ERP. In summary, a dream career is perhaps possible for all hard-working individuals, but when it comes to success, there are no short cuts. This is especially true in the highly vibrant ERP market.
19 November 2007
SYSTEMS APPLICATION PROTOCAL -SAP- AS APTLY DESCRIBED ABOVE BY OUR SRI SAMPAT JAIN IS A TOOL OF ERP. CAs CAN PLAY TREMENDIUS ROLE IN THIS AREA WITH THEIR FINANCE BACK GROUND. FICO -MODULE IS BEST FOR CAs,DEALING WITH FINANCE TOOLS. SIEMENS INSTITUTE OFFERS SAP FOR CAs WITH ASSURED PLACEMENT. one OF MY CA COLLEAGUE DID SIEMNS SAP FOR RS. 2 TO RS. 2. 5 LAKHS THAT WAS 3 YEARS BACK.HE GOT WONDERFUL PLACEMENT.THE COURSE COST RECOVERED IN LESS THAN 8 MONTHS BY HIM AFTER PLACEMENT. THERE ARE INSTITUTES WHO OFFER ERP AND SAP, BAAN,JDEDWARDS ORACLE FIN.11i FOR LESSER AMOUNTS . BUT THEY DONT GIVE ANY CERTIFICATE AND DONT HAVE RECOGNITION OR ACCREDITATION . BETTER DO SAP WITH SIEMENS LIKE RECOGNISED INSTITUTES , YOU GET CERTIFICATE AND PLACEMENT. R.V.RAO
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