Sie sind auf Seite 1von 8

- 1 -

Case study of
M/s Confused Inc
Delhi
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
- 2 -
You are an employee of a consulting company Consulting Inc and are a member of
the consulting team that is presenting the requirements of the Confused Inc in
the form of prototype to the Confused Inc team.
Depending on this presentation Confused Inc will decide whether to implement
SAP or not?
Procedure
You must organize your project, discuss and decide on the organizational structure
for the Confused Inc and then configure an SAP system.
This should be in two phases.
Phase I: Project Organization/Definition of Enterprise Structure
Phase II: Creation of Business Processes/Prototype Presentation
Phase III: Documentation.
Phase I: As in a real project the aim of Phase I is for you to organize your
team and for the project team members and the Confused Inc
management team, otherwise known as the steering committee, to
reach consensus regarding the organizational structure of the
company. The typical tasks are
a) Setup Project team and structure
b) Define Organizational structure with explanation as to why you
have resorted to the present structure along with the
alternate structures if any including advantages and
disadvantages
c) Wherever necessary make suitable assumptions with
substantiations.
d) Create presentations of the organizational structure.
e) Plan and define Mile stones.
Phase II The case study involves mapping and adapting the business
processes. On the last day of the project you will be presenting the
prototype to the steering committee and then discuss how the
implementation procedure you have selected will work in practice.
a) Update the project plan and document your progress.
b) Make sure that you have a clear view of your project.
c) Think about the integration aspects
d) Describe the problems that were encountered while creating
the prototype.
e) Prepare the presentations to the steering committee.
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
- 3 -
Phase III will require you to deliver the documentation of the implementation
procedure you have selected.
A) Document all the important discussions
B) Configurations
C) Business processes.
Business information on Confused Inc
Confused Inc is a large company that manufactures computers and sells them to
various industry segments like SOHO, Corporate, Educational, and Government.
Their product range includes SERVERS, DESKTOPS, LAPTOPS, and STORAGE
DEVICES. The company also does a strong trading business in ROUTERS, PRINTERS,
SCANNERS and DIGITAL Equipments like web cameras etc...
The head office of the company is located at NOIDA and the plants are located at
PONDICHERY and NOIDA. PONDICHERY produces SERVERS, DESKTOPS where as
LAPTOPS are being manufactured at NOIDA presently. The company is having the
plans to shift the LAPTOPS manufacturing to PONDICHERY and use NOIDA as an
exclusive unit Import trading products like ROUTERS, PRINTERS etc
The CEO of the company Mr. Confused while going through the business needs to
implement internal controls and deliver the financial statements in time to the
respective users entrusted the job to Mr. Still More Confused to evaluate the
options of implementing the ERP in the company.
After code naming the project as Project Confused the committee is
recommended to implement SAP R/3 in their company after evaluating various
ERPs that are available.
Confused Inc having spread its operations to countries like SRILANKA and PAKISTAN
is on the way to open their offices at CHINA and JAPAN basically to trade the
goods that are manufactured at their plants located in INDIA.
The Group currency is INR. The other companies need to maintain the books of
accounts meeting the legislative requirements of the respective countries having
their respective currencies.
The Fiscal year of M/s Confused Inc is April to March for the companies
incorporated in INDIA, PAKISTAN, SRILANKA locations and Calendar year for the
companies incorporated in CHINA & JAPAN. They have a group chart of accounts
which is enclosed here with for your ready reference and country specific chart of
accounts are also provided. The steering committee wants to see the R/3
capability of loading their COA through SCAT. An integrated cost accounting
system must be developed for the entire group.
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
- 4 -
The sales director Mr. Target would like to reorganize the sales organization
keeping in view of the new SAP R/3 Capabilities. Mr. Target wants to evaluate his
business basing on the profitability of each product. He also wants to control his
advertisement and sales promotion expenditure by way of budgets. Basically he
wants the R/3 system flexibility in controlling the expenditure of advertisement on
promoting a particular product. He is also concerned as how to capture the
employee wise performance in terms of sales vs Revenues.
Presently they have four sales regions and the details were given below.
South Headed by Hyderabad
North headed by New Delhi
East Headed by Kholkatta
West Headed by Mumbai
The CEO Mr. Confused decided to monitor the performance of the business starting
from the lowest level to the Highest level (Lowest being Sales Office and the
highest being the Group).
The Products that the company is dealing along with the modes of selling is given
below.
Product Mechanism of Sales
Desktops Direct Sales, Through Distributors
Laptops Direct Sales, Through Distributors
Servers
Only company. However commission will be passed
on to the distributors of the lead materializes
through the distributor
Printers Direct Sales, Through Distributors
Scanners Direct Sales, Through Distributors
Web Cameras Direct Sales, Through Distributors
Digital Equipment Direct Sales, Through Distributors
The finished goods details are
Product Brand
Desktops
Dumb Bean and Bright
Beans (Own Brand)s, HP,
Dell, IBM
Laptops Toshiba, HO, IBM, Dell
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
- 5 -
Servers HP, DELL, IBM
Printers
HP, Cannon, Lexmark
Scanners HP, Cannon
Web Cameras IBM, Logitech
Digital Equipment Transcend, Logitech
Mr. Target wants to have budgets starting from as minute as brand to a higher
level of products and employee wise targets to region wise targets basing on which
the Materials & Finance departments work for an efficient working capital
management.
The Products manufactured under the Bean brand will also get exported,
transferred to other countries/regions.
For an export sale no local taxes were levied and for a stock transfer in the regions
no tax is applicable.
All other sales in all other regions attract uniformly 4% VAT except in Pondicherry
where the tax rate is 0%. Due to the complications involved in the implementation
of CIN version the company is not going to implement CIN immediately. However
they want to set off and VAT input with the VAT out put for their regular
transactions.
They have broadly classified their customers as Domestic, Foreign, and One time
at present.
Sales director wants to capture the information on the targets Vs achievement
from both the distributors as well as from their employees and reward them
accordingly by calculating the commission of 2% on the sale value of the invoices
that were realized/settled in cash by the distributors/customers.
The company Confused Inc is having a strong material procurement division
headed by Mr. Less Confused who procure the material either from the domestic
market or from international market.
You may make reasonable assumption in making a computer along with their
approximate procurement prices. The habit of the company is to arrive at the
standard cost every two months due to the fluctuation in the tech market as well
as in foreign currency.
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
- 6 -
The other materials that are being traded are procured by importing the materials
from Singapore.
The production process for Dumb Bean and Bright Bean is same and the activities
are given below.
Activities needed for a finished Qty of
100 Computers Labor Qty Hours
Collection of Material from Quality
stores Unskilled 2 1
Assembling of Computers Skilled 10 10
Loading of software Skilled 2 10
Quality Pass Skilled 1 3
Packing in Plastic & Thermo Coal Unskilled 2 10
Card Board packing & Labeling Unskilled 2 10
Moving to Finished goods ware Hose Unskilled 1 2
The capacity of the plant is to manufacture 3000 units in a month.
Presently they have the following cost centers.
1) Assembly cost centre
2) Software Cost centre
3) Quality Cost centre
4) Packing Cost centre
5) Canteen Cost centre
As the present system on which they are, is not capable of handling apportionment
of Administration and selling over heads, they were stopping at the factory cot
only and not able to control the over heads.
The Factory manager Mr. Totally Lost agrees that though they were meeting the
plant capacity of production during the month but is not uniform. They are
deviating from the standard activities set by the industry and meeting the
production by over time which is leading to labor problems and deviation of
planned costs and in turn higher output cost per unit.
The project members of the Project confused were very much interested as to
how R/3 system delivers this need.
They also inform that some times the marketing persons bring specific
requirements from the market/customers which are one time with 3-5 days of
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
- 7 -
production and they do simultaneous production of both regular and specific
requirements by scheduling their assembly lines.
The Finance director Mr. Least confused on whose ability the company is managing
the cash flows very well needs to understand how the following were handled in
R/3 System and needs presentation.
Presently they are having collection accounts at all their sales locations and all the
collections were transferred by the end of the day to the corporate collection
account maintained by SBI.
They have disbursement account maintained in the same bank and the all the
expenses were met through this by issuing cheques to the parties and even for the
transfer of amounts to sales locations for their daily expenses.
The bank gives them on a daily basis the details of funds transferred from the
respective locations to cash collection account and this need to be reconciled
periodically. SBI has expressed their inability to provide electronic interface to
their bank. As the number of entries that are appearing are less now they are able
to do it manually.
Recently they have engaged a business consulting firm M/s. Frauds unlimited to
improve their business the company is expecting a huge volume of transactions
and the accounting department is insisting on the reconciliation part.
They also have two other bank accounts mainly used for Bills of exchange and
Foreign Payment ad receipts with HSBC and CITI Banks. All the Bills whether inland
ore Foreign were routed through the HSBC bank and are discounted as and when
the finance is needed. All collections from customers other than India are
deposited in CITI bank and the expenses at the respective locations were met
through this bank account.
CITI bank has agreed to give the LOCKBOX in CHINA and the finance director is
interested to implement the concept in R/3 system if it is cost effective.
All the payments to the vendors are through HSBC either by bills or by electronic
transfers per the agreements in line with ISO norms. The standard payment norms
for the international vendors is 30 days due net and is through Bills mode only.
Local vendors is 15 days 1% and 30 days due net.
Mr. Least Confused also wish to know the ability of R/3 system to segregate
Receivables and payable age wise, Creation of annual statements showing the
break up of Receivables as per Schedule VI of the Indian Companies Act, Liquidity
reports, Ratio analysis and other commonly required FI reports including the
ability to report trial balances and Petty expenses registers.
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
- 8 -
The steering committee of Project Confused has expressed their doubt about
their special requirement which is given below.
As the company is dealing in foreign exchange and is subjected to FEMA they dont
want all of their users to post in foreign currencies. They will be identifying the
person for that and the system should only allow the postings in foreign exchange
if the user is authorized user.
They also need Report Writer and Painter in SAP and expect you to explain by an
example how they can get benefited by them.
Customer masters and Vendor Masters for the above exercise may be created using
the upload programs like LSMW, BDC or SCAT.
You are requested to make other necessary assumptions with reference to the
Integration aspects and wherever necessary.
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m
C
lic
k
h
e
r
e
t
o
b
u
y
A
B
B
Y
Y
P
D
F
Transfo
r
m
e
r
2
.
0
w
w
w
. A
BBYY
.c
o
m