A Teaching Case Using Cost/Benefit Relationships Within An ERP System

Abstract

This paper describes a simulation model specifically for the Managerial Accounting Information Systems course—an SAP enabled course for junior Accounting majors. Supporting and measuring the Supply Chain through technology is a key goal of Accounting and should therefore be reflected in an Accounting curriculum. It will assist students to learn both the benefits, and costs, involved with implementing ERP software. The purpose of this case is to present students with a set of business scenarios, and have the students make a knowledgeable decision using SAP R/3 software. The scenarios will act as a simplified replication of the business environment; thus, they will provide the students with an integrated learning experience. They will make business decisions to ensure the profitability cash flow of their respective product lines. While making these decisions, students participate in the application and analysis provided by IDES. IDES is a simulated company within SAP for demonstration and education purposes. Eventually, the students will need to justify the existence of their division by evaluating benefits of the system verses its costs. The model created further examines the cost/benefit relationship that is undertaken when an enterprise chooses to switch from a legacy system to an ERP implementation. Students learn to compare the initial and recurring costs with the benefits derived through profitability and cash flow efficiencies. In their analysis students are confronted with both structured and unstructured information allowing them to measure and assess a full range of strategic and tactical implementations. To provide a “learning by doing” experience, the scenarios will be used to demonstrate the reporting functionality within IDES, the simulated company integrated into the SAP system. Today’s global economy is putting a premium on the ability of students to evaluate a broad range of decisions in collaboration with adaptive supply chains. A critical component of the evolving accounting curriculum lies in the ability to extend students beyond the numbers to evaluate the effective and efficient delivery of these supply chains.