ERP Implementation: Impact & Management

This assignment delves into the multifaceted aspects of Enterprise Resource Planning (ERP) implementation. It begins by examining the influence of ERP systems on management accounting practices, referencing a literature review that highlights key impacts. Subsequently, the focus shifts to project management considerations within the context of ERP implementation. The assignment draws upon various sources, including academic articles and online resources, to discuss critical success factors, potential risks, and best practices for managing ERP projects. Specific tools like context diagrams and work breakdown structures are analyzed to illustrate effective project planning and execution strategies.

PROJECT MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Overview of project................................................................................................................1
Scope statement......................................................................................................................3
Stakeholders identification.....................................................................................................4
PART 2............................................................................................................................................7
Project plan.............................................................................................................................7
Gantt Chart...........................................................................................................................10
Critical path and network diagram.......................................................................................12
Communication management process..................................................................................15
RISK MANAGEMENT.................................................................................................................17
Risk registers........................................................................................................................17
Risk severity Matrix.............................................................................................................19
Resource plan.......................................................................................................................21
Human resource management plan......................................................................................21
Procurement management process.......................................................................................22
Time management process...................................................................................................22
Cost management process....................................................................................................22
Quality management process................................................................................................23
Change management process...............................................................................................23
Project evaluation and review techniques............................................................................23
CPI (Cost performance index)..............................................................................................23
Contingency plan..................................................................................................................24
PART 3..........................................................................................................................................24
Factors that influence final output of sap FIC (ERP) project in project management.........24
CONCLUSION..............................................................................................................................29
REFERENCES..............................................................................................................................30

Illustration Index
Illustration 1: ERP implementation.............................................................................................................................................................5
Illustration 2: Context diagram....................................................................................................................................................................8
Illustration 3: WBS for implementation of SAP (ERP).............................................................................................................................10
Illustration 4: Stakeholder of SAP FIC (ERP) implementation project.....................................................................................................14
Illustration 5: Risk matrix..........................................................................................................................................................................31
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Index of Tables
Table 1: Stakeholder engagement..............................................................................................................................................................11
Table 2: Stakeholder management plan.....................................................................................................................................................12
Table 3: Project plan..................................................................................................................................................................................22
Table 4: Communication plan ...................................................................................................................................................................27
Table 5: Risk registers...............................................................................................................................................................................30
2

INTRODUCTION
Planning, controlling, monitoring and reviewing of tasks are the most essential part of project management through which
proposal can be completed within stipulated time (Haddara, 2014). Current project for the present report is implementation of SAP
FIC (ERP) in organization. Assignment will provide brief introduction of the project and its scope. Explanation of several stakeholders
that are involved in this project will be done in this study. Furthermore, It will discuss project planning by using planning techniques.
Resources required to complete this project, Gantt chart, critical path, will be described in this report (Vakalfotis, Ballantine and Wall,
2013). In addition, it will evaluate the factors that may influence the working of project to great extent.
PART 1
Overview of project
In the early years there were not that much advanced accounting software so people were used to do manual accounting (Leon,
2014). But now it is modern era and there are many advanced technologies thus it has become the necessary to use these advanced
accounting software to prepare their records (Ika and Donnelly. 2017).
SAP FIC includes many modules, each module is related with the business area. That includes material management, business
intelligence, sales and distribution, production planning etc (Lee-Kelley and Turner. 2017). ERP is known as Enterprise Resource
planning tool (Ifinedo and Olsen, 2015). ERP is the multi-module appliance software that records all integrated transactions of
different departments into one software. By this way company can analysis its performance easily. SAP FIC (ERP) is the software that
identify the mistakes in the financial records and helps in taking immediate action in this respect. It is used for preparing balance
sheet, profit and loss account (de Araújo, Alencar and de Miranda Mota. 2017).
Present project is of replacement of current financial system with implementation of SAP FIC (ERP) in the ABC Ltd ( Ahmad,
Ibrahim and Garba, 2015). Cited firm is working in the industry since longer duration at small size entity. It has good knowledge of
market and working well. But still company is unable to utilize its resources well that is why profit of the firm is too low. Apart from
this, ABC Ltd has many errors in the accounting process and sometime these mistakes are not analysed at the right time that have
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given loss to the entity many times (Chang, Fu and Ku, 2015). Cited firm is planning to replace its current financial system and want
to implement the SAP FIC (ERP) in the financial system. Accounting errors, general ledger mistakes create problem for the entity that
is why it is unable to increase its profit and manage its operations well.
Illustration 1: ERP implementation
Source: (Successful deployment of the first SAP ERP project in Myanmar, 2016)
Plan Scope Management
Product scope
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SAP FIC (ERP) is very important and advanced software of accounting system, it is used by most of the big size companies in
their accounting department. Implementation of SAP FIC is beneficial for the organization in order to gain competitive advantage and
gaining success in the market (Hsu, Yen and Chung, 2015). With the help of this tool companies can minimize its errors and can
enhance its business performance.
Project scope
Work performed by the employees of the company after implementation of Sap ERP in the system wil be effective and it will
be far away from mistakes. The scope of ERP implementation involves all the activities and tasks that will be undertaken for the ERP
implementation such as software purchase, business processes, software installation, testing, software changes, interface, technical
infrastructure design, training and others (Maylor, Turner and Murray-Webster. 2015).
Project charter
Implementation of SAP FIC (ERP) will include; finance and controlling, variant configuration, human capital management,
sales and distribution management, profitability analysis, material management, plant maintenance, service management. It covers all
aspect of business operations. Fund management can be done with the help of SAP FIC (ERP) project in the organization effectively.
Risk of the company in future will be minimized to great extent. By implementing the SAP FIC (ERP) in the financial system
corporation can analysis its returns and can manage its operations accordingly.
Scope management plan
Implementation of SAP ERP is beneficial for the organization because it minimizes errors of accounting. The plan will be
developed by project manager and it will be continuous monitor by the supervisors. For controlling over the plan project manager will
conduct time to time meeting with them so that mistakes can be analysed on time and individual can make effective strategies to
resolve these issues. Testing is the way through which individual will verify the plan, first project manager will test the plan and if it is
according to the expectation then it would be implementation in the company, otherwise after necessary chages implementation of
ERP would be done.
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Requirements management plan
Requirements will be analysed on the bases of budget of the owner in implementation of ERP system in the organization. It
will depend upon the extent to which project manager wants to make it successful. In the lack of the ERP system, giant processing
company may find themselves with numerous software which can hamper the business efficiency. ERP system connects the important
software that allows to manage the inventory that make company more profitable. ERP build up a standard for various business
process in an organisation. By implementation of ERP company get adapted to best practices that increases the efficiency of the
operations. It also establishes and updated IT SAP system.
Collect requirements
 Context diagram
6

Illustration 2: Context diagram
Source: (Project context diagrams, 2016)
 Multi criteria decision analyses: Risk will be moderate because management can clarify benefit to employees of
implementation of ERP. There would be risk of scheduling but with the help of effective scheduling individual will be able to
manage its risk.
 Facilitated workshop: New product development would help in minimizing the errors in financial accounting. Thus, company
will be able to manage its funds effectively that will support in improving business performance to great extent.
Defining scope
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 Org. process: Researcher has learned from the previous project about technology, so that manager can complete this project on
time. Individual has learned that following plan and policies is essential in project management that an help in completing the
project on time and meeting with the objective (Mozaffar and et.al, 2016).
 Project scope management: It has huge scope because by this way ABC will be able to know how to utilize the resources and
how these resources can be beneficial for the organization. It gives profit to the firm by reducing the cost of the entity
significantly. Cost benefit analysis is one of the main benefit of implementation of SAP FIC (ERP) system in the ABC Ltd
(Xie, James Allen and Ali, 2014). Because with the help of this cited firm will be able to allocate resources effectively so that
it can gain more profit . Implementation of SAP FIC will be beneficial in cost element accounting, product cost accounting,
profitability analysis etc.
WBS
8

Illustration 3: WBS for implementation of SAP (ERP)
Source: (Elragal, 2014)
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Control scope Performance report: performance of ERP will be good because by this way mistakes will be minimized in the accounting
process. Value management parameters of this implementation will be increasing business performance, competitor analysis,
fund management etc. Scope change control system: Continuous tracing can be beneficial that an support in knowing necessary changes in the
implementation plan. Scope changes: Cost of implementation of ERP need to be increase because installation of computers will be costly.
 Corrective action: project manager has to make changes and after that implementation plan need to be modified accordingly.
Stakeholders identification
Stakeholder engagement
Table 1: Stakeholder engagement
Process name Tools and techniques Input Output
Identification of stakeholders Stakeholder analysis
Meeting
Judgement of experts
Project charter
Procurement documents
EFEs
Stakeholder register
Planning stakeholder
management
Expert judgement
Meeting and analytical
techniques
Project management plan
EEFs
Stakeholder register
Project documents updates
Stakeholder management plan
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Table 2: Stakeholder management plan
S.No. Category Element Description
1 Integration Stakeholder management methods, review
of process and review of validity of
underlying assumptions
2 Scope Analysis impact of changes on stake
holder's scope
3 Time Time to time give detail and update all
stakeholders
4 Communication Effective coordination need to be done with
stakeholders
5 Stakeholders Good coordination, develop relationship
and engagement between stakeholders
 Control stakeholder engagement: It is required to make effective control over project management plan:
Scope management plan: Project manager will take care of all aspect that are necessary to implement SAP ERP in the organization
and will properly plan activities so that scope can remain same.
 Human resource management plan: There are various stakeholders those who are associated with the project of replacement of
current financial system and implementation of SAP FIC (ERP) in ABC Ltd (7 Factors Affecting Project Management in your
Organization, 2017).
Owner group
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CEO of ABC Ltd is major stakeholder of the cited firm, if business does not run well then it impacts on the financial position
of the owner to great extent directly (Khan and Faisal, 2015). Owners have complete power of an organisation. Implementation of
SAP FIC (ERP) can support the CEO in raising the profitability of the firm and reducing the cost. By this way individual will be able
to get more profit from the business.
Illustration 4: Stakeholder of SAP FIC (ERP) implementation project
Source: (Budayan, Dikmen and Birgonul, 2015)
Chief accountant
CFO or Chief accountant is another stakeholder of this project, it is the responsibility of the person that company earns more
profit. Individual has to monitor the financial performance closely so that mistakes can be addressed on time and it can be resolved on
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time (Elbanna, 2013). It is the responsibility of CFO that to train other people as well so that they can also work on this new software
and can contribute well in achieving goal of the firm (ERP Project Management, 2017.
Project manager
Project manager is another stakeholder of the project because it is the responsibility of the person to make it successful. If
manager fails to do that then it would be negative for the project manager (Melese, Lumbreras,Ramos, Stikkelman and Herder. 201).
Team members group
They are another stakeholder of this project because if workers are performing their work effectively then it would help the
cited firm in implementing SAP FIC (ERP) system in the financial system, of the organization on time (Elbanna, 2013). By this way
corporation will be able to accomplish its goal significantly.
End users group
They are also included in the stakeholders because if company is performing well then it will impact on customers as well.
Thus, they get affected by the decision of the corporation.
 Change management plan: All changes will be supervise by project manager. Time to time testing will be done so that if any
mistake takes place then individual can resolve it on the same time. By this way it will be able to achieve its objective
significantly. For monitoring the activities project manager will take feedback from stakeholders and will take their review. It
will support in examining the process well.
 Communication management plan: Project manager has to conduct meetings with stakeholders and have to circulate necessary
information through mail. It will support in increasing coordination.
PART 2
Project plan time management
For implementing the SAP FIC (ERP) various scheduled can be used. It include proper allocation resources in each task which
make smooth running of business. At development stage, it include proper management of team.
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Project plan for implementation of SAP FIC (ERP) in financial system is as following:
14

15

16

17

18

19

Gantt Chart
It is the tool which is commonly used in project management (Tsai and et.al, 2015). Time to time monitoring is done that helps
in identifying the issues in the plan and manager can make necessary changes on time so that it can be completed on time with quality.
Critical path and network diagram
Network diagram
20

21

Critical path
1+2+5+7+10+17+18+25+27
=112 days
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Communication management process
The above project hierarchy will follower for communicating the strategies and project goals to the entire team and also
presents clearly the reporting structure. In this, team members will communicate their progress and work status to their senior
authority.
Communication plan
Table 3: Communication plan
Purpose Attendees Location Meeting agenda Deliverables
Status meetings Determine project Entire ERP Conference Room Milestone, ahead Meeting minutes
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progress, identify
issues and receive
team feedback
implementation team or behind of
schedule
Progress reports
Determine issues
or difficulties
Summarize the
meetings
discussion
Management
Review
To monitor project
progress, finding
issues and gain
approval of the
owner for the project
progress.
Project Manager and
Project Owner
Owner’s office
Conference room
Project Status
Achieved
milestone
Actual Vs baseline
comparison
Meeting minutes
Team meetings Assessing project
progress and take
corrective actions
Project manager and
entire team
Conference room
(every week)
Actual Vs baseline
comparison
Project Status
Meeting minutes
Project
Schedules
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RISK MANAGEMENT
Risk registers
By using risk register, manager make complete records of risk in each department and also identify the impact on the
operations. (Ahmad, Ibrahim and Garba, 2015).
Risk
description in
implementati
on of ERP
system
Responsi
ble
person
Likelihoo
d of risk
occuring
Impact
of risk
on
project
Risk
factor
Risk
Categories
List of
Potential
Risk Owners
Mitigation strategy
Technical risk Project
manager
3 4 12 moderate Staff
members
and project
manager
Project manager should make sure that
installation done properly so that no harm
occur with anyone. It can be minimized by
hiring technical sound people in the
organization and organizing training to all
people so that they can also handle this
technology easily.
Scheduling
risk
Project
manager
4 2 8 Moderate Owner Plan activities properly and monitor them
time to time so that this risk can be
minimized.
Human Project 4 5 20 Major Staff Human risk can be minimized by hiring
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Resource risk manager members talented people in the organization so that
they can work better and can guide others as
well.
Design risk Project
manager,
technical
team
4 3 12 moderate Project
manager
By preparing feasible and flexible design it
would be possible to reduce designing risk in
the implementation of SAP FIC (ERP)
project.
Scope risk Project
manager
2 3 6 moderate Project team Clear goal and objectives and clear
understanding about goal to team members
can help in minimizing this scope risk.
Table 4: Risk registers
Risk severity Matrix
This is a simple mechanism to increase visibility of risks and assist management decision making. That helps in determining
the size and level of risk in the project. It is divided into three main areas:
 The low probability, low severity area: It shows that particular risk is not high and project manager can control over the risk
easily (Haddara, 2014).
 The high probability, high severity: This area indicates that project manager has to take necessary actions to control over this
risk so that overall project can be completed on time and risk can not harm its purpose (Tsai and et.al, 2015).
 The medium category: It is another area which shows that risk is medium and project manager has to monitor activities and
have to make control over them so that real objective of the proposal can be accomplished (Elbanna, 2013).
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Resource plan
Resource managers modify and approve resource plans before the plans are used. On other hand if there are sufficient
resources are available then it will help in completing the proposal on time and meeting with its objective (Chang, Fu and Ku, 2015).
Resources required for replacing of financial system and implementation of ERP in the ABC Ltd is as following:
Human resource management plan
 Project manager
 Functional Sap expert
27
Illustration 5: Risk matrix
Source: (ERP Project Management, 2017)

 Off-shore technical consultant
 Supervisor
 Support Staff
Procurement management process
It is another type of resource which is essential in the implementation of SAP FIC (ERP) project. Sales distributor, plant,
materiel etc. are physical resources of the project. Acquiring raw material can leads development of critical path. From this, supplier’s
performance can be affect, hence managing its performance is a crucial task. With the help of procurement management process,
better relationship with supplier can be developed. In this project manager is required physical resources such as machineries,
computers, tables, the latest high configuration tools etc. so that installation of ERP can be done significantly ( Mozaffar and et.al,
2016). Software suppliers will be contracted for purchase of SAP FIC whilst hardware engineers will be contacted for the
technological infrastructure and software engineer will look over the ERP functioning & its implementation.
Time management process
To complete the project on time it is essential to have sufficient financial resources (Elbanna, 2013). If project manager does
not have monitory resources then individual will not be able to implement SAP FIC (ERP) in the current system and will not be able
to replace the existing manual system of accounting with three ERP (Budayan, Dikmen and Birgonul, 2015). It is a process which
helps the manager to estimate the work completed as per prescribed time. It minimize the overload of work and also encourage the
performance level of employees. Progress report, work status reports will be communicated timely to the project manager who will
examine that whether all the activities were completed according to the time stipulated in the work breakdown structure.
Cost management process
For the purpose of managing cost of equipment, human resources and other overheads, cost variances (CV) will be computed
to determine the difference between budgeted and actual costs incurred by the firm. It provides assistance to the investigator to
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identify reasons behind costs overrun, so that, necessary decisions can be made for cost controlling. Besides this, cost report and work
status reports inform managers about cost incurred for the completed work.
Quality management process
Weekly meetings, status reports and scheduled updates will provided to the project manager to determine possible issues.
System actual implementation will assist manager to identify the issues in ERP functioning and helps to make decisions to overcome
it. Besides this, continuous monitoring & tracking system helps to identify hurdles so that required change can be implemented for
quality improvement. Total Quality Management (TQM) method will be employed for performing quality work.
Change management process
In case of any change that are considered necessary, a RFC proposal will be provided to the change implementation authority
along with the possible impact of change request on the project functioning in future. After the formal acceptance and approval by the
authority, change will be implemented and also monitored for the successful ERP implementation. Change management process is
necessary for the organisation by which they can adopt new techniques and methods as per the requirement. By using this, company
can reduce its cost by maximizing its profits (Marciniak and et.al, 2014).
Project evaluation and review techniques
PERT is the tool that can help in managing the project effectively and reviewing it properly. That supports in minimizing the
chances of failure of the project. In this technique project manager utilize information of precedence in order to identify time length of
the project. That helps in defining whether it will complete on time or not. In this technique individual have to calculate the timing so
that actual timing of the project can be identified (Bai and Sarkis, 2013).
CPI (Cost performance index)
It is the tool that is used to asses the health of the project. With the help of this project manager can identify efficiency level of
the project whether it is cost effective or not.
CPI = Earned value/ Actual cost
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Budget of SAP FIC (ERP) implementation project is 25000.
Six month have been passed and 12500 has been spent by the manager but still 40% work is remaining.
Actual cost (AC)=10000
Planned value (PV)=50% of 25000
Planned value =12500
Earned value=50% of 100000
Earned value (EV) =12500
CPI= EV/AC
12500/12500
CPI=1
Contingency plan
For minimizing the risk it is essential for the project manager that to make contingency plan so that project can be completed
on time. Individual will have to keep separate 10% of budget separately so that if any technical risk arise then manager can make
immediate changes in the plan (Coombs, 2015). Apart from this continuous monitoring needs to be included in the planning so that it
can get completed on time.
PART 3
Factors that influence final output of sap FIC (ERP) project in project management
In the implementation of SAP FIC (ERP) project company is required merely set up master data and it can start transacting on
the new financial system which is SAP FIC (ERP). Author has stated that sales and distribution is the part of module of SAP FIC
(ERP) financial system in which company can handle issues related to sales and distribution effectively. Hsu, Yen and Chung, (2015)
has argued that deadline is the major influencing element that impacts positively on the project. Author has argued that project
manager plan the activities after looking upon the project's each side effectively (Elbanna, 2013).
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As per the view of Ahmad, Ibrahim and Garba, ( 2015) ERP software support, investment in recruiting skilled people are the
major factors that impact on implementation of SAP FIC (ERP) financial system in the organization. Author has stated that it requires
huge investment for installing this software and getting right people in the workplace those who can work properly on this financial
system. If company fails to hire talented staff then it may impact on the final out to great extent.
According to Hsu, Yen and Chung, (2015) challenge of using external consultant and integrating their specific knowledge
about SAP FIC (ERP) financial system is main element that impact on the implementation of the project significantly. If there is lack
of technical expertise and issue in the client service then company will not be able to replace its manual financial system with the SAP
FIC (ERP). Elragal, (2014) has stated that effective planning is main element that impact on the implementation of the new system in
the workplace because in the absence of proper planning an communication this project can not be completed successfully in the
corporation.
As per the view of Elbanna, (2013) budget is the major factor that influence the final output of the SAP FIC (ERP)
implementation process. Budget plays significant role in the proposal, if budget is correct then individual will be able to allocate
financial resources to each task effectively. But if budget is not correct then it may create problem in the future that may create trouble
for the entity. On other hand Leu and Lee, (2016) has argued that if budget is high then project manager will also require more time to
finish the project. If budget is fine then individual becomes able to allocate resources properly and person needs not to compromise
with the quality (Chang, Fu and Ku, 2015).
According to the view of Ifinedo and Olsen, (2015) management of project is depended upon kind of stakeholders involved in
the project. Author has stated that if the number of stakeholders are high and they belong from different backgrounds. Then it becomes
difficult to understand needs of all these stakeholders. In this condition common situation occurs that one stakeholder is ready on one
point and another is negative for the same point (ERP Project Management, 2017). In this condition project manager becomes unable
to make effective decision on time. It can be critically evaluated that implementation of SAP FIC (ERP) or replacement of current
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financial system is big project (7 Factors Affecting Project Management in your Organization, 2017). And project manager has to take
guidance of stakeholder so that sound decision can be made by the person.
As per the view of Budayan, Dikmen and Birgonul, (2015) legacy is the main factor that can influence final output of Sap FIC
(ERP) project. When companies implement ERP in their system then they have to transfer their data or excel spreadsheet, old
disparate applications and manual records in the new system. These old data are stored by the firms for many years, it may be possible
that it shows error in new ERP projects. Replacing legacy system and consolidating disparate solutions are two main challenges that
are faced by companies while implementing SAP ERP system. Author has stated that due to these error's management have to make
correction in mistakes and have to again manage their records. Elbanna, (2013) has argued that legacy is the main risk because due to
which final output can be changed, There is chances that transferring data into new system can cause errors and this can reflect current
reality as well. Thus, it is essential to use Pilot test before transferring data into new system.
Elbanna, (2013) has argued that constant review is the major factor that influence the final output of the project. It is the
responsibility of project manager that to monitor activities properly and review them timely. That helps in addressing the issues on
time and resolving them timely. Regular review of budget, quality, schedule supports the manager in completing the project within
stipulated period (7 Factors Affecting Project Management in your Organization, 2017). On other hand Xie, James Allen and Ali,
(2014) has argued that constant review is not possible in every project. It is said that there are so many elements and activities which
manager has to monitor.
Budayan, Dikmen and Birgonul, (2015) has stated that the plan, do, check and act are fundamental principles of project
management. Author has said that for achieving the goal it is essential to plan the activities properly. Correct planning is the major
element that may influence final output to great extent (Liu and et.al, 2014). Good planning is the base that helps in conducting further
activities and it supports in allocating resources to each task. In the absence of good planning individual can not be able to allocate
resources properly.
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CONCLUSION
From the above report it can be articulated that project management helps in planning the activities properly so that overall
project can be completed within stipulated time. It is the responsibility of project manager that allocate resources well and monitor
activities properly. ERP implementation is the big project for the project manager, so it is very important to consider all aspects before
allocating resources. Successful implementation of SAP FIC (ERP) can support the organization in reducing the accounting errors.
Apart from this company will be able to identify its performance easily, that would assist in increasing revenue of the entity
significantly.
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