Grace Company manufactures and sells chemicals and construction products. Previously Grace Company had been facing problems brought about by its complicated ledger system. The company had two operating sections: Grace Construction Products and Davison. Therefore, Grace Company used SAP to solve these problems. The main function of SAP was to make ledger systems coherent and convenient. SAP introduced three separate ledger systems for reporting and operating functions (Johnson et al. 246).
The ledger systems introduced by SAP functioned differently. However, they all served the same function of reporting. Each ledger had its data source hence making it’s functioning effectively. The main function of the classic general ledger was to report revenues, expenditures, accounts, and subsidiaries in business areas (Martin & Yen 113).
The Grace Davison ledger stored information on company codes, accounts, business areas; profit centers plants, and trading centers. Moreover, Grace Construction’s ledger function was the same as those of Grace Davison ledger. Also, the ledger stored information on destination countries (Martin &Yen 113).
Grace company had a problem in managing its finances because each department had its way of doing it.SAP implemented a new method of managing finances; a system which took care of all Grace Business (Johnson et al. 247). SAP implemented a general ledger which could post all sub-ledger items on their respective accounts. It also could update the general ledger and areas of cost accounting. Further, it reported and evaluated current accounting data. This ledger offered an account to each of its divisions (Johnson et al. 247).
Grace Company had multiple ledger system, which made its operations difficult. According to Johnson, SAP offered a graphical representation which acted as an example to show how migration process functions (247). As a result, Grace Company would not incur any loses after migrating from the multiple ledger system to the general ledger system.
The migration cockpit provided a guideline to be followed in the migration process and an outline of the migration plan. SAP also provided a guideline on how business process changes should be in line with the technical changes accompanied in implementing a unified general ledger (248).
SAP divided the project into two to achieve the best results. One division was general ledger migration, and the other was business process testing. The general ledger project mainly dealt with relevant data acquisition from the three different ledgers utilized by Grace Company. SAP also combined and eliminated redundancies. The business process testing project dealt with testing different functions of the SAP general ledger to guarantee everything would work out to achieve the set objectives (Johnson et al. 251).
SAP used the unit testing method in the Business Testing Project. This method had testers, which consisted of examples of general ledgers. Also, the testers provided a basis for testing different types of accounting documents. The general ledger had to be in line with the needs and functions of the Grace Company; therefore, SAP acquired qualified personnel to take care of this (Martin & Yen 115).
SAP greatly helped Grace Company in taking care of its complicated ledger system. With an improved ledger system, Grace Company was in a position to perform its functions effectively. As a result, SAP became a logical partner for Grace’s upgrade. Grace Company currently associates itself with SAP to improve and unite its information systems (Johnson et al. 253).
Works Cited
Johnson, Todd, et al. “A customized ERP/SAP model for business curriculum integration.” Journal of Information Systems Education 2004: 245-254. Print.
Martin, Ian, and Yen Cheung. “SAP and business process re-engineering.” Business Process Management Journal 2000: 113-121. Print.