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Many novices are not very clear about how the cloud ERP system can help enterprises solve control problems. In order to help you solve this problem, the following editor will explain it in detail. People with this need can come and learn. I hope you can gain something.

Enterprise managers should balance the relationship between control and efficiency. Enterprises without efficiency cannot survive sustainably. According to Marx, the labor time invested in products and services exceeds the social necessary labor time, and can not get due profits. Enterprises that are out of control are even more terrible, which can only be described as "the blind ride a blind horse and face a deep pool in the middle of the night". At this time, efficiency can only be used to evaluate the speed of their running to death.

In other words, in the minds of enterprise managers, "effect", "doing the right thing" and "control" are inseparable. Before the information investment such as cloud ERP system, the hesitation of enterprise managers is not because they do not understand the ability of informatization to improve efficiency, but mostly because the feeling brought by informatization is "weakening of control"! Before the implementation of cloud ERP system, we rely on rules and regulations and practical experience to manage, in addition to massive information caused by data accuracy, timeliness out of control, most managers think that their business operation system is controllable. Before the ideas such as "process reengineering", "information transparency" and "method change" advocated by informatization, it seems that every business-- from the individual's operating methods to the boundaries of the department's functions and powers, and the overall process of the company-- is in the process of change. can you still guarantee that you don't dare to say the original control, let alone improve it?

So, can ERP help enterprises solve control problems? In other words, in what ways can ERP help the internal control of enterprises? Let's try to analyze it.

First of all, we need to make clear what internal control is and what it includes. According to the Audit Standards Bulletin No. 78 (SAS No.78) issued by the American Institute of Certified Public Accountants in 1996, internal control is defined as "the process achieved by the chairman, management and other personnel of an enterprise, which aims to provide reasonable assurance for the following objectives: (1) the reliability of financial reporting; (2) the effectiveness and efficiency of operations; and (3) compliance with applicable laws and regulations." In this criterion, a reasonable and complete internal control includes five parts, namely, control environment (Control Environment), risk assessment (Risk Assessment), control activities (Control Activities), information and communication (Information and Communication), monitoring (Monitoring).

We analyze the relationship between ERP and internal control based on each component of the above internal control to see what impact ERP will bring to internal control and how ERP brings these effects.

The control environment refers to the attitude, awareness and action of the board of directors and management towards internal control. It includes the following aspects:

Employee honesty and morality. This is what we often talk about at the level of "corporate culture". As a management information system, ERP seems to have no direct relationship with it. Therefore, after a factory director said that ERP is a kind of corporate culture, he received a lot of criticism. In fact, as a system with close relationship, close integration of various functions and information sharing, it can help management create an "honest" culture. for violations, the road from "dare not" to "unwilling" is very short. From "God knows only I know" to "indulge" is also only one step away.

The competence of employees. Because many methods of prediction and execution are solidified in the system at the time of design, ERP can greatly improve the competence of employees. For example, estimating the cost and completion date when accepting customer orders, issuing financial statements at the end of the month, accurately purchasing according to production plans and inventory, and reasonably arranging production tasks in multi-variety and small batch mode, even experienced and capable employees are not competent. With ERP as a tool, it is not difficult to calculate quickly and have the ability to simulate.

Board of directors or audit committee. Such as whether the board of directors is independent from the management, whether the audit committee and independent directors can complete their supervisory duties. There is really nothing ERP can do about this.

Management philosophy and mode of operation. This is similar to "employee honesty and morality", but one is from the employee's point of view, the other is from the management team's point of view. Generally speaking, we think that the establishment process of cloud ERP system is the transformation process of enterprises from extensive management to intensive management. The implementation of cloud ERP system marks the transformation of enterprise management philosophy and management mode to "accurate", "fast" and "quantitative".

Organizational structure. Unless the enterprise has great determination, ERP generally can not change the organizational structure of the enterprise in the construction stage, even if it changes, it should be attributed to the effect of business process reengineering. But it is also hard to imagine that the way of information transmission and the system of power and responsibility of an enterprise have changed, and the organizational structure has not been adjusted as always. Therefore, in the process of system operation, ERP will first solve the problem of information transmission in the organizational structure, and then solve the problem of smoothness and standardization of business processes. Finally, ERP will imperceptibly rationalize the organizational structure of enterprises.

The manner in which rights and responsibilities are granted. The operation of cloud ERP system requires enterprises to have a standardized and strict authorization system, whether it is the right to log on to the system, the right to query bills and statements, the right to examine and approve an economic business, the right to determine an annual budget, there is a clear authorization process in the system, and record the process of examination, approval and implementation, in order to implement the relevant responsibilities. Therefore, the implementation of ERP has greatly changed the situation that enterprises have unclear powers and responsibilities and have to find a big boss in case of trouble.

Human resources policy and implementation. The cloud ERP system includes a human resources management system to help enterprises manage the selection and retention of employees. Of course, the policies on hiring, training, promoting and rewarding employees still have to be made by the enterprises themselves. ERP just tells us what angles and methods we can use, and better implement them after we choose.

Risk assessment means that management identifies and takes corresponding actions to manage internal or external risks that have an impact on business strategy, daily operations, financial reporting, etc., including risk identification and risk analysis.

External risk identification, such as the identification of technological development, competition pattern, economic environment changes and other factors. For these external risks, it is difficult for ERP to help effectively.

Internal risk identification, such as the identification of the quality of employees, the nature of company activities, the characteristics of information system processing and other factors. Some of the reports and processes in ERP are specifically used to analyze internal risks, such as the analysis of the upper and lower limits of inventory, the fit between positions and personnel, order fulfillment ability and profitability, etc.

Analysis of the importance of risk. For those operational risks, such as time (such as late delivery), quantity (such as poor matching condition of materials), amount (such as large cost fluctuations), ERP can directly obtain its quantitative indicators for management reference.

Possibility analysis of risk occurrence. Similarly, for the operational risks in daily operation, such as sales forecast error rate, personnel turnover rate and so on, ERP can obtain approximate possibility reference values through structural analysis and trend analysis of the data.

Risk management approach analysis. Usually ERP can not directly give the solution to the problem, the system only preset as many reference solutions as possible, so that managers can choose to use the analysis results.

Control activities, or control procedures, refer to policies and procedures that help ensure the implementation of management instructions.

Performance evaluation. It refers to comparing actual performance with other criteria, such as prior-period performance, budget and external benchmark measures, and linking different series of data, such as operating data and financial data, to evaluate functional or operating performance. This is really the specialty of ERP, such as the sales list for business personnel and the balanced scorecard for profit centers, which are really difficult to do without ERP, at least in a timely and accurate manner.

information processing. Refers to those activities that ensure that the business is handled correctly, completely, and authorized in the information system. Information processing is divided into two categories: general control and application control. General control is related to the design and management of information systems, such as programs to ensure software integrity, information processing schedules, system files and data maintenance, which makes no difference to ERP or other software. Application control is related to the way individual data is processed in the information system, such as ensuring business correctness and authorized programs, ERP is much better than those single-function applications that are not integrated with each other, and can not be compared with manual operation.

Physical control. Also known as asset and record proximity control, including physical security control, authorization of access to computers and data, regular stocktaking, etc. ERP can't provide better help in this area. After all, software can't hold warehouse keys for people, nor can it protect others from looking at "shouldn't" reports on their desks.

Separation of responsibilities. Separate various functional responsibilities to prevent individual employees from engaging in or hiding abnormal behavior. In general, the following responsibilities should be separated: business authorization (management function), business execution (custody function), business records (accounting function), independent inspection of performance (supervision function), etc. Cloud ERP system can not guarantee the separation of responsibilities, but under the clear division of responsibilities and authorization system of cloud ERP system, enterprises can follow the context of ERP to complete this control activity.

Information and communication in order to enable employees to perform their duties, enterprises must identify, capture, and exchange external and internal information.

External information refers to market share, regulatory requirements, customer complaints, etc. External information is similar to external risks, ERP is difficult to help effectively, at most a part of normative external information can be processed more efficiently after the enterprise has identified and captured it.

Internal information refers to accounting system, management system, operating data, etc. In the final analysis, cloud ERP system is a system that provides internal information and standardizes internal information. If enterprises reasonably use ERP, they can draw lessons from cloud ERP system to formulate relevant systems, standardize their implementation through cloud ERP systems, and will become the carrier of institutions and data to run in the enterprise.

Communicate. Communication includes making employees aware of their responsibilities, how to contact others with their work, and how to report exceptions to their superiors. ERP can make employees aware of their responsibilities through its authorization system, and make employees understand the relationship between their work and the work of others by participating in business processes, completing receipts and reports.

Monitor the process of evaluating the quality of internal controls, including continuous monitoring, independent evaluation, or a combination of the two.

Continuous monitoring. Continuous monitoring is established in the business cycle within the unit, including daily management and monitoring activities. For example, managers of purchasing, production and sales departments in branch and headquarters maintain daily business contact and question reports that differ from their views to ensure mutual supervision. Without ERP, there would be no objective and scientific standard for continuous monitoring, and monitoring is either a mere formality or difficult to express one's own opinions. In ERP, the main production plan connects sales and production, material requirements plan connects production and purchasing warehousing departments, capital plan connects business departments and financial departments, and the mutual monitoring is based on detailed records and scientifically formulated plans. Of course, it can be monitored continuously and effectively. Independent evaluation. Independent evaluation is usually carried out by the internal audit department or personnel department to inspect and evaluate the design and implementation of internal controls, communicate with relevant personnel and make suggestions for improvement. Cloud ERP system enables internal auditors to quickly and deeply understand the business process and its control system, and save part of the workload in business sampling, correctness review and other aspects. Compared with the above analysis, we can draw an impact table of the role of ERP in the enterprise internal control system as follows. Among them, the influence mode refers to whether the help of ERP to the internal control system is direct, brought by its own characteristics, or indirectly, due to the use of ERP to improve management and environment; the scope of influence refers to whether the impact of ERP in this field is aimed at the overall situation of the enterprise, or is limited to some internal personnel and machines; influence refers to the changes caused by the application of cloud ERP system to the field of control. As can be seen from Table 1, except for a few areas, cloud ERP system is helpful to enterprises in most areas covered by internal control, and has a direct and significant influence in a considerable number of internal control areas. Of course, managers cannot pin all their hopes on ERP, nor can they shift all the responsibility of "control" to ERP, but they should no longer doubt the help of implementing ERP in improving the internal control ability of enterprises. The worry of "losing control" should not be given to ERP, but should worry about whether the control power that they think is "OK" is really effective for those enterprises that do not have access to ERP or ERP. Even if it is not out of control, how long can this control be maintained in a rapidly changing environment?

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