As part of the restructure of management of the business process the management of ABC Organisation is looking at implementing a SAP solution.

As part of the restructure of management of the business process the management of ABC Organisation is looking at implementing a SAP solution. The problems of mapping the current business process to the SAP systems are well understood and the management feel that they have secured the services of a capable firm to help with the process. However before proceeding with the project the management still have a number of issues they would like to address before proceeding with the planed implementation. Current system is based on centralised services where all the processing is done on a central IT infrastructure. Most of the systems as they were designed and built in house means that they don't conform to the usual standard used outside the organisation. As a result there are questions regarding the process of making the data and services work with the SAP. a) In order to move to the SAP platform the management would like some details on how the transition of the information and services to the industry standard should be implemented. How does SAP access information and services that are not implemented within the SAP framework? b) One of the problems the ABC organisation has been struggling with is the correct attribution of cost to the production process. The paper based model makes the keeping track of the standard cost of production to the actual cost difficult to manage and trace. • Explain why is the ability to correctly identify the actual production cost important to an organisation? • Discuss how variances between standard and actual costs result and how a product cost per unit sold can be calculated? Describe why cost variances would be difficult to research in a paper-based system.