CHAPTER 1

THE PROBLEM AND ITS BACKGROUND

Introduction
In these fast-pace transactions in our current state, businesses have to cope-up
with the everyday needs and wants of every customer. Every seconds matter because it
could mean loss of customer or gaining a patriot. Thus, an industry should have an
effective management of day to day operation, logistics, finances, month end, quarter
end, yearly activities. System Application and Product in data processing (SAP) plays a
big role in these industries. It has an integrated system that can help the business to run
its business at its best. SAP was created because there was a need to create
standardized software systems that helps companies run better.
Business needs accurate financial software that will help them to improve their
financial performance by managing the liquidity of cash, the streamlining processes and
reducing cost, including compliance and risk cost. Thus, SAP-Financial Accounting and
Controlling Software is an essential tool. (Veeriah, 2015) SAP is consisting of different
modules like SAP- FICO, software where you conduct all the financial transactions,
accounting and reporting activities in a smooth fashion (Richa, 2014).
This thesis is made to address the benefits and advantages of using System
Application and Product in data processing specifically the Financial Accounting and
Controlling module SAP-FICO), in the typical course of a business. It also takes glances
on how it become useful and effective in the Oriental and Motolite Corporation. In
addition, employees perception on SAP is also taken in consideration.

Background of the Study

SAP Development.
An almost abandoned software application was being snatch from the jaws of
death (save) by the five former IBM engineer employees, namely: Dietmar Hopp, Klaus
Tschira, Hans- Werner Hector, Hasso Plattner, and Claus Wellenreuther which all came
from Mannheim, Badem-Wrttemberg. Deciding to leave their former company, IBM
Tech, they formed their own private partnership on June 1970 under the German Civil
Code as System Analysis and Program Development Company. (SAP AP History, n.d.).
Originally, this software focused on the enterprise-wide system that was made for the
migration of Xerox, an American global corporation that sells business services and
document technology products, from their business systems to IBM technology.
(Audretsch, 2007. p. 108, Holmes, 1976, p.42)
SAP developed standalone software which they called a real-time system that
made mainframe programs for payroll and accounting. The first version or SAP R/1 aims
to be offered to other interested parties. The idea was to develop a software that
integrates business functions in a manner that reflects industry best practices and a
standard application software for real-time. Seeking for improvement, the first
commercial product was launched. It was called SAP R/98 and offered a common
system for multiple tasks. This permitted the use of centralized data storage, improving
the maintenance of data. It enables different departments to saw the information they
need. (Matthew, n.d.)
In 1976, their private partnership becomes SAP Gmbh, which is German for
"company with limited liability", as a sales and support subsidiary (SAP History, n.d. ).
After one year, they move its headquarters to Walldorf, Germany where they developed
the SAP to SAP R/2. The improved SAP was launched in 1979, it uses mainframe

computing and adds modules like material management and production planning. In
august 1988, they have decided to improve SAP gmbh to SAP AG and after three
months, on November 1988 public trading started. Looking for more innovations, several
versions of SAP R/3 was released in the market. It was a big hit in the market because it
follows the client/server architectures, a three-tier architecture. It is based on the concept
of presentation layer, application layer and business layer. It expands its capabilities to
support the growing needs of the businesses. (SAP AG, n.d.).

Simply, it change

business did business.

Grabbing the opportunity to have access to the internet, they established
mysap.com, which is now. It is a comprehensive e-business solutions, innovative
technologies, and extensive services platform.

As a result, employees, customers,

suppliers, and other business partners can work together across company borders
anytime, anywhere. It was followed by a Real-time integration platform, namely SAP
NetWeaver, in 2004. In 2014, they have decided to change SAP AG to SAP SE, a
public limited company. An enterprise cloud power, they launched the new evolution of
SAP, the SAP Hana, and a platform that give right answers to right people at the right
time at any device. It offers cloud, on-premises and hybrid deployment options to
customers, with its benefits including a smaller data footprint, higher throughput, faster
analytics and faster access to data. It also allows existing SAP Business Suite
customers to upgrade to this product from SAP Business Suite. Until the current year,
SAP stills work for more improvement to their product. (SAP History, n.d.)

SAP FICO
Managing the internal and external processes manually in the company can be a
burden to a company. Thus, a need for a system that will help all the accomplishment of
accounting and reporting requirements. SAP FICO is a great tool in addressing the

need for a streamlined core accounting and reporting capabilities for the huge
requirements of large multinational companies. It is one of the most widely used SAP
modules. (Esha, 2012) SAP FICO have two different parts, namely, SAP FI and SAF
FICO. Generally, FI transactions deals with the external stake, whereas the CO
transactions and data are more relevant to a companys internal management. (SAP
FICO JOBS, n.d.)
SAP FI (Financial Accounting) is one the functional module in SAP software. It's
used for external reporting, like balance sheet. The information provided by SAP FI is
used by investor and creditors to decide whether they accept the request of the
company. Company-wide control and integration of financial information is essential to
strategic decision making, SAP ERP Financials enables you to centrally track financial
accounting data within an international framework of multiple companies, languages,
currencies, and charts of accounts. (SAP FI, n.d.) Some of the SAP FI sub-modules are:
General- Ledger accounting, Accounts Receivable, Accounts Payable, Bank Accounting
and etc..
On the other hand, SAP CO is used for internal reporting.

The information

provided in SAP Co is used by the management to make decision-making. It basically

sums up all the operating costs and expenses of the organization, enabling management
to make essential business decisions. The CO (Controlling) module has components like
Cost Element Accounting, Cost Controlling, Cost Center Accounting, Internal Orders,
Activity Based Costing, Product Cost Controlling, Profitability Analysis, Profit Center
Accounting etc.
According to Richa (2014) SAP FICO: Provides quick, reliable and relevant data
in order to meet the external reporting tasks such as Balance Sheet, Profit and Loss
Statements, Profitability Analysis and etc.. Helps you to track and monitor data of

different cost and profit centers situated across the globe from one single platform Realtime financial processing enables quicker management decisions and etc.

Theoretical Framework
Throughout the study, the researchers will discuss the importance and the
advantages of using the System Application Product program considering the ease of
use of the program, to its features, functionality and its effectiveness relative to the
profile of the respondents. The researchers will also know the possible problem that
occurs in using the program and the solutions that the users recommend.
System Application Product program is a real-time system that made mainframe
programs for payroll and accounting. It would be a useful tool to the companies in order
to have fast transactions and for the employees to be more effective on their jobs.
Adaptive Structuration Theory by DeSanctis and Poole is formulated as the production
and reproduction of the social systems through members use of rules and resources in
interaction (Majchrzak. Rice. Malhotra. King. & Ba, 2000). AST criticizes the technocentric view of technology use and emphasizes the social aspects. Groups and
organizations using information technology for their work dynamically create perceptions
about the role and utility of the technology, and how it can be applied to their activities
The perception that varies widely across the groups influences the way how technology
is used and mediate its impact on group outcomes. (Adaptive Structuration Theory. N.d.)
According to DeSanctis and Poole AST is a viable approach for studying the role
of advanced information technologies in organization change. AST examines the change
process from two vantage points 1) the types of structures that are provided by the
advanced technologies and 2) the structures that actually emerge in human action as
people interact with these technologies.

DeSanctis and Poole study were consists of two groups that compared by the
used of Group Decision Support System (GDSS) for prioritizing projects for
organizational investment. A written transcript and an audio tape produced qualitative
summary. Also quantitative results were obtained which led to the following conclusions.
Both groups had similar inputs to group interaction. The sources of structure and the
groups internal system were essentially the same in each group, except that group 1
had a member who was forceful in attempting to direct others and was often met with
resistance. Group 2 spent much more time than group 1 defining the meaning of the
system features and how they should be used relative to the task at hand; also group 2
had relatively few disagreements about appropriation or unfaithful appropriation. In
group 2 conflicts was confined to critical work on differences rather than the escalated
argument present in group 1. This example shows how the Adaptive Structuration
Theory (AST) can help to understand advanced technology in group interactions.
Although the same technology was introduced to both groups, the effects were not
consistent due to differences in each groups appropriation moves. (Adaptive
Structuration Theory. N.d.)

The researchers study on the perception of the respondents on the advantages

and importance of SAP program on *cite the specific company* will relate on how
DeSanctis and Poole apply the Adaptive Structuration Theory (AST) in two organization
which there is a significant different effects in each group sample,

Conceptual Framework
The purpose of this section is to explain and rationalize the conceptual
framework proposed by the researcher. A model was used to show the perception of the
researcher regarding the study for a better and clear understanding.

The paradigm is based on IPO model that convey system fundamentals which
are the input, process and output. Based on the researches made, through theories and
concepts, the researched came up with a paradigm which consists of three (3) boxes.
The first box pertains to the independent variables which are profile of respondents in
terms of age, sex, number of years in the business, and highest educational attainment.
Further, the second box relates to dependent variable which is the level of effectiveness
in relations to effectiveness, functionality, efficiency, functionality and ease of use. The
third box or the output of the study, this is the main product of the study which answers
the questions we are researching for.

INPUT

1. Profile
1.1. Age
1.2. Sex
1.3. Civil Status
1.4. Highest
educational
attainment
1.5. Years in the
business
2. Perspectives of the
company
2.1. Location of the
business
2.2. Average daily
sales
2.3. Number of
accounting staff
2.4. Number of
personnel using SAP FICO
software
3. Perceptions of the users of
SAP FICO software
3.1. Ease of use
3.2. Features
3.3. Functionality
3.4. Effectiveness
4. Perception of the
respondents on the problems
encountered and possible
solutions of the SAP FICO
software in improving their
daily operation?

PROCESS

1. Survey
Questionnaire
2. Observation
3. Documentary
Search
4. Statistical
Analysis
4.1. Likert scale
.4.2. Weighted
Mean

FEEDBACK

OUTPUT

1. Solution to the
problems
2. Additional
knowledge for
the users of SAP
FICO
3. New knowledge
for the new
graduates in this
field of work

Figure 1. Conceptual Paradigm

Statement of the Problem
This research aimed to view the perception of the selected software users
regarding advantages and usefulness of the SAP FICO Module. Furthermore, the profile
of the respondents, perspective of the company, importance and advantage of the SAP
FICO software and the problems encountered and possible solutions of the SAP FICO
software were part of the study.
Specifically, the research sought to answer the following questions:
1.0 What is the profile of the selected SAP FICO software users in terms of the following:
1.1 Age;
1.2 Sex;
1.3 Civil status;
1.4 Highest educational attainment; and,
1.5 Number of years in the field of work?
2.0 What is the perspective of the company of SAP FICO software users in terms of the
following:
2.1 Location of the business;
2.2 Average daily sales;
2.3 Number of accounting staffs; and,
2.4 Number of personnel using SAP FICO software?
3.0 What are the perception of the respondents on the importance and advantages of
the SAP FICO software in improving their daily operation in terms of the following;
3.1 Ease of use;
3.2 Features;

3.3 Functionality; and,

3.4 Effectiveness?
4.0 What are the perception of the respondents on the problems encountered and
possible solutions of the SAP FICO software in improving their daily operation?
5.0 Is there a significant relationship between the profile of the respondents and the
following lead variables?
5.1 Perception on the Importance and advantages of SAP FICO; and,
5.2 Problems Encountered and Possible Solutions?
Hypothesis
Null form hypothesis:
There is no significant relationship between the profile of the respondents and
the following lead variables:
1. Perception on the importance and advantages of SAP FICO; and,
2. Problems encountered its possible solutions.

Scope and Limitations

This study is geared towards the evaluation of the selected users of Oriental and
Motolite Corporation about the usefulness and advantage of the SAP FICO software.
This is to have an understanding as to the perspective of the company, importance and
advantage of the SAP FICO software, and the problems encountered and possible
solutions of the latter.
The researchers concentrated on a specific version of SAP SAP FICO which
Oriental and Motolite Corporation is using.
The study aims to assess 33 selected users who are employed in Oriental and
Motolite Corporation. The main source of data will be the survey questionnaire, which

was prepared by the researchers and statistically treated by the use of descriptive
method.
Significance of the Study
SAP FICO is one of the number one providers of business software solutions
towards better work and data management in organizations across industries.
The generalization of this present study would be a great contribution to the vast
knowledge in relation to businesses application software. Viral results of this
investigation could be highly significant and beneficial to the following:
Accountancy students. This study will widen their knowledge in the latest
accounting software significantly used in the business world. This study will help their
preparation on the career that they will be taken.
Managers of the Company. This study will contribute the relevant information to
managers about the advantages of SAP FICO software. This will give them idea on what
is the perception of the employees on this software.
Business owners. This study will enlighten their awareness regarding the
benefits of using SAP FICO software. Thus, giving them a choice whether to acquire
SAP FICO software in their business or not.
Employees of the Company. This will make them give importance to the
software, knowing the advantages; it will motivated them knowing they are working in a
more simplified process.
Researchers and Other Researchers. This study served in a great part for the
completion of the researchers course requirement. This will give them advantage with
other new employees once they are working in a firm who uses SAP FICO because it
makes them aware of the software and its advantages. This helped them to become a
team-worker and at same time developed responsibility as a member of the group. This
aided them in increasing their vocabulary and knowledge. For other researchers, this

study will be an effective basis and reference who would intend to make any further
relevant study particularly the standards underlying the Advantages of using SAP FICO.
Definition of Terms
For the purpose of clarification, the important terms used in this study have been
operationally defined.
Accounting Staff. Those who are currently employed as an accountant or any
related work; work under the supervision of a controller, director or certified
public accountant (CPA).
Advantages of SAP FICO. It is the benefit the company and the users enjoy
when using SAP FICO.
Age. It is the number of years after the respondents birth; the length of time that
a person or thing has been existing.
Average Daily Sales. It is equal to total sales for a period over number of days in
such period.
Civil Status. In this study, it is the respondents legal status in society whether
single or married
Competitive Advantage. It is the lead that a firm has over its competitors,
allowing it to generate greater sales or margins and/or retain more customer. There can
be many types of competitive advantages including the firm's cost structure, product
offerings, distribution network and customer support.
Ease of Use. It refers to the usability and understandability of the SAP FICO by
personnel to achieve effectiveness and efficiency of objectives.
Effectiveness. It refers to the degree to which SAP FICO is successful in making
an anticipated outcome.

Enterprise Resource Planning (ERP). It is a process by which a company,

which is oftentimes a manufacturer, handles and assimilates the important parts of its
business. It is a type of business-management software that a business can use to
gather, store, manage and deduce data from many business activities, including: product
planning, acquisitions, manufacturing or service delivery.
Features. This is the unique quality or characteristic of SAP FICO software.
Field of work. It is the practical work or job done by the respondents in the
office.
Financial Accounting/Controlling Module. FICO module is a tool used in
Systems, Applications and Products in Data Processing, or SAP. FICO modules are
used for information technology through SAP, which is a package mainly employed for
financial accounting.
Functionality. It is the level of satisfaction of the users whether the software
meets the expectation of the company
Highest Educational Attainment. In this study, it is the highest degree of
education the respondents has completed, whether Bachelors Degree, Masters Degree
and Doctorate Degree.
Importance of SAP FICO. It is the state of the software being worthy or has a
significant value in the companys overall daily operations.
Location of the Business. This is the primary place where the firm decided to
establish its operation.
Problems Encountered. These are the complications faced by the users.
Profile. In this study, it refers to the respondents classification as to age, sex,
civil status, highest educational attainment and number of years in the field of work.
Sex. It is the two main categories (male and female) into which respondents are
divided on the basis of their reproductive functions.

Solutions. These are resolutions that could possibly solve the problems
encountered by the users.
Systems, Applications, and Products Software (SAP). It is a business solution
that will help enterprises to manage its operation. SAP provides software tailored to fit
different aspects of business.
Technology. It refers simply to the application of science. As to business, this
refers to the purposeful application of data gathered in the planning, creation and
utilization of goods and services, and in the organization of firm activities.
Users. To whom the SAP FICO software was built for; personnel who operate the
said software.

CHAPTER 2
REVIEW OF RELATED LITERATURE AND STUDIES
This chapter contains the related reviews and meaningful citations from, both
foreign and local, studies and related literature pooled by the researchers in order to
develop a deeper understanding into prior works and trends which are relevant to the
subject matter and as well as to reach certain aims of the study.

Foreign Literature
The term ERP was coined by the Gartner Group in 1990, although the
philosophy of ERP pre-existed in many MRP II implementation cases. The first synthetic
E stems from the word Enterprise to underline that this new kind of software applies to
all the departments of a company, thus it is an enterprise-wide solution. Before the
advent of ERP systems, every department in a company had its own, customized
computer system. Subsequently, communication problems between departments had
been pretty common. Gaps and differences in the data of the departments had been
resulting in inaccuracies, especially in the field of sales forecasting. The need for
integration had been more than evident.
According to Behl (2009), ERP systems, as introduced by Gartner, have three
main properties: hey are multifunctional. ERP systems treat a number of activities such
as manufacturing and human resources, sales, procurement, financial results, etc. They
favor integration by nature. For instance, when the procurement department places an
order, data in the financial department will be updated automatically. They are structured
modularly and can be used in parts (modules) or resoundingly.

As market leader in enterprise application software, SAP helps companies of all

sizes and industries run better. From back office to boardroom, warehouse to storefront,
desktop to mobile device SAP empowers people and organizations to work together
more efficiently and use business insight more effectively to stay ahead of the
competition. SAP applications and services enable more than 109,000 customers to
operate profitably, adapt continuously, and grow sustainably (SAP News 2011)
The financial benefits provided by an ERP system can be difficult to calculate
because sometimes ERP increases revenue and decreases expenses in ways that are
difficult to measure. In addition, some changes take place over such a long period of
time that they are difficult to track. Finally, the old information system may not be able to
provide good data on the performance of the company before the ERP implementation,
making comparison difficult. Still, the return on an ERP investment can be measured and
interpreted in many ways: Because ERP eliminates redundant effort and duplicated
data, it can generate savings in operations expense. And because an ERP system can
help a company produce goods and services more quickly, more sales can be generated
every month. In some instances, a company that does not implement an ERP system
might be forced out of business by competitors that have an ERP systemhow do you
calculate the monetary advantage of remaining in business? A smoothly running ERP
system can save a companys personnel, suppliers, distributors, and customers much
frustrationa benefit that is real, but difficult to quantify. Because both cost savings and
increased revenue occur over many years, it is difficult to put an exact dollar figure to the
amount accrued from the original ERP investment. Because ERP implementations take
time, there may be other business factors affecting the companys costs and profitability,
making it difficult to isolate the impact of the ERP system alone. ERP systems provide
real-time data, allowing companies to improve external customer communications, which
can improve customer relationships and increase sales.

SAPs goal was to develop a standard software product that could be configured
to meet the needs of each company. According to founder Dietmar Hopp, SAPs concept
from the beginning was to set standards in information technology. In addition, the
founders wanted data in real time, and they wanted users to work on a computer screen
rather than with voluminous printed output (Monk & Wagner 2013).
Sad reality is that for almost every business, version-lock is the Achilles heel of
their on-premise ERP. Customizations to an ERP that seemed so innocuous at the
beginning of an implementation years ago have built up over time like silicon plaque.
Gradually, your ERP becomes hardened to change because an upgrade to on-premise
technology means re-implementing and testing those custom schema changes,
integrations, workflows and reports.
Faced with outsized risk, cost and resource requirements for what may seem
like an incremental upgrade, your company can be effectively forced into version-lock,
with an aging ERP system thats increasingly out of alignment with the needs of the
business. Your users begin working around your system with unproductive manual
processes and spreadsheets to fill in the functional gaps that have grown over time. With
businesses already spending an average of 5 percent of their revenue on IT operating
and capital budgets, theres little appetite to further erode margin by growing the IT
budget without delivering sustained transformational value and real competitive
advantage.
Does running an aging, out-of-date ERP really damage your business? Does it
matter if your ERP is version-locked? After all, isnt it simply automating the same old
accounting processes that havent changed in decades? The reality is that the damage
is real, and while your ERP has your business stuck in quicksand, your competitors are
not standing still. Your business needs ERP that supports real transformation, and that

outdated ERP system youre running simply isnt aligned with the business environment
in which you and your competitors operate (NetSuite 2015).

Local Literature

Foreign Studies
According to the study of Yingyu Wang (2013), there are many positive impacts
of SAP on management accounting. To start with, the SAP system changed the original
management and improved the integration, cooperation between different departments.
The purchasing, logistics and sales departments are linking together, working at the
same platform. This characteristic removes much manual work which should be done by
management accountants. Once the data is input into the system by first-line
employees, it will automatically transfer to every process throughout the business. In the
transformation, the data keeps consistency and acquirable by staffs. From another
perspective, this function guarantees the accuracy and transparency of data and
provides more reliable information for management accountants.
In study made by Xun Liu (2013), the users of SAP application today do know
how to use it. When introducing any whole new and ambitious graphic interfaces to the
users, the acceptance of theirs must be taken a serious consideration. Transforming the
interface step by step seems to be a better approach. And the user should be given the
right to choose as well.
Applying a usability project to a system like SAP is a massive work. It will take a
very long period to harvest. The next phase for this project is to involve a small group of
end user testing the new technologies. A clear communication with SAP AG is
necessary.

SAP ERPs highly integration enables FI module to provide real-time data to

information users and the configurable and based on best practices enable FI module to
provide correct data to Company Vendor Accountings Warehouse Purchase Function
Receives Order Creates purchase order for Vendor in System Shipment to Cronus Send
invoices to Cornus (Vendor Invoice No.555101 ) Receives payment Receives shipment
from vendor Receives Invoice from vendor Creates purchase invoice with reference
invoice No. 555101 Pays vendor invoice Consistent with receipt & order information?
Yes Checking information with warehouse & purchase No Records into system 44
information users. Meanwhile the versatile analysis and reporting tools supported by the
SAP information technology present comprehensive and multidimensional analysis
results to users, and SAP FI module provides a platform to visualize the business
transactions in operating layer and results in a higher transparent and quicker
accounting process. Therefore the finding of this thesis is that SAP FI module optimizes
financial accounting performances through providing precise and real-time data and
presenting comprehensive and multidimensional analysis results to information users
and decision-makers Furthermore, SAP FI module provides competitive advantage for
the SAP FI users through accelerating accounting process (Study of Yu Zhang, 2012).
The benets of SAP NetWeaver on SAP customers is believed to be high
however there would be some minor drawbacks. 1 SAP NetWeaver effects on SAP
developers are smaller than on customers as the tools used for the development of new
applications are basically the same with the addition of enriched functionality. 2
According to SAP specialists the impact of SAP NetWeaver on SAP consultants is the
least among the three analysed business partners. (Studies of Diana Gold Oguzhan
Osman Erim, 2009)
According to the study made by Daryna Barsukova (2013), the results of
research showed the variety of attitudes largely dependent on the particular project

experience and interviewees role in it. The methodology is seen as good framework to
work in a structured way. Though, once mastered it goes a bit to the background. What
makes a difference then is a set of other issues related to change management and
project management. Implementation comes with a stress to the organization so the
client has to be prepared to cope with extremely complex project.
Consultants share some of attitudes. Namely, all of the respondents are willing to
have enough of competent and devoted people to the project team. Another requirement
for them is to have enough of power to make motivated decisions quickly and effectively.
Train the trainers concept is largely used to the education of the users where
consultants educate super-users and they in turn educate all the rest of end users.
Consultants do seem to avoid system customizations and think that packaged solution
incorporates all necessary functionality. Other attitudes are different depending on the
type of consultant, size and profile of projects they are working on. The differences are
also related to activities that consultant attaches importance to ranging from
communication, change management to active participation from client and scope
control.

Local Studies
Almost all aspects of the SAP utilization have significant influence on the plants
perceived operation efficiency except for production order. There is a very strong
association between transactional process and the plants perceived operational
efficiency. Through simple regression analysis, it is learned that there is significant
influence between perceived operational efficiency of Holcim Philippines, Davao plant
and production, transactional process, inventory management, work order, and
purchasing process. Through multiple regression analysis, the transactional process

alone is the strongest influencing factor to the plants perceived operational efficiency.
(Servando Nudas, 2008)
According to Flordeliza Poncio (2013), the current setup of the sales and
distribution data are manually posted into both the front-end and back-end systems that
may cause data discrepancies that the systems used are not fully utilized due to
insufficient training to the main SAP users.
Enterprise resource planning system is a complex and integrated systmen which
management regards as a strategic tool to make improvement. Owing to its defined
processes and integrated nature, organizations are usually required to make some
changes to adopt the systems. The perception of high failure rate in ERP implementation
motivates researchers to study critical success factors which are expected to help
organization implement ERP systems successfully, although critical success factors in
ERP implementation have been quite well studied. It is still one of the popular topics in
the field (Chuen 2010).
It is determined that both SAP ERP and Oracle ERP software provides ease in
adaptation, provides ease in data sharing and the terms of the system are not
complicated.
Based on the respondents perception on features of SAP ERP and Oracle ERP,
the method of data storage can be considered independently of the programs that
access the database. It also ensures integrity constraints are enforced on the database
and takes the ability to swiftly recover from crashes and errors, including restorability
and recoverability. It also helps in accomplishing every task by integrating the
information system and provides accurate, relevant and timeliness of information. On the
other hand, it acquires answer on any query by its powerful query and filtering facility
and provides information updated and on real time. (Ecal, Mariano, Millares, Rodrigues,
Romblon, 2015)

According to the study of Salvador & Villamor (2007), ERP can be viewed as
valuable resources that can provide various capabilities to companies that use it. It can
be a source of competitive advantage for a firm. However, the successful adaptation of
ERP, especially in developing countries like Philippines, will require culture modification
within a firm as if involves revolutionary changes in the way people will be doing things,
especially in developing countries like Philippines. This modification raises some issues
which point to the viability of ERPs use in the Philippine context.

Synthesis

CHAPTER 3
RESEARCH METHODOLOGY
This chapter shall discuss the research methods available for the study and what
is applicable for it to use in response for the statement of the problem in Chapter 1 which
is directed towards the perception of the selected software users regarding advantages
and usefulness of the SAP FICO.
This part of the study specifies the method of research used, description of the
respondents, population and sampling, description of instruments used in the collection
of data, how data were collected, and how data were treated and organized.

Research Method Used

This study used a descriptive survey method to assess demographic profile such
as age, sex, civil status, highest educational attainment, number of years in the business
and their perception of the selected software users regarding advantages and
usefulness of the SAP FICO.
Descriptive research method defined as a study designed to represent the
respondents in an accurate way. Descriptive research is all about who are the people as
they are engaged in the study. Basically, descriptive research is merely describing
people who take part in the study.
Furthermore, descriptive research is primarily concerned with describing the form
or nature and the degree in the detail of the present situation. To conform to the

assumed results, survey method is used. Because of the high representativeness

brought about by the survey method, it is often easier to find statistically significant
results than other data gathering methods. Multiple variables can also be effectively
analyzed using surveys.

Respondents of the Study

The respondents of the study are 33 selected Oriental and Motolite Corporation
employees who are using SAP FICO software and are chosen through expert sampling.
This is a type of purposive sampling, which is under nonprobability sampling. Purposive
sampling is a sampling technique in which researcher relies on his or her own judgment
when choosing members of population to participate in the study.
Expert sampling defined as a method also known as judgment sampling. In this
method, a researcher collects the samples by taking interviews from a panel of
individuals known to be experts in a field.

Sampling Technique
The method of purposive sampling was used to develop the sample of the
research under the discussion. According to this method, which belongs to the category
of non-probability sampling, techniques, sample members are selected on the basis of
their knowledge or expertise. In this study, the selected respondents have sufficient and
relevant experience and expertise on the SAP FICO Software.

Instruments Used
The instrument used was a researcher-made Likert scale questionnaire to gather
the needed data for the perception of the selected software users regarding advantages
and usefulness of the SAP FICO. The draft of the questionnaire was drawn out based on
the researchers readings, previous studies, and on SAP FICO itself. In the preparation

of the instrument, the requirements in the designing of good data collection instrument
were considered. Hence, researchers had to make the questions unbiased, unequivocal
and not leading to a desired answer.
The questionnaire is consisting of four (4) parts. The first part is focused on the
profile of the respondent. Included items are Age, Sex, Civil Status, Highest Educational
Attainment and Number of years in the field of work of the respondents. The second part
concentrated on the perspective of the company of SAP FICO software users in terms of
the location of the business, average daily sales, number of accounting staff and number
of personnel using SAP FICO software. The third part, with the use of Likert scale
questioning, evaluates the perception of the respondents on the importance and
advantages of the SAP FICO based on SAP FICOs A: Ease of Use; B: Features; C:
Effectiveness; D: Functionality. The options are Strongly Agree (5), Agree (4), Neutral
(3), Disagree (2) and Strongly Disagree (1). The last part, also in a Likert scale format,
embraces the solutions to the possible problems that they are encountering in their daily
operations. The researchers included an option for the respondents to specify those
problems they encounter and possible solutions not existing in the questionnaire.

Validation of the instrument

For the researchers to assure that the results will meet the expected outcomes,
the instruments must be subjected to validation. Validation requires the instrument to
undergo into a test or series of tests to know what it truly intends to measure. The
researchers consulted experts who are knowledgeable, have the experience and have
the expertise on the subject matter, the SAP Financial Module.
At first, the study was all about the SAP as a whole itself. The first draft of
instrument was scrutinized by Professor Ryan Roque. Through his guidance, the
researchers were able to make the study be specific. He gave an option whether to

choose SAP Inventory Management Module or Financial Accounting Module as the

topic- the researchers chose the latter. As a result, the researchers revised the
instrument which then submitted to Professor Jeffrey Ebio for further suggestions and
revisions. He found some items to be vague and subject to different interpretations.
Subsequently, the instrument was submitted to the researchers adviser, Professor
Ellinor Fua-Geronimo. Items considered to be lacking of importance and irrelevant to the
study were omitted. The final revised form of the instrument was then submitted to the
finance manager for the respondents to answer.

Data Gathering Procedures

The data for this research were collected using a survey questionnaire. The
researchers prepared formal letters addressed to the management seeking their
permission to conduct survey. Upon receiving the approval of the management and the
validation of the questionnaire, the researchers went to the companys site which is at
Ramcar Center Bldg, Don Alejandro Roces Ave, Diliman, Quezon City to give the
questionnaire to the Finance Manager of Oriental and Motolite Corporation, she then
distributed the questionnaires to the employees through e-mail due to their busy
schedule.
The researchers converted their questionnaires into Google Forms for the
convenience of the respondents. After the result will be interpreted using various
statistical tools. The results of the technique used in the data gathering helped the
researchers to arrive at the interpretation of the study.

Statistical Treatment of Data

The data gathered by the proponents through questionnaire were summarized,
tabulated, presented, analyzed and interpreted. Samples preferences will be

established which will be serve as basis for conclusions and recommendations. The
following are the statistical methods and techniques used for better interpretation of the
data obtained:
1. Frequency Distribution
The proponents first used the frequency method. The frequency of an item refers
to the total number of respondents who favored an item over the other given items.

2. Percentage Distribution
After the frequencies were determined, percentages was used. The percentage
distribution was used to determine and show the relationship between two magnitudes,
especially of a part to a whole. This method was also used to show the demographic
profile and the distribution of the respondents as to various categories in the study. The
percentage distribution method may be illustrated by the formula of:
P = (f/n) x 100
Where:
P

= Percentage

= Frequency

= Total Sample

3. Weighted Mean
Weighted mean method was used to determine the average responses of the
different options provided in the various parts of the survey questionnaire used. This
method was used in conjunction with Likert Scale and can be solved using the formula
of:
X = fx/n
Where:

= weighted arithmetic mean

fx

= sum of all products of f and x

= being the frequency of each weight

= weight of each operation

= total number of respondents

4. Chi-square
It was used to determine the significant differences between the perceptions of
the respondents. The values of chi-square of a given distribution are computed by:
4.1. Finding the differences in between each observed value and the
corresponding expected value;
4.2. Expressing the square of the differences as a fraction of the expected value;
and
4.3. Summing
Thus, the formula used for computing the chi-square values is presented
below:
x2 = _[(fo fe)2]_
fe
Where:
x2

= Chi-square Value

fo

= Observed Frequency

fe

= Expected Frequency

The computation for the degree of freedom is necessary in order to obtain

the critical value (P). The formula is:
df = (rl) (kl)

Where:
r

= number of rows

= number of columns

df

= degree of freedom

a. Hypothesis
Ho = The perception of the student in variation when they group according to their
age group are independent.
Ha= The perception of the student in variation when they group according to their
age group are not independent.
b. Decision Rule
Reject Ho if the computed p-value is less than to alpha (0.05).
Likert Scale. The Likert Scale method (Emory, 1993) of Summated Ratings was used in
responses. To analyze responses to a Likert Scale, each category is assigned a
numerical value such as Strongly Agree which is equal to 5 and Strongly Disagree which
is equal to 1. The total assigned value will be determined by using weighted mean. The
scoring systems for each item must be such that a high score consistently reflects a
favorable response and a low score consistently reflects an unfavorable response.
The consolidated points from the respondents answer to each item over a fivepoint scale were as follows:

WEIGHTED MEAN

SCALE

VERBAL INTERPRETATION

5-4.21

Strongly Agree

3.4-4.20

Agree

2.61-3.40

Neutral

1.81-2.60

Disagree

1-1.80

Strongly Disagree

WEIGHTED MEAN

SCALE

VERBAL INTERPRETATION

5-4.21

Always

3.4-4.20

Frequent

2.61-3.40

Often

1.81-2.60

Sometimes

1-1.80

Not at all