ERP Audit Services

Applications can play a pivotal role in supporting business processes and ensuring effective control over these processes. However, excessive or ineffective controls can harm the bottom line. Our IT audit practice can help you to identify the best way to balance powers with business processes so that the process remains effective and the organization is safe from risk. We can guide you to ensure that the applications in place support the business processes and provide a robust control environment.

What is an ERP Audit

ERP auditing is the assessment of enterprise resource planning functions to evaluate their efficiency. The aim is to examine how well each ERP component addresses issues and streamlines processes to make enhancements and reinforce the system.

Once the ERP software is implemented, ongoing management and refinement are necessary to ensure it brings measurable benefits to the business. Regular maintenance and auditing after go-live are essential to keep the system delivering the expected results.

Chudovo can assist in recognizing the significant risks and oversight matters associated with ERP systems.

Why Are They Necessary?

Chudovo will provide periodic ERP Audits to address the technical complexities, Reliability, availability of data, flexible configuration, customization, and maintenance of the integrated system. These Audits will assess the Implementation Review, including High Level and essential practices, to ensure optimal support for business needs.

Conducting a Business Audit: Examining the processes set up in the modules to guarantee essential supervision is implemented for modules & components in the ERP system.
Review of module features: Examine the features and functions configured in the modules and components to identify any missing elements.
Review of ERP System Security: Ensuring proper configuration of the administrative component and secure system.

Carrying out an ERP audit is essential for the following reasons:

Ensures data accuracy

Are your ERP modules collecting accurate data and correctly segmenting it? Can improvements be made to prevent aggregation errors that could affect different areas of your organization? Ensuring data accuracy is vital.

Safeguards compliance

Ensuring adherence to regulations and standards – if your business is in a highly regulated industry, regular auditing of your ERP system can provide peace of mind and compliance across your supply chain.

Bolsters security

Enhancing safety – don't let single components of your ERP program put your supply chain security in danger; staying current with the system is essential to preserving the protection of your information and resources.

Error avoidance

Assess the potential for errors as the business implements and adopts your ERP suite. An audit can identify these mistakes early, allowing you to make corrections before they become widespread, thus avoiding productivity losses along the supply chain.

Consistent ROI

Ensuring consistent ROI is a significant incentive for investing in ERP solutions. To guarantee your system is delivering the desired return, regular auditing is essential for attaining peace of mind that each process and application is helping your bottom line.

To be ready for the future, it is necessary to understand what is to come. It is where forecasting plays a crucial role in success.

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HOW TO CONDUCT A MEANINGFUL ERP AUDIT

You've had your ERP system for some time now and are using only a few of the modules it offers. You may use the system extensively but must review its post-implementation efficiency. Auditing an ERP system requires a unique approach due to its varying processes, architectures, and security features. To begin, we advise considering these five objectives:

Study your processes and KPIs

Start by determining the organization's objectives. What are the desired outcomes? What metrics are currently being used to evaluate progress? It will provide a clear understanding of the processes being implemented. Afterward, use technology to strengthen these processes. When conducting an audit, the most precise success indicators are KPIs linked to core business operations.

Assess the quality of usage

Working with business users to understand their use of the system is the next step. What is being done well and needs improvement? What gaps exist? What are the adoption rates? How well-trained are users on the current version? Are they taking advantage of the features? How much better is the system compared to manual tasks? Are there any duplications or wasted time because of the system? If there are multiple systems, are they integrated? Does the current workflow match the one established initially? Start with one department and document the results to identify trends and map out new processes to address them.

Identify control points

Examine your 'control points'. In a business process, certain areas may necessitate approval or other action. Such areas are labeled as control points and commonly identified as system issues. You should survey all your control points for your audit to ensure you have feasible methods of making your workflow as smooth as possible. Your productivity will heighten if your control points do not bring about obstructions as tasks progress through the system.

Identify critical risks and put in place measures to mitigate them

Evaluate and manage risks in the wake of system audit. After the audit, it is possible to identify areas of vulnerability and how to rectify them with the system. Working with concrete situations can be beneficial in assessing risks. For instance, consider how quickly a product recall could be conducted and if this is practicable.

Make an action plan for the future

A well-documented audit provides valuable findings; however, these are only meaningful with an action plan. Identifying what needs to be improved, enhanced, and added is essential to take your processes to the next level and getting the best out of your system. Establish a timeline for process enhancement and assign responsibility to key personnel to implement your action plan.

Take action

Ensuring the alignment of your auditing activity with its purpose and objectives can be achieved by creating a checklist of strategic actions, regardless of the auditing measures you plan to implement.

Different Types of ERP Audits

Each approach is suitable for auditing an ERP system. Your business's ERP software, applications, and unique needs will determine the type of evaluations, checks, and evaluations you do. Various ERP auditing tactics have developed recently as companies seek to evaluate their system's core structure. Here's an overview of some of the distinct ERP audit types and their applications.

Process Audit
Examining processes and workflows throughout your supply chain, this type of auditing evaluates their effectiveness, necessity, and performance. It can help spot bottlenecks and project hold-ups, enabling you to take appropriate steps to streamline operations.
Compliance Audit
Ensuring compliance with regulations is the focus of this type of ERP auditing. Having processes and procedures that align with legal requirements is essential for business continuity, significantly when regulations influence your industry.
System Audit
System auditing focuses on the technical needs of the software and is usually done by IT personnel or a reliable third-party vendor. The goal is to confirm that your ERP applications have the hardware and networking capability to operate at their best.
Security Audit
Evaluating the safety of an Enterprise Resource Planning (ERP) system involves a security audit to identify which applications are most vulnerable to cyber threats and what security measures are in place to protect against data loss or corruption.
Waste Audit
Conducting a waste audit can help pinpoint unnecessary components within your ERP system. From overproduction to prolonged process times, many variables can be considered 'waste', and managing these can lead to increased efficiency and reduced costs.

Here are five steps to consider when planning an ERP audit.

Identify Your Objectives

Assemble Your Audit Team

Create a Simple Issue Flagging Process

Accurate Issue Recording

Prioritise and Execute Changes

Identify Your Objectives

An audit assesses a system, process, or organization to determine whether it functions as intended. To ensure the success of the auditing project, it is essential to identify clear objectives that align with the business's overall aims. Here are some examples of typical ERP auditing objectives:

- Evaluating the supply chain for overproduction weaknesses

- Examining the security of individual ERP applications for vulnerabilities

- Determining if the current network is capable of supporting the ERP software.

Assemble Your Audit Team

Carefully consider who in your organization would be best suited to audit the project and review the software concerning the critical objectives. Make sure to include a varied selection of disciplines, not limiting it to IT and engineering personnel, but also include those who regularly use the system and can provide a practical understanding of how it operates daily.

Create a Simple Issue Flagging Process

Auditors must flag issues for review and approval: establishing an uncomplicated, transparent system for presenting and assessing audit results is a must before beginning the project. Depending on the audit range, this may be just a standard Google sheet, yet for complete cooperation, transparency, and efficient audit direction, we suggest a Kanban-style process board.

Accurate Issue Recording

Once you have established the location for logging system issues, you should outline the information to be recorded. It will vary depending on the audit, but typically the log should contain: a concise description of the issue, the potential risk if it's not resolved, the auditor who found the problem, and the date and time it was identified.

Prioritise and Execute Changes

It is essential to order issues by seriousness once the audit is finished and assign basic improvement tasks to the relevant personnel. Investing the necessary time and resources into making the necessary improvements is essential for making the audit activity effective.

Benefits and Advantages of ERP

Data Security

Data is a valuable asset for businesses because it is crucial for sound decision-making. ERP software can help guard this resource. Instead of having data spread across multiple systems with different security levels, ERP systems store all information in one place. It replaces the need for documents and emails on employees' computers. Cloud ERP systems create redundancies and protect against single points of failure by distributing data across multiple remote servers. Companies need to handle sensitive customer information.

An ERP system can enhance data security by granting restricted access to data. Setting up simple permissions ensures staff only view the relevant information, thus reducing the chances of fraud or other wrongful actions.

Standardized/Centralized Data

The value of ERP is significant as it allows for the centralization of data from different departments into one convenient location. Without it, information is scattered across multiple applications and spreadsheets, making it difficult to access. Moreover, this can lead to duplicated data in different formats, further complicating matters.

An ERP system can aid with this by unifying all essential data. As it's all in one system, the information will be in the same format, preventing problems when running analytics or reports. This standardization allows for more comprehensive insights, which can aid in making decisions to maximize time and cost savings for the business.

Increased Productivity

An ERP system can provide a significant productivity boost in numerous ways. One of these is the automation of mundane, repeated duties, enabling employees to work on more value-adding projects. Additionally, straightforward processes and quick access to the necessary information can help them complete tasks faster. With a clear view of the entire company, no time is spent asking for specific data or process details.

With an ERP platform, greater productivity can be achieved without increasing the headcount. It reduces employees' workload, allowing them to focus on more meaningful tasks and projects that utilize their skills and expertise.

Visibility

ERP provides a broad, fundamental advantage of visibility to all business stakeholders, allowing faster and more informed decisions. For instance, having insight into the status of incoming purchase orders can help the purchasing team avoid the excessive or insufficient stock. This visibility into different aspects of the business is a powerful thing.

Having visibility into the status of processes and data managed by other teams enables all teams and individual contributors to do their jobs more effectively. It also saves time and energy that would otherwise be spent locating this information.

Accurate Forecasting

Forecasting helps businesses predict future demand, revenue, expenses, and other figures by analyzing past data and other inputs. When an ERP system is in place, forecasts become even more accurate because it is easier to access accurate and comprehensive information as all the data can be found anywhere.

Accurate forecasts enable businesses to prepare adequately for what is likely to come. If sales are anticipated to rise by 30%, it would be beneficial to stock up on inventory or, if it is a services business, to hire personnel who possess the necessary skills when demand is increasing. Additionally, looking for methods to reduce expenses is wise if costs are expected to grow more than sales. Ultimately, better forecasts can help organizations make more money by having all the resources available and decrease costs by not incurring overheads in the wrong areas.

Scalability

The functionality of leading ERP systems gives businesses the option to start with what they need now and add more capabilities as their business grows and evolves. This scalability allows new users to be added as teams expand without replacing the existing system, even when the company undergoes significant changes.

A cloud-based ERP system can offer your business the scalability it needs for rapid growth. With cloud-based systems running on remote servers, acquiring and adding the resources required to keep the solution running efficiently is much simpler. That reduces the strain on IT and eliminates the need for a specialist technical team.

Cost Savings

For business owners and leaders, one of the most compelling reasons to invest in an ERP system is the potential to dramatically lower costs. Automation can reduce or even eliminate many manual labor costs, such as data entry or processes that involve long paper trails.

This software offers numerous insights that can lead to cost savings. Its ability to monitor the organization's activity in one place quickly identifies costly operations, making it easier to cut back. Moreover, the improvements in planning enabled by an ERP system can help avoid rush orders, over-production, and over-ordering, all of which can lead to increased expenses. An ERP system can reduce costs in numerous ways, making it a worthwhile investment with a fast return.

Real-time Reporting

Customizable reporting is one of the significant advantages of utilizing an ERP system. With an ERP system, the ability to generate reports on various functions such as finance, inventory, orders, procurement, sales and marketing, HR, and any additional areas is boundless. It is possible to measure whatever KPIs are the most important for a company, and an ERP solution can calculate them. Moreover, with the help of an ERP system, it is possible to track the performance of different business components and measure the performance of departments to recognize what is driving the company forward and what is limiting its advancement.

Your report must reflect the most recent data, which is why real-time is valuable. If it takes two weeks to obtain revenue figures from the previous quarter, that is not helpful because the data needs to be updated and may be irrelevant. However, if revenue totals update in real time, as each transaction occurs, you can instantly use it to determine actions. It is crucial in today's fast-moving, highly competitive climate.

FAQ

What is an ERP audit?

Auditing of ERP is a process of evaluating and assessing the functioning of enterprise resource planning to ensure it's functioning optimally. The goal is to ascertain how well individual ERP components solve problems and streamline processes to enhance and strengthen the system.

What are services in ERP?

ERP is an all-in-one business software solution that facilitates your organization's resource management and service delivery. It also assists in streamlining financial operations and providing insights into the performance of the entire service organization.

What can we get from an ERP audit?

An audit of the ERP solution implemented by enterprises is used to assess the quality of business process execution. This audit follows the prescribed methodology for the project's critical phases and produces all necessary documents.

Conduct an audit to examine compliance with objectives, pinpoint areas of difficulty, recognize deficiencies in the automation process, and modify the business plan.

Conduct an audit to monitor the quality of execution