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Chapter: Business Science : Enterprise Resource Planning

Important Questions and Answers: Enterprise Resource Planning

Business Science - Enterprise Resource Planning - Important Questions and Answers: Enterprise Resource Planning - Introduction

1. Define ERP.


Enterprise Resource Planning (ERP) covers the techniques and concepts employed for the integrated management of businesses as a whole, from the viewpoint of the effective of management resources, to improve the efficiency of an enterprise.



2. What is an Enterprise?


An enterprise is a group of people with a common goal, which has certain resources at its disposal to achieve that goal.



3. What are the main misconceptions about ERP?


·        First is that ERP is a computer system.


·        Second is ERP is for manufacturing organizations alone.



4. What are ERP packages?


ERP packages are integrated (covering all business functions) software packages that support the ERP concepts. ERP software is designed to model and automate many of the basic processes of a company, from finance to the shop floor, with the goal of integrating information across the company and eliminating complex, expensive links between computer systems that were never meant to each other.



5. Who are the main players in the ERP market?


SAP AG, PeopleSoft, Oracle, Baan, JD Edwards, QAD, Ramco, IFS, DataWorks etc.



6. When do the ERP system’s set of generic processes produce dramatic improvements?


ERP software is a mirror image of the major business processes of an organization, such as customer order fulfillment and manufacturing. Its success depends upon reach – a circumscribed ERP system isn’t much better than the legacy system it replaces. ERP system’s set of generic processes produce the dramatic improvements they are capable of, only when used to


connect parts of an organization and integrate its various processes seamlessly.


7. What are the reasons for the explosive growth of the ERP market?


·        They enable improved business performance by achieving: cycle-time reduction, increased business agility, inventory reduction, order fulfillment improvement etc.


·        They support business growth requirements.


·        ERP systems provide flexible, integrated, real time decision support.


·        ERP packages can now be afforded by even small and medium sized businesses and offers increased functionality at a reasonable cost.


·        They help companies in supporting new products and new customers by meeting their global requirements, including multiple languages and currencies.



8. What are the direct benefits of ERP systems?


·        Business Integration


·        Flexibility


·        Better analysis and planning capabilities


·        Use of latest technology



9. Why is it said that ERP systems are flexible?


Different languages, accounting standards can be covered in one system, and functions that comprehensively manage multiple locations of a company can be packaged and can be implemented automatically.



10. What is cycle time?


Cycle time is the time between receipt of the order and delivery of the product.



11. What is Business Integration and how do the ERP systems achieve it?


The reason why ERP packages are referred as being integrated is the automatic data updation (automatic data exchange among applications) that takes place between related business components.


12.            What are the factors that are critical for the success of the ERP implementation?


·        Selection of the right package


·        Commitment of top management


·        Participation and dedication of the system’s future users


·        Backing, support and cooperation of the IS/IT personnel


·        Development of interfaces with current operational systems and with those under development


·        Effort of consultants, who have respect for the company’s know-how and work culture


·        Spirit and collaboration on the part of all



13.            How do conventional application packages and ERP packages differ?


·        First, ERP packages cannot have only individual business functions such as accounts and inventory, but also the entire range of main business functions necessary for the company’s operations


·        Second, ERP packages are targeted at everything from small businesses to the largest organizations, and that they can be composed of a highly flexible decentralized database and an information system cluster linked by a network


·        Third, is global adaptation, represented by ERP packages’ multilingual and multi-currency capacity.



14.            What are the limitations of ERP?


·        Managers cannot generate custom reports or queries without help from a programmer and this inhibits then from obtaining information quickly, so that they can act on it for competitive advantage


·        ERP systems provide current status only, such as open orders. Managers often need to look past the current status, to find trends and patterns that aid better decision-making


·        The data in the ERP application is not integrated with other enterprise or division systems and does not include external intelligence







1. What is ERP? Give an overview.


·        ERP


ERP concept describes the integration of key business information across the organization by way of computer software that is engineered to benefit the organization as a whole and improve its competitive posture.


·        Reasons for growth of ERP market


a.     Intra department communication


b.     Paperless work


c.      Conflict free system


d.     Focuses on the growth of the business


e.      Go global


f.       Decision support system


g.     Overcome limitations of legacy system


h.     Latest technologies



·        Advantages


a.     Business integeration


b.     Accuracy and cost control


c.      Flexibility


d.     Multilanguage


e.      Multi Currency


f.       Multiple accounting standards


g.     Analysis and planning capabilities


h.     Decision making


i.       Latest technology


·        Problem areas


a. Personnel turnover


b. Customization



c. Too expensive


d. Technical deficiency


e. problem in sharing


f. Inability



·        Future of ERP packages



2. What is an Enterprise? Give an overview.


·        Enterprise


Enterprise system can be defined as a computer based information system that is


built around a common database. This means that data that are registered by a


user can be  used by  others        who  have   access to            the    enterprise       system





·        Integrated management information


An integrated                  management   system          is               one  that   produces      information               using


input,process and output with a feedback architecture.



·        Role of enterprise


Enterprise system can be described as complex information system which supports organizations in their business activities and also integrate all business data transactions as a single entity. Enterprise systems are application software packages that help manage business activities, information flows, information analysis, generating reports in the organizations etc.



·        Business modeling


·        Integrated data model


The organizations use integrated data for analysis and taking decisions.



3. What are the benefits of ERP?


·        Reduction of lead time


·        On-time shipment



·        Reduction in cycle time


·        Better customer satisfaction


·        Improved supplier performance


·        Increased flexibility


·        Reduction in quality costs


·        Improved resource utility


·        Improved information accuracy and decision making capability



4. Write about the related technologies of ERP?


·        Business process Reengineering (BPR)


·        Management Information system (MIS)


·        Decision Support system (DSS)


·        Executives information system


·        Data Warehousing


·        Data mining


·        On-Line Analytical processing (OLAP)


·        Supply chain Management(SCM)


·        Customer Relationship Management


·        Business Intelligence (BI)


5. What are the phases of BPR?


·        Begin organizational change


·        Building the reengineering organization


·        Identifying BPR opportunities


·        Understanding the existing process


·        Reengineering the process


·        Blueprint of the New Business System


·        Perform the transformation



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