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1 .Chapter 7 | An Overview of Enterprise Resource Planning Chapter 7 AN OVERVIEW OF ENTERPRISE RESOURCE PLANNING (ERP) 7.

and 1 UI 3.any module can be added/deleted Should support multiple HW platforms. 1 database. Modular and Open • • Should have open system architecture . To facilitate these transactions. Data warehousing. 3rd party add-ons no effect on other modules 3. Fully integrated.EDI.men.2 . 3-tier C-S Technology. Internet. F&A and HR .Open Database Connectivity 2. material. Work group. Integrated information storehouse where information needs to be stored only once and can be further processed and reported to anyone in the value chain “ERP solutions seek to streamline & integrate operation processes & information flows to synergise the resources of an organisation . Intranet etc] 3. Hence. Electronic Data Interchange (EDI). Power of 3-Tier Client Server Architecture. ERP. Scalable RDBMS. Companies implementing ERP solutions have multiple locations of operation and control. Best Business Practices • Must adhere to best business processes applicable worldwide [STORY: F M Opened ERP Company with Comprehensive Business practices ] 7. Enabling Technologies The new era of PC. Characteristics of ERP (Evaluation of ERP done on following criteria – refer Step 5 of Methodology) 1. Production. 1 application. the online data transfer has to be done across locations. Comprehensive • • Should support variety of organizational functions Must be suitable for wide range of business organizations 5. Flexibility • • Should respond to changing needs Able to run data back-ends through ODBC . closed-loop business management system integrating functional areas of an enterprise like Logistics. Group Ware.to make optimum use of resources 2. the other important enabling technologies for ERP systems are Workflow. The load of data processing and application logic is divided between the server & client. Server stores the data. maintaining its integrity and consistency and processes the requests of the user from the client desktops. global.Chapter 7 | An Overview of Enterprise Resource Planning 1. Internet. Beyond the Company • • Should not be confined to organizational boundaries Should support on-line connectivity 4.DEFINITION 1. Intranet.all have contributed for the ease of deployment of ERP systems. Others. etc [STORY: PC. advent of C-S technology (client-server) and scalable RDBMS (Relational Database Management System) . money and machine” 2. ERP package works on the fundamental premise that the whole being greater > sum of its parts 4.

8.Performs core activities and improves customer service.material shortages. Standardise HR information • In companies with multiple business units – HR may not have a unified. HR etc Integrated Systems.3 . 2.across departments and subsidiaries. increases productivity and reduce headcount 4. 6. multi-mode manufacturing. Support Multi-facilities. E. Augments corporate image. EDI. Int.Should support EFT. Integrate financial information- 2. WIP. multi-currency.Multi-platform. customer service. Bridges Information Gap across organizations Integrated Information system. Supports Planning & Execution. Features of ERP 1.Chapter 7 | An Overview of Enterprise Resource Planning 4. 5. Corporate Image. Video conferencing. Ecommerce 10. [STORY: Multi . Reduce inventory • ERP improves flow of goods and information across processes resulting in reduced RM. operational. Eliminates business problems. Coordinate manufacturing. refer Chap 1 7. inventory and shipping among different locations 5. selling. ERP standardizes reports by integrating all facts and provides a uniform reporting system. Communication & order tracking improves. Internet and Intranet.multiple business units across company make same transaction/ recording/ report using different methods and computer systems Standardization and automation of these steps reduces costs. Better Project management 9. • • Why Companies Undertake ERP (FACTORS to be considered BEFORE undertaking implementation) Financial reports made by different persons or dept. Finance vs.Provides complete integration of systems . may create different versions of truth. Integrate customer order information• • ERP integrates all customer related processes from receiving of orders to invoicing and delivery. F&A. optimization of resources 3. cash mgmt. distribution. 7. ERP helps. etc. Standardise and speed up Mfg. 3.Supports end-to-end SCM to optimize overall demand and supply data.g. execution activities.DDS and EIS. FG inventories resulting in saving of costs and improved inventory control [STORY: Fin + HR -----> Mfg -> Order -> Inventory ] Also.Covers all functional areas: Mfg. inventory problems. multi-lingual facilities. data mining tools for better decision making 11. simple method for tracking employees’ time and informing them about benefits & services. Supply Chain Management. Provides Intelligent Business tools.PL EX Supply-Chain Corp -> Big Info. Sales dept 1. Supports Latest technologies.Supports strategic & business planning. processes • • Manufacturing companies esp. those in M&A . 4. Proj -> Latest tech & Tool -> Problem solved] 5.

fund flow Fund management. Cost control ↑ 4. quality and output of materials or services. International operations ↑. sales. modern measures of performance such as cost. sources. currencies.e. sensitivity analysis Budget Allocation. Efficient cash collection 7. satisfactory for the auditors 10.g. Mix of funds (D/E) Material requirement planning (MRP). Accurate information with detailed content.“Why do you do what you do” (Redesign it afresh) May NOT require IT 8. risks.Better monitoring and quicker resolution of queries. (Value added chains are a series of connected steps running through a business which when efficiently completed add value to enterprise and customers) IT (client-server model) helps to develop business models Adapt to changes • • 7.different tax structures. Benefits of ERP 1. expand] 7.Chapter 7 | An Overview of Enterprise Resource Planning 6. BUSINESS PROCESS REENGINEERING (BPR) BPR refers to the fundamental rethinking and radical redesign of processes to achieve dramatic improvement/breakthroughs in critical. Quick response to changes . RM -> FG.competitive advantage ↑ 3. service & speed. Others.e.e.e.e.Faster response and follow-up on customers. • Efficient redesigning of company’s value added chains. 2.g. better presentation.g. Some typical processes: • • • • • • Forecasting. Business Engineering (BPR+IT) or Methods of BE BE .Products are of desired quality 9.4 .g. quality. • • • • Cleanslate approach – “Whatever you were doing in the past is all wrong” Radical redesign – X improvement of 5%-10% But 80%-90% Fundamental rethinking . Information access & timely information ↑ 9. AP.Personnel has increased control of invoicing and payment & thus productivity & self-reliance ↑ 6.rethinking of Business Processes to improve speed. Unified customer database .Client -> Goods Purchased (AP) -> Goods Sold (AR) -> Timely Paper work & reports -> Auditors ☺ -> Intl.g. Improves supply-demand linkage 5.solution for problems like Y2K and Single Monetary Unit (SMU-Euro) [STORY: “Dominos Pizza” . ERP & BPR Every company that intends to implement ERP has to reengineer its processes in one form or the other. AR. requirement planning Quality control. accounting period & languages etc 11. Reduce paper documents by providing on-line formats for data entry/retrieval 8. what-if analysis Price Planning. production scheduling.

WIP. Basic objective of implementing an ERP program . AR etc The general principles of Business Process Analysis and classification and methodology of looking at a Business Information system to support a series of interlocking subsystems are universally applicable. (-Refer Book for diagrams-) Example: List of some entities forming a data modelENTITY External Data Internal Data Sales forecast Mktng. Business Modelling (“1st step in ERP implementation”) “Approach of ERP implementation carried out using MIS planning. skills Salaries. 2. profiles. Business Management • • ERP merges very well with common business management issues like BPR. An underlying Data Model.g. SAP uses event driven process chain (EPC) methodology to model Business Process 7.Chapter 7 | An Overview of Enterprise Resource Planning 10.5 . projections Product-wise and period-wise Surveys Sources & Availability Time & material RM. Expected and resultant deviation E. environment Transaction. A diagram describing various Business processes and their interactions. tax etc Payroll. Business Modeling in Practice • • • Most ERP programs enable flow charting business processes for analysis Also provide standard template for analysis of Actual vs. > Reference model can be used to list processes and data entities and if needed can be later modified.put in place applications & infrastructure architecture that effectively and completely support the Enterprise’s business plan and business processes 11. FG Nos. TQM etc.” Develop business process model (consisting of CORE business processes) using MIS planning• • • Show process interconnections & sequence Top-down approach is used (wheras MIS implementation where Bottom-up approach is used) Information is a vital resource in managing other resources > Data model consists of 2 elements: 1.. Research Data Funding Data Production Data Inventory data Personnel data Payroll data General Ledger DESCRIPTION (DATA REGARDING …) External entities.

Consultants understand users’ needs + Users’ active involvement Roles & resp.Requires time. Customize-) (+) Best industry practices . have to be clearly identified. users and vendors work together.1 • • • • ERP or not to ERP? (-Strategic PPT?-) Decision should be based on a business case rationale.6 . effort.implementing new strategies w. ERP expected to improve information flow and formalize and standardize business processes. understood & configured in the system.2 Follow Software’s Processes or Customize? (-Std. ERP IMPLEMENTATION Risky .include Y2K problem.may be simple/major – Called Customization ERP package > Modules > Components Changes in module(s) may affect functioning of others Beneficial if package is implemented in totality Success depends on how closely implementation consultants.t.r. customer service etc Process improvements. Considerations: Strategy. package may undergo changes.include the need to close the financial cycle and overall production ↑ Technology justifications. ROI upto 200% if implemented well otherwise as low as 25% 13.Chapter 7 | An Overview of Enterprise Resource Planning 12. integrate/replace/merge functionalities 13.improve and standardize processes . Staff must accept them Processes and procedures have to be simple and user friendly ERP should be expandable and adaptable to changes Conclusion: Post-implementation.3 Outsource or In-house? (+) Focus on core activities (+) Company need not manage / recruit experts & avoid financial commitment (+) Minimize impact on MIS dept (-) Security issues & employee morale In-house NA if lack of internal expertise and personnel to support 7.facilitate future change (-) May require employees to change their ways of doing business (+) Employees will not have to experience the pain and stress related to change (-) Costly to customize & sustain (-) Interfaces modular compatibility X 13. vs. Key Planning and Implementation decisions 13. competition. valuable resources + Success not guaranteed During-implementation (-impediments for the successful implementation OR challenges involved in ERP implementation-) • • • • • • • • Std.address personal and IT cost reductions Productivity improvements.

often a single location at a time. No redundant system 14. 7. Risky & stressful. Featureso Basis of comparison o Existing system serves as backup o o o • More costly .one or a group at a time. Evaluating available ERP packages Finalising ERP packages Installing the required hardware & network Finalising ERP Consultant Implementing the ERP package.reduced risk Knowledge gained with each phase and the usefulness of demonstrable working system 13. motivates user to convert. CharacteristicsNo need for Temporary interfaces Limited requirement to maintain legacy (old) software Cross-module functionality Low overall cost IF no contingencies arise > “Phased” implementation. Identifying needs 2.7 .Requires more computing and HR Existing system may not be properly maintained during the period Re-engineering not supported by existing systems Instant cut-over (flip-the-switch): Old system is completely replaced with the ERP system on a predetermined date. Evaluating ‘As Is’ situation (existing strength & weakness) 3. 8. branches or regions Parallel approach: Both existing system and new ERP system run together for some time. Features.Chapter 7 | An Overview of Enterprise Resource Planning 13. ERP Implementation Methodology Several steps are involved in the implementation of a typical ERP package 1.4 • • • • “Big Bang” or Phased Implementation? > “Big Bang” Implementation – ERP implemented with all the modules in place on day one.Low cost. business units. Reengineering existing Business Process 5. Benefits• • • • Smoothing of resource requirements Focus on select modules Availability of existing legacy systems as fallback . Deciding ‘Would be’ situation (changes expected) 4. 6. 7. 9.5 • • Other implementation approaches include: Wave approach: Conversion is implemented in waves of change to diff.

of dept. X manual work. Industry specific experience.Post-implementation support Integrated New technologies Step 6 . Step 3 . information flow & routing.Chapter 7 | An Overview of Enterprise Resource Planning Step 1 .Why? Benefits (Cost.Installing hardware & networks • Carried out in a phased manner -Depends on schedule & available hardware Step 8 .Finalizing ERP package • Make comparison of critical factors through matrix analysis Step 7 .Finalizing Implementation consultants • Selection factors: Skill set.Identify needs • Ask basic questions. transaction processes should first be listed Details by mapping process to functions to find time taken.Deciding the desired ‘Would Be’ situation • ‘Benchmark’ (with best in industry) on factors like costs. no.8 .Reengineering the business process • • • Reduce business process cycle time Minimizing number of decision points Streamline information flow Step 5 – “Evaluation of various ERP packages based on following criteria” • • • • • • • • • • • Flexibility Comprehensive Beyond the company Best business practices Price & Cost of implementation Obsolescence Ease of implementation Market Targeted by the package Global presence / Local presence . service to optimize processes Step 4 . Cost of hiring 7. decision & reporting points. customer service. time. decision making. quality.Evaluating the “As Is” situation of the business • • Functions. and productivity)? • Information flow. integration etc. profit. Step 2 .

Chapter 7 | An Overview of Enterprise Resource Planning Step 9 – “Implementation of ERP package” • • • • • • • • • • • Form team -> prepare of plan -> mapping of business processes to package -> Gap analysis (deviation) Customization .IMPLEMENTATION – Expectations & Fears Wrong expectations and fears because of ERP vendors and their pre-implementation sales hype Expectations: • • • • • • Process ↑ Productivity ↑ Performance indicators ↑ (Key PIs) Automation – X Manual process & manual record keeping Real time information Total integration 7. Test runs Parallel run User acceptance Migration to the new system User Training User documentation Post-implementation support System monitoring and fine tuning [STORY: Team Work Tests User accepts Migrate Training Doc Support & Monitor] 15. Implementation GUIDELINES for ERP (BEFORE starting the ERP implementation) –orgn/team/user• • • • • • • • Understanding organisation’s corporate needs and culture Doing a business process redesign exercise Estb. POST. a good communication network Providing a strong and effective leadership .User-specific reports and transactions Uploading of Data from existing system.capable project manager Balanced team of implementation consultants Training end user Adapting to changes Selecting a good implementation methodology with minimum customization 16.9 .

They must understand their action’s impact.Since all data & transaction processing is done within 1 application system 2. “Additional” risks & good governance issues introduced by e-enabled ERP environments concern 11.Inexperience pose significant challenges 8.1) Traditional roles to empowered-based roles with greater access to real-time information and 2) point of control shifting from the back-end financial processes to front-end point of creation. Data content quality. Job role changes. integrated ERP systems.> Dependence on External Auditors Data on Single PC ] 7. Unless properly managed.Extensive interfaces and data conversions from legacy systems are often necessary. Audit expertise.Increased remote access by users and outsiders + increased access due to high integration 9. 13.An online. Online.User acceptance essential. Single point of failure (SPF). Data integrity. security and capacity requirements is high 3. 4.Chapter 7 | An Overview of Enterprise Resource Planning Fears: • • • • • • Job redundancy – Loss of Job Change in job profile Loss of authority Loss of proper control and authorization Loss of importance ↑ Stress caused by greater transparency 17. Program interfaces and data conversions. security and resource management risk ↑ 10.Significant personnel & organizational structures changes associated with reengineering or redesigning business processes. Training / awareness required 6.Specialist expertise is required to effectively audit and control an ERP environment. real-time. Change management. 18.” Those risks include: 1.Organization may have to rely on external help. real-time system environment requires a continuous business information flow 7. Privacy and Confidentiality. but simultaneously introduces additional risk in that an incorrect assignment of access may result in inappropriate access to multiple systems. Dependency on external assistance. Distributed computing experience. RISK AND GOVERNANCE ISSUES IN AN ERP “Organizations face several new business risks when they migrate to real-time.As enterprise applications are opened to external suppliers and customers. the need for integrity is high 12.It reduces the security administration effort associated with administrating web-based access to multiple systems. Structural changes.10 . 5. Broad system access.Regularity and governance issues surrounding the increased capture and visibility of personal information [STORY: SPF Conversions ∆s Online Computing Access . Single sign on.

workshops. and create/implement PLAN Develop and amend HR. BUT through website and not via-ERP software jargon. performance measures (KPI-Key Performance Indicators) required to address these CSFs Having evolved the processes while the configuration.11 . LIFE AFTER IMPLEMENTATION [CSF-KPI] Effective use of ERP is a direct result of steps taken at the time of implementation toward preparing the organization. Critical success factors (CSFs) for respective functionalities or departments From these CSFs.Chapter 7 | An Overview of Enterprise Resource Planning 19. E. • • one for customers (B2C) who want order status and billing information one for suppliers and partners (B2B) who want everything else 21. etc. order status. construction and implementation are in progress. • • • • Change integration has to be embedded Communication in all forms-written. Some of the tasks that are to be performed are: • • • • • Develop NEW job descriptions and organization structure Determine SKILL GAP between existing & envisioned jobs Assess TRAINING REQUIREMENTS. Why do ERP projects fail so often? Staff resistance to change -> Political fights -> Push IT dept for Customization -> Customized ERP difficult to maintain -> ERP unstable 20. inventory levels and invoice reconciliation. the organization needs to “ready itself for the post-implementation period”. E-commerce means IT departments need to build two new channels of access into ERP systems. oral.g. financial and operational POLICIES Develop a plan for workforce LOGISTICS ADJUSTMENT 7. HOW DOES ERP FIT WITH E-COMMERCE? ERP is complex and not intended for public consumption – Basic assumption is that users highly trained and comfortable with the tech jargon Today customers and suppliers are demanding access to the same information company’s employees get through the ERP system. meetings.

f) Oracle o o o Applications (Oracle)Internet-enabled. Although out dated. new system is available. b) Prism (Marcam Corporation): Prism is a specialist process manufacturing solution for the AS/400.to evaluate the security. d) System 21 (JBA): Its software license revenues are small compared to those of other major ERP vendors. Mapics is a suite of 40 modules with 'good enough' functionality. refer Study Material) a) Mapics XA (Marcam Corporation): Dated. Mgmt’s will is needed • During post-implementation there will be need for “course correction (changes) many times”. tools. applications and Unix OS Runs on a wide choice of hardware 7. Offers credible tools for business process analysis linked to implementation of its software. reliable manufacturing solution. Nevertheless. it is a world player. c) MFG/Pro (QAD): QAD's strength is in repetitive manufacturing. which is akin to a flowchart. It may be because of the following reasons: • • • • • ∆ business environment -> ∆ CSFs -> ∆ KPIs -> ∆ reconfiguration New additions to business require changes Review require changes in some process Vision changes in the ERP Improvements in hardware & communication technology require changes Emerging trends• • To outsource the activity of maintenance and upgradation to enable the company to concentrate on its core business activity.Stretched target to be achieved in phases Resistance to change when choice of legacy vs. easy implementation and reasonable value for money. ERP audit (general vs. Post-implementation “BLUES” • To monitor KPIs and take correct decisions to improve them o If indicators non-existent. authorization and controls and ROI 23. but does offer a rugged.12 . SAMPLE LIST OF ERP VENDORS (For details. It offers robustness. Sound Technology base and a broad functional scope. It does not offer leading-edge technology. implementation.Chapter 7 | An Overview of Enterprise Resource Planning 22. Originally designed to meet the MRP II criteria published by Oliver Wight. Its production model. legacy application. MFG/Pro's reputation includes reliable manufacturing functionality and straightforward implementations.offers the database. network-centric computing A one-stop shop . handles process industry problems elegantly. e) Baan (The Baan Company): Established in 1994. specific) . then set achievable goals o Realistic way. it does the job.

it remains complex.Investment Management LOGISTIC MODULES PP . Profitability Analysis.Few people get fired for buying it o However.Project System Internet Applications Component 25. Enterprise Controlling consists of 3 modules: EC-CS./Borrowing | Liquidity | Forex | Forecast | Monitors & Controls * ENTERPRISE CONTROLLING: Enterprise can be managed by using an Integrated Enterprise Management. Depreciation Forecast. Cost Object Controlling.Production Planning & Control PM .Executive information system: Combines above with external data 7.Consolidation: Financial Statutory & Management Consolidation EC-PCA.Controlling EC . Funds Management. Treasury Management.Chapter 7 | An Overview of Enterprise Resource Planning g) R/3 (SAP)o Market leader o Matches business processes to modules o No major shortcomings . Correct Profit/Cost centre EC-EIS. This data is transferred to a module called Enterprise Controlling (EC).Treasury IM .Enterprise Controlling TR .Sales and Distribution SM .Financial Accounting CO .13 . OH Cost Control. because it offers much o Few people know how to get the best from it. Market risk management Cash Mgmt: Budget | Source & Use of funds | Monitors in/out cash flows | ST Invt. This consists of getting accounting data prepared by subsidiaries for corporate reporting which will be automatically prepared simultaneously within the local books of each subsidiary.Human Resource Management PS .Quality Management SD .Product Data Management QM . Controlling Cost: Includes: Cost Center Accounting. Investment Management: Includes: Corporate wide budgeting. * TREASURY: Includes: Cash Management. GL. Product Cost Control. OH Orders. Appendix (SAP) Financials: Includes: Financial Accounting. Investment measures. Activity based Costing. Appropriation requests.Profit Center Accounting: T/F Pricing. SAP has a number of Application Modules in the package FINANCIAL MODULES FI . AR & AP.Materials Management PDM . Automatic settlement to FA. FA Accounting.Service Management [STORY: FI CO mey Enterprise Time Invest karta hai] OTHER MODULES HR . 24.Plant Maintenance MM .

executing and controlling production. and Shift Planning. Salary administration etc. Integration. Warehouse management and Invoice Verification. Project Information System. This covers the complete production process starting from creation of master data. Purchasing. Project System. capacity planning. The application itself could be carried out online by calling up an application form filling it out and returning it by e-mail. Internet and Intranet: The R/3 system offers a special Internet functionality for large number of business processes.14 . Integration and Interfaces. Time management Review. The module consists of various components such as Personnel Management. Time data. production control and costing.Chapter 7 | An Overview of Enterprise Resource Planning Product Data Management (PDM): PDM supports in creating and managing product data throughout product lifecycle. Human Resource Management (HR): HR provides comprehensive process driven solutions that can address organization's human resources needs worldwide. Production Control Modules. Benefits administration. It also introduces a high degree of automation into standard procedures. Time evaluation. MRP. online information from sales support to the billing process. Materials Management: The system's materials management module contains all functions required to simplify business processes in Requirements planning. Travel Management. SAP supports two basic scenarios in PDM environment Sales and Distribution: The system's Sales and Distribution application offers access to real-time. Product planning modules are: Sales and Operation Planning (SOP). Global Solutions. Personnel administration. Payroll Accounting: R/3 HR payroll accounting addresses payroll functions from a global point of view. It also gives an opportunity to advertise vacancies to potential applicants all over the world. It also enables to establish business rules without modifying existing payroll. 7. Time Management. production planning. Recruitment management. Production Planning and Control: This module is used for planning. It is possible to centralize or decentralize payroll processing based on country or legal entities. Inventory Management. This includes: Payroll Processing. The application would be processed automatically in R/3 HR. Quality Management.

extended to partners and dealers CRM 27. Case Study – Telecom: Airtouch Cellular (Oracle) Problem• • • Financial analysts . after-sales-service Implementation• • • • Pilot project at the first site Factories (parent units) went live first Mix of leased lines. LCs. concept Project completed within budget in 6 months. Few post-implementation changes Benefits• • • • More than $85mn savings. ISDN. analyze performance. production planning. Case Study – Videocon Group (SAP) Problem• • • • Multiple branches. quality-control. import clearances Product evolution module great help to management Looking ahead• • • Roll-out SAP in all group companies IT initiatives.integrated system.Each factory and branch had different software. VSATs and Internet connectivity to optimise the costs Training & education to increase awareness and remove fears Lessons to Learn• • Modules not specific to Indian requirements.15 . evaluate opportunities Implementation• • Oracle Online analytical processing (OLAP) tools: provided on-site expertise.located in five different geographic regions Could not have timely access to budgeted and actual data resided in different systems Needed to control costs.e-business and Internet-based customer relationship management systems.Taxes. Helps them stay on budget / shift business direction Reduced length of budgeting cycle Analysts access data warehouse for analysis VP get budget data on timely basis 7. credit control. varied platforms Difficult to Consolidate/Collate/Analyse data uniformly + Data duplication Needed common platform with dealers Needed responsive and fast system Mandate• • Consultant suggested SAP ERP Issues to be addressed. cash flow planning. financial reporting and control. inventory management and control.Chapter 7 | An Overview of Enterprise Resource Planning 26. accurate costing. automation of certain tasks.

digital TV and satellite system etc. To improve the basis for making decisions quickly and accurately with real time. analyze performance. therefore they are facing several problems. 7. o user friendly. internet services. separating critical components of the profit and loss account thus failing the financial analysts to assess results. a global telecom company is serving to more than 10 million customers in the area of communications through fixed land lines. Dated budget and actual numbers for each business unit reside in seven different systems. online decisions based on more accurate information. The problem gets further complicated as the field analysts are not able to go to one universal place to retrieve the data themselves and they have to rely upon the home office for the same. o The field analysts are not able to retrieve the data themselves from one universal place and therefore they have to rely upon the home office for the same. The system should provide online. Dated budget and actual numbers for each business unit reside in seven different systems. located world wide. The company is expected to be benefited by significant financial saving and therefore it should reduce the length of the budgeting cycle and the number of people involved in the process. based on actual data in the process. The objective of the company is to set some critical financial goals so that the company could remain competitive and increase market share. It is therefore important that the company should buy new software for the solution of the problems as mentioned above.Chapter 7 | An Overview of Enterprise Resource Planning 28. The financial analysts of the company are located in different functional groups in six geographical regions. These analysts are missing the access to the same data.Nov 2009 Q: Worldwide. o enabling business units to make real-time. what kind of software the company should select? (10 Marks) Solution: As the financial analysts of the company are working in six different geographical locations and the financial data is stored on seven different systems. thus keeping the company financially competitive in a growing market. of course the company should select the one which could make same data available to all the financial analysts. real time access to the information. One such software is available from Oracle Corporation known as On Line Analytical Processing (OLAP) tool for better control over costs. Read the above carefully and answer the following with justifications: • To overcome the problems which the financial analysts are facing. evaluate opportunities. o o As far as software is concerned. mobiles. Case Study .16 . Few of them are as under : Missing the access to the same data as well as timely access to information. to provide consistent data which will improve cost control and to simplify and shorten the budgeting process. as well as timely access to the information. and formulate future directions. separating critical components of the Profit and Loss account and inhibiting analyst’s ability to assess results. the software should be capable of the following: o hands on ability to consolidate budgets.

c) While selecting the ERP package. Better inventory management and control. is engaged in manufacturing of several types of electronic goods. state the issues to be considered. therefore. As each factory is using different type of software on varied platforms. there is a huge inflow of data which could not be consolidated for analysis. No doubt. It is confronted with the problem of centralizing and consolidating the information flowing in from its various branches in uniform manner across various levels of the organization. What are the problems that the company is facing now? (5 Marks) b. will the company be able to share a common platform with its dealers to access servers and database to update the information of issues of mutual interest? (5 Marks) c. engaged in the manufacturing of several types of electronic goods is having its branches all over the World. creation of material and resources. The factories are already working on legacy systems using an intranet and collating information. multi facility. This not only results in huge inflow of data which could not be consolidated for analysis but also the duplication of data. Because of this reason. dealers will be able to update the information of issues of mutual interest.Jun 2009 Q: XYZ Company. 7. Read the above carefully and answer the following with justifications: a. Should the company go for ERP solution? If yes. All these functions are effectively integrated for flow and updation of information immediately upon entry of any information. multi currency. Suggest how to go about the implementation of ERP package. The company wishes to centralize and consolidate the information flowing from its branches in a uniform manner across various levels of the Organization. For the selection of ERP package. the company should go for ERP solutions. they are not able to communicate with each other. It supports strategic and business planning activities. the factories are working on legacy systems using an intranet and collating information.] Some of the major features of ERP are that it provides the support to multi platform. Hence. Lack of communication among factories has not only resulted into duplication of the data entry which is not only costly. So the company needs a system that would help them to be responsive and act fast. personalities. (5 Marks) d. But each factory and branch is using different software and varied platforms.17 . b) Yes. thereby providing a company-wide Integrated Information System. (5 Marks) [Steps] Solution: a) XYZ company. Case Study . the performance of following issues should be taken into account: i. procedures. operational planning and execution activities. manufacturing. there is an urgent need of a system that would help the branches to be responsive and to act fast. Even one percent change in any data entry or analysis translates into millions of Rupees and can sometimes wipe out the profits of the organization. slight change in data entry and analysis may translate into millions of rupees that can sometimes wipe out the profits of the organization. [ERP implementation brings different business functions. with an aim to pool knowledge base to effectively integrate and bring worthwhile and beneficial changes throughout the organization. multi mode. which do not communicate with each other. ideologies and philosophies on one platform. multi lingual facilities.Chapter 7 | An Overview of Enterprise Resource Planning 29. the company decides to include a module for dealers which provides limited/restricted access to company databases and server. having its branches all over the world. In case.

Automation of certain takes that were performed manually to increase productivity. d) In the stated scenario. Better credit control. x. thereby eliminating errors of duplicate entries. vii. Improved production planning. the changes expected after the implementation of ERP. v. iv. Improved cash flow planning. Using an integrated system as opposed to disparate systems at different locations. iii. Finalizing the Implementation consultants who will assist in implementation. Identifying the needs for implementing an ERP package. iv.Chapter 7 | An Overview of Enterprise Resource Planning ii.. viii. Reengineering the Business Process to achieve the desired results in the existing processes. Better information on stocks at various locations.. Automatic quality control and tracking. v. 7. vi. Installing the required hardware and networks for the selected ERP package. ii.e. vii.e. ix. Finalizing of the most suitable ERP package for implementation. Evaluating the various available ERP packages to assess suitability. Improved financial reporting and control. Deciding the ‘Would be’ situation for the business i. viii. iii. Implementing the ERP package. vi. several steps involved in the implementation of a typical ERP package are enumerated below: i. More accurate costing of products. ix. to understand the strength and weakness prevailing under the existing circumstances. Evaluating the ‘As Is’ situation of the business i.18 .

(5 mks) What is ERP? Briefly describe its benefits. You have taken care of all the preparations during the implementation. The technical advisor of the company advised the owner that the company should take necessary steps to analyze several types of risks. 4 1. What can be the reasons for them? (4 Marks) 10) Why does an organization implement an ERP package and evaluate the various available ERP packages for assessing suitability? Mention the various evaluation criteria that are required to assess suitability of an ERP package on implementation. during post implementation. 3 3. a global telecom company…” [PM Case Study] (ISCA 20 mks) 22 N10 14 (5) 14 (5) 14 (5) Chap 2 21 16 N10 M06 M10 M09 M11 M09 17. Para Ref.19 . (4 Marks) 11) Explain the various criteria used for evaluation of the ERP packages. (MICS 5 marks) 19) Short Notes: Enterprise Controlling (5 mks) 20) Discuss the functions and facilities provided by Treasury Cash Management module of an ERP package. (MICS 5 mks) 21) List the items of information provided by cash management of Treasury module of SAP. there will be a need for course correction many times. (MICS 8 mks) 22) “XYZ Company. engaged in the manufacturing of several types of electronic goods…” [PM Case Study] (ISCA 20 mks) 23) “Worldwide. (10 Marks) What are the benefits achieved by implementing the ERP packages? (MICS 10 marks) If you are the CEO of a company. 18 N09 21 23 25 * 25 * 25 * Ref PM 29 M07 M05 N06 N08 M09 M09 N09 7. what factors would be considered before undertaking implementation of an ERP system? (5 marks) Briefly describe the method of Business Engineering (4 mks) Short Notes: Business engineering (5 mks) How will you get over the impediments for the successful implementation of ERP? Mention any five. N09 M08. However. 6 6 5 9 9 12 Year N10. (5 Marks MICS) Briefly explain the characteristics and features of an ERP.Chapter 7 | An Overview of Enterprise Resource Planning Question Bank Past Year Questions [M05–N11] 1) 2) 3) 4) 5) 6) 7) 8) 9) Enumerate the characteristics of ERP Systems. Explain those risks in brief (ISCA 5 mks) 17) How will you establish and implement Critical Success Factors (CSFs) and Key Performance Indicators (KPIs) in an organization for achieving the benefits of implementation of ERP? [Hints: Life After Implementation] 18) List any five ERP Vendors and briefly describe the ERP packages offered by them.M05 N07 N05 M10 N10 N05 M10 You are entrusted with the duty of implementing an ERP in your office. (10 marks MICS) [Hints: Criteria] 13) Discuss the factors to be considered for evaluation of a vendor’s proposal. (5 mks) 12) Explain the process of evaluation of various ERP packages.N08. (MICS 4 mks) 14) What are the tasks for which the company should be ready for post-implementation period of an ERP System? (4 Marks) 15) List the fears that are expected to arise among employees of an organization during implementation of ERP (MICS 4 mks) 16) ABC Limited has migrated from traditional systems to new real-time integrated ERP systems.

The objective of the company is to set some critical financial goals so that the company could remain competitive and increase market share. Para 27-28] b) The company is advised that the adoption of BS7799 International Standard will help in overcoming the problems and achieving its goals. The financial analysts of the company are located in different functional groups in six geographical regions. 25 * 25 * 1. Write a detailed note on the expectations. separating critical components of the Profit and Loss account and inhibiting analyst’s ability to assess results. a global telecom company is serving to more than 10 million customers in the area of communications through fixed land lines. digital TV and satellite system etc. Benefits of ERP [Para 6] b. What are the steps involved in the implementation of an ERP package? Write down the general guidelines which are to be followed before starting the implementation of an ERP package. as well as timely access to the information. (5 Marks) [Hints: NA] c) How should the human resources be enriched for effective utilization of the proposed new systems and standards? (5 Marks) [Hints: NA] Practice Manual 1) 2) 3) 4) 5) 6) 7) 8) What is an ERP system? *Bring out the major challenges involved in its implementation. [Hints: Enterprise Controlling] 7.Chapter 7 | An Overview of Enterprise Resource Planning 24) Worldwide. 18 17. Dated budget and actual numbers for each business unit reside in seven different systems. As an IS Auditor. Discuss. fears and the ground realities that a corporate management faces during the post-implementation phase of ERP. [Hints: Ground realities – NA] Write short notes on the following: a. internet services. The problem gets further complicated as the field analysts are not able to go to one universal place to retrieve the data themselves and they have to rely upon the home office for the same. Business Process Reengineering (BPR) [Para 8] Discuss the functions and facilities provided by Treasury Cash Management module of an ERP package. ABC Limited has recently migrated to real-time Integrated ERP System. Write short notes on Business Engineering. Read the above carefully and answer the following with justifications: a) To overcome the problems which the financial analysts are facing. 12 9 14 15 17.20 . mobiles. advice the company as to what kinds of businesses risks it can face? Identify the risks and governance issues an organization faces while migrating to an integrated ERP system. These analysts are missing the access to the same data. 18 16 M10 9) 10) Identify the SAP module used to consolidate the financial statements including elimination of intercompany transactions. what kind of software the company should select? (10 Marks) [Hints: Problems faced & On Line Analytical Processing (OLAP) tool from Oracle Corporation.

The owner of the company wishes to centralize and consolidate the information flowing from its branches in a uniform manner across various levels of the organization. The company wishes to centralize and consolidate the information flowing from its branches in a uniform manner across various levels of the Organization. Para Ref 4 12 19 6 Yr N08 N06 N11 M11 29 9 to 11 25 * 5. Why the company should “undertake” ERP? [Hints: Benefits + Why Undertake] RTP [M05–N11] 1) 2) 3) 4) 5) What are the major features of ERP? What is an ERP system? Bring out the major challenges involved in its implementation.Chapter 7 | An Overview of Enterprise Resource Planning 11) * XYZ Company. will the company be able to share a common platform with its dealers to access servers and database to update the information of issues of mutual interest? c) For the selection of ERP package. The company wanted to sell this system as an ERP solution. 6 3 N10 6) 4.21 . The technical advisor of the company recommended that the company should go for the implementation of the ERP Package. List out the reasons for ERP adoption by the company? [Feature + Benefits + Why Undertake] A company is developing several types of biscuits. Why the company should undertake ERP? Explain the general model of the ERP. Presently the company has its functioning at different units being automated as per the local requirements. The management of the company intends to centralize and integrate the information flow across its different manufacturing units in a uniform manner at various levels of the company. Even one percent change in any data entry or analysis translates into millions of Rupees and can sometimes wipe out the profits of the organization. The factories are already working on legacy systems using an intranet and collating information. [ISCA Exam May 09] Read the above carefully and answer the following with justifications: a) What are the problems that the company is facing now? b) Should the company go for ERP solution? If yes. The owner of the company wishes to centralize and consolidate the information flowing from its branches in a uniform manner across various levels of the organization. technical expertise and on an ad-hoc basis. 12) Explain the following terms with respect to ERP: a) Business Engineering [Para 9] b) Business Management [Para 10] c) Business Modeling [Para 11] 13) What is Enterprise Controlling? Briefly explain its modules. But each factory and branch is using different software and varied platforms. So the company needs a system that would help them to be responsive and act fast. which do not communicate with each other. 6. The technical advisor of the company recommends that the company should go for the implementation of the ERP Package. having its branches all over the country. any system has to possess few characteristics to qualify for a true ERP solution. state the issues to be considered. This not only results in huge inflow of data which could not be consolidated for analysis but also the duplication of data. ABC company has presence across India in manufacturing of medicine. engaged in the manufacturing of several types of electronic goods is having its branches all over the World. d) Suggest how to go about the implementation of ERP package. But. What are those characteristics? Explain in brief. 14) A company is developing several types of biscuits. Reasons for failure of ERP projects What are the main benefits achieved by implementing the ERP package? XYZ Company developed an information system for the integration of various organizational processes. having its branches all over the country. The technical advisor of the company recommended that the company should go for the implementation of the ERP Package. 5 M10 7) 5 N09 8) M10 7.

[Hints: Include BE. [Hints: Original Budget approval and release. 11) List out various steps involved in the implementation of a typical ERP package [Hint: 9 main steps] 12) What do you mean by ERP ? Discuss the nature of ERP packages that are available in the market and the criteria applied in evaluating these packages ? 13) Write a short notes on BPR (Business Process Re-Engineering). Quality control 25) Explain the useful tasks served by budgeting function. Fund centers and their hierarchical structures provide a base for top down budgeting and represent responsibility areas within the budget control.M06 M07 N07 N07 N08 M09 M06 M08 M11 M09 M07 M09 N07 10) List out some of the entities forming a data model in business modelling.’ What are those fears? Explain in brief. 17) Short Notes: Implementation Guidelines for ERP.22 . 11 M05 M10 14 1. Material requirement planning vi. 24 N09. 21) Short Notes: Product Data Management (PDM) 22) Short Notes: Quality Management Module 23) Short Notes: SAP 24) Describe the following processes in brief: i. Budget Allocation v.23.] 8 N10 - N10 7. 9. 19) ‘ERP implementation also engenders a host of fears. 18 25 * 25 * 23-G. Forecasting ii. returns.Chapter 7 | An Overview of Enterprise Resource Planning 9) What is Business Modelling? How can it be used for judging the suitability of ERP Package.14 (5) 7. 14 (5) 14 14 15 15 16 17. 20) Identify the risks and governance issues an organization faces while migrating to an integrated ERP system. Analyses by responsibility area and commitment items allow identification of any budget bottlenecks. 15) What are the steps involved in the implementation of an ERP package? 16) Explain in brief the ERP implementation methodology. Fund management iii. Price Planning iv. Budget supplements. 18) What are the general guidelines which are to be followed before starting the implementation of an ERP package. 10 1. BM] 14) How an ERP is important to an organization? Describe the implementation of the ERP package in short. Commitment management system enables control of funds tracking. transfers. in brief.