BA7301 ENTERPRISE RESOURCE PLANNING

Department of MBA: II YEAR / III SEM

2 MARKS - QUESTIONS & ANSWERS

Prepared by: R.Sathya, AP / IT

UNIT I 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. When used generically, an enterprise
is defined as the aggregate of all functional elements participating in a business
process improvement action, regardless of the organizational structure housing
those functional elements. It is a complete business consisting of functions,
divisions or other components used to accomplish specific objectives and defined
goals.
3. What are the main misconceptions about ERP?

First is that ERP is a computer system. Even though computers and IT are
integral parts of an ERP system, ERP is primarily an enterprise-wide
system, which encompasses corporate mission, objectives, attitudes,
beliefs, values, operating style and people who make the organization.

Second is ERP is for manufacturing organizations alone. This assumption is

basically due to the way in which ERP was historically developed from the
methods of Material Requirements Planning (MRP) and Manufacturing
Resource

Planning

(MRP

II)

which

are

relevant

to

manufacturing

organizations. MRP became the fundamental concept in 1970s. At this

Ganadipathy Tulsis Jain Engineering College, Department of Information
Technology.
R.Sathya, AP / IT

stage BOM (Bill of materials) was the prevailing trend. It further got
unfolded as ERP II and now it has resulted in ERP, which is the concept of
enterprise-wide planning of resources and is not limited to any particular
segment of the industry.
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 systems 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 isnt much better than the
legacy system it replaces. ERP systems 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.

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Technology.
R.Sathya, AP / IT

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 / tangible 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. To cope with company
globalization and system unification, this flexibility is essential.
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.

Since

conventional

company

information systems were aimed at the optimization of independent business

functions in business unite, almost all were weak in terms of communication and
integration of information that transcended in different business functions. In case
of ERP packages, the data of related business functions is also automatically
updated at the time a transaction occurs. For this reason, one is able to grasp
business details in real time, and carry out various types of management decisions
in a timely manner, based on that information.
12. What are the factors that are critical for the success of the ERP
implementation?

Selection of the right package

Commitment of top management

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Technology.
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Participation and dedication of the systems 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 companys 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 companys 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

15. What is BPR?

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Technology.
R.Sathya, AP / IT

BPR or Business Process Reengineering is the fundamental rethinking and

radical redesign of business processes to achieve dramatic improvements in critical,
contemporary measures of performance such as cost, quality, service and speed.
16. What is MIS?
MIS or Management Information System is a computer based system that
optimizes the collection, collation, transfer and presentation of information
throughout an organization through an integrated structure of databases and
information flow.
17. What are the main characteristics of MIS?

MIS supports the data processing functions of transaction handling and

record keeping

MIS uses an integrated database and supports a variety of functional

areas

MIS provides operational, tactical an d strategic levels of the organization

with timely information

MIS is flexible and can be adapted to changing needs of an organization

18. What is DSS?

DSS or Decision Support System is information and planning system that
provides the ability to interrogate computers on an ad-hoc basis, analyze
information and predict the impact of decisions before they are made. A DSS is a
cohesive and integrated set programs that share data and information.
19. What is EIS?
EIS or Executive Information System is an information system that
consolidates and summaries the ongoing transactions within an organization. It
should provide management with all the information it requires, at all times, from
internal as well as external sources. A successful EIS is easy to use, flexible and
customizable.
20. What is 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
Ganadipathy Tulsis Jain Engineering College, Department of Information
Technology.
R.Sathya, AP / IT

effective use of management resources, to improve the efficiency of an enterprise.

Ideally the data for various business functions are integrated.
21. Write the advantages of ERP.
Installing an ERP system has many advantages both direct and indirect.

The

direct advantages include improved efficiency, information integration for better

decision making, faster response time to customer queries, etc.

The indirect

benefits include better corporate image, improved customer goodwill, customer

satisfaction, and so on.
22. Discuss evaluation of ERP.
As the department become large, they became closed & water tight. Each had their
own set of procedures & hierarchy, each & every department maintain information
separately which causes waste of resources.
Hence ERP is implemented to integrate all the department together and
limit the waste of resources.
23. How business integration achieved by ERP system?
ERP packages are considered to be integrated, is the automatic data
updation (automatic data exchange among applications) that is possible among the
related business components.
24. Why are ERP systems said to be flexible?
Different languages, currencies, accounting standards and so on can be covered in
one system, and functions that comprehensively manage multiple locations of a
company can be packaged and implemented automatically.
25. Why do many ERP Implementation fails?
Many a company fails in this because of a wrong product, incompetent and
haphazard implementation and inefficient or ineffective usage.
26. What are the reasons for the growth of the ERP market?

To enable, improved business performance

To support business growth requirements
To provide flexible, integrated, real-time decision support
To eliminate limitation in legacy systems
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Technology.
R.Sathya, AP / IT

 To take advantage of the untapped mid market (medium size

organizations)
27. How do conventional application packages and ERP packages differ?
The first answer to this question is that ERP packages cannot only handle
individual business functions such as accounts and inventory, but also the entire
range of business functions necessary for the companys operations.
The second difference is that ERP packages are targeted at everything
from small businesses to the largest organizations, and that they can be composed
of a highly flexible decentralised database and an information system cluster linked
by a network.
The third difference is global adaptation, represented by ERP packages
multilingual and multi-currency capacity.

In the present day, when companies,

irrespective of their size and market share, are manufacturing and selling in various
areas of the world, the globalization of management platforms is being hastened,
along with the global adaptation of enterprise information systems.
28. What is an integrated information system?
An information system is an open, purposive system that produces
information using the input process output cycle.

The minimal information

system consists of three elements people, procedures and data.

People follow

procedures to manipulate data to produce information. In todays computer world,

the definition of information systems has undergone a slight change.

Today, an

information system is an organized combination of people, hardware, software,

communication networks and data resources that collects, collates, transforms and
disseminates in an organization.
29. What is MIS?
MIS or Management Information System is a computer based system
that optimises the collection, collation, transfer and presentation of information
throughout an organization through an integrated structure of databases and
information flow.
30. Why are the integrated information system important for the
organizations success?
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Technology.
R.Sathya, AP / IT

ERP system that treats the organization as a single entity and caters to
the information needs of the whole organization.

If this is possible, and if the

information that is generated is accurate, timely and relevant, then these systems
will go a long way in helping the organization in realizing its goals.
31. What is business modeling?
In business modeling, we model the business as an integrated system,
taking the processes managing its facilities and materials as resources. Information
is a very important resource and is very critical in managing all the other resources.
Thus, the business model is a representation of the actual business what
are the various business functions of the organization, how are they related, what
are their interdependencies, and so on. The business model is usually represented
in the graphical form using flow charts and flow diagrams.

From the business

model, the data model of the system is created.

32. What is integrated data model?
It should clearly depict the organization; it should reflect the day-to-day
transactions and it should be updated continuously.

At any given time, the

database should give a snapshot of the organization at that point in time. So if an

order is entered, the sale is done and the goods are dispatched, then the database
should reflect those changes. The inventory should be reduced and the account
receivables should be increased. All these things have to happen instantaneously
and automatically. That is the challenge and that is the advantage of the integrated
database and the integrated data model.
33. How to overcome the limitations of ERP?
Some of these technologies are:

Business Process Reengineering (BPR)

Management Information System (MIS)
Decision Support Systems (DSS)
Executive Information Systems (EIS)
Data Warehousing
Data Mining
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 On-line Analytical Processing (OLAP)

Supply Chain Management
Customer Relationship Management (CRM)
34. What is data warehousing?
The primary concept of data warehousing is that the data stored for
business analysis can be accessed most effectively by separating it from the data in
operational systems. The most important reason for separating data for business
analysis, from the operational data, has always been the potential performance
degradation on the operational system that can result from the analysis processes.
35. What is Data mining?
Data mining is the process of identifying valid, novel, potentially useful
and ultimately comprehensible information from databases that is used to make
crucial business decisions.
36. What do you mean by OLAP?
OLAP

can

be

defined

in

five

words

Fast

Analysis

of

Shared

Multidimensional Information.
FAST means that the system is targeted to deliver most responses to
users within about five seconds, with the simplest analysis taking no more than one
second and very few taking more than 20 seconds.

ANALYSIS means that the

system can cope with any business logic and statistical analysis that is relevant for
the application and the user, and keep it easy enough for the target user. SHARED
means that the system implements all the security requirements for confidentiality
(possibly down to cell level) and, if multiple write access is needed, concurrent
update locking at an appropriate level. MULTIDIMENSIONAL means that the system
must provide a multidimensional conceptual view of the data, including full support
for hierarchies and multiple hierarchies.

INFORMATION is refined data that is

accurate, timely and relevant to the user.

37. Explain the concept of supply chain management?
A supply chain is a network of facilities and distribution options that
performs the function of procurement of materials, transformation of these
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Technology.
R.Sathya, AP / IT

materials into intermediate and finished products, and the distribution of these
finished products to customers.

Supply chains exist in both service and

manufacturing organizations, although the complexity of the chain may vary greatly
from industry to industry and firm to firm.
38. What is the use of common database?
The common database can allow every department of a business to store
and retrieve information real time. The information should be reliable, accessible
and easily shared.
39. List the Reasons for the growth of the ERP Market

To improve business performance

To support business growth requirements
To eliminate limitations in legacy system

Ganadipathy Tulsis Jain Engineering College, Department of Information

Technology.
R.Sathya, AP / IT