THE INDIAN ENGINEERING COLLEGE VADAKKANGULAM DEPARTMENT OF INFORMATION TECHNOLOGY

2 MARKS QUESTIONS & ANSWERS

IT705 ENTERPRISE RESOURCE PLANNING

Year/ Sem: IV/VII

ra!"#: IT

Pre$are% &': ()UMADEVI* AP/IT

IT705 Enterprise Resource Planning

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. !. "hat is an Enterprise# $n enterprise is a group of people with a common goal which has certain resources at its disposal to achieve that goal. "hen used generically an enterprise is defined as the aggregate of all functional elements participating in a business process improvement action regardless of the organi%ational structure housing those functional elements. &t is a complete business consisting of functions divisions or other components used to accomplish specific ob'ectives and defined goals. (. "hat are the main misconceptions about ERP# )irst is that ERP is a computer system. Even though computers and &* are integral parts of an ERP system ERP is primarily an enterprise+wide system which encompasses corporate mission ob'ectives attitudes beliefs values operating style and people who ma,e the organi%ation. -econd is ERP is for manufacturing organi%ations alone. *his assumption is basically due to the way in which ERP was historically developed from the methods of .aterial Requirements Planning (.RP) and .anufacturing Resource Planning (.RP &&) which are relevant to manufacturing organi%ations. .RP became the fundamental concept in 1/01s. $t this stage 23. (2ill of materials) was the prevailing trend. &t further got unfolded as ERP && 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. "hat are ERP pac,ages# ERP pac,ages are integrated (covering all business functions) software pac,ages 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 comple5 e5pensive lin,s between computer systems that were never meant to each other.

6. "ho are the main players in the ERP mar,et# -$P $7 People-oft 3racle 2aan 8D Edwards 9$D Ramco &)- Data"or,s etc. :. "hen do the ERP system;s set of generic processes produce dramatic improvements# ERP software is a mirror image of the ma'or business processes of an organi%ation such as customer order fulfillment and manufacturing. &ts 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 organi%ation and integrate its various processes seamlessly. 0. "hat are the reasons for the e5plosive growth of the ERP mar,et# *hey enable improved business performance by achieving= cycle+time reduction increased business agility inventory reduction order fulfillment improvement etc. *hey support business growth requirements. ERP systems provide fle5ible integrated real time decision support. ERP pac,ages can now be afforded by even small and medium si%ed businesses and offers increased functionality at a reasonable cost. *hey help companies in supporting new products and new customers by meeting their global requirements including multiple languages and currencies. >. "hat are the direct benefits of ERP systems# 2usiness &ntegration )le5ibility 2etter analysis and planning capabilities ?se of latest technology

/. "hy is it said that ERP systems are fle5ible# Different languages accounting standards can be covered in one system and functions that comprehensively manage multiple locations of a company can be pac,aged and can be implemented automatically. *o cope with company globali%ation and system unification this fle5ibility is essential. 11. "hat is cycle time# @ycle time is the time between receipt of the order and delivery of the product.

11. "hat is 2usiness &ntegration and how do the ERP systems achieve it# *he reason why ERP pac,ages are referred as being integrated is the automatic data updation (automatic data e5change among applications) that ta,es place between related business components. -ince conventional company information systems were aimed at the optimi%ation of independent business functions in business unite almost all were wea, in terms of communication and integration of information that transcended in different business functions. &n case of ERP pac,ages the data of related business functions is also automatically updated at the time a transaction occurs. )or 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. 1!. "hat are the factors that are critical for the success of the ERP implementation# -election of the right pac,age @ommitment of top management Participation and dedication of the system;s future users 2ac,ing support and cooperation of the &-A&* personnel Development of interfaces with current operational systems and with those under development Effort of consultants who have respect for the company;s ,now+how and wor, culture -pirit and collaboration on the part of all

1(. Bow do conventional application pac,ages and ERP pac,ages differ# )irst ERP pac,ages 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 -econd ERP pac,ages are targeted at everything from small businesses to the largest organi%ations and that they can be composed of a highly fle5ible decentrali%ed database and an information system cluster lin,ed by a networ, *hird is global adaptation represented by ERP pac,ages; multilingual and multi+currency capacity. 14. "hat are the limitations of ERP# .anagers cannot generate custom reports or queries without help from a programmer and this inhibits then from obtaining information quic,ly so that they can act on it for competitive advantage

ERP systems provide current status only such as open orders. .anagers often need to loo, past the current status to find trends and patterns that aid better decision+ma,ing *he data in the ERP application is not integrated with other enterprise or division systems and does not include e5ternal intelligence

16. "hat is 2PR# 2PR or 2usiness Process Reengineering is the fundamental rethin,ing and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost quality service and speed. 1:. "hat is .&-# .&- or .anagement &nformation -ystem is a computer based system that optimi%es the collection collation transfer and presentation of information throughout an organi%ation through an integrated structure of databases and information flow. 10. "hat are the main characteristics of .&-# .&- supports the data processing functions of transaction handling and record ,eeping .&- uses an integrated database and supports a variety of functional areas .&- provides operational tactical an d strategic levels of the organi%ation with timely information .&- is fle5ible and can be adapted to changing needs of an organi%ation

1>. "hat is D--# D-- or Decision -upport -ystem is an information and planning system that provides the ability to interrogate computers on an ad+hoc basis analy%e information and predict the impact of decisions before they are made. $ D-- is a cohesive and integrated set programs that share data and information. 1/. "hat is E&-# E&- or E5ecutive &nformation -ystem is an information system that consolidates and summaries the ongoing transactions within an organi%ation. &t should provide management with all the information it requires at all times from internal as well as e5ternal sources. $ successful E&- is easy to use fle5ible and customi%able.

!1. "hat is 3C$P# 3C$P or 3n+Cine $nalytical Processing is a decision support software that allows the user to quic,ly analy%e information that has been summari%ed into multidimensional views and hierarchies. *hese multidimensional views are supported by multidimensional database technology and provide the technical basis for the calculations and analysis required by 2usiness &ntelligence applications.

UNIT II ERP IMPLEMENTATION

1. "hat are the different phases of ERP implementation# Pre+evaluation screening Pac,age evaluation Pro'ect planning phase

7ap analysis Reengineering @onfiguration &mplementation team training *esting 7oing live End user training Post+implementation

!. "hat is gap analysis# 7ap analysis is the most crucial phase for the success of the ERP implementation. &t is the process through which companies create a model of where they are now an din which direction they want to head in the future. *he tric, is to design a model which anticipates and covers any functional gaps. &t is true that even the best ERP pac,age custom tailored to a company;s needs meets only >1D of the company;s functional requirements. (. "hat are the general four phases of an ERP implementation# ?nderstanding the problem Defining solutions 7etting down to wor, 7oing live

4. 7ive the hidden costs in ERP implementation# *raining &ntegration and testing Data conversion Data analysis ERP consultants

6. -tate the main members of an implementation team. E5ecutive committee Pro'ect management team

"or, team *echnical support team $dministrative support team

:. "hat are the s,ills the people who implement the ERP should possess# Enowledge of how to organi%e and run a pro'ect of this magnitude Enough e5perience in handling problems and issues that arise during the implementation 7ood people s,ills and e5cellent training s,ills 7ood leadership s,ills

0. "ho are vendors and give their role# Fendors are people who have invested huge amounts of time and effort in research and development to create pac,aged (ERP) solutions. )irst and foremost the vendor should supply the product and its documentation as soon as the contract is signed. Ge5t the vendor should impart training to its clients;. >. "ho are business consultants and specify their role# 2usiness consultants are professionals who speciali%e in developing techniques and methodologies for dealing with the implementation and with the various problems that will crop up during the implementation. @onsultants should guarantee the success of the pro'ect and should be able to satisfy the company management with its needs. *hey should add value to the pro'ect. /. -tate some ,ey points of the contract with the vendor which should be addressed. Falue of the software and conditions of payment Cist of deliverables (software documents etc.) @ost of implementation training @ost of end+user training $nnual maintenance fee "arranty or guarantee terms

11. -tate some ,ey points of the contract with the consultant which should be addressed. Profile of the consultants; team with the resume of each member

@onsulting fee and payment details &mplementation methodology *ime schedule and the implementation budget *erms and conditions of ,nowledge transfer and employee training Cist of deliverables (reports manuals ,nowledge bases etc) Pro'ect monitoring and status reporting systems

11. "hat is a data warehouse# $ data warehouse is a database designed to support decision+ma,ing in an organi%ation. &t is updated batch+wise and is structured for fast online queries and summaries for managers. Data warehouses can contain enormous amounts of data. 1!. "hat is data mining# Data mining is the process of identifying valid novel potentially useful and ultimately comprehensible ,nowledge from databases that is used to ma,e crucial business decisions. 1(. "hat is supply chain# $ supply chain is a networ, of facilities and distribution options that performs the functions of procurement of materials transformation of these materials into intermediate an finished products and the distribution of these finished products to customers. 14. "hat is -@.# -@. or -upply @hain .anagement is a generic term that encompasses the coordination of order generation order ta,ing and offer fulfillmentAdistribution of products services or information.

16. "hy is the pre+evaluation screening required# *here are hundreds of vendors claiming a solution that is ideal for your company. $naly%ing these pac,ages though a time+consuming process would give a viable solution needed. 1:. Define action plan.

$ document used to guide the implementation of business process improvements. &t contains tac, assignments schedules resource allocations assignments and evaluation criteria. 10. "hat is an activity# $ named process function or tas, that occurs over time and has recogni%able results. $ctivities use up assigned resources to produce products and services. $ctivities combine to form business processes. 1>. Define 23$. 23$ or 2ill of $ctivity is the listing of activities involved in the production of a certain output together with the number of times each component activity is performed. 1/. "hat is 23.# 23. or 2ill of .aterials is a list of direct materials required to manufacture a given product or provide a given service. !1. "ho are 2PR professionals# 2PR professionals are individuals necessary for a 2usiness Process Reengineering effort. )ive distinct s,ill areas have been identified as being essential to the tas,. *hey are= functional e5perts strategic planners data and process modelers cost analysis and )unctional $ctivity @oordinators ()$@).

UNIT III U!INE!! MODULE!

1. Define business. 2usiness can be defined as the activities of individuals or groups that are involved in developing producing and distributing the goods and services needed to satisfy other peoples; needs. !. "hat are the three resources of business# Cand labour and capital

(. -tate the various business modules in ERP system. Buman resources )inance .anufacturing Plant maintenance -ales H distribution .aterials management 9uality management Production planning

4. -tate the finance modules in most ERP systems. )inancial accounting &nvestment management @ontrolling *reasury Enterprise controlling

6. "rite about financial accounting. &t provides company wide control and integration of financial information that is essential to strategic decision ma,ing. &t gives the ability to centrally trac, financial accounting data within an international framewor, of multiple companies languages currencies and charts of accounts. :. "hat is 7eneral ledger# 7eneral ledger is essential both to the financial accounting system and to strategic decision ma,ing. &t provides document par,ing posting reporting and an integrated financial calendar for automating periodic activities. 0. "hat is asset accounting and legal consolidation# $sset accounting manages the company;s fi5ed assets whereas legal consolidation permits direct data transfer from individual statements into the consolidated report.

>. "hat is cost centre accounting# @ost center accounting analyses where overheads occur within the organi%ation. @osts are assigned to the sub+areas of the organi%ation where they are originated. /. "hat is E&-# E&- or E5ecutive &nformation -ystem is an information system that consolidates and summaries the ongoing transactions within an organi%ation. &t should provide management with all the information it requires at all times from internal as well as e5ternal sources. $ successful E&- is easy to use fle5ible and customi%able. 11. -tate some ma'or subsystems of manufacturing module. .aterial and capacity planning -hop floor control 9uality management 8&* A Repetitive manufacturing @ost management *ooling

11. "hat are the various subsystems in BR module# Personnel management 3rgani%ational management Payroll accounting *ime management Personnel management

1!. "hat are the various subsystems of a plant maintenance module# Preventive maintenance control Equipment trac,ing @omponent trac,ing Plant maintenance calibration trac,ing Plant maintenance warranty claims trac,ing

1(. "hat are the main modules of .aterials .anagement module# Pre+purchasing activities Purchasing Fendor evaluation &nventory management &nvoice verification and material inspection

14. -tate the sub activities in pre+purchasing. Requirements calculation Requisition for quotations Fendor ratings 9uotation evaluation Fendor selection @ontracts

16. "hat is meant by @$9 and @&9# @$7 means @omputer $ided 9uality management and @&9 means @omputer &ntegrated 9uality management. 1:. -tate the functions of quality management module. 9uality planning 9uality inspection 9uality control

10. 7ive some sales related business transactions. -ales queries such as inquiries and quotations -ales orders 3utline agreements such as contracts and scheduling agreements Delivery A shipment &nvoicing A billing $fter sales support

1>. "hat are the basic functions in sales order processing# &nquiry handling 9uotation preparation and quotation @ontracts and contract management (order management) .onitoring the sales transactions @hec,ing for availability *ransferring requirements to materials planning (.RP) -cheduling the delivery @alculating pricing and ta5es @hec,ing credit limits &nvoicing A billing @reating printed or electronically transmitted documents

1/. "hat are the subsystems in a sales and distribution module# .aster data management 3rder management "arehouse management -hipping 2illing Pricing -ales support *ransportation )oreign trade

!1. -tate the components of a warehouse management application. &nventory planning &nventory handling &ntelligent location assignment &nventory reporting &nventory analysis

Cot control Distribution data collection

UNIT I" T#E ERP MAR$ET

1% "ho are the main players in the ERP mar,et#

-$P $7 People-oft 3racle 2aan 8D Edwards 9$D Ramco &)- Data"or,s etc. !. "hat is -$P# -$P means -ystems $pplications and Products in Data Processing. (. -tate the versions of -$P;s ERP pac,age. .ainframe version (-$P RA!) @lientAserver version

4. "hat are the three different layers of -$P RA(# Database layer $pplication layer Presentation layer

6. -tate about the three layers of -$P RA(. Database layer < resides on central severs or mainframe host computers $pplication layer < holds the processing logic of the system preparing and formatting data for individual offices or departments Presentation layer < handles all the tas,s related to the presentation of data including user interfaces that enable easy access to comple5 applications and data :. "hat are the general RA( modules# )inancial accounting *reasury @ontrolling Enterprise controlling &nvestment management Production planning .aterials management Plant maintenance and service management 9uality management Pro'ect system -ales and distribution

Buman resources management

0. "rite about -$P;s business engineer# 2usiness engineer delivers a complete tool,it that greatly facilitates the implementation of RA( and the engineering of your business processes. &t ensures quic, and high quality customi%ation of RA(. >. -tate some areas of business management solutions provided by People-oft. BR management $ccounting and control *reasury management Performance management Pro'ect management -ales and logistics .aterials management -upply chain planning -ervice revenue management Procurement

/. "hat are four strategies incorporated by People-oft implementation tool,it# 7eographical Departmental @ore and support process Go phasing

11. "hat is 2aanDE.-E# 2$$G < Dynamic Enterprise .odeling -trategy E5ecution 11. "hat are the ERP modules of 2aanERP# .anufacturing module )inance module Pro'ect module Distribution module

1!. "hat is the I*BREE &J philosophy# &ntegrity &nnovation &nitiative

1(. 7ive some categories of 3racle software applications. 3racle )inancials 3racle Buman Resources 3racle Pro'ects 3racle .anufacturing 3racle -upply @hain 3racle )ront 3ffice

14. "hat is the flagship product of 9$D# .)7APR3 16. "hat is --$# --$ means -ystem -oftware $ssociates 1:. "hat are the si5 ,ey goals of --$# 2est client satisfaction -ingle image worldwide Enterprise solutions leadership Proven leading technology Bighly s,illed and motivated professionals -trong financial results

10. "hat is lead time# *he elapsed time between placing an order and receiving it is ,nown as the lead time. 1>. "hat is E5tended ERP#

E5tended ERP is a set of enterprise modeling tools for effective implementation. &t is a concept promoted by 2aan for rapid fle5ible and quality implementation of ERP systems. 1/. "hat is product fle5ibility# Product fle5ibility is the ability of the operation to efficiently produce highly customi%ed and unique products. !1. "ho is the leader in the ERP mar,et and what are its products# -$P $7 is the mar,et leader and its ERP products are -$P RA! for the mainframe environment and -$P RA( for the clientAserver environment.

UNIT " ERP &PRE!ENT AND 'UTURE(

1. "hat does 2&- allow# @ustomer service .anufacturing and purchase -ales

!. "hat are the general traditional business processes# )ulfillment Payment Procurement Replenishment

(. -tate the steps in retail fulfillment process. &nitiate order Ferify identity or payment $rrange drop shipment $c,nowledge order *rac, order status

4. -tate the steps in corporate procurement process. &nitiate requisition Ferify item data *ransmit purchase order @onfirm receipt *rac, purchase status

6. -tate the steps in inventory replenishment process. &tem reorder limit reached Purchase order approved &tem shipped

&tem received Payment received

:. "hat is the use of -E*# -ecure Electronic *ransaction (-E*) protocol addresses the vulnerability in -ecure -oc,et Cayer (--C) by providing an encrypted channel between the customer and the ban,. 0. -tate some ERP vendors and their products. -$P $7 3racle @orporation 8D Edwards "orld -olutions @o. People-oft &nc. 2aan @o. + + RA(

3racle $pplications + + + 3ne"orld People-oft 2aan &F

IT705 Enterprise Resource Planning

UNIT I INTRODUCTION
1. "hat is ERP# 7ive an overview. ERP Reasons for growth of ERP mar,et $dvantages Problem areas )uture of ERP pac,ages

&)* Mar+s(

!. "hat is an Enterprise# 7ive an overview. Enterprise &ntegrated management information Role of enterprise 2usiness modeling &ntegrated data model

(. "hat are the benefits of ERP# Reduction of lead time 3n+time shipment Reduction in cycle time 2etter customer satisfaction &mproved supplier performance &ncreased fle5ibility Reduction in quality costs &mproved resource utility &mproved information accuracy and decision ma,ing capability

4. "rite about the related technologies of ERP# 2PR Data mining 3C$P -@.

6. "hat are the phases of 2PR# 2egin organi%ational change 2uilding the reengineering organi%ation &dentifying 2PR opportunities ?nderstanding the e5isting process Reengineering the process 2lueprint of the Gew 2usiness -ystem Perform the transformation

UNIT II ERP IMPLEMENTATION

1. "hat are the different phases of ERP implementation# Pre+evaluation screening Pac,age evaluation Pro'ect planning phase 7ap analysis Reengineering @onfiguration &mplementation team training *esting 7oing live End user training Post+implementation

!. "hat are the general four phases of an ERP implementation#

?nderstanding the problem Defining solutions 7etting down to wor, 7oing live

(. 7ive the hidden costs in ERP implementation# *raining &ntegration and testing Data conversion Data analysis ERP consultants

4. -tate the main members of an implementation team. E5ecutive committee Pro'ect management team "or, team *echnical support team $dministrative support team

6. -tate some ,ey points of the contract with the vendor which should be addressed. Falue of the software and conditions of payment Cist of deliverables (software documents etc.) @ost of implementation training @ost of end+user training $nnual maintenance fee "arranty or guarantee terms

UNIT III U!INE!! MODULE! 1. -tate the various business modules in ERP system.
Buman resources

)inance .anufacturing Plant maintenance -ales H distribution .aterials management 9uality management Production planning

!. -tate the finance modules in most ERP systems. )inancial accounting &nvestment management @ontrolling *reasury Enterprise controlling

(. -tate some ma'or subsystems of manufacturing module. .aterial and capacity planning -hop floor control 9uality management 8&* A Repetitive manufacturing @ost management *ooling

4. "hat are the basic functions in sales order processing# &nquiry handling 9uotation preparation and quotation @ontracts and contract management (order management) .onitoring the sales transactions @hec,ing for availability *ransferring requirements to materials planning (.RP) -cheduling the delivery

@alculating pricing and ta5es @hec,ing credit limits &nvoicing A billing @reating printed or electronically transmitted documents

6. "hat are the main modules of .aterials .anagement module# Pre+purchasing activities Purchasing Fendor evaluation &nventory management &nvoice verification and material inspection

UNIT I" T#E ERP MAR$ET 1. "hat are the general RA( modules#
)inancial accounting *reasury @ontrolling Enterprise controlling &nvestment management Production planning .aterials management Plant maintenance and service management 9uality management Pro'ect system -ales and distribution Buman resources management

!. -tate some areas of business management solutions provided by People-oft. BR management $ccounting and control *reasury management Performance management

Pro'ect management -ales and logistics .aterials management -upply chain planning -ervice revenue management Procurement

(. "hat are the ERP modules of 2aanERP#

.anufacturing module )inance module Pro'ect module Distribution module

4. 7ive some categories of 3racle software applications. 3racle )inancials 3racle Buman Resources 3racle Pro'ects 3racle .anufacturing 3racle -upply @hain 3racle )ront 3ffice

6. "hat are the si5 ,ey goals of --$# 2est client satisfaction -ingle image worldwide Enterprise solutions leadership Proven leading technology Bighly s,illed and motivated professionals -trong financial results

UNIT " ERP &PRE!ENT AND 'UTURE(

1. "hat are the general traditional business processes#

)ulfillment Payment Procurement Replenishment

!. -tate the steps in retail fulfillment process.

&nitiate order Ferify identity or payment $rrange drop shipment $c,nowledge order *rac, order status

(. -tate the steps in corporate procurement process. &nitiate requisition Ferify item data *ransmit purchase order @onfirm receipt *rac, purchase status

4. -tate the steps in inventory replenishment process. &tem reorder limit reached Purchase order approved &tem shipped &tem received Payment received

6. -tate some ,ey points of the contract with the consultant which should be addressed. Profile of the consultants; team with the resume of each member @onsulting fee and payment details &mplementation methodology

*ime schedule and the implementation budget *erms and conditions of ,nowledge transfer and employee training Cist of deliverables (reports manuals ,nowledge bases etc) Pro'ect monitoring and status reporting systems