Enterprise Resource Planning (ERP) Systems (Answer Key)

Experiencing MIS Chapter Extension 9 Enterprise Resource Planning (ERP) Systems 1) ________ is a suite of applications, a database, and a set of inherent processes for consolidating business operations into a single, consistent computing platform. Enterprise resource planning B) Customer relationship management C) Warehouse management system D) Supply chain management Answer: A 2) The primary purpose of an enterprise resource planning (ERP) system is integration. Answer: TRUE 3) What is the primary purpose of an enterprise resource planning (ERP) system? Answer: The primary purpose of an ERP system is integration. An ERP system allows the left hand of the organization to know what the right hand is doing. This integration allows real-time updates, globally, whenever and wherever a transaction takes place. Critical business decisions can then be made on a timely basis using the latest data. 4) Which of the following is an example of a supply chain activity? A) capacity planning B) marketing C) inventory management D) customer management Answer: C 5) Which of the following is a manufacturing activity that must be included in a true enterprise resource planning (ERP) product? A) supplier management B) capacity planning C) sales prospecting D) procurement Answer: B 6) Customer relationship management (CRM), as an application that must be included in a true enterprise resource planning (ERP) product, includes ________. A) cash management B) HR management C) sales prospecting D) capacity planning Answer: C 7) ________ activities include payroll, time and attendance, and benefits administration that must be integrated into applications in order to form a true enterprise resource planning (ERP) product. A) Manufacturing B) Supply chain C) Human resource D) Accounting Answer: C 8) The process of maintaining a general ledger, which must be integrated into applications in order to form a true enterprise resource planning (ERP) product, is a(n) ________ activity. A) supply chain B) accounting C) human resources D) manufacturing Answer: B 9) Which of the following statements is true of enterprise resource planning (ERP) application programs? A) During the ERP development process, the development team sets configuration parameters that specify how ERP application programs will operate. B) There are virtually no limits to how much configuration can be done in an ERP application program. C) Custom programming of ERP application programs are economical both initially and for long-term maintenance. D) In order to meet varying customer requirements, development teams must often change the program code of ERP application programs. Answer: A 10) Which of the following statements is true of an enterprise resource planning (ERP) database? A) An ERP solution contains the company's operational data. B) A stored procedure is a computer program code stored within an ERP database that runs to keep the database consistent when certain conditions arise. C) An ERP solution includes initial configuration data. D) A trigger is a computer program code stored in an ERP database that is used to enforce business rules. Answer: C 11) Which of the following statements describes a trigger? A) It is a computer program stored within a database that runs to keep the database consistent when certain conditions arise. B) It is a computer program stored in a database that is used to enforce business rules. C) It is a set of inherent procedures in an enterprise resource planning (ERP) solution that implement standard business processes. D) It is a programming paradigm that describes computation in terms of statements that change a program state. Answer: A 12) What is a stored procedure? A) It is a computer program stored within a database that runs to keep the database consistent when certain conditions arise. B) It is an area of memory that is used for dynamic memory allocation. C) It is a computer program stored in a database that is used to enforce business rules. D) It is a software program that houses and serves business logic for use by multiple applications. Answer: C 13) As an element of an enterprise resource planning (ERP) solution, supply chain includes scheduling, capacity planning, quality control, bill of materials, and related activities. Answer: FALSE 14) Enterprise resource planning (ERP) vendors design application programs to be configurable so that development teams can alter them to meet customer requirements without changing program code. Answer: TRUE 15) An enterprise resource planning (ERP) solution includes a database design, initial configuration data, and the company's operational data. Answer: FALSE 16) A stored procedure is a computer program stored within a database that runs to keep the database consistent when certain conditions arise. Answer: FALSE 17) An example of a stored procedure would be never to sell certain items at a discount. Answer: TRUE 18) Process blueprints are the inherent processes in an enterprise resource planning (ERP) solution that implement standard business processes. Answer: TRUE 19) Enterprise resource planning (ERP) training includes topics such as obtaining top-level management support. Answer: TRUE 20) The enterprise resource planning (ERP) training sessions in which the implementing organization's employees teach the ERP trainers about the organization's processes are called train the trainer. Answer: FALSE 21) Explain enterprise resource planning (ERP) application programs. Answer: ERP vendors design application programs to be configurable so that development teams can alter them to meet customer requirements without changing program code. Accordingly, during the ERP development process, the development team sets configuration parameters that specify how ERP application programs will operate. There are limits to how much configuration can be done. If a new ERP customer has requirements that cannot be met via program configuration, then it either needs to adapt its business to what the software can do or write, or pay another vendor to write, an application code to meet its requirement. Thus, choosing an ERP solution that has applications that function close to the organization's requirements is critically important to success. 22) Which of the following tasks should be considered while implementing an enterprise resource planning (ERP) application? A) creating an as-is model that summarizes current business procedures and practices B) plunging the organization into the new system C) modeling all current practices "as-is" and implementing them on ERP application D) modifying every existing practice to match blueprint models Answer: A 23) For implementing enterprise resource planning (ERP) systems, the first task is to create a model of current business procedures and practices, which is called the as-is model. Answer: TRUE 24) The differences between as-is processes and the blueprint should be reconciled after the enterprise resource planning (ERP) system has been implemented. Answer: FALSE 25) A new enterprise resource planning (ERP) implementation process cannot be carried out if a business is running on an old system. Answer: FALSE 26) An enterprise resource planning (ERP) implementation depends primarily on the backing of a departmental manager. Answer: FALSE 27) Explain briefly the steps for implementing enterprise resource planning (ERP) systems. Answer: The first task in implementing ERP systems is to create a model of current business procedures and practices, which is called the as-is model. Managers and analysts then compare those as-is processes to the ERP process blueprints and note differences. The company then must find ways to eliminate the differences, either by changing the existing business process to match the ERP process or by altering the ERP system. Once the differences between as-is processes and the blueprint have been reconciled, the next step is to implement the system. Before implementation starts, however, users must be trained on the new processes, procedures, and use of the ERP system's features and function. Additionally, the company needs to conduct a simulation test of the new system to identify problems. Then, the organization must convert its data, procedures, and personnel to the new ERP system. All of this happens while the business continues to run on the old system. 28) Which of the following aspects that impact enterprise resource planning (ERP) differs among companies of different sizes? A) relevance of ERP systems B) value chains C) availability of skilled IT staff D) basic business processes Answer: C 29) Which of the following statements is true of the impact of enterprise resource planning (ERP) on the IT staff of small organizations? A) IT specialists in small organizations are dedicated to managing only the ERP system. B) The IT staff in small organizations is isolated from senior management. C) The chief information officer obtains the backing of the entire executive group for ERP implementation. D) IT specialists in small organizations are spread very thin and often are in over their heads during an ERP implementation. Answer: D 30) Which of the following statements is true of the effect of enterprise resource planning (ERP) on the IT staff of midsized organizations? A) In midsized organizations, the IT staff is often isolated from senior management. B) ERP implementation in midsized companies will be part of a strategic process and, once begun, will have the full backing of the entire executive group. C) IT specialists in midsized organizations are spread very thin and often are in over their heads during an ERP implementation. D) Midsized organizations employ only one or two IT specialists. Answer: A 31) Which of the following statements is true of the types of organizations that use enterprise resource planning (ERP)? A) ERP vendors started selling ERP solutions to distributors after their success with the manufacturing industry. B) Implementing ERP in organizations of different scales is difficult due to the differences in their basic business processes. C) ERP procedures are uniform in large organizations operating in multiple countries. D) Availability of IT personnel does not have an impact on ERP implementation. Answer: A 32) Enterprise resource planning (ERP) was initially adopted by government and public service agencies to handle complex administrative tasks. Answer: FALSE 33) Small organizations tend to employ only one or two IT specialists who not only manage the enterprise resource planning (ERP) system, but the entire IS department as well. Answer: TRUE 34) In midsized organizations, the first step in moving toward enterprise resource planning (ERP) is to obtain deep senior-level management commitment to the project. Answer: TRUE 35) Explain how organizations of different sizes use enterprise resource planning (ERP) differently. Answer: Companies of different sizes have one very important difference that has a major impact on ERP: the availability of skilled IT personnel. Small organizations employ only one or two IT specialists who not only manage the ERP system, but the entire IS department as well. They are spread very thin and often are in over their heads during an ERP implementation. Smaller, simpler ERP solutions are common among these companies. Midsized organizations expand IT from one person to a small staff, but frequently this staff is isolated from senior management. Such isolation creates misunderstanding and distrust. Because of the expense, organizational disruption, and length of ERP projects, senior management must be committed to the ERP solution. When IT management is isolated, such commitment is difficult to obtain and may not be strong. This issue is so prevalent that many ERP consultants say the first step in moving toward ERP is to obtain deep senior-level management commitment to the project. Large organizations have a full IT staff that is headed by the chief information officer (CIO), who is a business and IT professional who sits on the executive board and is an active participant in organizational strategic planning. ERP implementation will be part of that strategic process and, once begun, will have the full backing of the entire executive group. 36) ________ offers Business Cloud, an enterprise resource planning (ERP) solution that can be used as a software service, can be installed on the customer's servers and managed by personnel. A) Sage B) SAP C) Infor D) Oracle Answer: C 37) In the future, which of the following Microsoft products is likely to be a true enterprise resource planning (ERP) product for larger organizations? A) Solomon B) Nav C) AX D) GP Answer: C 38) Which of the following statements is true of Oracle's enterprise resource planning (ERP) products? A) Oracle has never been known to create easy-to-use ERP products. B) Oracle traditionally does not develop its ERP products in-house. C) Oracle's ERP products are not available on mobile devices. D) Oracle's ERP products are not designed according to SOA principles and hence are non-customizable. Answer: A 39) Which of the following statements is true of enterprise resource planning (ERP) products offered by SAP? A) SAP HANNA is a SaaS (software as a service) cloud offering. B) SAP does not have technical, marketing, sales, and customer support challenges. C) Classic SAP uses thick-client, client/server architecture. D) Because of its installed base, SAP can make a rapid move to cloud-based solutions. Answer: C 40) Which of the following statements is true of Microsoft's enterprise resource planning (ERP) products? A) Dynamics CRM is a true ERP product used by large organizations. B) GP is the easiest of Microsoft's ERP products to install. C) Nav is likely to continue as a general-ledger program in the future. D) AX is developed in-house by Microsoft. Answer: B 41) Which of the following statements is true of an enterprise resource planning (ERP) software in the cloud? A) Customers of thick-client, client/server ERP software can move to the cloud at low costs. B) Cloud-based ERP software is more expensive for customers. C) Mobile systems using cloud-based ERP require thin-client applications. D) It is safe to provide mobile systems access to ERP systems. Answer: C 42) Infor Business Cloud is an enterprise resource planning (ERP) solution that can be installed in a bare-bones way and offered as IaaS (infrastructure as a service). Answer: TRUE 43) Microsoft relies heavily on its network of independent software vendors to create customer solutions using the Solomon platform. Answer: FALSE 44) Oracle's enterprise resource planning (ERP) products are designed according to SOA principles and hence are adaptable and customizable. Answer: TRUE 45) SAP's enterprise resource planning (ERP) products are relatively economical compared to other companies' products. Answer: FALSE 46) Infor's enterprise resource planning (ERP) products span the mid-range, serving higher-end small companies and lower-end large companies. Answer: TRUE 47) PeopleSoft is an HR product developed in-house by Oracle. Answer: FALSE 48) Microsoft offers its CRM product online as SaaS (software as a service), but it has no full enterprise resource planning (ERP) implementation in the cloud. Answer: TRUE 49) Briefly describe Microsoft's enterprise resource planning (ERP) products. Answer: Microsoft offers five ERP products, all obtained via acquisition: AX, Nav, GP, Solomon, and Dynamics CRM. AX and Nav have the most capabilities; GP is more limited but is easier to use. The future of Solomon is uncertain. Dynamics CRM is primarily a CRM product, but it is extensible in ways that enable customers to use it for ERP as well as CRM. Microsoft is in the process of consolidating its offerings. Most likely AX will continue going forward as a true ERP product for larger organizations. Dynamics CRM will serve as a CRM product as well as a platform for custom ERP solutions. GP, which is the easiest of the products to install, will continue as a general-ledger program that can also be used as a platform for simpler ERP solutions. Microsoft relies heavily on its network of independent software vendors to create customer solutions using the Dynamics platform. These vendors take off-the-shelf Dynamics products and adapt and customize them for particular situations. Microsoft offers its CRM product online as SaaS, but it has no full ERP implementation in the cloud. 50) Briefly explain Infor's enterprise resource planning (ERP) products. Answer: After Infor was purchased by private-equity investors, it bought many ERP companies. It now sells many ERP products for many different industries. These products vary in purpose, scope, and quality. They span the midrange, serving higher-end small companies and lower-end large companies. Recently, Infor began to offer the Infor Business Cloud, an ERP solution that can be used as a software service, can be installed on the customer's servers and managed by Infor personnel, or can be installed in a bare-bones ways and offered as IaaS.