ERP/EBiz Question Bank Solution 2016

Contents

Q.1 What is an ERP?

Q.2 List down 5 major functions of ERP with details.

Q.3 What is E - Business? And Its 5 major benefits and 5 major challenges.

Q.4 What are the similarities and differences between E-Commerce & E-Business. Write few important revenue models of E-Business.

Q.5 Define an organization & an extended organization?

Q.6 Draw generic ERP diagram to illustrate organization and extended organization concept.

Q.7 Successful organizations existed prior to ERP came in vogue. Write an essay on ‘Why necessity of ERP is felt in organizations now’?

Q.8. Implementing successful change management.

Q.9 Describe “Why is e-business important in current connected world”.

(a)Cost-Effective Marketing

(b)Flexible Business Hours

(c)Eliminates Geographic Boundaries

(d)Reduces Transaction Cost

(e)Low Overhead Costs

Q.10 What are different revenue models?

Q.11 Explain the revenue model of Paytm, Flipcart or Ola cabs.

Q.12 Explain the information Systems architecture of a typical organization.

Q.13 Organizations have implemented standard ERP product. Since all the business processes are standard, describe the following:

Why do they differ in their implementation successes rate?

Why is their profitability different even though they use same ERP product?

Q.14 Write pros & cons of eBusiness

Q.15 What are the security risk associated with eBusiness?

Q.16 Describe 4 stage approach to manage transition as part of change management.

Q.17.We have discussed Advertisement, subscription, Transaction, Product/Service, affiliate based revenue models. Please suggest a new revenue model for eBusiness organization

Q.18 Critical Success factors for an ERP implementation

Q.19 Describe the importance of PM & PTs.

Q.20 We have discussed the impact of GST on ERP systems. Please explain the process to implement it successfully for your organization.

Q.1 What is an ERP?

ANS: Enterprise resource planning(ERP) is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to complete business processes such as order fulfillment or billing.

An ERP system supports most of the business system that maintains in a single database the data needed for a variety of business functions such as Manufacturing, Supply Chain Management, Financials, Project s, Human Resources and Customer Relationship Management.

ERP provides an integrated view of core business processes, often in real-time, using commondatabasesmaintained by adatabase management system. ERP systems track business resources—cash,raw materials,production capacity—and the status of business commitments: orders,purchase orders, andpayroll. The applications that make up the system share data across various departments (manufacturing, purchasing, sales,accounting, etc.) that provide the data. ERP facilitates information flow between all business functions and manages connections to outsidestakeholders.

ERP positively affects organizations in the following ways:

  • Assisting in defining business processes and ensuring they are complied with throughout the supply chain.
  • Protecting critical business data through well-defined roles and security access.
  • Enabling to plan your work load based on existing orders and forecasts.
  • Providing you with the tools to give a high level of service to your customers.
  • Translating data into decision making information.

The right ERP software brings all your business processes together for easier collaboration, faster decision making, and improved overall productivity for the whole team. An integrated ERP system helps you with:

  • Financial management- Improve your control over company assets, cash flow, and accounting
  • Supply chain and operations management- Streamline your purchasing, manufacturing, inventory, and sales-order processing
  • Customer relationship management- Improve customer service, and increase cross-sell and upsell opportunities
  • Project management- Get what you need to deliver work on time and on budget with better billing and project monitoring
  • Human resources management- Attract and retain good employees with tools that help you hire, manage, and pay your team
  • Business intelligence- Make smart decisions with easy-to-use reporting, analysis, and business intelligence tools.

Advantages:

  • ERP can improve quality and efficiency of the business. By keeping a company's internal business processes running smoothly, ERP can lead to better outputs that may benefit the company, such as in customer service and manufacturing.
  • ERP supports upper level management by providing information for decision making.
  • ERP creates a more agile company that adapts better to change. It also makes a company more flexible and less rigidly structured so organization components operate more cohesively, enhancing the business—internally and externally.
  • ERP can improve data security. A common control system, such as the kind offered by ERP systems, allows organizations the ability to more easily ensure key company data is not compromised.
  • ERP provides increased opportunities forcollaboration. Data takes many forms in the modern enterprise. Documents, files, forms, audio and video,emails. Often, each data medium has its own mechanism for allowing collaboration. ERP provides a collaborative platform that lets employees spend more time collaborating on content rather than mastering the learning curve of communicating in various formats across distributed systems.

Disadvantages:

  • Customization can be problematic. Compared to the best-of-breed approach, ERP can be seen as meeting an organization’s lowest common denominator needs, forcing the organization to find workarounds to meet unique demands.
  • Re-engineering business processesto fit the ERP system may damage competitiveness or divert focus from other critical activities.
  • ERP can cost more than less integrated or less comprehensive solutions.
  • High ERPswitching costscan increase the ERP vendor's negotiating power, which can increase support, maintenance, and upgrade expenses.
  • Overcoming resistance to sharing sensitive information between departments can divert management attention.
  • Integration of truly independent businesses can create unnecessary dependencies.
  • Extensive training requirements take resources from daily operations.
  • Harmonization of ERP systems can be a mammoth task (especially for big companies) and requires a lot of time, planning, and money.

Top 4 ERP Trends

The ERP field can be slow to change, but the last couple of years have unleashed forces which are fundamentally shifting the entire area. The following new and continuing trends affect enterprise ERP software:

  • Mobile ERP

Executives and employees want real-time access to information, regardless of where they are. It is expected that businesses will embrace mobile ERP for the reports, dashboards and to conduct key business processes.

  • Cloud ERP

The cloud has been advancing steadily into the enterprise for some time, but many ERP users have been reluctant to place data cloud. Those reservations have gradually been evaporating, however, as the advantages of the cloud become apparent.

  • Social ERP

There has been much hype around social media and how important – or not -- it is to add to ERP systems. Certainly, vendors have been quick to seize the initiative, adding social media packages to their ERP systems with much fanfare. But some wonder if there is really much gain to be had by integrating social media with ERP.

  • Two-tier ERP

Enterprises once attempted to build an all-encompassing ERP system to take care of every aspect of organizational systems. But some expensive failures have gradually brought about a change in strategy – adopting two tiers of ERP.

Q.2 List down 5 major functions of ERP with details.

ANS: Functional Areas of a Typical ERP system

1. Marketing and Sales (M/S):Marketing and Sales (M/S) department or functional area needs information from all other functional areas and share available information to effectively complete the business activities. In this functional area of business, the sale and marketing department following typical functions are included.

  • Customers can order online, monitor the progress of their purchase order.
  • Sales and marketing can process the order real time, access the stocks and monitor order status.
  • Share the sales forecasts and sales orders with supply chain management.
  • Provide sales order data to Accounting and Financing, and have a feedback on the cost and profits of sales.
  • Provide Human resource requirements, and personnel information to HR department and receive legal and job information for the planning process.

2. Supply Chain Management: Following are typical information sharing in the supply chain management functional area.

  • The supply chain management can place order for raw material and get feedback on the raw material availability and delivery status.
  • Share information on production plans, material stocks, and inventories with Accounting and Finance.
  • Obtain sales data and manufacturing cost analysis from Accounting and Finance.
  • Provide information to sales and marketing on product availability and order status.
  • Know present sales forecasts and sales orders from Sales and Marketing.
  • Provide human resource hiring need and personnel information to HR.
  • Obtain legal requirements and job information from HR.

3. Engineering / Production module:

  • Production module is great help for manufacturing industry for delivering product.
  • This module consist of functionalities like production planning, machine scheduling, raw material usage,(Bill of material)preparation, track daily production progress production forecasting & actual production reporting.

4. Accounting and Finance: Following are some typical functions of ERP system in Accounting and Financing area.

  • Issue invoices and credit memos, and receive payments.
  • Provide sales data and manufacturing cost analysis to supply chain management.
  • Receive data on production plans, material requirement and inventory data from supply chain management.
  • Share cost and profit data with Marketing and Sales.
  • Receive sales order data from Marketing and Sales.
  • Share hiring needs and personnel information with HR.
  • Receive legal requirements, job information, and payroll and benefit expense data.

5. Human Resources: Following are typical functions of ERP system with respect to functions in HR department.

  • The HR shares job information and legal requirements on employment and remunerations with other departments, namely Marketing and Sales, Supply Chain Management, and Accounting and finance.
  • Receive hiring needs from other business functional areas such as Supply chain management, marketing and sales, and Accounting and Finance.
  • Share payroll and benefit expense data with Accounting and Finance.

Basic Management Modules and their functions in ERP systems:

Module / Function
Sales and Distribution (SD) / This module records sales orders and scheduled deliveries. Information about the customer including pricing, address and shipping instructions, billing details, etc., is maintained and accessed from this module.
Materials Management (MM) / This module manages the purchasing of raw materials from suppliers and the subsequent handling of raw materials inventory, from storage to work-in-progress goods to shipping of finished goods to the customer.
Production Planning (PP) / This module maintains production information. This module facilitates to create production plans and schedule productions, and record information on actual production activities.
Plant Maintenance (PM) / This module helps to manage maintenance resources and facilitates planning for preventive maintenance of plant machinery in order to minimize equipment breakdowns.
Asset Management (AM) / This module helps the company to manage fixed-assets including plant and machinery and their related depreciation.
Human Resources (HR / This module facilitates employee recruiting, hiring, and training. This module also includes payroll and benefits of employees.
Project System (PS) / This module facilitates the planning and control of research and development, construction, and marketing projects.
Financial Accounting (FI) / This module records transactions in the general ledger accounts. This module generates financial statements for external reporting purposes.
Workflow (WF) / This module includes set of tools that can be used to automate any of the activities in ERP system
Controlling (CO) / This module serves internal management purposes, assigning manufacturing costs to products and to cost centers so the profitability of the company’s activities can be analyzed. The CO module supports managerial decision making.

Q.3 What is E - Business? And Its 5 major benefits and 5 major challenges.

ANS: Electronic business (e-business) refers to the use of the Web, Internet, intranets, extranets or some combination thereof to conduct business. E-business is similar to e-commerce, but it goes beyond the simple buying and selling of products and services online. E-business includes a much wider range of businesses processes, such as supply chain management, electronic order processing and customer relationship management.Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers.In practice, e-business is more than just e-commerce. While e-business refers to more strategic focus with an emphasis on the functions that occur using electronic capabilities, e-commerce is a subset of an overall e-business strategy. E-commerce seeks to add revenue streams using the World Wide Web or the Internet to build and enhance relationships with clients and partners and to improve efficiency using the Empty Vessel strategy. Often, e-commerce involves the application of knowledge management systems.

E-business involves business processes spanning the entire value chain: electronic purchasing and supply chain management, processing orders electronically, handling customer service, and cooperating with business partners. Special technical standards for e-business facilitate the exchange of data between companies. E-business software solutions allow the integration of intra and inter firm business processes. E-business can be conducted using the Web, the Internet, intranets, extranets, or some combination of these.

Benefits of E – Business:

1. Removes location and availability restrictions:The internet reaches across the world and spans all time zones. That means that when businesses take their operations online, they have the same capabilities. With a physical store, customers are limited by how close the store is and its hours of operation. E-businesses, on the other hand, are accessible from any area with internet access and open 24 hours a day. Additionally, with M-Commerce on the rise, E-business has yet another advantage: being accessible to anyone with a mobile device. Customers are only limited by their mobile network coverage, which goes practically everywhere.

2. Reduces time and money spent: With bills for rent, electricity, telephones and general office upkeep, expenses for physical locations can start to pile up. By taking business online, one can reduce or eliminate a lot of these overhead costs. Plus, things get a lot easier from a logistical standpoint, since one person can do the work of several people. Take mass communicating with customers, for example. Sending a bulk email to a list of customers is easier than sending out 100 direct mailings (paper, postage, staff, etc.). In addition to customer-facing processes, inside processes also become friendlier on the pocketbook when going online. For example, transaction costs are lessened, since there’s no need to hire a cashier when shopping cart software lets customers check out themselves. And if that’s not enough, e-business marketing is often more affordable too, as online advertising tends to cost less than traditional marketing channels.

3. Expedites customer service: When customers contact you, they want answers fast. Thanks to email and live chat software, e-businesses have no trouble fulfilling that need. Plus, these flexible forms of customer service can extend past a physical store’s hours of operation. E-businesses also offer the convenience of delivering products straight to a customer’s front door, no braving of traffic needed.

4.Shows you how to improve:When it comes to learning more about your customers, a physical store is no match for an e-business. With tools like Google Analytics, it’s much easier to access information on your sales and customers, at no extra cost. Want to know how a product has fared over the past three months? What about how many returning customers you’ve had? Unless you’re doing some extreme record-keeping, you don’t have easy access to this kind of data with a brick and mortar store. This data gives insight into your customers’ buying behaviors and interests, which is invaluable to improving your business.

5. Keeps your business relevant: The internet is a big part of our lives, and isn’t showing signs of leaving anytime soon. Opening an e-business keeps you in touch with what’s current: it levels the playing field and gives you the resources needed to compete in today’s increasingly digital marketplace. For example, having an online presence on social media websites is a big part of getting your name out there. To stay relevant, businesses need to consistently post content on these outlets that interest their consumers.