Enterprise Resource Planning-1

Assignment – A

Question 1. a. What is an ERP system? Suffice your answer with an example in the Transportation Industry.

Question 1. b. Comment on “ERP is a package software and not a custom-made software for a specific form”.

Question 2. a. Why do organizations go in for ERP?

Question 2. b. What would the typical modules of ERP system constitute? Clarify with an example.

Question 3. a. Why is change management necessary for ERP?

Question 3. b. What are the special challenges of introducing ERP in a developing country?

Question 4. a. Describe briefly the various steps required during the implementation of a typical ERP project.

Question 4. b. Comment on “ERP is a package software and not a custom-made software for a specific form”.A heating system

Question 5. ERP decisions are “high-risk, high-reward” decisions. Elucidate the statement with respect to the Indian scenario.

Assignment – B

Question 1. a. What are the drawbacks of Over Customisation? Support your answer with an example in the Educational Distance Learning Systems.

Question 1. b. What are the risks associated with ERP implementation.

Question 2. a. Why is the Top Management commitment necessary for the success of ERP?

Question 2. b. What are the pitfalls of ERP implementation?

Question 3. a. What does Hardware Sizing mean?

Question 3. b. How is Data Warehousing related to ERP?

Case Study

At a very early stage in October 1996, HPL decided to use SAP solutions as a strategic information management tool. HPL derived a competitive advantage in adopting the SAP solution right from the project stage itself. Says Sethi / VP, Information Systems “SAP is a backbone application and is seen as an integral part of the HPL organization. We wanted the entire organization to be configured around the best business practices pertinent to the industry.” He adds, “In hindsight, it was a good choice because SAP has been used as a platform by a large number of petrochemical and Oil and Gas companies around the world. This would place HPL in the same sort of bracket.”

The advantage of SAP lies in on-line, real-time transaction processing and integration, linking the company’s business processes and application in an overall system for planning, controlling and monitoring. “Thanks to the user-friendly interface of SAP R/3, the users have responded with enthusiasm and are at ease during the implementation” adds Banerjee.

HPL has adopted all the SAP modules. However, being a start-up organization, HPL did not go for the big-bang approach, by unfolding the entire range of R/3 package in one go. The implementation plan is being carried out in two phases. Phase-I has been configured to support the organization at its project stage and Phase-II is expected to address the manufacturing organization. “Modules that have been implemented are in keeping with the business requirements that HPL needs to address at the project stage. The core modules like financial accounting, controlling, treasury, materials management, sales and distribution and project systems have been implemented at this stage. Some of the key benefits accruing from Phase-I are material codification, integrated on-line information, effective inventory management budget control, cost accumulation for capitalization, reporting in multiple currencies, smooth information flow between various functions, amongst others.”

By the end of this year the modules in Phase-II like plant maintenance, quality management, production planning etc., will be rolled out, thus completing a major portion of the SAP R/3 suite. Phase-II will see the generation of enormous information in the manufacturing operation, which can be integrated, as part of the total business information system. The data can analysed within as well as outside the SAP framework by the decision support system, a key requirement of HPL. Says Sethi “We will have a highly information-driven factory at HPL which will become a subset of a highly information-driven business right up to the customer and supplier.”

SAP supports all the computing platforms in a most flexible manner. The three-tier client/server architecture of SAP supports a host of operating systems and a wide choice of database applications to work with. The architectural framework of SAP will enable it to become the central information infrastructure with various other third party utilities and applications formed around it like process control system, data warehousing, decision support systems etc. HPL has two SAP servers – an Intel based development server of one make and a Production Server of another make. HPL uses VSAT to connect its three locations on a closed user group network for voice, data, video and campus networking of the plant information highway is underway.

HPL has kept abreast of the latest developments in electronic business commerce and has made Internet available to all the users through a 64 Kbps radio link to VSNL – country’s major internet and other overseas communication services provider. Says Sethi, “One of the key benefits of SAP is that it is web-enabled which can facilitate the company’s vision of integrating the extended supply chain over the Internet to form a large global community.”

Mr. Sethi sums up the benefits of company-wide SAP installation “It impacts the organization at two levels – the strategic initiative of the organization, which is a pre-requisite in the competitive global market today and the core operations, which is a foundation for performance and costs of manufacturing.”

Assignment – C

Answer True or False

1. ERP systems can be compared to the “fly-by-wire” operation of an aircraft.

2. ERP systems lead to significant cost savings by continuously monitoring the organizational health.

3. ERP systems have been evolved from Manufacturing Planning (MRP) systems of the 1970s and the material Resources Planning (MRP II) systems of the 1980s.

4. Since ERP implements the organizational processes, it is necessary to re-engineer the business process before introducing ERP.

5. ERP is a high-end-mission-critical application with significant investment in hardware and software.

6. Introduction of ERP software would need mostly customization rather than software building.

7. The skills for customization are more process-oriented rather than IT/IS skill based.

8. Top Management commitment is not a critical success factor in ERP implementation.

9. Top Management commitment does not address the issue of empowering people to usher in changes.

10. ERP is coordination only between the hardware vendor and the consultant.

11. ERP solutions use technology to address business issues, at the same time striving to keep technology transparent to the users.

12. The very first step in implementation is mapping of the current business processes to the ERP solutions and arriving at the “to be” model.

13. ERP cannot help organizations in addressing needs like reduced cycle time, reduced inventories and sharing information seamlessly across the organization.

14. ERP provides the means to optimize the organizational resources.

15. ERP as it exists today, acts as the link between supply chain and the demand chain.

16. ERP is not a production-oriented information system.

17. ERP is the latest enhancement of MRP II with the added functionality of Finance, distribution and Human Resources Development, integrated to handle the global business needs of an integrated and networked enterprise.

18. ERP is supposed to provide timely and accurate production oriented information for long-range planning and day-to-day operational planning and control.

19. The ERP selection exercise can consume enormous time and manpower in identifying evaluation criteria and gathering information on alternatives.

20. The ERP products should be scored on three major criteria, the Product, implementation ease and the Future Road Map.

21. the real benefit of ERP comes in the long-term when the organization is in a position to apply the experience of the best business processes evolved over years of implementing the ERP for other organizations.

22. Project Champions do not provide the leadership so as to sustain the trials and tribulations of an ERP implementation project.

23. The “go live” date marks the end of ERP project.

24. Most ERP projects “go live” at the start of the fiscal/financial year.

25. ERP customization does not involve fitting the ERP software to meet the demands of a particular organization.

26. ERP implementations that are geographically distributed do not need reliable communication links for on-line transaction processing.

27. Hardware sizing for ERP is not a specialized job.

28. Low end Unix versions may not support ERP.

29. ERP vendors do not recommend DBMS that do not support “row-level locking.”

30. ERP does not address the service industry.

Select any one of the correct answers

31. ERP systems can be compared to
(a). fly-by-wire operation of an aircraft
(b). fly-by-airplane operation
(c). none-of the above

32. ERP systems have evolved from
(a). Materials Requirements planning
(b). MRP systems of 1970 & MRP II systems of 1980
(c). Manufacturing Resources Planning

33. Top Management commitment in ERP is
(a). to write a big cheque
(b). to select champions from key functions and detain for the ERP project implementation
(c). to select champions and ensure release for ERP core commitee

34. The special role of consultants is
(a). that they are actively engaged in ERP consulting
(b). that they have accumulated the richest ERP implementation experiences
(c). that they have developed their own methodologies of implementation that add significant value to ERP software.

35. The responsibility of the ERP Project team
(a). is to implement the ERP for a specific organisation
(b). to work on behalf of the consultant
(c). to lead the functional teams

36. The go-live dte in the ERP project corresponds to
(a). end of the project implementation
(b). start of the fiscal year
(c). shift from the legacy system to ERP system date

37. The “bolt-on” approach calls for
(a). tighter integration
(b). is the same as “plug-and-play” approach
(c). or, could be delivered as ERP of choice

38. Which is not an dominant approach to ERP implementation
(a). big-bang
(b). boot-strap
(c). location-wise
(d). modular-wise

39. Data migration is the
(a). transfer of master data from legacy system
(b). transfer of manual data
(c). cleaning of data from machine-readable form

40. Operating systems that support ERP would need a
(a). high-end operating system that supports multi-tasking, multi-user application
(b). muli-threading to support high performance
(c). both a) & b)