exam1studyguideISM 3011 - ISM 3011 Fall 2010 Exam 1 study...

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ISM 3011 Fall 2010 Exam 1 study guide B10. ERP 1. Benefits a. Integrate financial information i. To understand an organization’s overall performance, managers must have a single financial view. b. Integrate customer order information i. With all customer order information in a single system it is easier to coordinate manufacturing, inventory, and shipping to send a common message to customers regarding order status. c. Standardize and speed up manufacturing processes i. ERP systems provide standard methods for manufacturing companies to use when automating steps in the manufacturing process. Standardizing manufacturing processes across an organization saves time, increases production, and reduces head count. d. Reduce inventory i. With improved visibility in the order fulfillment process, an organization can reduce inventories and streamline deliveries to its customers. e. Standardize human resource information i. ERPs provide a unified method for tracking employee’s time, as well as communicating HR benefits and services. 2. Costs a. Software cost i. Purchasing the software b. Consulting fees i. Hiring external experts to help implement the system correctly. c. Process rework i. Redefining processes in order to ensure the company is using the most efficient and effective processes. d. Customization i. If the software package does not meet all of the company’s needs, it may be required to customize the software. e. Integration and Testing i. Ensuring all software products, including disparate systems not part of the ERP system, are working together or are integrated. Testing the ERP system includes testing all integrations. f. Training i. Training all new users. g. Data warehouse integration and data conversion i. Moving data from an old system into the new ERP system. 3. Core components and their basic functions a. Accounting and Finance i. These components manage accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management. 1
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ii. One of the most useful components is it credit-management feature which manages customer “company extended” credit limits. iii. Profitability analysis iv. ERP financial components are the backbone behind product profitability analysis and allow companies to perform all types of advanced profitability modeling techniques. b. Production and materials management i. These components handle the various aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control. ii. Sales forecasting 1. Operations planning a. Detailed Scheduling i. Production b. Materials requirement planning i. Purchasing c. Human Resource i. The HR component tracks employee information including payroll, benefits, compensation, and performance assessment, and assure compliance with the legal requirements of multiple jurisdictions and tax authorities.
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