MBA SEMESTER-3

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ENTERPRISE RESOURCE PLANNING OM0011

ASSIGNMENT SET
Q1. Write Short notes on the followinga. Internal Business Functions and External Business
Functions
b. Characteristics of information
c. Decision Support System (DSS)
A. Internal Business Functions and External Business Functions
A business function refers to an activity that an enterprise performs to realise its predetermined goals and objectives. Generally, an enterprise classifies similar activities into
groups to simplify work, increase efficiency, and allocate resources effectively. For example,
activities, such as recruitment, performance appraisal, and compensation management, come
under the human resource function of an enterprise. Business functions are broadly
categorized into two types:
Internal Business Functions: Refer to business functions that are performed within an
enterprise. For example, sales, production, human resource, etc.
External Business Functions: Refer to those business functions that are performed by an
external enterprise or agency. For example, public relations, market research, etc.
Figure represents the different business functions of an enterprise:

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An enterprise that is engaged in the manufacturing and selling of products can have the
following business functions:
Sales and marketing
Production
Materials management
Human resource
Accounting and finance
Quality control
Each of these business functions consists of numerous business processes/activities.
The marketing function of an enterprise includes activities (processes) such as budgeting,
planning, market research, demand forecasting, pricing, packaging, advertising, and
distribution. Similarly, the human resource function of an enterprise comprises activities such
as recruitment, compensation management, and performance evaluation.
Characteristics of information
Information is integral to effective decision making in an enterprise. Therefore, it is important
for an enterprise to have the right information, in the right form, and at the right time, to
make correct decisions. The following are the characteristics of information:
Accuracy: Implies that information should be correct and based on facts. Inaccurate
information not only turns useless, but also leads to ineffective decision making.
Relevance: Refers to one of the most important characteristics of information. The
information can only be useful if it is relevant to the respective domains of decision making.
For example, an enterprise wants to formulate effective marketing strategies. In this case, the
collected information should be related to current market trends and needs and preferences of
customers.
Timeliness: Implies that information should be available when it is needed.
For example, You have to select an appropriate promotional tool .If you get information
related to consumer behaviour after the completion of the decision-making process, the
information is useless. So, you should note that the value of the information is inversely
proportional to time.
Completeness: Refers to the characteristic of the information being fully interpretable. If the
information does not make complete sense, it may not help in decision making.
Decision Support System (DSS)
Decision Support System (DSS) Refers to a system that helps managers to make decisions in
situations when there is uncertainty about the possible outcomes of those decisions. DSS uses
spread sheets to analyse different options and alternatives.
DSS is an interactive information system that provides substantial support to managers while
taking critical business decisions. It is a computerised information system that is capable of
performing logical data analysis and testing hypothesis. Some of the popular definition of
DSS is as follows:

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According to Hicks, DSS is an integrated set of computer tools that allow a decision-maker
to interact directly with computers to create information useful in making decisions.
If the organisation needs to select the option that best meets its business objectives and is
likely to derive maximum return. DSS can help the organisation in gathering and analysing
the relevant information by performing logical reasoning.
Some of the main advantages of DSS:
Supports the decision-making process by providing useful information.
Performs logical operations before providing a conclusion.
Evaluates each available alternative with respect to prevailing business conditions.
Reduces time and efforts required in business decision making.

In spite of its many benefits, there are a number of limitations of DSS. The following
are some limitations of DSS:
It only supports the decision-making process of an organisation by providing and
analysing data, but the final decision is taken by an individual. Thus, it totally
depends on the competency of the individual to take the correct decision.
It may not be able to match the decision-making mode of expression or perception.
It is unable to rectify a faulty decision-making process.
Its efficiency depends on the accuracy of data entered in it.

Q2. Explain the concept of Business Process

Reengineering (BPR). What are the steps involved in an
effective BPR process?
A. Definition of BPR
BPR can be defined as the overall redesigning of a business process. More specifically, it is a
process that involves analysing and redesigning the workflow pattern and processes of an
organisation to make them more effective. It helps an organisation in identifying loopholes in
its existing business processes and designing new business patterns. According to Hammer
and Champy (1990),
Re-engineering is the fundamental rethinking and radical redesign of business processes to
achieve dramatic improvements in critical, contemporary measures of performance, such as
cost, quality, service and speed. The business environment is driven by three Cs: customer,
competition, and change. Therefore, organisations are constantly finding out new ways and
methods for their business problems. In such a scenario, BPR seems to be an incredible
solution for the different business problems of organisations. A re-engineered business
process improves the competitive strength of an organisation and enhances its productivity.
For example, the re-engineered production and marketing processes of an organisation would
lead to higher customer satisfaction. Hence, the organisation would gain customer loyalty and
win over its competitors.
Process

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BPR is a process that involves analysing and redesigning the workflow pattern and processes
of an organisation to make them more effective. It is a step-by-step approach; an organisation
should adopt the following steps to re-engineer its business processes:
1. Identify the business process that needs to be redesigned.
2. Find out the areas of improvement in the process and the measures to correct it.
3. Bring the improved process in practice and manage changes (for example, providing
training to employees so that they can work efficiently with the new process).
4. Integrate the improved process with other business processes of the organisation.
5. Take feedback from employees and ensure that the process is as per the requirements of the
organisation.

Q3. Explain various Functions of quality management

module.
A. The quality management module consists of a wide range of parameters that help an
organisation in ensuring that the quality requirements, at every stage of production, are
fulfilled. For this, the module collects data from other sub-modules of the manufacturing
module that has a direct impact on the quality of the final output.
The quality management module is capable of optimising the product-design process,
production methods, and process engineering techniques, thereby ensuring high-quality
output. In this way, this module enables an organisation to perform recurring operations and
defect-cause analysis and make continuous improvements in its production methodologies.
Quality management is actually a comprehensive task for any organisation. This is because
an organisation needs to manage quality at every step, before a product reaches end users.
A number of international quality standards have been defined to help the task of quality
management, such as ISO 9000 series.
Quality is a measure of how well a product or service conforms to the specified standards.
The quality standards can be a combination of product attributes to be produced by an
organisation. These attributes include the performance, reliability, and appearance of the
product and commitment to delivery time. When you buy a product, you must always be
focused on its quality, irrespective of its cost. If the product is not as per your quality
requirements, you may not purchase it or switch to other brands. Therefore, in order to win in
todays competitive business environment, it is important for every organisation to manage
quality.
The quality management module of an ERP system provides necessary information and
technical support to an organisation for adopting appropriate quality standards and making
continuous improvements in its products and processes.

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Although every module of an ERP system shares the responsibility of quality management,
the quality management module is specific to the quality of the overall production process of
an organisation.

The major functions of the quality management module of an ERP system are:
Quality Planning: Involves accumulating basic data for deciding the required level of quality
for materials, operations, and finished products. Quality planning aims at improving quality
by preventing repetitive defects in the production process.
Quality Monitoring: Involves the inspection of materials, processes, and finished products.
This helps an organisation in ensuring whether the level of quality is maintained as per the
planned quality.
Quality Control: Refers to a process in which the system undertakes the historical data
related to the level of quality maintained in the past. Thereafter, the system applies various
quality control techniques to maintain the desired level of quality and improve it
continuously. Some of these techniques include sample testing, quality control charts, and
quality circles.
The quality management module is closely related to the functions of purchasing, inventory
management, shop-floor control, and customer relationship management. Therefore, the
module is capable of accessing data from other modules such as material management,
manufacturing, and sales.

Q4. Write Short notes on: 1.Role of ERP in Purchasing

2.Warehouse management 3.Features of ERP inventory
management system
A. Role of ERP in Purchasing
Purchasing is an act of acquiring products and services at a certain amount of money. A
manufacturing organisation needs to acquire raw materials for producing products.
Considering the importance of purchasing, most manufacturing organisations have a separate
purchasing department. In any manufacturing organisation, the cost of materials ranges from
50-80 per cent of the product cost. Therefore, the purchasing department should ensure the
purchasing of the right quality of materials in the right quantity from the right supplier at the
right time by spending the most economical cost. To do so, organisations implement an ERP
system with purchasing functionality.
An ERP system helps an organisation in making efficient purchase decisions. It also allows
an organisation to perform purchase-related activities, such as supplier selection, order
placement, order review, and invoice generation, effectively.

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In addition, an ERP system enables an organisation to have an integrated view of all

purchase-related activities performed by the different departments of an organisation, such as
stores, production, and finance.
To perform these activities, an ERP system works in association with a purchase module.

Warehouse management
The warehouse management module provides up-to-date information related to the inventory
levels of an organisation. In addition, it provides tools for managing the daily operations of a
warehouse. The module also integrates the warehouse functions of an organisation with its
different departments. An effective warehouse management module is able to satisfy the
needs of a warehouse, such as proper space, safety of employees, and prevention of inventory
from wastage or spoilage. For this, the warehouse management module works in association
with its different components. These components are:
Inventory Planning: It helps an organisation in planning its inventory requirements
effectively. This can be done by accurate forecasting of market trends and adjustment
of reordering points, safety stock, lead-times, and service levels.
Inventory Handling: It enables an organisation to monitor all its warehouse
activities, such as the receipt, issue, and transfer of inventory.
Inventory Reporting: It tracks inventory available at different places in the
organisation. In addition, it provides an organisation with different tools to determine
and communicate accurate product delivery dates to customers.
Inventory Analysis: It enables an organisation to determine an optimum level of
inventory, thereby preventing the excess and shortage of inventory.

Features of ERP inventory management system

The inventory management process of an organisation includes various activities. Some of
these activities are: Identifying stock requirements, Determining the production schedule ,
Implementing techniques of information sharing ,Monitoring the inflow and outflow of
inventory ,Coordinating with suppliers for maintaining an optimum inventory level
,Generating an inventory report and communicating it to the procurement department. An
organisation can perform all these activities efficiently by using the ERP inventory
management system. The ERP inventory management system is able to automatically update
variations in inventory levels. By doing so, the system enables an organisation to ensure the
timely availability of inventory in all of its stores.
Following are some important features of the ERP inventory management system:
It is an organisation-wide system that improves the overall efficiency of an
organisation.
It involves quality-check parameters to identify the desired quality level of materials.
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It performs continuous inventory analysis, thereby, maintaining the optimum stock

level.
It performs extensive inventory monitoring by taking into account the rate of
inventory consumption.
It automatically updates the status of stock on-hand, reserved stock, ordered stock,
defective and rejected stock, etc.
It makes use of bar codes while managing inventory, thereby, facilitating easier
inventory tracking

Q5. Explain the products and technology of SSA

(System Software Associates).
A. With an increase in demand for ERP, a large number of ERP vendors have emerged in the
market. All these vendors provide innovative ERP products to different industries. ERP
vendors play a significant role in ERP implementation. These ERP vendors are responsible
for administering the entire ERP implementation process, providing training to end users, and
resolving issues that may take place during implementation. One such renowned ERP vendor
is Systems Software Associates Inc. (SSA).
System Software Associates (SSA), Inc., a part of Infor Group, was established in 1981 by
Roger E. Covey. It is one of the worlds leading providers of ERP software for different
industries. The main reason for the early growth of SSA was its unique distribution system.
In 1989, SSA provided integrated software in different languages, such as French, German,
Italian, Chinese, and Japanese, at a price ranging from $50,000 to $500,000. In 1989, the net
income of SSA was $11.1 million. In 1994, SSA started focusing on a new strategy for
supporting open system, client server computing environment. It started providing more
flexible software as compared to its previous products. During this year, SSA introduced a
new series, called Business Planning and Control System/Advanced Solution (BPCS/AS).
SSA uses the CASE technology for developing AS series. This technology provides
flexibility to the products of AS series, which further helps customers to modify these
products according to their requirements. A new product line of SSA called Main/Tracker
enables an organisation to automate its maintenance tasks, perform safety inspections, and
track warranty.
Apart from this, some of the popular products of SSA are:
Business Planning Control System (BPCS): It is the main product line of SSA. It is
an integrated group of software that involves applications for manufacturing,
distribution, and financial activities. BPCS is able to run on various systems,
including IBM AS/400 or IBM, eServer, iSeries. It supports various computer
languages, such as SQL, AS/Set, RPG, and other IBM languages. BPCS application
suite is used for performing distribution and manufacturing activities efficiently. The
BPCS application suite includes various components, which are:
Finance: Includes tools, such as Costing (CST), Accounts Payable (ACP), Accounts
Receivable (ACR), Billing (BIL), General Ledger (GLD), Cash Management (CSH),
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Multiple Currencies (MLT), Currency Translation (CTR), Financial Assistant (FIN),

Fixed Assets (FXA), and Payroll (PAY).
Planning: Consists of applications, such as Forecasting (FOR), Master Production
Scheduling (MPS), Material Requirements Planning (MRP), Capacity Planning
(CAP), Distribution Resource Planning (inter facility) (DRP), and Planner's Assistant
(PLN).
Distribution: Involves various applications, such as Inventory (INV), Purchasing
(PUR), Customer Order Processing (ORD), Billing (BIL), Sales Analysis (SAL),
Promotions and Deals (PRO), and Performance Measurement (PRF).
Manufacturing: Includes tools, such as Bill of Material (BOM), Inventory (INV),
Shop Floor Control (SFC), Master Production Scheduling (MPS), Material
Requirements Planning (MRP), Capacity Planning (CAP), Laboratory Management
(LMS), Just-in-Time (JIT), and Advanced Process (chemical) Industries (API).
Business Performance Management (BPM): It includes a set of management and
analytical processes that helps an organisation to define and measure its strategic
goals and manage performance against these goals.
Customer Relationship Management (CRM): It includes tools for acquiring and
retaining customers and building cordial relationships with them. In addition, it
provides quick access to customer information to the different departments of an
organisation.
Financial Management (FM): It involves tools for managing financial activities
effectively.
Human Resource Management (HRM): It helps an organisation in performing and
improving its HRM function effectively.
Product Lifecycle Management (PLM): It enables an organisation to monitor all the
activities involved in PLM by providing up-to-date information related to products.
Supply Chain Management (SCM): It allows an organisation to monitor the
movement and storage of raw materials, work-in-process, and finished goods from the
point of origin to the point of consumption.
Supplier Relationship Management (SRM): It enables an organisation to build
healthy relationships with its suppliers by tracking their activities.

Q6. Write short notes on : a) Gap Analysis b) Reduction

of lead time
c) BAAN company d) End users e) ERP trends
A. Gap Analysis
Gap Analysis is a crucial phase for the success of the ERP implementation. It is the process
through which organisations create a complete model of where they are now, and in which
direction they want to head in the future.
In Gap Analysis a model is designed which both anticipates and covers any functional gaps. It
has been estimated that even the best ERP package, custom tailored to a company's needs,
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meets only 80% of the company's functional requirements. The remaining 20% of these
requirements present a problematic issue for the company's BPR (business process reengineering). One of the most affordable, albeit painful, solutions entails altering the business
to fit the ERP package. Of course, a company can simply agree to live without a particular
function (the cheap but annoying solution).
Other solutions include:
Pinning your hopes on an upgrade (low cost but risky).
Identifying a third-party product that might fill the gap (hopefully it also partners with
the ERP packages, keeping interfacing to a minimum).
Designing a custom program.
Altering the ERP source code, (the most expensive alternative; usually reserved for
mission-critical installations).
Reduction of lead time
Lead time reduction is one of the powerful methods to reduce cost throughout the supply
chain. It also helps to enhance the customer satisfaction. Increase in uncertainty, increase in
inventory costs and decrease in response time to customer needs are some of the negative
impact of longer lead time.
We can obtain the following benefits by reducing the lead time:
Fulfil customer orders quickly
Reduce bullwhip effect
Create accurate forecasts
Reduce finished products inventory levels
The two components involved in lead times are:
Order lead time
Information lead time

BAAN company
Baan was founded in the Netherlands in 1978 by brothers- Jan and Paul Baan. Baan
Company offers a widespread collection of best-in-class, component-based applications for
front office, corporate office and back office automation. Baan Companys product family
offers on-going delivery of open components for enterprise applications. It consists of a
comprehensive and flexible suite of year 2000-compliant software solutions and best-in-class
business modeling tools.
These tools are based on a flexible, multi-level architecture which can scale to meet the needs
of small, medium, and large enterprises. Baan Company makes this possible with its open
architecture. This enables customers to migrate to new technologies and product releases at
their own pace
Baan Company aims to ensure that every interaction its customers have is in line with its
Three I philosophies:

Integrity: In its interactions with its customers, colleagues, partners, and shareholders.

Innovation: In what it builds and how it delivers.

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Initiative: In the speed and focus it brings to all aspects of its market

End users
End Users involve persons who use information produced by IS.
They include market researchers, production managers, cus & accountants. In this phase, the
employees who need to work on the ERP system are identified and segregated into groups so
that they can be trained to work on the new system.

ERP trends
The following are the latest trends in ERP:
Open Source ERP: Refers to an ERP system whose access code is available publicly.
It allows organisations to access the code of an ERP system and customise it
according to their requirements without paying extra charges for customisation and
licensing to vendors.

Web-enabled ERP: Allows organisations and its various stakeholders (customers,

employees, suppliers, distributors, and other parties) to access business information as
and when required from anywhere in the world.

Wireless ERP: Facilitates information sharing with the help of the Internet and
various other devices. It allows outsiders (customers, suppliers, and shareholders) to
access business information anytime. It allows access to ERP via mobile devices.
SaaS ERP: Enables organisations to get a ERP software package on rent or on license
for a defined period of time instead of purchasing it. This helps organisations to
reduce the costs of purchasing and implementing ERP software.

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