Diploma in Business Enterprise IT School of Information Technology

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IT1566 (BPIS)
Tutorial 6 – Enterprise Resource Planning

1. List some of the characteristics of an ERP system.

-Integrate the data and processes of an organization into one single system.
-Use a unified database to store data for various business functions (e.g. human
resource, financial, manufacturing, CRM, SCM)

2. ERP system can improve 3 major aspects in an organization. What are they?

Resource planning, Management control and Operational control.

3. What are the advantages of the re-engineering method of implementing ERP?

What are its disadvantages?

Advantages:
-ERP solution represents industry’s best practices, which may improve process
change.
-ERP solution is available & ready to implement.
-Implementation is cost effective.

Disadvantages:
-Does not support strategic or unique business processes.
-Resistance occurs when there is extensive organizational change.

4. What are the advantages of the customizing method of implementing ERP?

What are its disadvantages?

Advantages :
-Supports unique and strategic business processes
-Not constrained by off-the-shelf system which are built for general use.

Disadvantages :
-Difficult in customizatio, since modules are integrated.
-Difficult to upgrade software to newer versions.
-Higher costs.
-More time consuming to implement.
5. An organization intended to implement an ERP solution. However, it wanted a
more flexible architecture and the opportunity to select software from various
vendors. What were the advantages and disadvantages to using this
approach?

Advantages :
-Can select packages which fit unique business requirements.

Disadvantages :
-Purchasing individual licenses for different modules will be more costly than
acquiring an integrated package from one vendor.
-Modules from different vendors may not be compatible.

6. What are the advantages and disadvantages of using an Application Service

Provider (ASP) to implement ERP?

Advantages :
-Can have access to technological expertise
-More cost-effective than full-scale ERP implementation.

Disadvantages :
-Dependent on the reliability and stability of the vendor.

IT1566 Tutorial 6 Page 1