Assignment Tasks Exercises Chapter 1 and 2

Chapter 1

Exercise 1.1(Function vs. Process)

1. Distinguish between a business function and a business process. Describe how a business process cuts
across functional lines in an organization. How might a manager organize his or her staff in terms of
business processes rather than functional departments? What benefits would there be with this type of
organization? What challenges would it pose?

Business function: Are activities specific to that functional area of operation.

Business process: Collection of activities that takes some input and creates an output that is of value to
the customer.

Nowadays, business managers try to think in terms of business processes that integrate the functional
areas, thus promoting efficiency and competitiveness. An important aspect of this integration is the need
to share information between functional areas, and with business partners. ERP software provides this
capability by means of a single common database.

The better a company can integrate the activities of each functional area, the more successful it will be
in today’s highly competitive environment. Integration also contributes to improvements in
communication and workflow. Each area’s information system depends on data from other functional
areas.

Monk, E. & Wagner, B. Concepts in enterprise resource planning, 4th edition

Exercise 1.3 (Selling Honey)

3. Assume your uncle raises bees for honey on his farm. You help him package the honey and sell it on
the Internet. Reproduce Figure 1-1 for this small business example. Add a one-sentence description for
each function as it relates to selling this artisan honey online.
 Marketing and Supply Chain Accounting and Human

Sales Management Finance Resources

Marketing a product Purchasing Financial accounting of Recruiting and

hiring
goods and raw payments from customers
and suppliers
materials

Taking sales orders Receiving goods and Cost allocation and control Training
raw materials

Customer support Shipping Planning and budgeting Payroll

Customer Scheduling Cash-flow management Free Sample Honey

Production runs
relationship

management

Sales Harvesting the honey Government

compliance
forecasting

Advertising Beehive Care

Maintenance and

Exercise 1.7 (Credit Limits)

7. Assume you own and run a small ice cream shop located on the grounds of a private pool. You want
to maximize sales and decide that allowing customers to buy on credit could be a big driver of sales
since most people come to the pool without cash. What information do you need to keep track of to
make sure a given customer doesn’t go over their $20 credit limit. What problems might occur?

The information we need to keep track information to track customers may include: Customer’s Data
(Name, Address, and phone number, Number of orders, Total cost of orders and amount owed.

Marketing and Sales personnel require data from Accounting and Finance to evaluate customer credit. If
an order will cause a customer to exceed his or her credit limit, Marketing and Sales should see that the
customer’s accounts receivable balance (the amount owed to the company) is too high and hold new
orders until the customer’s balance is lowered. If Accounting and Finance are slow to record sales, the
accounts receivable balances will be inaccurate and marketing and Sales might approve credit for
customers who have already exceeded their credit limits and who might never pay off their accounts. If
Accounting and Finance do not record customers’ payments promptly, the company could deny credit to
customers who actually owe less than their credit limit, potentially damaging the company’s relationship
with those customers.

Chapter 2

Exercise 2.1 (Moore’s Law)

1. Moore’s Law is said to be more of a trend, rather than a representation of the actual number of
transistors on a silicon chip. What is the current status of Moore’s Law? If it is not exactly holding true,
what does this mean for the future of the computing industry?

It can be said that Moore's Law is not a law of nature, and you can even say that goes against the laws
of nature. This law is simply keen observation of an engineer which so far has been fulfilled, but it is
moreover, at any moment, this could turn out to expire. For years, there are rumors that Moore's Law
terminated. In my opinion Moore's Law has largely defined the world of modern computing. It is true
that this Act has undergone some changes with time, but its average balance has even served as a
reference for other similar laws which are applied to other components such as the Law of Kryder,
which is used for hard disks, but still, I think it will not last forever. If we take the words of Moore as
reference, today we would average between five and ten years for the use of this Act until it finally get
to meet the basic limits, which will require other methods of manufacture that could affect or completely
eliminate the application of this law. According to the company Intel, the end to Moore's Law has been
predicted between 2013 and 2018, when it finally gets to meet the 16 nanometer manufacturing,
although there is also the possibility of making larger processors provided that cooling requirements are
met, but meanwhile, this famous Moore's Law continues compliance.

The Status of Moore's Law: It's Complicated. Retrieved from

http://spectrum.ieee.org/semiconductors/devices/the-status-of-moores-law-its-complicated

Keeping Up with Moore’s Law. Retrieved from http://dujs.dartmouth.edu/spring-2013-15th-

anniversary-edition/keeping-up-with-moores-law#.UtBgM_RDt4I
Exercise 2.2 (ERP Characteristics and Features)

2. What are the main characteristics of an ERP system? What are some newly developed features of
ERP systems?

An ERP system can dramatically reduce costs and improve operational efficiency. The main
characteristics of ERP systems are Integration, Completeness (generic function) , Homogenisation, Real-
time, Adaptability (flexibility) , Openness (evolutionary) , and Transversality (process oriented view),
Simulation.

The main objectives of an ERP system are, optimization of business processes, access to all information
in a reliable manner, accurate and timely data integrity, provide the ability to share information between
all components of the organization, deleting unnecessary or redundant data and operations, and
reduction of time and costs of processes.

Retrieved from http://www2.isye.gatech.edu/~jswann/teaching/6201/6201erp_6.pdf

10 Key Features To Look For in a Basic ERP System. Retrieved from

http://pssiusa.wordpress.com/2011/07/07/10-key-features-to-look-for-in-a-basic-erp-system/

Exercise 2.4 (ERP Report using Online Library Resources)

4. Much has been written in the news media about ERP systems, both in print and online. Using library
resources or the Internet, report on one company’s positive experience with implementing an ERP
system, and on another company’s disappointing experience.

A company which had a positive experience with ERP software is Toro, a wholesale lawnmower
manufacturer, spent $25 million and four years to implement an ERP system. At first, ROI was difficult
for Toro to quantify. Then, the emergence of an expanded customer base of national retailers, such as
Sears and Home Depot, made it easier to quantify benefits. With this larger pool of customers, Toro’s
ERP system allowed it to save $10 million in inventory costs annually the result of better production,
warehousing, and distribution methods.

Another disappointing experience with ERP software is W. L. Gore, the maker of GoreTex fabric, had
problems implementing its PeopleSoft system for personnel, payroll and benefits. The manufacturer
sued PeopleSoft, Deloitte & Touche LLP, and Deloitte Consulting for incompetence. W. L. Gore
blamed the consultants for not understanding the system and leaving its Personnel department in a mess.
PeopleSoft consultants were brought in to resolve the problems after implementation, but the fix cost W.
L. Gore additional hundreds of thousands of dollars.

Toro. Retrieved from http://www.highjump.com/sites/default/files/Resources/CS-US-Toro-SAP-Data-

Collection.pdf
High-tech firm sues PeopleSoft, Deloitte. Retrieved from
http://www.bizjournals.com/philadelphia/stories/1999/11/08/story5.html?page=all

Exercise 2.5 (ERP Vendor Analysis)

5. Some of examples shown in this chapter are from a traditional ERP system, SAP. Consider some
smaller ERP systems. Look on the Internet at Business One by SAP, and an additional smaller system,
such as Pronto software or Exact software. Compare two of the systems, and list the similarities between
the module-type offerings. Are there any clear differences between them?

SAP Business One is a solid system with powerful core functionality, including CRM functions,
manufacturing and finance. The solution includes core processes and tailored elements to each country,
for example, legal financial requirements, of currency and finances to use in a given country. The SAP
Business One System features, Accounting Software, Business Management Program, and specialized
distribution option, among others. It contains a module of integrated and extended reports which
provides data of different modules installed and observe the results in a personalized way. These reports
include modules such as Finance, Opportunities, Shopping and Sales, Distribution Partners commercial
banks Management, Inventory, Production, MRP, Service, HR, RF and can also collect reports in
virtually any configuration to suit the needs of the company. In the Epicor 9 system, nine business
systems converge into a single business solution responding to the strategy known as "protect, extend
and converge" of Epicor to provide unprecedented business management which provides an overview of
the company in real time and supports continuous improvement of performance. Some of the work areas
where Epicor 9 performs are, Enterprise Resource Planning, Financial Management, Project
Accounting, Production Management, Warehouse Management, Managing the Supply Chain, Supplier
Relationship Management, Relationship Management with Clients, Detail Retail Management, Sales
Management, Service Management, Information Management Product, Planning and Scheduling,
Human Capital Management, Enterprise Performance Management, Service Management Information
Technology (IT) Project Portfolio Management, Governance, Risk and Compliance Professional
Services Automation, and Business Process Management. Epicor 9 is a global provider of
manufacturing solutions, which provides real-time collaboration where the needs of manufacturing
companies are satisfied and whether small or medium, combined discreetly. Epicor 9 offers a number of
solutions which are specifically aimed at the manufacturing industry. The extensive series of Epicor
Vantage and Epicor Vista include integrated software solutions for enterprise resource planning (ERP),
with complete solutions for managing customer relationships, sales, service, product data management,
planning and production, management chain supply, finance and accounting, enterprise performance
management and in-line business.

SAP Business One Modules. Retrieved from http://www.businesserp.org/sap-business-one-modules.htm

SAP Business All-in-One. Retrieved from http://www.sap.com/solution/sme/software/erp/all-in-
one/index.html

Enterprise Resource Planning (ERP) Software. Retrieved from

http://www.epicor.com/Solutions/Pages/ERP.aspx

Epicor. Retrieved from http://www.epicor.com/Products/Pages/FullProductListing.aspx

Ch. 2 – Another Look on Sustainability and ERP (pg. 38)

The mission of the sustainable development of a company like Walmart is clear as it not only generates
economic prosperity but also ensures, in turn, the welfare of future generations. This is the reason the
focus of sustainable development has become an elemental part of corporate strategic planning.
Certainly there is much that the private sector can do, from minimizing their greenhouse gas emissions
and use renewable energy sources, investing in human capital and creating better communication
practices in the communities where they operate. These sustainable development policies should play
a key role in social inclusion. For some companies, such as Walmart, immediate responsibility is to
increase profits, provided they meet the established legal standards and ethical and moral principles
are respected. Besides, is that, higher profits, higher tax revenues and, therefore, greater resources,
which through tax collection it may be redistributed in society through investment in infrastructure,
health, education and other basic services. In a 2010 study by the United Nations, 93% of managers
think that sustainability is a crucial aspect for the success of their businesses in the near future. Since
they believe that, in just ten years, the sustainability of enterprises will be fully integrated into the
activities, processes and systems in organizations and also local brands and global supply. According
to the report of the 2010 survey to United Nations Global Compact CEOs the current economic crisis
has not diminished the responsibility of companies in this issue of sustainability in the companies. In
fact, this crisis seems to have achieved the opposite effect since 80% of managers claim that present
economic crisis has increased the importance of this issue. In times like we are experiencing is that
companies must cope with the difficulties that have arisen by the current economic crisis as
sustainability is shown as a solution for reducing costs and, therefore, to increase the income. In
addition, many companies consider sustainability as a key factor in promoting the expansion into new
markets with the purpose of obtaining an economic recovery.

Sustainable business. Retrieved from

http://www.fordham.edu/academics/colleges__graduate_s/undergraduate_colleg/college_of_business_/a
cademics/business_areas_of_study/sustainability/sustainability_important.asp
Is sustainability now the key to corporate success? Retrieved from
http://www.theguardian.com/sustainable-business/sustainability-key-corporate-success

A New Era of Sustainability. Retrieved from

http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_A_New_Era_of_Sustainability_C
EO_Study.pdf

Ch. 2 – Another Look on Buyer Beware – Check that Contract (pg. 43)

The importance of the impact of an ERP system in the daily processes of a company and the
investment that must be made in economic terms make the process of selecting an ERP system is
becoming a sensitive issue. Also remember that this is not a task that is frequently made and from
which a particular benefit expected is dependent on the investment that will be carried out both in
monetary terms and time of use. The proper choice of software like this can be a very difficult task. With
so many technological options available, finding the software package to suit the particular needs of a
business is a challenge. Nonetheless, once you have found the right software which contain all the
functions necessary for your business, you will need to be aware and make sure that all costs that it
can generate are understood since there are upfront costs that must be considered such as hidden
costs can be avoided. It is crucial that the client understands the project's total cost and whether it will
be including all necessary components such as software licenses, implementation services and
hardware. With respect to all licenses of an ERP system vendors must ensure that the client fully
understands all the points that will be exposed in the contract before those clients sign. For example,
some of the points that you should explain to the client would be, is if the system is priced per user or
per module, if the client can purchase full user and light user licenses, is the system priced by
concurrent users or named users, is it easy to upgrade the ERP system, the required annual
maintenance fees, and what is included in the annual maintenance fees. If the client fully knows all
these responses and the clauses of the contract, then the customer will feel informed and likewise
pervaded with the system in which is going to invest.

Tips for Contract Negotiations with ERP Vendors. Retrieved from http://panorama-consulting.com/tips-
for-contract-negotiations-with-erp-vendors/

Negotiating an ERP Contract. Retrieved from http://www.ultraconsultants.com/negotiating-an-erp-

contract/

6 Pieces of Essential ERP Documentation You Should Understand. Retrieved from

http://www.erpfocus.com/erp-documentation-you-should-understand-1677.html