# Enterprise Systems and ERP Multiple Choice Questions
1. What is the primary promise of Enterprise systems?
a) Only financial integration
b) Only human resource management
c) Seamless integration of financial, HR, supply chain, and customer information
d) Only supply chain management
Answer: c) Seamless integration of financial, HR, supply chain, and customer information
2. Which of the following is the market leader in ERP systems?
a) Oracle
b) PeopleSoft
c) SAP
d) Microsoft
Answer: c) SAP
3. Companies spend approximately how much per year on ERP systems (excluding consulting fees)?
a) $5 billion
b) $10 billion
c) $15 billion
d) $20 billion
Answer: b) $10 billion
4. Which of these was NOT mentioned as a factor responsible for Cisco's ERP implementation success?
a) Handsome awards
b) Full dedication by employees
c) Low implementation cost
d) Support from top management
Answer: c) Low implementation cost
5. Which company filed for bankruptcy due to ERP implementation issues?
a) Dell Computer
b) FoxMeyer Drug
c) Mobil Europe
d) Applied Materials
Answer: b) FoxMeyer Drug
6. How long did Dow Chemical spend implementing their mainframe-based enterprise system?
a) 3 years
b) 5 years
c) 7 years
d) 10 years
Answer: c) 7 years
7. What can be a potential negative consequence of ERP implementation?
a) Improved data integration
b) Loss of competitive advantage
c) Better process management
d) Enhanced communication
Answer: b) Loss of competitive advantage
8. Which company chose NOT to implement ERP after evaluating its competitors' implementations?
a) Air Products and Chemicals
b) Dell Computer
c) Mobil Europe
d) Applied Materials
Answer: a) Air Products and Chemicals
9. What was Air Products and Chemicals' main concern about implementing ERP?
a) Technical complexity
b) Employee resistance
c) Price increase affecting sales
d) Integration issues
Answer: c) Price increase affecting sales
10. What is at the heart of an enterprise system?
a) User interface
b) Central database
c) Network infrastructure
d) Application server
Answer: b) Central database
11. In modern ERP implementation, which comes first?
a) Business processes are defined, then software is chosen
b) Software is chosen, then business processes are modified
c) Both are developed simultaneously
d) Neither affects the other
Answer: b) Software is chosen, then business processes are modified
12. What approach did Compaq take with their ERP implementation?
a) Pure vanilla implementation
b) Complete customization
c) Hybrid approach with proprietary applications
d) No implementation
Answer: c) Hybrid approach with proprietary applications
13. What operating model is recommended as the best strategy for ERP implementation?
a) Centralized model
b) Federalist operating model
c) Decentralized model
d) Matrix model
Answer: b) Federalist operating model
14. Which of these is NOT mentioned as an additional cost of ERP implementation?
a) Training
b) Maintenance costs
c) Marketing costs
d) Consulting expenditures
Answer: c) Marketing costs
15. What was Compaq's rationale for spending more on proprietary applications?
a) Better user interface
b) Lower maintenance costs
c) Protection of competitive advantage
d) Faster implementation
Answer: c) Protection of competitive advantage
16. What happens to system communication capabilities with increased customization?
a) They improve significantly
b) They become more complex
c) They become less able to communicate with suppliers and customers
d) They remain unchanged
Answer: c) They become less able to communicate with suppliers and customers
17. What does ES configuration tables enable a company to do?
a) Change the source code
b) Tailor aspects of the system to business needs
c) Improve system performance
d) Reduce costs
Answer: b) Tailor aspects of the system to business needs
18. Which is NOT mentioned as an impact of Enterprise Systems on organizations?
a) Streamlined management structure
b) Real-time access
c) Increased employee autonomy
d) Standardization of business transactions
Answer: c) Increased employee autonomy
19. What role is necessary for successful ES implementation?
a) External consultants only
b) IT department only
c) Top management involvement
d) End users only
Answer: c) Top management involvement
20. How did Dell Computer's ERP implementation fail?
a) System was too expensive
b) System wouldn't fit their decentralized management model
c) Technical issues
d) Employee resistance
Answer: b) System wouldn't fit their decentralized management model
21. Which question should managers NOT ask when considering ERP implementation?
a) How might it strengthen competitive advantages?
b) What will be the system's effect on organization?
c) How quickly can we implement all modules?
d) Are there better alternatives?
Answer: c) How quickly can we implement all modules?
22. What was the primary reason for companies having fragmented information before ERP?
a) Multiple data repositories
b) Lack of technology
c) Poor management
d) Employee resistance
Answer: a) Multiple data repositories
23. Which is NOT mentioned as an advantage of implementing ERP?
a) Centralized control over systems
b) Increased marketing capabilities
c) Integrated enterprise-wide tools
d) Increased control of budgeting
Answer: b) Increased marketing capabilities
24. What is a major disadvantage of ERP implementation?
a) Too much data integration
b) Requires major organizational changes
c) Too much automation
d) Reduced control
Answer: b) Requires major organizational changes
25. In which industry was SAP's R/3 package being widely implemented?
a) Automobile industry
b) Healthcare industry
c) Personal computer industry
d) Retail industry
Answer: c) Personal computer industry
26. What aspect of Cisco's implementation strategy helped address problems effectively?
a) Quick implementation
b) Phased implementation
c) Minimal testing
d) Complete automation
Answer: b) Phased implementation
27. What type of business would likely NOT need a manufacturing module?
a) Manufacturing company
b) Service business
c) Retail company
d) Distribution company
Answer: b) Service business
28. What is the primary benefit of using a single database in ERP?
a) Lower costs
b) Better security
c) Streamlined information flow
d) Faster processing
Answer: c) Streamlined information flow
29. Which company successfully protected its competitive advantage while implementing ERP?
a) Dell
b) Compaq
c) FoxMeyer Drug
d) Mobil Europe
Answer: b) Compaq
30. What is the vendor's role in defining ERP systems?
a) They let customers define all processes
b) They define what "best practices" means
c) They only provide technical support
d) They have no role in defining processes
Answer: b) They define what "best practices" means
31. A manufacturing company finds that after implementing ERP, their previous competitive advantage of quick custom deliveries has been lost. Based on the document, what likely happened?
a) The system was poorly implemented
b) The standardized processes reduced their flexibility
c) The employees weren't properly trained
d) The software was defective
Answer: b) The standardized processes reduced their flexibility
32. A sales representative in Tokyo is creating a quote for a German customer through an ERP system. Which capability is NOT mentioned as part of this process?
a) Automatic currency conversion
b) Credit limit verification
c) Social media integration
d) Inventory verification
Answer: c) Social media integration
33. Your company is considering ERP implementation but is worried about losing unique business processes. Based on Compaq's example, what would be the best approach?
a) Abandon the ERP implementation
b) Develop proprietary applications in the ERP vendor's language
c) Ignore the unique processes
d) Switch to a different vendor
Answer: b) Develop proprietary applications in the ERP vendor's language
34. When an organization implements ERP across multiple regions, the recommended approach is to:
a) Use identical systems everywhere
b) Use completely different systems in each region
c) Roll out different versions tailored to local practices
d) Avoid international implementation
Answer: c) Roll out different versions tailored to local practices
35. In the context of ERP customization, which statement represents the biggest risk?
a) Higher initial costs
b) Longer implementation time
c) Reduced ability to communicate with external partners
d) Increased maintenance needs
Answer: c) Reduced ability to communicate with external partners
36. A company has the following characteristics:
- High customization in products
- Quick delivery requirements
- Premium pricing strategy
Based on the document, what should they be most concerned about with ERP implementation?
a) Cost of implementation
b) Employee training time
c) Loss of service flexibility
d) Database security
Answer: c) Loss of service flexibility
37. In the context of the Paris-based sales representative example, what is the most significant feature of the ERP system demonstrated?
a) Multi-language support
b) End-to-end process integration
c) Speed of operation
d) User interface simplicity
Answer: b) End-to-end process integration
38. A company notices all its competitors implementing ERP systems. Based on Air Products and Chemicals' example, what should be their FIRST step?
a) Immediately implement the same system
b) Evaluate the impact on their business model
c) Choose a different ERP vendor
d) Reduce their prices
Answer: b) Evaluate the impact on their business model
39. When considering ERP modules, the document suggests that:
a) All modules should always be implemented
b) Only core modules should be implemented
c) Modules should be selected based on business needs
d) Technical modules should be prioritized
Answer: c) Modules should be selected based on business needs
40. A company's ERP implementation is failing because processes don't match the software. According to the document, what was likely done incorrectly?
a) Wrong vendor selection
b) Poor employee training
c) Trying to modify the software instead of business processes
d) Inadequate hardware infrastructure
Answer: c) Trying to modify the software instead of business processes
41. In the petrochemical industry, implementing SAP R/3 might lead to:
a) Immediate competitive advantage
b) Loss of industry differentiation
c) Reduced operational costs
d) Better customer service
Answer: b) Loss of industry differentiation
42. During ERP implementation, employees resist the standardized processes. Based on the document, what is the most appropriate response?
a) Allow employees to maintain old processes
b) Modify the ERP system to match existing processes
c) Adapt business processes to fit the system
d) Implement only non-controversial modules
Answer: c) Adapt business processes to fit the system
43. A medium-sized company finds that their legacy systems are "adequate." Based on Air Products and Chemicals' example, what should they consider MOST carefully?
a) Competitor's implementations
b) Latest technology trends
c) Whether ERP costs might force price increases
d) Employee preferences
Answer: c) Whether ERP costs might force price increases
44. When implementing ERP across global operations, the "federalist model" suggests:
a) Complete standardization across all regions
b) Different systems for each region
c) Mix of enterprise system with customized software
d) No integration between regions
Answer: c) Mix of enterprise system with customized software
45. Based on the FoxMeyer Drug case, what is the most severe potential risk of ERP implementation?
a) Temporary operational disruption
b) Loss of market share
c) Organizational bankruptcy
d) Employee turnover
Answer: c) Organizational bankruptcy
46. According to the document, what made Compaq's ERP implementation strategy successful?
a) Complete standardization of processes
b) Minimal customization
c) Strategic customization of critical processes
d) Rapid implementation
Answer: c) Strategic customization of critical processes
47. The document suggests that modern ERP implementation differs from past information systems because:
a) It's more expensive
b) Business processes are modified to fit the software
c) It requires more training
d) It's more technical
Answer: b) Business processes are modified to fit the software
48. According to the document, what is a key indicator that an ERP implementation might be problematic?
a) High initial costs
b) Long implementation time
c) Loss of existing competitive advantages
d) Employee resistance
Answer: c) Loss of existing competitive advantages
49. Based on the Cisco success factors, what is most crucial for ERP implementation?
a) Large budget
b) Latest technology
c) Top management support
d) External consultants
Answer: c) Top management support
50. The document suggests that ERP's central database primarily benefits organizations by:
a) Reducing storage costs
b) Improving data security
c) Streamlining information flow
d) Increasing processing speed
Answer: c) Streamlining information flow
51. According to the document, why is training considered a significant cost in ERP implementation?
a) It requires external consultants
b) It's an ongoing process
c) It involves all employees
d) It requires special facilities
Answer: c) It involves all employees
52. When choosing an ERP vendor, the document suggests that companies should primarily consider:
a) Cost of the system
b) Vendor market share
c) Fit with business processes
d) Implementation timeline
Answer: c) Fit with business processes
53. The primary problem with legacy systems mentioned in the document was:
a) Slow processing speed
b) Multiple data repositories
c) High maintenance costs
d) Poor user interface
Answer: b) Multiple data repositories
54. According to the Paris sales representative example, what security feature is built into the ERP workflow?
a) User authentication
b) Credit limit verification
c) Encryption
d) Access control
Answer: b) Credit limit verification
55. For multinational companies, the document suggests that ERP implementation should:
a) Be identical across all locations
b) Be completely different for each location
c) Support local operating practices
d) Focus only on headquarters
Answer: c) Support local operating practices
