CHAPTER 11
ENTERPRISE RESOURCE PLANNING SYSTEMS
1. REVIEW QUESTIONS
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1. ERP systems are multiple module software packages that evolved primarily
from traditional manufacturing resource planning (MRP) systems. The purpose
2. The closed database architecture is similar in concept to the basic flat-file
model. Under this approach, a database management system is used to
3. Core Applications are those applications that operationally support the
day-to-day activities of the business. If these applications fail, so does the
4. On-line Analytical Processing (OLAP) includes: decision support, modeling,
5. The client-server model is a form of network topology in which the user’s
computer or terminal (the client) accesses the ERPs programs and data, via a
6. In a two-tier architecture, the server handles both application and database
duties. Some ERP vendors use this approach for local area network (LAN)
7. The database and application functions are separated in the three-tier model.
This architecture is typical of large production ERP systems which use wide
8. Many organizations have found that ERP software alone cannot drive all the
9. SCM systems are a class of application software that support supply chain
management. The supply chain is the set of activities associated with moving
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10. A technique called changed data capture can dramatically reduce the
extraction time by capturing only newly modified data. The extraction software
11. A data warehouse is a relational or multi-dimensional database that may
12. Data mining, which was introduced in chapter 8, is the process of selecting,
exploring, and modeling large amounts of data, in order to uncover
relationships and global patterns that exist in large databases, but are “hidden”
13. Data cleansing involves filtering out or repairing invalid data prior to being
stored in the warehouse. Operational data are “dirty” for many reasons.
Clerical, data entry, and computer program error can create illogical data such
14. Because of the vast size of a data warehouse, inefficiency caused by joining
normalized data can be very detrimental to the performance of the system. A
three-way join between tables in a large data warehouse may take an
15. Drill down analysis begins with the summary views of data described above.
16. The big bang is a method of implementing an ERP system. Organizations
taking this approach in an attempt to switch operations from their old legacy
17. Scalability is the system’s ability to grow smoothly and economically as user
requirements increase. The term system in this context refers to the technology
platform, application software, network configuration, or database. Smooth and
economical growth is the ability to increase system capacity at an acceptable,
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19. An access control list specifies the user-ID, resources available to the user, and
20. The access control list approach assigns access directly to the individual. RBAC
assigns permissions to a role and then the individual is assigned to the role. It
21. Consolidation is the aggregation or roll-up of data. For example, sales offices
23. Slicing and dicing enables the user to examine data from different viewpoints.
One slice of data might show sales within each region. Another slice presents
2. DISCUSSION QUESTIONS
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1. On-line Transaction Processing (OLTP) are the core business applications that
operationally support the day-to-day activities of the organization. If these
applications fail, so does the business. Typical core applications would include
2. In a two-tier architecture, the server handles both application and database
duties. Some ERP vendors use this approach for local area network (LAN)
applications. Client computers are responsible for presenting data to the user
and passing user input back to the server. In the three-tier model the database
3. Many organizations have found that ERP software alone cannot drive all the
processes of the company. These firms use a variety of bolt-on software
provided by third party vendors. At present, most electronic commerce
supported ERP systems use bolt-on packages that upload product information
4. The decision to use bolt-on software requires careful consideration. Most of the
leading ERP vendors have entered into partnership arrangements with third
party vendors to provide specialized functionality. The least risky approach is to
5. One reason for a separate data warehouse is that the structural and
operational requirements of transaction processing and data mining systems
are fundamentally different, making it impractical to keep both operational
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6. Typically transaction data are loaded into the warehouse only when the activity
on them has been completed e.g., they are stable. Potentially important
relationships between entities may, however, be absent from data that are
captured in its stable state. For example, information about cancelled sales
7. Wherever possible, normalized tables pertaining to selected events should be
consolidated into denormalized tables. Because of the vast size of a data
warehouse, inefficiency caused by joining normalized data can be very
8. Clerical, data entry, and computer program error can create illogical data
values such as negative inventory quantities, misspelled names, and blank
fields. Also, data in the data warehouse are often comprised of output from
9. To improve operational efficiency, certain data are transformed into summary
views before they are loaded into the warehouse. For example, a decision
maker may need to see product sales figures summarized for a week, a month,
a quarter, or annually. It may not be practical to summarize information from
10. Yes.
The auditor may use drill-down techniques to identify unusually high levels of
business activity for a particular supplier. Excessive purchases from a single supplier
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11. The reengineering of business processes that often accompanies ERP
implementation is the most commonly attributed cause of performance
problems. Operationally speaking, when business begins under the ERP
system, everything looks and works differently from the way it did with the
12. When a business’ processes are truly unique, the ERP system must be
modified to accommodate industry specific (bolt-on) software or to work with
custom-built legacy systems. Some organizations, such as telecommunications
13. Size. With no other changes to the system, if database size increases by a
factor of x, then query response time will increase by no more than a factor of x
Speed. An increase in hardware capacity by a factor of x will decrease query
response time by no less than a factor of x in a scalable system. For example, by
Workload. If workload in a scalable system is increased by a factor of x, then
response time or throughput can be maintained by increasing hardware capacity by
Transaction cost. In a scalable system, increases in workload do not increase
transaction cost. Therefore, an organization should not need to increase system
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14. Roles support the objectives of segregation of duties. Each role is associated
with a specific set of activities which are assigned to an authorized user of the
ERP System. SAP currently provides over 150 predefined user roles, which
limit a user’s access to only certain functions and associated data. The system
15. Centralized organizations with highly integrated business units may need a
single global ERP system that is accessed via the Internet or private lines from
around the world, to consolidate data from subsidiary systems. A server failure
under this model could leave the entire organization unable to process
16. Companies whose organizational units are autonomous and do not share
common customers, suppliers, or product lines often choose to install regional
17. Consolidation is the aggregation or roll-up of data. For example, sales offices
data can be rolled-up to districts and districts rolled-up to regions. Drill-down
18. Slicing and dicing enables the user to examine data from different viewpoints.
One slice of data might show sales within each region. Another slice presents
19. Managers in ERP environments have significant discretion in creating new roles for
individuals. This may be done for employees who need access to resources for
special and/or one-time projects. Such access granting authority needs to be
tempered with judgment to prevent the number of roles from multiplying to the point
20. The fundamental concept behind the rule of least access is that access privileges
(permissions) should be granted on a need to know basis only. Nevertheless, ERP
users tend to accumulate unneeded permissions over time. This is often due to two
problems:
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21. Role-based governance software monitors role creation and permission granting to