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1
Copyright © 2019 Pearson Education, Inc.
Processes, Systems, and Information, 3e (McKinney/Kroenke)
Chapter 7 Supporting Processes with ERP Systems
1) With information silos, the data needed by one process are stored in an information system
designed and used in another process.
Answer: TRUE
Difficulty: Easy
AACSB: Information Technology
Chapter LO: 1: What problem does an ERP system solve?
Course LO: Discuss the role of information systems in supporting business processes
2) Information silos create islands of automation that increase the performance of processes and
make process integration easy.
Answer: FALSE
Difficulty: Easy
3) An ERP system tackles the silo problem by bringing data together in a big database to help a
company improve its processes.
Answer: TRUE
Difficulty: Easy
Course LO: Describe the uses of enterprise systems and enterprise resource planning
4) An ERP system use a centralized database.
Answer: TRUE
Difficulty: Easy
5) By consolidating data, a company can avoid the problem of having multiple versions of the
same thing.
Answer: TRUE
Difficulty: Easy
6) The challenges now involve updates and expansions, not the initial implementation.
Answer: TRUE
Difficulty: Easy

2
7) ERP system can improve a single process, but it interferes with the processes in an entire
organization.
Answer: FALSE
Difficulty: Easy
8) Businesses have been using information systems to support their processes well before the
Internet was invented.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2: What are the elements of an ERP system?
9) Material requirements planning provided financial tracking capabilities and the opportunity to
schedule equipment and facilities.
Answer: FALSE
Difficulty: Easy
10) To execute a just in time delivery, unimpeded flows of data are essential between the
supplier and manufacturer.
Answer: TRUE
Difficulty: Easy
11) The progress of information systems and business processes impact one another.
Answer: TRUE
Difficulty: Moderate
12) For a product to be considered a true enterprise resource planning product, it must include
applications that integrate processes in supply chain management, manufacturing, customer
relationship management, human resources, and accounting.
Answer: TRUE
Difficulty: Easy

3
13) An enterprise resource planning solution cannot be partially implemented.
Answer: FALSE
Difficulty: Easy
14) Writing new code to supplement an enterprise resource planning system is called
customization.
Answer: TRUE
Difficulty: Easy
15) If a new enterprise resource planning customer has requirements that cannot be met via
configuration, then the customer must stay with its current systems.
Answer: FALSE
Difficulty: Easy
16) Application code can be added to any enterprise resource planning implementation using
specific application languages such as Java.
Answer: TRUE
Difficulty: Easy
17) An enterprise resource planning solution does not contain a company's actual operational
data, but operational data can be entered during development and use.
Answer: TRUE
Difficulty: Easy
18) Enterprise resource planning (ERP) systems rely on a DBMS to process and administer the
ERP database.
Answer: TRUE
Difficulty: Easy

4
Course LO: Discuss best practices for using and managing databases
19) Transactional data are data related to events such as a purchase or a student enrollment.
Answer: TRUE
Difficulty: Easy
Course LO: Discuss best practices for using and managing databases
20) Master data, used in an enterprise resource planning system, changes with every transaction.
Answer: FALSE
Difficulty: Easy
21) Transactional data, also called reference data, includes supplier names and addresses, item
names and units of measure, and employee data.
Answer: FALSE
Difficulty: Easy
22) A procedure is a set of instructions for a person to follow when operating an information
system.
Answer: TRUE
Difficulty: Easy
23) In the context of an enterprise resource planning (ERP) system, a systems analyst works for
the ERP vendor or a third party, and helps budget, plan, train, configure, and implement the
system.
Answer: FALSE
Difficulty: Easy
24) Users are the employees of the firm implementing the system.
Answer: TRUE
Difficulty: Easy

5
25) Training an organization's users to become in-house trainers for enterprise resource planning
systems reduces the total expenses.
Answer: TRUE
Difficulty: Easy
26) Organizations implementing an enterprise resource planning system are restricted from
designing new business processes.
Answer: FALSE
Difficulty: Easy
27) A gap analysis highlights the differences between the business requirements that emerge
from strategic planning and the capabilities of the enterprise resource planning system.
Answer: TRUE
Difficulty: Easy
28) One of the shortcomings of using an enterprise resource planning product is that data sharing
does not occur in real time.
Answer: FALSE
Difficulty: Easy
Chapter LO: 3: What are the benefits of an ERP system?
29) A benefit of an ERP system for the organization is converting its processes to the
well-integrated, inherent, best-practice processes of the ERP vendor.
Answer: TRUE
Difficulty: Easy
30) Customers and suppliers want to do business with an organization that does not use an ERP
system.
Answer: FALSE
Difficulty: Easy

6
31) To help managers spot trends and changes, enterprise resource planning systems can provide
managers with dashboards.
Answer: TRUE
Difficulty: Easy
32) Selecting the right ERP vendor is one of them most challenging decisions for an
organization.
Answer: TRUE
Difficulty: Easy
Chapter LO: 4: What are the challenges of implementing an ERP system?
33) A long list of “likes” will lead to a long list of gaps and a difficult implementation.
Answer: TRUE
Difficulty: Easy
34) The configuration decisions that implementation teams must make include decisions about
item identifiers, order size, and bill of material.
Answer: TRUE
Difficulty: Easy
35) Data issues are rarely a decision implementation challenge.
Answer: FALSE
Difficulty: Easy
36) The actions and attitudes of the people in the client organization can make implementation
even more challenging.
Answer: TRUE
Difficulty: Easy

7
37) Management’s failure to anticipate cultural resistance may negatively impact self-efficacy.
Answer: TRUE
Difficulty: Easy
38) Most companies have not survived an initial implementation and have not learned how to
cope with many of the problems of an ERP implementation.
Answer: FALSE
Difficulty: Easy
39) When a firm customizes the ERP software, it is always compatible with new ERP software
versions.
Answer: FALSE
Difficulty: Easy
40) Among companies of varied sizes, the availability of skilled business and IT analysts is an
important difference that has a major impact on enterprise resource planning.
Answer: TRUE
Difficulty: Easy
Chapter LO: 5: What types of organizations use ERP?
41) Small organizations expand IT from one person to a small staff, but frequently this staff is
isolated from senior-level management.
Answer: FALSE
Difficulty: Easy
42) Midsize organizations have a full IT staff that is headed by the chief information officer.
Answer: FALSE
Difficulty: Easy

8
43) International enterprise resource planning solutions are designed to work with multiple
currencies.
Answer: TRUE
Difficulty: Easy
44) International organizations can maintain multiple instances of enterprise resource planning
implementation for each country, business unit, or region.
Answer: TRUE
Difficulty: Easy
45) Intel has the largest market share in the enterprise resource planning industry.
Answer: FALSE
Difficulty: Easy
Chapter LO: 6: Who are the major ERP vendors?
46) A Microsoft Dynamics implementation is larger in scale and functionality compared to
Oracle and SAP.
Answer: FALSE
Difficulty: Easy
47) All the enterprise resource planning products of Microsoft Dynamics are well integrated with
Microsoft Office and Microsoft's development languages.
Answer: FALSE
Difficulty: Easy
48) Oracle is the gold standard of enterprise resource planning (ERP) products and offers the
most extensive line of ERP products.
Answer: FALSE
Difficulty: Easy

9
49) SAP produces and sells cost-specific platforms to speed up the configuration process.
Answer: FALSE
Chapter LO: 7: What makes SAP different from other ERP products?
50) A configuration is a distinct and logical grouping of processes.
Answer: FALSE
51) The SAP Business Suite runs on an application platform called NetSuite.
Answer: FALSE
Difficulty: Easy
52) With ________, the data needed by one process are stored in an information system designed
and used in another process.
A) information silos
B) automation
C) encapsulation
D) data warehousing
Answer: A
Difficulty: Easy
53) Which of the following statements is true about ERP systems?
A) It utilizes a centralized database.
B) It provides users with access to metadata files that describe the location of an organization's
data.
C) It appears to be an integrated database to the user.
D) It prohibits information silos from communicating with each other and sharing data.
Answer: A

10
54) In an organization, data from a new sale is immediately sent to the database and that new
data updates the pace of production and the procurement of supplies. This is an example of
enterprise resource planning process ________.
A) customization
B) duplication
C) integration
D) decentralization
Answer: C
55) By the 1970s, manufacturing companies began to use software called ________ to efficiently
manage inventory, production, and labor.
A) enterprise application integration
B) enterprise resource planning
C) business performance management
D) material requirements planning
Answer: D
Difficulty: Easy
56) ________ integrates manufacturing and supply where manufacturing occurs just as raw
materials arrive.
A) Just in case manufacturing
B) Just in time delivery
C) Material requirements planning
D) Economic order quantity
Answer: B
Difficulty: Easy
57) Which of the following federal laws required companies to exercise greater control over their
financial processes?
A) the Gramm–Leach–Bliley Act
B) the Volstead Act
C) the Tower Amendment
D) the Sarbanes-Oxley Act
Answer: D
Difficulty: Easy

11
58) Which of the following activities is included in supply chain management?
A) sales prospecting
B) bill of materials
C) inventory management
D) customer management
Answer: C
Difficulty: Easy
Course LO: Discuss the role of information systems in supply chain management and
performance
59) Which of the following activities is included in customer relationship management?
A) procurement
B) marketing
C) bill of materials
D) payroll
Answer: B
Difficulty: Easy
Course LO: Describe the functions of customer relationship management (CRM) systems
60) Which of the following activities is included in human resources?
A) capacity planning
B) call center support
C) benefits administration
D) cash management
Answer: C
Difficulty: Easy
61) The customization of enterprise resource planning software to meet different customer
requirements without changing the program code is called ________.
A) modularity
B) configuration
C) automation
D) process blueprinting
Answer: B
Difficulty: Easy

12
62) Writing new code to supplement an enterprise resource planning system is called ________.
A) automation
B) customization
C) integration
D) centralization
Answer: B
Difficulty: Easy
63) Which of the following technological advances has enabled the use of off-premises
enterprise resource planning systems?
A) cloud computing
B) computer card reader
C) punch card
D) legacy system
Answer: A
Difficulty: Easy
64) A ________ is a set of instructions for a person to follow when operating an information
system.
A) procedure
B) metadata
C) process
D) database
Answer: A
Difficulty: Easy
65) A ________ works for an enterprise resource planning (ERP) vendor or a third party and
helps budget, plan, train, configure, and implement an ERP system.
A) developer
B) consultant
C) systems analyst
D) business analyst
Answer: B
Difficulty: Easy

13
66) A ________ understands the technical aspects of enterprise resource planning (ERP) and
helps plan, configure, and implement an ERP system for company use.
A) trainer
B) project manager
C) business analyst
D) developer
Answer: C
Difficulty: Easy
67) ________ write additional code where necessary for implementing enterprise resource
planning systems.
A) Consultants
B) Business analysts
C) Architects
D) Developers
Answer: D
Difficulty: Easy
68) The inherent processes defined in an enterprise resource planning system are also known as
________.
A) inbound processes
B) stored procedures
C) transaction logs
D) process blueprints
Answer: D
Difficulty: Easy
69) Which of the following is an organizational benefit of using an enterprise resource planning
system?
A) It maintains individual databases for each department.
B) It facilitates data sharing in real time.
C) It minimizes the use of dashboards.
D) It promotes the duplication of data.
Answer: B

14
70) Organizations conduct ________ to identify the differences between the business
requirements that emerge from strategic planning and the capabilities of the chosen enterprise
resource planning system.
A) access controls
B) inherent processes
C) gap analysis
D) dashboards
Answer: C
71) The ________ is used to specify the raw materials, quantities, and subassemblies needed to
create a final product.
A) bill of material
B) bill of lading
C) item identifier
D) dashboard
Answer: A
Difficulty: Easy
72) Which of the following challenges of implementing an enterprise resource planning (ERP)
system is people-related?
A) the structure of the bill of material
B) the order size
C) the data in the ERP system
D) the inability to collaborate
Answer: D
73) When organizations upgrade existing enterprise resource planning systems, they can be
challenged by the version lock problem because of ________.
A) employee self-efficacy
B) heavy customization
C) organizational culture
D) minimal configuration
Answer: B

15
74) Which of the following statements is true of small organizations?
A) They expand IT from one person to a small staff, but frequently this staff is isolated from
senior-level management.
B) They employ only one or two IT analysts who not only manage the enterprise resource
planning system, but also the entire IS department.
C) They employ several IT analysts to manage the enterprise resource planning system.
D) They have a full IT staff that is headed by the chief information officer.
Answer: B
75) When international firms consolidate all their operations within a large enterprise resource
planning implementation, it is referred to as a(n) ________.
A) single instance
B) multiple instance
C) inherent process
D) configuration decision
Answer: A
Difficulty: Easy
76) The ________ is a business and IT professional who heads the IT staff in large
organizations, sits on the executive board, and is an active participant in organizational strategic
planning.
A) chief executive officer
B) chief information officer
C) chief operating officer
D) chief financial officer
Answer: B
Difficulty: Easy
77) Which of the following companies has the largest market share in the enterprise resource
planning industry?
A) Epicor
B) SAP
C) Oracle
D) Microsoft
Answer: B

16
Difficulty: Easy
78) Oracle's high-quality HR products are branded as ________.
A) PeopleSoft
B) NetWeaver
C) Siebel
D) Epicor 10
Answer: A
Difficulty: Easy
79) Oracle's high-quality CRM products are branded as ________.
A) PeopleSoft
B) Siebel
C) Epicor 10
D) NetWeaver
Answer: B
Difficulty: Easy
80) Which of the following statements is true about Oracle and its enterprise resource planning
(ERP) products?
A) It is known primarily for its retail-oriented ERP software.
B) It is known to create easy-to-use products.
C) It is known to produce fully-featured products with superior performance.
D) It is known for its cost-effective solutions.
Answer: C
81) Which of the following is the gold standard of enterprise resource planning products?
A) Oracle
B) Microsoft
C) Epicor
D) SAP
Answer: D
Difficulty: Easy

17
82) Tier 1 enterprise resource planning vendors such as SAP and Oracle are more appealing to
large firms due to ________.
A) opportunities for corporate-wide standardization
B) industry-specific systems
C) solutions for specific business functions
D) pay-as-you-go cloud services
Answer: A
Difficulty: Easy
83) Enterprise resource planning vendors outside of Tier 1 are establishing a strong niche in the
industry by focusing on ________.
A) preconfigured platforms
B) industry-specific systems
C) standardized processes
D) fully-featured products
Answer: B
Difficulty: Easy
84) The core business of SAP AG is ________.
A) providing consulting and training services in enterprise resource planning software
B) offering pay-as-you-go cloud services
C) developing personal computers, laptops, and smartphones
D) selling licenses for software solutions and related services
Answer: D
85) All SAP implementations start with an SAP ________.
A) user training program
B) industry-specific platform
C) gap analysis
D) requirement analysis
Answer: B
Difficulty: Easy

18
86) Which of the following best defines a module?
A) It is a distinct and logical grouping of processes.
B) It is a preconfiguration platform devised for a particular industry.
C) It is a collection of interconnected and interdependent programs.
D) It is an inherent process in an enterprise resource planning system.
Answer: A
Difficulty: Easy
87) Which of the following statements is true about SAP and its enterprise resource planning
products?
A) SAP has made a rapid move to thin-client, cloud-based solutions.
B) SAP addresses the needs of only small and mid-sized organizations.
C) SAP provides industry-specific platforms that are configured to a particular company.
D) SAP has overcome its dependence on client-server architecture.
Answer: C
88) ________, one of the more well-known versions of SAP, was the first truly integrated system
that was able to support most of an organization's major operational processes.
A) R/3
B) NetWeaver
C) ABAP
D) NetSuite
Answer: A
Difficulty: Easy
89) The SAP Business Suite runs on an application platform called ________.
A) R/3
B) NetSuite
C) NetWeaver
D) Baan ERP
Answer: A
Difficulty: Easy

19
90) What are information silos? What problems do they cause in a database?
Answer: An information silo is isolated data stored in separated information systems. With
information silos, the data needed by one process are stored in an information system designed
and used in another process. Because information silos exist in isolation from one another, they
create islands of automation that can reduce the performance of processes and make process
integration difficult.
Difficulty: Easy
91) How can the problem of information silos be solved?
Answer: In business, the silo problem is solved by ERP systems. ERP systems are very large
enterprise IS that bring data together in a big database and help a company improve its processes.
An ERP system is an IS designed to integrate processes by consolidating data. An ERP system
creates a single database. By consolidating data, a company can avoid the problem of having
multiple versions of the same thing—for example, storing data about a customer in two silos and
not knowing which customer data is correct. ERP systems provide a set of industry-leading
processes that are well integrated with each other.
92) Describe how businesses used computers for inventory purposes before the advent of the
Internet.
Answer: Although the term enterprise resource planning (ERP) is relatively new, businesses
have been using IS to support their processes for 50 years, well before the Internet. In the 1960s,
a business could use a dedicated phone line, a computer card reader, and punch cards to send
inventory orders to a supplier. By the 1970s, businesses began to buy their own mainframe
computers, and manufacturing companies began to use software called material requirements
planning (MRP) to efficiently manage inventory, production, and labor. As computing power
became cheaper, manufacturing resource planning (MRPII) was developed that added financial
tracking capabilities as well as the opportunity to schedule equipment and facilities. The business
environment continued to evolve with the advent of just in time (JIT) delivery, which integrated
manufacturing and supply.
93) What are the different business functions integrated by enterprise resource planning (ERP)
products?
Answer: For a product to be considered a true ERP product, it must include applications that
integrate the processes in the following business functions:
- Supply chain management (procurement, sales order processing, inventory management,

20
supplier management, and related activities)
- Manufacturing (manufacturing scheduling, capacity planning, quality control, bill of materials,
and related activities)
- Customer relationship management (sales prospecting, customer management, marketing,
customer support, call center support)
- Human resources (payroll, time and attendance, HR management, commission calculations,
benefits administration, and related activities)
- Accounting (general ledger, accounts receivable, accounts payable, cash management, fixed-
asset accounting)
94) Explain configuration in enterprise resource planning (ERP) systems. What are its
limitations?
Answer: The enterprise resource planning (ERP) software typically resides on servers and on
client machines in the company. The software can be customized to meet customer requirements
without changing program code. This customization is called configuration. There are limits to
how much configuration can be done. If a new ERP customer has requirements that cannot be
met via configuration, then the customer either needs to adapt its business to what the software
can do or write application code to meet its requirements. Code can be added to any ERP
implementation using specific application languages such as Java. The most common use of this
application code is to create company-unique reports from ERP data.
Difficulty: Easy
95) What are the different types of data in an enterprise resource planning (ERP) database?
Answer: In an ERP database, there are several different types of data. Transactional data are
data related to events such as a purchase or a student enrollment. Examples of transactional data
include purchases at the bookstore, student tuition payments, deliveries, and payroll
expenditures. Master data, also called reference data, are data used in the organization that don't
change with every transaction. Master data includes supplier names and addresses, item names
and units of measure, and employee data. ERP systems also designate organizational data, data
about a university such as the location of its warehouses, the mailing address of the buildings,
and the names in its financial accounts.
96) Explain the different categories of people involved with enterprise resource planning (ERP)
systems.
Answer: The people involved with an ERP system fall into three general categories. Users are
the employees of the firm implementing the system. IT analysts, also called systems analysts, are

21
also employees. IT analysts have specialized training or education that enables them to support,
maintain, and adapt the system after it has been implemented. Many analysts have a background
or education in MIS or IT. A third role is consultant. A consultant works for the ERP vendor or a
different company, called a third party, and helps budget, plan, train, configure, and implement
the system. These consultants may work at the implementing firm for a period before, during,
and after the implementation.
97) Explain the steps to create a functioning enterprise resource planning (ERP) system.
Answer: First, the top managers of the company revisit their strategy so that the ERP system has
clear goals. Next, they conduct a gap analysis, a study that highlights the differences between the
business requirements that emerge from strategic planning and the capabilities of the ERP
system. The implementation team then develops processes it will use and configures the
software. In the final steps, the company's IT staff writes procedures, trains the users, and tests
the system.
98) What are the benefits of using an enterprise resource planning (ERP) system?
Answer: The benefits of using an ERP system are:
- It converts its processes to the best-practice processes of the ERP vendor.
- Data sharing occurs in real time.
- Management can be more insightful and provide better oversight.
- It solves the information silo problem.
Difficulty: Easy
99) Explain the kinds of configuration decisions that enterprise resource planning (ERP)
implementation teams must make.
Answer: One configuration decision is item identifiers. Another set of issues is order size—the
organization must specify the number of items in a standard order. A third detailed decision is
the structure of the bill of material (BOM). For each of these configuration decisions, the
implementation teams must first decide if any of the configuration choices offered by the ERP
vendor are suitable. If not, the team must then weigh the advantages and disadvantages of using
customized software.
Difficulty: Easy

22
100) What are the Management-related issues faced by enterprise resource planning (ERP)
implementation teams?
Answer:
One common problem occurs when top management believes the hard part of the
implementation process is the decision to implement. Managers believe that once that decision is
made, they can move on. Instead, they need to stay involved, ensure implementation is
monitored, resources are committed, good procedures are written, and thorough training is
conducted.
A second top management problem is overselling the vision of what the system will do. Often
management can be blinded by the benefits of the promised system and not look carefully at the
assumptions behind the promises. This can lead top management to buy more features than it
needs or than the organization can implement successfully.
When an ERP system is implemented, the way work is done is changed and the culture typically
bites back. Changing the culture can lead to employee resistance as the change in work habits
may threaten self-efficacy, which is a person's belief that he or she can be successful at his or her
job.
ERP projects are very large, and many businesses struggle to find managers with the project
management skills necessary to make these projects successful.
101) How does team collaboration impact enterprise resource planning (ERP) implementation
teams?
Answer: Implementing an ERP system requires extensive and effective
collaboration; when collaboration breaks down, implementation suffers. Consultants from the
vendor, IT analysts from the client firm, and end users all know things the others don’t know;
these missing bits of knowledge can only be learned by collaborating
Difficulty: Easy
102) What are the individual-related issues faced by enterprise resource planning (ERP)
implementation teams?
Answer: As mentioned, implementation changes the work people do. However, the people
whose work has changed often receive no benefit from the change; they get the pain but no gain.
A final challenge is how to get the firm’s people to learn and use ERP software that is not
particularly user-friendly. ERP screens are jargon filled, are difficult to correct, offer unhelpful
help, and are hard to explain.
Difficulty: Easy

23
103) Explain the challenges that companies face with and ERP upgrade:
Answer: Resistance may be particularly strong if people believe the upgrade will be as disruptive
as the original implementation. Resistance may be particularly strong if people believe the
upgrade will be as disruptive as the original implementation. A third problem with upgrades is
sometimes referred to as version lock. Version lock occurs when a client firm has so customized
ERP software that it has locked itself out of upgrading to new ERP software. Finally, upgrades
are challenging if the client firm has not developed a long-term strategy
for ERP updates
Difficulty: Easy
104) What enterprise resource planning (ERP) needs are unique to midsized and large
organizations?
Answer: Midsize organizations may expand IT from one person to a small staff, but frequently
this staff is isolated from senior-level management. Such isolation can create misunderstandings
and distrust. Because of the expense, organizational disruption, and length of ERP projects,
senior management must be committed to the ERP solution. When IT management is isolated,
such commitment is difficult to obtain and may not be strong. This issue is problematic enough
that many ERP consultants say the first step for these firms in moving toward ERP is to obtain
deep senior-level commitment to the project.
Large organizations have a full IT staff that is headed by the chief information officer (CIO), a
business and IT professional who sits on the executive board and is an active participant in
organizational strategic planning. ERP implementation will be part of that strategic process and,
when begun, will have the full backing of the entire executive group.
105) Explain the benefits of an enterprise resource planning (ERP) application to multinational
organizations.
Answer: ERP brings huge benefits to multinational organizations. International ERP solutions
are designed to work with multiple currencies, manage international transfers of goods in
inventories, and work effectively with international supply chains. Even more important, ERP
solutions provide a worldwide consolidation of financial statements on a timely basis. As a
result, they can produce one set of financial reports, better analyze where costs could be saved,
and identify where production can be optimized. While it is advantageous for these international
firms to consolidate all their operations within one large ERP implementation, called a single
instance, some firms maintain multiple instances, or an ERP for each country, business unit, or
region. For these firms, the advantages of one set of data, a single financial system and
worldwide process standards are outweighed by the cost of consolidating or the disparity among
divisions.

24
106) Name two vendors of enterprise resource planning (ERP) solutions and explain how they
are unique.
Answer: Oracle is an intensely competitive company with a deep base of technology and high-
quality technical staff. Oracle developed some of its ERP products in-house and has
complemented those products with others obtained through its acquisition of PeopleSoft (high-
quality HR products) and Siebel (high-quality CRM products). Beginning with its first DBMS
product release, Oracle has never been known to create easy-to-use products. It is known,
however, for producing fully-featured products with superior performance. They are also
expensive.
SAP is the gold standard of ERP products. SAP is used by midsized and large companies and
offers the most extensive line of ERP products. It has recently introduced Business ByDesign
and Business One as smaller, more lightweight options for small to midsized companies, and it is
expanding its cloud offerings with Cloud for Financials and Cloud for Customers.
107) How does SAP speed up the configuration process? What is a module?
Answer: To speed up the configuration process, SAP produces and sells industry-specific
platforms. An industry-specific platform is a preconfiguration platform that is appropriate for a
particular industry, such as retail, manufacturing, or health care. All SAP implementations start
with an SAP industry-specific platform and are further configured to a particular company.
A module is a distinct and logical grouping of processes. For example, SD, the Sales and
Distribution module, is a collection of processes supervised by the marketing department. These
processes record customer data, sales data, and pricing data. Not every module is implemented in
every installation of SAP. Companies that install SAP choose modules for their implementation.
108) Explain the important characteristics of SAP's enterprise resource planning (ERP) system.
Answer: SAP was the first ERP software designed to work at different companies. One of the
more well-known versions of SAP is called R/3. The R/3 program (where R means "real time")
was the first truly integrated system that was able to support most of an organization's major
operational processes. SAP R/3 uses classic, native client, client-server architecture, rather than a
browser-based approach that would be easier to use on a wide range of devices, such as
smartphones and other thin clients. SAP later rebranded its R/3 software as the SAP Business
Suite. The SAP Business Suite runs on an application platform called NetWeaver. NetWeaver
connects SAP to hardware, third-party software, and output devices. NetWeaver also has SOA
capabilities that help it integrate SAP with non-SAP applications. These features enable the
Business Suite/NetWeaver approach to be more adaptive to new IT developments compared to

25
R/3. ABAP is SAP's high-level application language that is used to enhance the functionality of
an SAP implementation.

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