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Enterprise Systems for Management, 2e (Motiwalla/Thompson) Chapter 6 Software and Vendor Selection 1) The customer is often blamed for an unsuccessful implementation. Answer: FALSE Diff: 2 Page Ref: 169 2) Once the decision has been made to implement an ERP system, the initial step is to select an ERP vendor. Answer: TRUE Diff: 1 Page Ref: 169 3) Companies often bring in specialized consulting firms to assist in the ERP vendor selection process. Answer: TRUE Diff: 2 Page Ref: 169 4) The final step in the ERP purchasing process is to release the request for bid to the vendors. Answer: FALSE Diff: 1 Page Ref: 169 5) Pricing for the ERP software is done in the Needs/Requirements assessment step of the purchasing process. Answer: FALSE Diff: 2 Page Ref: 170 6) Usually the first step in selecting an ERP system is researching the ERP vendors on the market. Answer: TRUE Diff: 1 Page Ref: 170 7) State of the art ERP systems usually can be run on old legacy hardware without any problems. Answer: FALSE Diff: 2 Page Ref: 170 8) When selecting an ERP software package, it is important to research all aspects of the package including the platform on which it will run. Answer: TRUE Diff: 1 Page Ref: 170 9) It is not a good idea to include end-users in the vendor selection process as this will only complicate the process. Answer: FALSE Diff: 2 Page Ref: 170

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10) An ERP vendor should not be required to explain their software release and upgrade strategies as this is a separate issue from the purchasing decision. Answer: FALSE Diff: 2 Page Ref: 170 11) It is good to ask department managers and subject matter experts if they have any knowledge or experience with ERP vendors. Answer: TRUE Diff: 1 Page Ref: 170 12) It is important to consider the ERP vendor's overall financial position when selecting an ERP vendor. Answer: TRUE Diff: 2 Page Ref: 170 13) A business should not bother to examine what ERP packages their competition uses when selecting an ERP vendor. Answer: FALSE Diff: 1 Page Ref: 170 14) Great Plains is designed to be used by companies that have a large number of potential users. Answer: FALSE Diff: 2 Page Ref: 170 15) Company size is an important factor to consider when choosing an ERP package since some packages don't work well with large numbers of users. Answer: TRUE Diff: 2 Page Ref: 170 16) PeopleSoft is known for its financial applications in the ERP software market. Answer: FALSE Diff: 2 Page Ref: 170 17) Some ERP products are designed with a particular industry focus. Answer: TRUE Diff: 1 Page Ref: 170 18) Some ERP vendors have focused their products on specific IT platforms. Answer: TRUE Diff: 1 Page Ref: 170 19) Once the ERP system is installed, the relationship with the ERP software vendor is completed. Answer: FALSE Diff: 2 Page Ref: 171

20) After researching all the ERP vendors, the results should be a short list of possible vendors. Answer: TRUE Diff: 1 Page Ref: 171 21) The functional requirements process will be helpful in choosing an ERP vendor. Answer: TRUE Diff: 3 Page Ref: 171 22) The RFI is an essential part of the ERP vendor bidding process. Answer: FALSE Diff: 3 Page Ref: 173 23) Along with responding to the RFI, ERP vendors often will do a demo of their system. Answer: TRUE Diff: 2 Page Ref: 173 24) The bidding process is required for purchasing an ERP system in private industry. Answer: FALSE Diff: 2 Page Ref: 173 25) The RFP should specify what infrastructure the company already has in place. Answer: TRUE Diff: 2 Page Ref: 173 26) The RFP or RFQ is sent to ERP vendors to get bids on specific ERP systems. Answer: FALSE Diff: 2 Page Ref: 174 27) All the ERP bids will need to be carefully evaluated by the different groups of people involved in the decision-making process. Answer: TRUE Diff: 2 Page Ref: 174 28) The largest cost of the ERP system occurs after the implementation with the system design and upgrades. Answer: FALSE Diff: 3 Page Ref: 174 29) TCO provides a financial framework for evaluating and comparing ERP vendors and products. Answer: TRUE Diff: 3 Page Ref: 174 30) The accuracy of TCO when applied to ERP systems has been marginal but is still a worthwhile exercise in the selection process. Answer: TRUE Diff: 3 Page Ref: 174

31) The ERP implementation contract is usually separate from the software vendor license and contract. Answer: TRUE Diff: 3 Page Ref: 175 32) In the ERP software vendor contract it is important that all of the investments are clearly defined. Answer: FALSE Diff: 3 Page Ref: 175 33) If the client miscounts the number of users, this would be an example of a(n) foreseeable circumstance that may require a change in the contract. Answer: FALSE Diff: 3 Page Ref: 176 34) Most companies base their ERP system requirements on a business process reengineering analysis. Answer: TRUE Diff: 1 Page Ref: 176 35) Negotiating with two ERP vendors will yield a higher purchase price. Answer: FALSE Diff: 1 Page Ref: 176 36) Buying a new ERP system usually means that the company will also have to update their attorneys. Answer: FALSE Diff: 2 Page Ref: 170 37) A good potential ERP vendor will have an active user base involved in defining future functional changes, and this is important to consider when selecting a vendor. Answer: TRUE Diff: 3 Page Ref: 170 38) When considering an ERP vendor it is important consider the hardware and software infrastructure preferred to support the ERP system. Answer: TRUE Diff: 2 Page Ref: 170 39) Oracle recently acquired, Seibel, JDEdwards and PeopleSoft in order to centralize their offerings in the ERP world. Answer: FALSE Diff: 2 Page Ref: 170

40) Senior management must be committed to the ERP project in terms of both resources and time or the project is doomed to failure from the beginning. Answer: TRUE Diff: 3 Page Ref: 171 41) When evaluating an ERP vendor, it is important to consider the already using the system. A) partners B) user base C) module portfolio D) change management team Answer: B Diff: 2 Page Ref: 171

, or the companies

42) If the ERP vendor is a publicly traded firm it is useful to examine public reports to make sure they are in strong position. A) managerial B) growth C) technical D) financial Answer: D Diff: 1 Page Ref: 171 43) IT companies regularly survey the ERP market and are a good source of current information on any implementation or support issues that may be happening. A) marketing B) design C) research D) management Answer: C Diff: 2 Page Ref: 171 44) When selecting an ERP vendor it is important to consider the hardware and software infrastructure the ERP vendor supports since this will determine the fit and of the system. A) instances B) web capabilities C) scalability D) bandwidth Answer: C Diff: 3 Page Ref: 170

45) ERP vendors usually issue a statement of development of the product is headed. A) direction B) support C) historical evolution D) vendor upgrades Answer: A Diff: 2 Page Ref: 170

which describes where future

46) Some ERP products were developed using technology, so it is important that ERP vendors be able to migrate quickly to current technologies. A) outsourced B) older C) used D) offshore Answer: B Diff: 1 Page Ref: 171 47) ERP vendors have different of new system fixes and upgrades. A) development B) management C) cost D) release Answer: D Diff: 3 Page Ref: 171 48) It is good to consider the relative ERP vendor has available. A) awareness B) position C) proportion D) configuration training E) training Answer: C Diff: 2 Page Ref: 171 49) Microsoft's ERP product is called: A) Fusion. B) Great Plains. C) NetWeaver. D) Epicor. Answer: B Diff: 2 Page Ref: 172

strategies which determine the content and frequency

of development and maintenance staff that each

50) currently claims the largest share of the ERP software market. A) Oracle B) PeopleSoft C) SAP D) Lawson Answer: C Diff: 1 Page Ref: 171 51) is an ERP vendor that focuses on the mid-market. A) Epicor B) PeopleSoft C) SAP D) Lawson Answer: A Diff: 2 Page Ref: 172 52) was the first ERP vendor to develop and deploy 100 percent internet-enabled enterprise software across its whole product line. A) Oracle B) PeopleSoft C) SAP D) Lawson E) SSA Global Answer: A Diff: 3 Page Ref: 172 53) A key factor in choosing a software vendor will be the extent to which the the functionality of the ERP software. A) maintenance upgrades B) project philosophies C) eCommerce strategies D) user requirements Answer: D Diff: 3 Page Ref: 173

match

54) In the functional requirements document, a key component will describe how the crossfunctional of the new integrated ERP system will affect departments within the company. A) legacy systems B) utilities C) databases D) data flows Answer: D Diff: 3 Page Ref: 173

55) The document will describe the level of importance of each function for each department within the company. A) design B) functional requirements C) RFP D) vendor requirements Answer: B Diff: 3 Page Ref: 173 56) Once the departmental functions and business processes have been documented, a written request, or is sent to potential ERP vendors asking for information. A) RFI B) RFP C) RFB D) functional requirements analysis Answer: A Diff: 2 Page Ref: 174 57) In institutions, the bid process is almost always required. A) private B) non-profit C) public D) corporate Answer: C Diff: 2 Page Ref: 174 58) Because there are many to an ERP system bid, multiple teams with a variety of skill sets will be needed to compare and evaluate the bids. A) functions B) changes C) modules D) components Answer: D Diff: 3 Page Ref: 174 59) The choice of an ERP vendor should not just focus on cost or functionality, but on the best: A) process management scenarios. B) change management team. C) overall fit. D) data migration plan. Answer: C Diff: 2 Page Ref: 174

60) The actual cost of the ERP software itself should be around A) 15% B) 25% C) 35% D) 45% Answer: A Diff: 2 Page Ref: 174 61) Potential customers often use the different ERP systems proposed to them. A) ROI B) NPV C) PP D) TCO Answer: D Diff: 2 Page Ref: 174

of the overall cost.

as a financial framework for evaluating the

62) Companies often turn to professional companies for their ERP implementations instead of contracting with the software vendor to install and configure their new ERP system. A) development B) consulting C) outsourcing D) integration E) data migration Answer: B Diff: 3 Page Ref: 175 63) Deliverables must be clearly identified and delivery dates associated with them in the: A) RFI. B) purchase order. C) RFB. D) ERP contract. Answer: D Diff: 2 Page Ref: 175 64) It is more difficult for an ERP vendor to cut corners if the customer has a clear each deliverable. A) statement of intent B) scope document C) acceptance contract D) functional requirements document Answer: C Diff: 3 Page Ref: 176

for

65) If after the ERP project starts and it turns out that the hardware for supporting the volume of transactions was undersized then it may be necessary to the contract. A) dissolve B) change C) re-bid D) finalize Answer: B Diff: 2 Page Ref: 176 66) To help evaluate ERP vendors it is often helpful to check the from previous customers. A) references B) invoices C) processes D) pictures E) none of the above Answer: A Diff: 2 Page Ref: 174

that they provide

67) The TCO of an ERP system includes getting the system installed and also the cost of running the system for years afterward. A) two B) five C) ten D) twenty E) none of the above Answer: A Diff: 3 Page Ref: 174 68) According to a rule of thumb, the cost of installing the system is about ERP license costs. A) two B) six C) ten D) twenty E) none of the above Answer: B Diff: 2 Page Ref: 174

times the

69) When the ERP vendor evaluation process gets down to the final two vendors, it is good to create a between the two vendors. A) synergy B) competition C) RFB D) TCO E) none of the above Answer: B Diff: 2 Page Ref: 175 70) Terms and conditions will be a significant part of the vendor contract and will be addressed by the . A) managers B) executives C) attorneys D) consultants E) none of the above Answer: C Diff: 3 Page Ref: 175 71) The contact manager will become an expert on the ERP A) hardware B) software C) contract terms D) data E) none of the above Answer: C Diff: 2 Page Ref: 175

and conditions.

72) that specialize in selection of ERP vendors may be brought in at the beginning of the process. A) Consultants B) Attornies C) Managers D) Executives E) none of the above Answer: A Diff: 2 Page Ref: 169 73) During contract negotiations it is best to over A) state B) commit C) communicate D) price E) none of the above Answer: C Diff: 3 Page Ref: 175

about the progress being made.

74) It is important to include change management later on. A) attorneys B) consultants C) executives D) end-users E) none of the above Answer: D Diff: 2 Page Ref: 170

in the vendor selection process since this will help in

75) Some ERP products cannot support a large number of factor to consider when choosing a vendor. A) attorneys B) users C) consultants D) executives E) none of the above Answer: B Diff: 2 Page Ref: 170

so this will be an important

76) What should be the first step in the process of selecting an ERP vendor? Answer: The first step should be to research all the different vendors of ERP systems on the market and come up with a short list of vendors who will be able to meet the general business requirements. If the company is running their current systems on outdated legacy systems, much of the research should focus on those computer platforms that will support the hardware and software needed to move the company to the cutting edge. Diff: 2 Page Ref: 169-70 77) Describe three different factors that should be researched when examining potential ERP vendors. Answer: Because ERP systems are so complex, there is a wide variety of questions that should be asked when researching potential ERP vendors. Because you want a company that will be around in ten years, their financial position should be considered. Other businesses who have used them should also be consulted and their reference customers checked. In the industry, you should check what your competition is using. A major consideration will be the infrastructure that their ERP system supports and how many users it will support. Of course, they should be using the latest technologies and should have a release and upgrade strategy. The quality of their customer support and maintenance should also be checked. Diff: 2 Page Ref: 169-170

78) What is a "release strategy" and why is it an important factor in choosing an ERP vendor? Answer: This is an important factor to consider because it can vary quite a bit from vendor to vendor. The release strategy describes how often fixes, minor upgrades, and new releases of the software will be made. They should be able to tell you how often major releases will come and how long the vendor will support the older releases. There should also be a defined upgrade path. Vendors will also vary a bit in what they charge for upgrades and how well they keep up with the maintenance of them. Diff: 2 Page Ref: 171 79) Describe the main ERP vendors and what distinguishes them from the rest. Answer: There are probably several dozen different ERP vendors, but with the recent acquisitions, now there are only about four or five major ERP vendors. The oldest and largest of these is the German company, SAP. Their ERP products span all sizes of firms and industries. The number two vendor is certainly the combination of Oracle/PeopleSoft. In addition to their market leading database product, they were also the first vendor to 100% web-enable all of their products. Lawson is a mid-size ERP vendor who focuses on industry-tailored software solutions. Microsoft entered the market with their product, Great Plains, which is oriented towards smaller companies. Diff: 2 Page Ref: 173 80) What should be the result of the functional requirements process? How is this used in the selection of an ERP vendor? Answer: The process of determining the functional requirements of the new ERP system involves first documenting the current legacy systems functionality or using business process reengineering to identify the "best practices" in that particular industry. There should be two major documents output from this process. One will describe the data and functional flow of departmental/business processes and any changes to those processes. The second major document will be a description of all the functions in each department and relative level of importance of each of these functions. Diff: 3 Page Ref: 173 81) What is an RFP and how is it used in the vendor selection process? Answer: The RFP, short for "Request for Proposals," is sometimes also called the RFB or request for bids. Once a list of potential ERP vendors has been identified, then they are provided with a description of all the existing systems and the desired functionality, along with the hardware, software, and training requirements. They are also provided with a description of how the selection process will proceed and deadlines for their proposals. This should make it much easier to compare each vendor and decide which one will provide the best fit for the organization. Diff: 2 Page Ref: 174

82) What are the different skills needed to thoroughly evaluate the various bids from ERP vendors? Answer: Because ERP system bids are so complex and have so many different components, it is important to have a team with a wide variety of skills help to evaluate the bids. Of course, the IT staff will have to help evaluate the technology requirements and how well the bid satisfies them. The end users and office staff will be useful for evaluating the usability and functionality of the proposed system. Specialized knowledge about the pricing and contract conditions will have to come from the corporate contract staff also. Their input should help narrow the choice of vendors down to one or two finalists. Diff: 2 Page Ref: 174 83) What is meant by TCO and how is it used to evaluate ERP system bids? Answer: TCO is short for "Total Cost of Ownership" and this provides a financial framework for comparing different ERP bids and alternative designs. TCO costs include hardware, software, training, and implementing the system. They also include all the cost of maintenance, optimization, and upgrading for a period of two years after the installation. Some claim that this is not a very accurate measure of ERP systems, but it is a helpful input into the ERP selection process. Diff: 3 Page Ref: 174 84) What is contract life cycle management and how is this used in ERP implementations? Answer: Careful management of all the aspects of an ERP contract will increase the chances of a successful ERP implementation. This means that the contract has to clearly identify all the deliverables and their delivery dates. The contract should also make sure that the customer has acceptance authority so that there is less chance for squabbling over unsatisfactory work. The contract should also specify the individuals who are responsible on both sides of the contract and who will have authority to authorize any changes in the contract. Diff: 2 Page Ref: 175...