ERP Business Processes 2 — Questions and Answers
Question 1: In ERP systems, which business process is responsible for converting a customer purchase order into a delivery and invoice?
- Order-to-Cash (O2C) (Correct answer)
- Procure-to-Pay (P2P)
- Record-to-Report (R2R)
- Plan-to-Produce (P2P)
Correct answer: Order-to-Cash (O2C)
The Order-to-Cash process spans receiving a customer order through fulfillment, invoicing, and collecting payment.
Question 2: A company wants to automate three-way matching in its ERP. Which three documents are compared?
- Purchase order, goods receipt, and vendor invoice (Correct answer)
- Sales order, packing slip, and customer invoice
- Budget request, purchase requisition, and approval form
- Contract, delivery note, and payment voucher
Correct answer: Purchase order, goods receipt, and vendor invoice
Three-way matching compares the purchase order, goods receipt, and vendor invoice to validate payment accuracy.
Question 3: Which ERP module typically manages the routing and work center assignments used during manufacturing execution?
- Production Planning (PP) (Correct answer)
- Materials Management (MM)
- Sales and Distribution (SD)
- Financial Accounting (FI)
Correct answer: Production Planning (PP)
The Production Planning module controls routings, work centers, and shop floor execution in manufacturing.
Question 4: What is a 'business blueprint' in the context of an ERP implementation?
- A document capturing how the company's business processes will be configured in the ERP (Correct answer)
- A technical schema of the ERP database tables
- A vendor proposal for licensing costs
- A project timeline created by the IT department
Correct answer: A document capturing how the company's business processes will be configured in the ERP
A business blueprint documents the agreed-upon design of business processes and their configuration in the ERP system.
Question 5: In an ERP environment, 'process integration' between the SD and MM modules is most evident when:
- A sales order triggers a material requirements check and potential replenishment (Correct answer)
- A vendor invoice is matched to a goods receipt
- Payroll costs are posted to cost centers
- Fixed assets are depreciated and posted to the general ledger
Correct answer: A sales order triggers a material requirements check and potential replenishment
When a sales order is created in SD, the ERP checks stock availability in MM and can trigger replenishment, demonstrating cross-module integration.
Question 6: Which key performance indicator (KPI) best measures the efficiency of the Procure-to-Pay process?
- Days Payable Outstanding (DPO) (Correct answer)
- Days Sales Outstanding (DSO)
- Inventory Turnover Rate
- Return on Assets (ROA)
Correct answer: Days Payable Outstanding (DPO)
Days Payable Outstanding measures how long a company takes to pay its suppliers, directly reflecting P2P process efficiency.
Question 7: During an ERP go-live, what does 'parallel running' mean?
- Operating both the legacy system and the new ERP simultaneously to validate outputs (Correct answer)
- Running multiple ERP modules at the same time
- Executing batch jobs in parallel to speed up processing
- Installing ERP on multiple servers at once
Correct answer: Operating both the legacy system and the new ERP simultaneously to validate outputs
Parallel running means keeping the old system active alongside the new ERP so outputs can be compared and validated before full cutover.
ERP Business Processes 2
In ERP systems, which business process is responsible for converting a customer purchase order into a delivery and invoice?