ERP Management 5 — Questions and Answers
Question 1: What is 'hypercare' in ERP project management?
- An intensive support period immediately after go-live with extra resources on standby (Correct answer)
- A pre-implementation health check of existing IT infrastructure
- A premium support tier purchased from the ERP vendor
- An emergency shutdown procedure for critical ERP failures
Correct answer: An intensive support period immediately after go-live with extra resources on standby
Hypercare is the post-go-live phase where the full project team remains available to rapidly resolve issues before transitioning to steady-state support.
Question 2: In ERP management, what does 'total cost of ownership' (TCO) include beyond the initial software license?
- Only hardware and infrastructure costs
- Implementation, training, customization, maintenance, and upgrade costs over the system's lifetime (Correct answer)
- Annual support fees paid to the vendor only
- The cost of data migration and go-live activities only
Correct answer: Implementation, training, customization, maintenance, and upgrade costs over the system's lifetime
TCO encompasses all costs over the ERP system's life, including hidden costs like ongoing customization, upgrades, and internal staff time.
Question 3: Which ERP management technique assigns overhead costs to products based on the activities that consume resources?
- Standard costing
- Activity-based costing (ABC) (Correct answer)
- Absorption costing
- Variable costing
Correct answer: Activity-based costing (ABC)
Activity-based costing identifies cost drivers for each activity and allocates overhead proportionally, giving more accurate product profitability data.
Question 4: What is the purpose of an 'ERP center of excellence' (CoE)?
- A dedicated team that manages ERP upgrades, best practices, and continuous improvement across the organization (Correct answer)
- A physical training facility for new ERP users
- A vendor certification program for ERP implementation partners
- A committee that approves new ERP module purchases
Correct answer: A dedicated team that manages ERP upgrades, best practices, and continuous improvement across the organization
A CoE centralizes ERP expertise to standardize processes, govern configurations, drive adoption, and deliver ongoing value after go-live.
Question 5: In ERP supply chain management, what is 'safety stock' designed to protect against?
- Theft and shrinkage in the warehouse
- Unexpected demand spikes or supply delays (Correct answer)
- Damage during transportation
- Excess inventory write-downs
Correct answer: Unexpected demand spikes or supply delays
Safety stock is buffer inventory held to prevent stockouts caused by demand variability or supplier lead time uncertainty.
Question 6: Which management concept in ERP describes the practice of continuously reviewing and improving business processes after go-live?
- Business process reengineering (BPR)
- Continuous improvement (CI) (Correct answer)
- System integration testing
- Post-implementation review (PIR)
Correct answer: Continuous improvement (CI)
Continuous improvement is an ongoing effort to incrementally enhance ERP-supported processes using data, user feedback, and best practices.
Question 7: What is 'parallel running' in the context of ERP go-live management?
- Running multiple ERP instances simultaneously for load balancing
- Operating both the old and new system concurrently to validate results before full cutover (Correct answer)
- Executing batch jobs in parallel to speed up processing
- Migrating data in parallel streams to reduce downtime
Correct answer: Operating both the old and new system concurrently to validate results before full cutover
Parallel running mitigates go-live risk by letting users compare outputs from the legacy and new ERP systems until confidence in the new system is established.
ERP Management 5
What is 'hypercare' in ERP project management?