Question No 1 What is the risk incurred by a functional orga

Question No. 1

What is the risk incurred by a functional organizational structure of an enterprise ?
How such a risk can be escaped? Is there any existing solution for that ?
                  

Question No. 2

Recent enterprise systems combine a collection of intra-company process-based systems and inter-company process-based applications. Explain and illustrate.

Question No. 3

Why is material master one of the most complex types of data in an ERP system?

Question No. 4

How do you explain the common claim that “financial accounting is the “heart” of the enterprise system”?

Question No. 5

What are depreciation areas? Why do firms maintain different depreciation areas?

Solution

Answer to Question number 1:

There are several risks which can be incurred:

1. Internal risk in which any misbehave of employee conducts and the employee may leave the company and share the important details with other company.

Internal risks can be:

Human factor

Technological factors like using outdated machines and tectics may cause failure of projects because of slow speed of production

Physical factors

2. Strategic Risk

In this type of risk the strategy may not work or may skip some scanerio. Such risks are mised opportunities and uncertainities uncertainties. This may possibly due to unsucessful plan execution.

3. External Risks

The outside world and competition provide critical risks like loose the projects.

ERM or Enterprise Risk Management is a possible solution to work upon them. It is process analysis, planning implementation and then testing.

ERM can also be described as an apporach to manage risks that can occur in the normal operations of any enterprise.

Answer to Question 2:

Intra Company process based System:

Profit center is use to represent a complete company inside a company.
Segments is also introduced which is master data in profit center
Document spliting and zero balancing functionality help to balance the interdependent processes in the company

Example :

Stock Exchange Process in company

By planning the stock exchange the company can optimize the process of transfer the products from one site to another.

Inter Company process based applications:

A purchasing unit in the organization places the order for purchasing goods from a plant and the delievering company delivers
the good quality products because the two companie maintains the balance sheets seprately and independently.

Now in this case the internal biling transaction is executed by inter-company process-based applications of billing documents.

Answer to Question Number 3:

It is used in many processes and every process use it in own way more over the process need data regarding the meterial which may be used by othe process or not. So to manage such data the master data should be classed into different views which is the reason the material master is a complex types in data in an ERP System.

Answer to question Number 4:

Any ERP system must have a mechanism to deal with the billing information and other critical issue related to money like leadger of the company annual income reports which can be proved as an essential tool for the company to watch on.

Answer to question number 5:

Depreciation Areas:

Machinery, Financial State Versions etcs

Maintain different depriciation areas is important becasue by doing so the company may come to know which assest value is decreasing day by day