OIM 452 EXAM QUESTIONS AND
ANSWERS ALL CORRECT
1. Describe the functional organizational structure. Why do you think this structure is so
common? - Answer-The functional organization structure is divided into functions, or
departments, each of which is responsible for a set of closely related activities. This
type of organizational structure is widely used because it spreads the responsibility
across an organization instead of locating it in one particular person or group. In
addition, it enables people to specialize in terms of skills and knowledge.
2. What is the silo effect? Why does it exist? How can an organization reduce or
eliminate the silo effect? - Answer-The silo effect refers to an organizational structure in
which workers complete their tasks in their functional "silos" without regard to the
consequences for the other functions in the process. This situation exists because each
department within a functional organization works independently and focuses on its
objectives. This tendency can be reduced by thinking sideways or viewing the business
across functional boundaries and focusing on the end-to-end nature of the process and
its intended outcomes.
3. What is a business processes? Why is a process view of organizations essential to
becoming a successful manager? - Answer-A business process is a set of tasks or
activities that produce desired outcomes. Every process is triggered by some event,
such as receiving a customer order or recognizing the need to purchase something. A
process view can liberate managers from the silo effect. Managers must have a solid
understanding of the processes that their company uses so that they can meet their
company's and customer's satisfaction.
4. Describe the client-server and service-oriented architectures. What are their
advantages and disadvantages? - Answer-Client-server architecture uses three layers
to provide functionality: the presentation layer, application layer, and data layer. It uses
a Web browser or a graphical user interface (GUI) to communicate with the application
layer. In desktop applications all three layers are contained in one system. The shift to
three-tier client-server architecture dramatically reduced the costs of acquiring,
implementing, and using an enterprise system while significantly increasing the
scalability of these systems. Service-oriented architecture allows multiple client server
systems to communicate via new technologies called Web services. SOA also enables
companies to create new applications quickly and inexpensively. In addition, it allows
,them to build composite applications on top of their existing three-tier client-server
applications without changing the underlying applications. The disadvantage is that this
arrangement exposes business processes and data contained in an enterprise system.
5. What is an enterprise system application suite? Describe the capabilities of the
individual components of the application suite. - Answer-The collection of inter-company
systems and an underlying intra-company ERP system is called an application suite.
Suite vendors, such as SAP and Oracle, provide fairly comprehensive collections of
applications that offer an enormous amount of functionality and cover most of the
standard business processes. Supply chain management connects a company to other
companies that supply the materials it needs to make its products. Supply relationship
management systems typically manage the overall relationships with the suppliers.
Customer relationship management systems provide companies with capabilities to
manage marketing, sales, and customer service. Product lifecycle management
systems help companies administer the processes of research, design, and product
management.
6. Briefly explain the three types of data in an enterprise system and how they are
related. - Answer-The three types of data in an enterprise system are organizational
data, master data, and transaction data. Organizational data are used to represent the
structure of an enterprise. Examples of organizational structure are companies,
subsidiaries, factories, warehouses, storage areas, and sales regions. Examples of
organizational data are client, company code, and plant. Master data represent entities
associated with various processes such as selling a product to a customer. Examples of
master data are customers, vendors, and materials. Transaction data reflect the
consequences of executing process steps, or transactions. Examples of transaction
data are dates, quantities, prices, and payment and delivery terms. Transaction data are
a combination of organizational data, master data, and situational data, that is, data that
are specific to the task being executed, such as who, what, when, and where.
7. Explain the relationship between client, company code, and plant in SAP ERP. What
are these typically used to represent? - Answer-A client is the highest organizational
level in SAP ERP. It represents an enterprise consisting of many companies or
subsidiaries. Each company within the enterprise is represented by a company code.
Each company code represents a separate legal entity, and it is the central
organizational element in financial accounting. A plant is an organizational element that
performs multiple functions and is relevant to multiple processes.
8. Why is the material master one of the most complex types of data in an ERP system?
Provide some examples of data in a material master. - Answer-The material master is
one of the most complex types of data in an ERP system because it is used by many
processes and each process uses the material differently. Each process, therefore,
requires data about the material that may or may not be needed by other processes. To
manage these data, the material master groups them into different categories or views,
each of which is relevant to one or more processes. Some of the data that are provided
in the material master are basic data, sales data, and financial accounting data.
, 9. What are material types? Explain the four common material types in SAP ERP. -
Answer-Material types are categories of materials that are based on how the materials
are used in the firm's operations. The four most common material types are raw
materials, semi-finished goods, finished goods, and trading goods. Raw materials are
purchased from a vendor and used in the production process. Semi-finished goods are
typically produced in-house from other materials and are used in the production of a
finished good. Finished goods are created by the production process from other
materials, such as raw materials and semi-finished goods. Trading goods are
purchased from a vendor and resold to customers. The company does not perform any
additional processing of trading goods prior to reselling them.
10. How are transaction data created in an ERP system? - Answer-Transaction data are
a combination of organizational data, master data and situational data. A SAP ERP
system records transaction data using several different types of documents, such as
sales orders and purchase orders. Anytime an activity is performed in the system,
transactions data is created
11. Explain the key organizational data in financial accounting and the relationships
among them. - Answer-The key organizational data in financial accounting are client,
company code and business area. The client is the highest organizational level; it
represents an enterprise that consists of multiple companies. These companies in turn
are represented by company codes. Business areas are internal divisions of an
enterprise that are used to define areas of responsibility or to meet the external
reporting requirements of an enterprise segment. Financial statements are generated
for each business area within the enterprise.
12. What are charts of accounts and the general ledger? How are they related? -
Answer-The general ledger is used to record the financial impacts of business process
steps. It therefore contains much of the data needed for financial reporting. The chart of
accounts is an ordered listing of accounts that comprise a company's general ledger.
13. What are subsidiary ledgers and reconciliation accounts? How are they related? -
Answer-Subsidiary ledgers are accounts that are not directly maintained in the general
ledger; for example, accounts that track the amounts owed to customers and the
payments made for each customer. Reconciliation accounts are general ledger
accounts that consolidate data from a group of related sub-ledger accounts, such as
customers (accounts receivable) and vendors (accounts payable). Data cannot be
posted directly into a reconciliation account. Rather, they must be posted to sub-ledger
accounts, at which point they are automatically posted to the corresponding
reconciliation account.
14. What is an accounting document? What role does it serve? - Answer-An accounting
document (FI document) records the impact (financial data) of a transaction step on
financial accounting.
ANSWERS ALL CORRECT
1. Describe the functional organizational structure. Why do you think this structure is so
common? - Answer-The functional organization structure is divided into functions, or
departments, each of which is responsible for a set of closely related activities. This
type of organizational structure is widely used because it spreads the responsibility
across an organization instead of locating it in one particular person or group. In
addition, it enables people to specialize in terms of skills and knowledge.
2. What is the silo effect? Why does it exist? How can an organization reduce or
eliminate the silo effect? - Answer-The silo effect refers to an organizational structure in
which workers complete their tasks in their functional "silos" without regard to the
consequences for the other functions in the process. This situation exists because each
department within a functional organization works independently and focuses on its
objectives. This tendency can be reduced by thinking sideways or viewing the business
across functional boundaries and focusing on the end-to-end nature of the process and
its intended outcomes.
3. What is a business processes? Why is a process view of organizations essential to
becoming a successful manager? - Answer-A business process is a set of tasks or
activities that produce desired outcomes. Every process is triggered by some event,
such as receiving a customer order or recognizing the need to purchase something. A
process view can liberate managers from the silo effect. Managers must have a solid
understanding of the processes that their company uses so that they can meet their
company's and customer's satisfaction.
4. Describe the client-server and service-oriented architectures. What are their
advantages and disadvantages? - Answer-Client-server architecture uses three layers
to provide functionality: the presentation layer, application layer, and data layer. It uses
a Web browser or a graphical user interface (GUI) to communicate with the application
layer. In desktop applications all three layers are contained in one system. The shift to
three-tier client-server architecture dramatically reduced the costs of acquiring,
implementing, and using an enterprise system while significantly increasing the
scalability of these systems. Service-oriented architecture allows multiple client server
systems to communicate via new technologies called Web services. SOA also enables
companies to create new applications quickly and inexpensively. In addition, it allows
,them to build composite applications on top of their existing three-tier client-server
applications without changing the underlying applications. The disadvantage is that this
arrangement exposes business processes and data contained in an enterprise system.
5. What is an enterprise system application suite? Describe the capabilities of the
individual components of the application suite. - Answer-The collection of inter-company
systems and an underlying intra-company ERP system is called an application suite.
Suite vendors, such as SAP and Oracle, provide fairly comprehensive collections of
applications that offer an enormous amount of functionality and cover most of the
standard business processes. Supply chain management connects a company to other
companies that supply the materials it needs to make its products. Supply relationship
management systems typically manage the overall relationships with the suppliers.
Customer relationship management systems provide companies with capabilities to
manage marketing, sales, and customer service. Product lifecycle management
systems help companies administer the processes of research, design, and product
management.
6. Briefly explain the three types of data in an enterprise system and how they are
related. - Answer-The three types of data in an enterprise system are organizational
data, master data, and transaction data. Organizational data are used to represent the
structure of an enterprise. Examples of organizational structure are companies,
subsidiaries, factories, warehouses, storage areas, and sales regions. Examples of
organizational data are client, company code, and plant. Master data represent entities
associated with various processes such as selling a product to a customer. Examples of
master data are customers, vendors, and materials. Transaction data reflect the
consequences of executing process steps, or transactions. Examples of transaction
data are dates, quantities, prices, and payment and delivery terms. Transaction data are
a combination of organizational data, master data, and situational data, that is, data that
are specific to the task being executed, such as who, what, when, and where.
7. Explain the relationship between client, company code, and plant in SAP ERP. What
are these typically used to represent? - Answer-A client is the highest organizational
level in SAP ERP. It represents an enterprise consisting of many companies or
subsidiaries. Each company within the enterprise is represented by a company code.
Each company code represents a separate legal entity, and it is the central
organizational element in financial accounting. A plant is an organizational element that
performs multiple functions and is relevant to multiple processes.
8. Why is the material master one of the most complex types of data in an ERP system?
Provide some examples of data in a material master. - Answer-The material master is
one of the most complex types of data in an ERP system because it is used by many
processes and each process uses the material differently. Each process, therefore,
requires data about the material that may or may not be needed by other processes. To
manage these data, the material master groups them into different categories or views,
each of which is relevant to one or more processes. Some of the data that are provided
in the material master are basic data, sales data, and financial accounting data.
, 9. What are material types? Explain the four common material types in SAP ERP. -
Answer-Material types are categories of materials that are based on how the materials
are used in the firm's operations. The four most common material types are raw
materials, semi-finished goods, finished goods, and trading goods. Raw materials are
purchased from a vendor and used in the production process. Semi-finished goods are
typically produced in-house from other materials and are used in the production of a
finished good. Finished goods are created by the production process from other
materials, such as raw materials and semi-finished goods. Trading goods are
purchased from a vendor and resold to customers. The company does not perform any
additional processing of trading goods prior to reselling them.
10. How are transaction data created in an ERP system? - Answer-Transaction data are
a combination of organizational data, master data and situational data. A SAP ERP
system records transaction data using several different types of documents, such as
sales orders and purchase orders. Anytime an activity is performed in the system,
transactions data is created
11. Explain the key organizational data in financial accounting and the relationships
among them. - Answer-The key organizational data in financial accounting are client,
company code and business area. The client is the highest organizational level; it
represents an enterprise that consists of multiple companies. These companies in turn
are represented by company codes. Business areas are internal divisions of an
enterprise that are used to define areas of responsibility or to meet the external
reporting requirements of an enterprise segment. Financial statements are generated
for each business area within the enterprise.
12. What are charts of accounts and the general ledger? How are they related? -
Answer-The general ledger is used to record the financial impacts of business process
steps. It therefore contains much of the data needed for financial reporting. The chart of
accounts is an ordered listing of accounts that comprise a company's general ledger.
13. What are subsidiary ledgers and reconciliation accounts? How are they related? -
Answer-Subsidiary ledgers are accounts that are not directly maintained in the general
ledger; for example, accounts that track the amounts owed to customers and the
payments made for each customer. Reconciliation accounts are general ledger
accounts that consolidate data from a group of related sub-ledger accounts, such as
customers (accounts receivable) and vendors (accounts payable). Data cannot be
posted directly into a reconciliation account. Rather, they must be posted to sub-ledger
accounts, at which point they are automatically posted to the corresponding
reconciliation account.
14. What is an accounting document? What role does it serve? - Answer-An accounting
document (FI document) records the impact (financial data) of a transaction step on
financial accounting.
