CGEIT Question #230: Real Exam Question with Answer & Explanation

Question

An enterprise is planning to replace multiple enterprise resource planning (ERP) systems at various regions with one company-wide ERP system. The main objective of this change is to achieve economies of scale efficiencies resulting in cost reductions. To meet this objective, what is the BEST approach in the planning phase of the project?

Options

• AImplement an ERP system on shared resources with the lowest cost.
• BMinimize custom zation by standardizing ERP processes across regions.
• CAdopt a b st in breed web-based architecture for the ERP system.
• DUse a ser ice provider to evaluate and implement the new ERP processes.

Explanation

To achieve economies of scale and cost reductions in a company-wide ERP implementation, the best planning approach is to minimize customization by standardizing ERP processes across all regions.

Common mistakes.

• A. Implementing on shared resources with the lowest cost might save some infrastructure costs but doesn't address the fundamental operational efficiencies and cost reductions from process standardization across the business.
• C. Adopting a "best-in-breed" web-based architecture focuses on technology choice rather than the critical process standardization needed for economies of scale and cost reduction in a consolidated ERP.
• D. Using a service provider for evaluation and implementation is a common project management strategy but does not directly address the approach for achieving economies of scale and cost reductions through process design.

Concept tested. ERP implementation strategy, process standardization

Reference. https://learn.microsoft.com/en-us/dynamics365/fin-ops-core/dev-itpro/organization-administration/standardize-processes

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