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ACCA Applied Skills · Performance Management · Management information systems

A manufacturer is replacing separate departmental systems for production, sales, purchasing and finance with a single enterprise resource planning (ERP) system. Which of the following is the most significant benefit of an ERP system compared with the separate systems?

The key benefit of an ERP system is that all functions share one central database, so data is entered once and is consistent across departments. This improves integration and information quality. It does not remove the need for controls and is usually costly and disruptive to implement.

  1. AData is entered once into a shared central database, so information is consistent across all functionsCorrect
  2. BStaff in each department can keep their own versions of data, tailored to local needs
  3. CImplementation is normally quick and requires little change to existing business processes
  4. DThe system removes the need for any internal controls over data input

Explanation

An ERP integrates functions around a single shared database, so data is entered once and is consistent across departments. The other options are wrong: ERP typically requires significant process change and a long implementation, and controls remain necessary. Separate local data versions are the problem ERP removes.

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