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ERP Selection Process: Getting it Right the First Time

CASE STUDY, STRATEGY
ET Cases, 10 pages
AUTHOR(S) : Dr. Arnab Banerjee (Principal Consultant, Enterprise Application Services - Oracle Supply Chain Competency, Infosys Ltd.), Vijay Kumar Dharmadhikari (D.G.M., Nicolas Correa, Pune, Maharashtra, India)

Case Preview

ERP Selection Process: Getting it Right the First Time

 

Sipping a cup of coffee while waiting for his train at Lekhapani railway station, returning from his much deserved week long vacation, Abhay was reflecting on his journey at Enigma System Ltd. (Enigma). It had been good eight years with the company and he had tried his best to ensure that the IT department was focused and drives all critical business operations effortlessly. Thanks to his effort Enigma has always been in the forefront of evolving technologies. His team had evaluated and implemented many a standalone software system for various business purposes. However, many a times, his strategy to go for the best systems in individual departments had created multiple challenges for the IT Department. Not only were the systems sluggish and slow, the data crunching and system responses were showing signs of breakdown. Many a times the system would hang and refuse to move forward. There was always a challenge to hire multiple skill set people to drive numerous technical programs. Many a time hardware system designs and requirement posed a challenge to the departments funds. Only client-based system was also another headache for the department. Abhay was well aware that the biggest challenge for the IT department was that the systems were not linked to each other. This island of systems based on different platforms and operating systems posed multiple challenges to business operations ranging from loss of critical data/information to loss of cross functional data/information. This had its toll on many of management decisions as well as daily operations. The business intelligence was far from correct to make high cost decisions and often leading to big errors and in turn losses to Enigma.......

The Need for ERP – An Executive Decision

The next day Abhay spent the forenoon clearing his mails and issues requiring his immediate attention owing to his long absence. Abhay was constantly getting disturbed with his thoughts about how to decide on the right ERP for Enigma. Suddenly, Abhay saw the meeting request for the routine Head of Departments meeting next day afternoon. Abhay immediately sprang into action. Firstly, he requested an extension of the meeting by an hour and secondly, he started preparing some presentation to give shape to his thoughts and ideas. The meeting extension was accepted and so began the long journey of transformation..........

Team Selection

Abhay did a thorough study and formed a core team who would actually partner with the consultants of the consulting firm. He selected representatives from all areas of business which would be affected by the new ERP system. He carefully selected members who were respected by their peer. The core team was a blend of company veterans and rookies as these members were the key who would drive requirements of business..............

Deciding the Type of ERP

After a lot of negotiations and due diligence Gail and Company was selected. Dr. Kumar was the Lead Consultant along with his team selected to implement ERP at Enigma.

One of the first tasks for Dr. Kumar was to decide whether to go for an in-house ERP or a packaged ERP. The consulting partner did an analysis on numerous points and came up with their recommendations. Abhay presented the analysis to the steering committee as shown in Exhibit I. The six main criteria considered by Dr. Kumar’s team were: ..............

Evaluating and Deciding on the Standard ERP Software Selection

Abhay started the new phase of the journey with a meeting with Dr. Kumar and his team and understanding the next set of actions. Abhay being the Project Manager and also a stakeholder in the entire transformation program wanted a clear understanding of steps so as to be better prepared. Based on their discussion with the team Dr. Kumar and Abhay came up with the roadmap for the standard ERP selection process as shown in Exhibit II. The plan as presented in Exhibit II though was going to take some time to execute. Abhay presented the plan as in Exhibit II to the steering committee who agreed for the execution of the plan with a caveat. The steering committee wanted the team to be explicitly identified who will be responsible for each task with a brief what is going to be achieved in that step................

Exhibits

Exhibit I: Analysing the Situation for ERP Selection Decision for Enigma

Exhibit II: Standard ERP Selection Process Flow

Exhibit III: Standard ERP Selection Process Flow Presented at the Meeting

Exhibit IV: Representative List of Business Process Flow

Exhibit V: Cost along the ERP Life Cycle

Exhibit VI: Representative Figures of Various Analyst Rankings, Market Shares Results Considered for Decision making

Teaching Note Preview

ERP Selection Process: Getting it Right the First Time

 

Synopsis

The case study demonstrates the detailed steps and finer points of selecting Enterprise Resource Planning (ERP) software which transforms the business transactions of the company enabled through Information Technology. The protagonist of the case study is the IT Director, Abhay Kishore, of Enigma Systems Ltd., tasked to head a team for selecting the right ERP for the business. The case study highlights the current pain point of the company operations and demonstrates the decisionmaking process for ERP selection along with all the considerations. The case study touches upon the key aspects like that of need for ERP, core team formation and deciding on the type of ERP. The case study gives the ground reality of the struggles faced by the team while going through the process of selection and evaluation for fitment of an ERP system. ERP system is not only a far sighted strategic investment for the company it also impacts every business processes from Finance, Supply Chain, Distribution, Purchasing, Inventory, Manufacturing, Customer service to HR departments and its employees. The case study highlights the various aspects, consideration and processes that can help ascertain the best fit ERP. The case study also highlights the challenges faced by IT and core ERP selection team in its pursuit for the right fit ERP for its processes.

Case Objective

This case study gives the students/participants an opportunity to think about the problems faced for selecting an ERP for its business operations. The case study highlights the issues faced by the managers and the strategies adopted to solve them. The key objective of the case study is to help students understand the complexity of ERP selection process. It is important for students to understand the difference between regular software which touches upon single processes or at max couple of processes with that of ERP which impacts a number of business processes together.............

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Abstract


The case study demonstrates the detailed steps of selecting Enterprise Resource Planning (ERP) software which transforms the business transactions of a company, Enigma Systems Ltd., enabled by information Technology. The protagonist of the case study, IT Director, Abhay Kishore, heads the team for selecting the right ERP for the business at Enigma. The case study highlights the pain point of the company operations and demonstrates the decision-making process for ERP selection along with all the considerations. The case study touches upon the key aspects like that of need for ERP, core team formation and deciding the apt ERP. The case study also gives the ground reality of the struggles faced by the team in process of selection and evaluation for fitment of an ERP system. ERP system is not only a farsighted strategic investment for the company it also impacts every business process from Finance, Supply Chain, Distribution, Purchasing, Inventory, Manufacturing, Customer service to HR Departments and its employees. The case study highlights the various aspects, considerations and processes that can help ascertain the best fit ERP. The case study also highlights the challenges faced by IT and core ERP selection team in its pursuit for the right fit ERP for its processes.



Pedagogical Objectives

  • To frame strategies for successful Evaluation of ERP system in Enigma Systems Ltd.
  • To understand the steps involved in the ERP selection process
  • To arrive at the resource and project needs for a typical ERP selection project

Case Positioning and Setting

  • Strategic Management
  • Operations Management
  • Technology Management



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