Arise Ltd. is manufacturing several types of computer components and is having its branches throughout the globe. The company wants to centralise and consolidate the information flowing in from its branches in a uniform

CS Professional · Information Technology and Systems Audit · PYQS · December 2015
Arise Ltd. is manufacturing several types of computer components and is having its branches throughout the globe. The company wants to centralise and consolidate the information flowing in from its branches in a uniform manner across various levels of the organisation. Each factory and branch is using different software and varied platforms which do not communicate with each other. Also, there is no retention of electronic records in a common server. This results in large duplication of data. So, the company has decided to implement an ERP system to take care of all these issues. In light of the above, answer the following: Discuss various factors which are to be considered while deciding about purchase of the ERP system from a third party.

Answer & Explanation:

Comparing the implementation cost: Implementing Enterprise Resource Planning (ERP) involves high cost, thus, comparing the cost involved in in-house implementation of ERP vis-à-vis outsourcing the same to the third party is significant. Critical Success Factor of the Vendor and ERP: Some ERP vendors began by developing manufacturing software; others entered the field via a robust human resources package, or a data warehouse solution. Thus, understanding business needs and product's relative strengths is essential for better selection. Functional Specifications & Customizations: The ERP must suit the needs of the business. Further, the vendor should be ready to customize the same to fit the needs of the business as far as possible. Vendor's track record: The track record of the vendor is also an important factor as the ERP solution and the vendor should come with a pedigree of successful implementations in the similar industry. Support Capabilities: Be sure to evaluate the company's customer-support capabilities. The company must find out whether the vendor offers 24/7 customer support, international support, and a Web-based help desk along with post implementation support. Flexibility: ERP is a long-range investment. A flexible system will grow with the company, accommodating new specifications as they emerge. Flexibility is also crucial in the implementation phase, to ensure that the program can be aligned with existing business needs and achieve integration. Time to Implement: Implementation can be a daunting prospect when company-wide integration is at stake. Check the rollout time proposed by the vendor. An efficient rollout minimizes the costs and disruption associated with conversion. A speedy, vendor-supported implementation process also promotes user buy-in and a faster return on investment.

Topics: Enterprise Resource Planning (ERP)

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