1. Enterprise Computing Trends and Enterprise Resource Planning
CHAPTER 4
Enterprise Computing Trends and Enterprise Resource Planning
Opening Case:
Shell Canada Fuels Productivity with ERP
CLASSROOM OPENER
GREAT BUSINESS DECISIONS – Warren Buffet Decides to Invest in Berkshire Hathaway
In 1962, Warren Buffett decided to invest in an ailing textile company called Berkshire Hathaway. Today, the company has a market capitalization of $60 billion, and Buffett is recognized as one of the greatest investors of all time.
Buffett believes in focused investing and believes that all investors should look at five features:
The certainty with which the long-term economic characteristics of the business can be evaluated
The certainty with which management can be evaluated, both as to its ability to realize the full potential of the business and to wisely employ its cash flows
The certainty with which management can be counted on to channel the reward from the business to the shareholders rather than to itself
The purchase price of the business
The levels of taxation and inflation that will be experienced and that will determine the degree by which an investor’s purchasing-power return is reduced from his gross return
Overall, Buffett uses information from every source to analyze and evaluate an investment. Without looking at a business from every angle, internally and externally, including customers, partners, and suppliers, it is impossible to gain an accurate assessment of the business. If a person could capture Warren Buffett’s “know how” and put it in a data warehouse, they could make a small fortune.
One of the greatest benefits of an ERP system is helping people understand how the organization is performing from an enterprise perspective. ERP systems provide organizations with information that was previously difficult if not impossible to obtain allowing the organization to perform more efficiently and effectively. Better performance usually means higher profits, which pleases stakeholders and investors.

2. Chapter Four Overview SECTION 4.1 - ENTERPRISE COMPUTING TRENDS
Innovation: Finding New
Social Entrepreneurship: Going Green
Social Networks: Who’s Who
Virtual Worlds: It’s a Whole New World
SECTION 4.2 – ENTERPRISE RESOURCE PLANNING
Enterprise Resource Planning
Core ERP Components
Extended ERP Components
Integrating SCM, CRM, and ERP
Measuring ERP Success
Choosing ERP Software
ERP and SME Markets

3. LEARNING OUTCOMES
Explain what enterprise computing trends are happening in organizations today (e.g. innovation, going green, social networks, and virtual worlds).
Understand enterprise resource planning as a management approach and how information systems can help promote ERP.
Describe the components of ERP systems and the differences between them.
Explain what enterprise computing trends are happening in organizations today (e.g. innovation, going green, social networks, and virtual worlds).
Understand enterprise resource planning as a management approach and how information systems can help promote ERP.
Describe the components of ERP systems and the differences between them.

4. LEARNING OUTCOMES
Explain the business value of integrating supply chain management, customer relationship management, and enterprise resource planning systems together.
Explain how an organization can measure ERP success, choose ERP software, and use ERP in SME markets.
Explain the business value of integrating supply chain management, customer relationship management, and enterprise resource planning systems together.
Explain how an organization can measure ERP success, choose ERP software, and use ERP in SME markets.

5. ENTERPRISE COMPUTING TRENDS
SECTION 4.1
ENTERPRISE COMPUTING TRENDS
CLASSROOM OPENER
GREAT BUSINESS DECISIONS – Warren Buffet Decides to Invest in Berkshire Hathaway
In 1962, Warren Buffett decided to invest in an ailing textile company called Berkshire Hathaway. Today, the company has a market capitalization of $60 billion, and Buffett is recognized as one of the greatest investors of all time.
Buffett believes in focused investing and believes that all investors should look at five features:
The certainty with which the long-term economic characteristics of the business can be evaluated
The certainty with which management can be evaluated, both as to its ability to realize the full potential of the business and to wisely employ its cash flows
The certainty with which management can be counted on to channel the reward from the business to the shareholders rather than to itself
The purchase price of the business
The levels of taxation and inflation that will be experienced and that will determine the degree by which an investor’s purchasing-power return is reduced from his gross return
Overall, Buffett uses information from every source to analyze and evaluate an investment. Without looking at a business from every angle, internally and externally, including customers, partners, and suppliers, it is impossible to gain an accurate assessment of the business. If a person could capture Warren Buffett’s “know how” and put it in a data warehouse, they could make a small fortune.
One of the greatest benefits of an ERP system is helping people understand how the organization is performing from an enterprise perspective. ERP systems provide organizations with information that was previously difficult if not impossible to obtain allowing the organization to perform more efficiently and effectively. Better performance usually means higher profits, which pleases stakeholders and investors.

6. INNOVATION: FINDING NEW
Six Best Practices of Innovation
This figure illustrates the six best practices of innovation:
Find your relevant edge
Assemble innovation hothouses
Reward risk takers
Celebrate diversity
Look around
Mix practitioners and developers

7. Energy Consumption
Breakdown of Power Usage in The Typical Data Centre

8. Recycle IT Equipment
Some Provincial E-Waste Recycling Programs

9. Greener IT Ways To Go Green
Figure 4.4 displays the current ways companies are choosing to go green.

10. SOCIAL NETWORKS: WHO’S WHO
Organizational Social Networking
Figure 4.5 displays three types of social networking an organization can implement:
Passive search
Boomerangs
Marketing networks

11. VIRTUAL WORLDS: IT’S A WHOLE NEW WORLD
Virtual is the theme of Web 2.0.
The two primary types of virtual must be considered when looking at the 21st century world are:
Virtual worlds
Virtual workforces
CLASSROOM EXERCISE
Designing a Digital Dashboard for an ERP System
Digital dashboards offer an effective and efficient way to view enterprise-wide information at near real-time. According to Nucleus Research, there is a direct correlation between use of digital dashboards and a company’s’ return on investment (ROI), hence all executives should be using or pushing the development of digital dashboards to monitor and analyze organizational operations.
Break your students into groups and ask them to develop a digital dashboard for an ERP system. Review the digital dashboards in the text. Be sure your students have addressed all of the following in their digital dashboard:
Accounting
Finance
Logistics
Production
Distribution
Manufacturing
Human resources
SCM
CRM

12. OPENING CASE QUESTIONS Shell Canada
How can large organizations like Shell Canada use innovation to fuel productivity?
What advantages are there for Shell Canada to recycle its IT equipment? How could recycling IT equipment be potentially threatening to Shell Canada?
How can large organizations like Shell Canada use innovation to fuel productivity?
Answers will vary but the case does put forward a number of examples where innovation through the ERP has help Shell Canada become more productive. One example of this is just the invoices that come from contractors.
What advantages are there for Shell Canada to recycle its IT equipment? How could recycling IT equipment be potentially threatening to Shell Canada?
Recycling of IT equipment first reduces Shell Canada’s environmental footprint by diverting the old equipment from the waste stream and second much of this equipment finds it way to organization in need of equipment that cannot afford it and this promotes Shell Canada as a good corporate citizen. There is also a potential threat from the equipment not being prepared right during recycling and the potential for the leaking of sensitive information.

13. OPENING CASE QUESTIONS Shell Canada
How could Shell Canada use social networking to boost productivity and increase profits?
How could Shell Canada use virtual worlds such as Second Life to make the company more successful? Give specific examples.
How could Shell Canada use social networking to boost productivity and increase profits?
Answers will vary but should focus on the fact that the new generation of workers already work this way (they use social networking as part of their daily life) and adding it to the workflow would boost productivity by giving employees a familiar way to network within the company.
How could Shell Canada use virtual worlds such as Second Life to make the company more successful? Give specific examples.
Answers will vary but the answers and examples should relate to Shell Canada’s core business opportunities which are upstream oil and gas exploration, refining, and service stations.

14. ENTERPRISE RESOURCE PLANNING
SECTION 4.2
ENTERPRISE RESOURCE PLANNING

15. ENTERPRISE RESOURCE PLANNING
Enterprise resource planning – integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprise-wide decisions by viewing enterprise-wide information on all business operations
This section covers:
Core ERP components
Extended ERP components
ERP benefits
ERP risks
Future of ERP

16. ENTERPRISE RESOURCE PLANNING

17. ENTERPRISE RESOURCE PLANNING
Enterprise Resource Planning System
This figure shows how an ERP system takes data from across the enterprise, consolidates and correlates the data, and generates enterprise-wide organizational reports.

18. ENTERPRISE RESOURCE PLANNING
ERP Integration Data Flow
At the heart of all ERP systems is a database; when a user enters or updates information in one module, it is immediately and automatically updated throughout the entire system
Why do organizations need integrations, if an ERP system contains one database that connects all applications together?
Most organizations operate functional “silos”, and each department typically has its own systems
A company might purchase an ERP and then all of the functional silos would be on one system; however, this doesn’t happen very often in the real world
Most organizations require anywhere from 10 to 100 to 1,000 different systems to run their business
Finding one system that could meet all the needs of an entire organization from billing to sales is almost impossible, “sort of a utopia”
An organization can purchase an ERP and still have other applications running parts of its business (for example, taxation packages) that are not supported, or not supported well, by the ERP system

19. ENTERPRISE RESOURCE PLANNING
ERP Process Flow
ERP automates business processes such as order fulfillment—taking an order from a customer, shipping the purchase, and then billing for it. With an ERP system, when a customer service representative takes an order from a customer, he or she has all the data necessary to complete the order. When one department finishes with the order, it is automatically routed via the ERP system to the next department. To find out where the order is at any point, a user needs only to log in to the ERP system and track the order.
ERP systems automate business processes, for example, order fulfillment
When a Customer Service Representative (CSR) takes an order from a customer, he or she has all the information necessary to complete the order (the customer’s credit rating and order history, the company’s inventory levels, and the delivery schedule)
Since the company is using an ERP, everyone else in the company will automatically see the information that the CSR types into the ERP system
When one department finishes with the order, it is automatically routed via the ERP system to the next department
To determine where an order is at any point in time, a user only needs to login to the ERP system and track it down

20. ENTERPRISE RESOURCE PLANNING
The organization before ERP
Figures 4.13 and 4.14 give the “before” and “after” views.

21. ENTERPRISE RESOURCE PLANNING
The organization after ERP

22. CORE AND EXTENDED ERP COMPONENTS
The Evolution of ERP
Core ERP components – traditional components included in most ERP systems and they primarily focus on internal operations
Extended ERP components – extra components that meet the organizational needs not covered by the core components and primarily focus on external operations
CLASSROOM EXERCISE
Analyzing ERP Components
Break your students into groups and ask them to provide an analysis of Figure 6.14, the enterprise resource planning vendor components. Ask your students to analyze the different components and from this brief description rank the vendors from the vendor that offers the greatest business intelligence and strategic advantage to the vendor that offers the least business intelligence and strategic advantage.

23. CORE AND EXTENDED ERP COMPONENTS
Review the Turner Industries example
Turner Industries grew from $300 million in sales to $800 million in sales in less than 10 years thanks to the implementation of an ERP system. Ranked number 369 on the Forbes 500 list of privately held companies, Turner Industries is a leading industrial services firm. Turner Industries develops and deploys advanced software applications designed to maximize the productivity of its 25,000 employees and construction equipment valued at more than $115 million.
Core ERP components – traditional components included in most ERP systems and they primarily focus on internal operations
Extended ERP components – extra components that meet the organizational needs not covered by the core components and primarily focus on external operations
CLASSROOM EXERCISE
Analyzing ERP Components
Break your students into groups and ask them to provide an analysis of Figure 4.16, the enterprise resource planning vendor components. Ask your students to analyze the different components and from this brief description rank the vendors from the vendor that offers the greatest business intelligence and strategic advantage to the vendor that offers the least business intelligence and strategic advantage.

24. CORE AND EXTENDED ERP COMPONENTS
Core ERP component – traditional components included in most ERP systems and they primarily focus on internal operations
Extended ERP component – extra components that meet the organizational needs not covered by the core components and primarily focus on external operations

25. CORE ERP COMPONENTS Three most common core ERP components
Accounting and finance
Production and materials management
Human resource
Accounting and finance components – manage accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management
Production and materials management components – handle the various aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control
Human resource components – track employee information including payroll, benefits, compensation, performance assessment, and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities

26. Accounting and Finance ERP Components
Accounting and finance ERP component – manages accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management
Discuss the Harley-Davidson example (page 162)
Deeley Harley-Davidson Canada (DHDC), the exclusive Canadian distributor of Harley-Davidson motorcycles, has improved inventory, turnaround time, margins, and customer satisfaction—all with the implementation of a financial ERP system. The system has opened up the power of information to the company and is helping it make strategic decisions when it still has the time to change things. The ERP system provides the company with ways to manage inventory, turnaround time, and utilize warehouse space more effectively.
Credit-management feature set limits on how much a customer can owe at any time
Product profitability analysis feature allows companies to perform all types of advanced profitability modeling techniques

27. Production and Materials Management ERP Components
Production and materials management ERP component – handles the various aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control
Discuss the Grupo Farmanova Intermed example
Grupo Farmanova Intermed, located in Costa Rica, is a pharmaceutical marketing and distribution company that markets nearly 2,500 products to approximately 500 customers in Central and South America. The company identified a need for software that could unify product logistics management in a single country. It decided to deploy PeopleSoft financial and distribution ERP components allowing the company to improve customer data management, increase confidence among internal and external users, and coordinate the logistics of inventory. With the new PeopleSoft software the company enhanced its capabilities for handling, distributing, and marketing its pharmaceuticals.

28. Production and Materials Management ERP Components
This figure displays the typical ERP production planning process. The process begins with forecasting sales in order to plan operations. A detailed production schedule is developed if the product is produced, and a materials requirement plan is completed in the product is purchased.

29. Human Resource ERP Component
Human resource ERP component – tracks employee information including payroll, benefits, compensation, performance assessment, and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities
Features include the ability to perform a detailed employee analysis to discover who is likely to leave the company unless additional compensation or benefits are provided
Can also identify employee resource utilization such as employee long distance bills and online training

30. EXTENDED ERP COMPONENTS
Extended ERP components include:
Business intelligence
Customer relationship management
Supply chain management
E-business
Depending on when you cover this material, these terms may or may not need to be reviewed (since the students have already learned about BI, CRM, and SCM)
If you do want to review – simply cut and paste the definitions into the slide above
Business intelligence – describes information that people use to support their decision-making efforts
Customer relationship management – involves managing all aspects of a customer’s relationships with an organization to increase customer loyalty and retention and an organization's profitability
Supply chain management – involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability
E-business – means conducting business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners

31. E-Business Components
E-business components include e-logistics and e-procurement
E-logistics – manages the transportation and storage of goods
E-procurement – the business-to-business (B2B) purchase and sale of supplies and services over the Internet
The original focus of ERP systems was the internal organization
In other words, ERP systems are not fundamentally ready for the external world of e-business
The newest and most exciting extended ERP components are the e-business components e-logistics and e-procurement

32. INTEGRATING SCM, CRM, AND ERP
SCM Market Overview
The leaders and their respective market share are displayed in the above figures

33. INTEGRATING SCM, CRM, AND ERP
CRM Market Overview
The leaders and their respective market share are displayed in the above figures

34. INTEGRATING SCM, CRM, AND ERP
Primary Users and Business Benefits of Strategic Initiatives
This figure displays the primary users of each application along with the primary business benefit gained

35. Integration Tools
Many companies purchase modules from an ERP vendor, an SCM vendor, and a CRM vendor and must integrate the different modules together
Middleware – several different types of software which sit in the middle of and provide connectivity between two or more software applications
Enterprise application integration (EAI) middleware – packages together commonly used functionality which reduced the time necessary to develop solutions that integrate applications from multiple vendors
One of the big selling points of an ERP or SCM system can be the EAI that is offered to easily integrate with other vendors’ modules
For example, if a company is looking at purchasing Siebel CRM and they find out the Siebel has already built many integrations to PeopleSoft financials, it would be more inclined to purchase the product

36. INTEGRATING SCM, CRM, AND ERP
Integrations Between SCM, CRM, and ERP Applications
Companies run on interdependent applications
If one application of the company does not function well, the entire customer value delivery system is affected
The world-class enterprises of tomorrow must be built on the function of world-class applications implemented today

37. THE CONNECTED CORPORATION
SCM, CRM, and ERP are the backbone of e-business
Integration of these applications is the key to success for many companies
Integration allows the unlocking of information to make it available to any user, anywhere, anytime
It might be a bit confusing to your student that many ERP vendors offer SCM and CRM components
Explain to your students that these modules are typically not as functional or flexible as the modules offered by industry leaders who specialize in SCM and CRM
A good analogy is to brand-name foods at a grocery store
A grocery store, such as A&P, maintains all types of products
A&P offers its own products, such as spaghetti sauce and paper towels (these are known as name brand products and usually offer a cost advantage)
The store also carries products that are specific to a manufacturer, such as Ragu’s spaghetti sauce and Bounty’s paper towels
Customers can choose to buy A&P’s product (this is similar to product supplied by the ERP), or customers can choose to buy a specialty product that is usually more expensive but offers better quality, additional features, and better taste (such as Ragu)
Explain to your students that ERP vendors carry SCM and CRM components, but they are usually not as good as the vendors that specialize in SCM and CRM components (Siebel CRM, i2 SCM)

38. MEASURING ERP SUCCESS
Balanced scorecard is a management system, in addition to a measurement system, that enables organizations to clarify their vision and strategy and translate them into action.

39. MEASURING ERP SUCCESS
The Four Primary Perspectives of the Balanced Scorecard

40. CHOOSING ERP SOFTWARE Successful ERP projects share 3 attributes
Overall fit
Off the rack
Off the rack and tailored to fit
Custom made
Proper business analysis
Successful companies spend up to 10 percent of the project budget on a business analysis
Solid implementation plans
A plan is needed to monitor the quality, objectives, and timelines
Overall fit
This refers to the degree of gaps that exist between the system and the business process. A well-fitting ERP has no major process gaps and very few minor ones
Proper business analysis
The best way to determine which fit strategy is right is to conduct a thorough business analysis. Successful companies normally spend up to 10 percent of the project budget on a business analysis. A proper analysis must result in a documented list of the business processes at work within the company. This will provide a basic tool that can measure vendor capability.
Solid implementation plans
As with the installation of any successful process or machinery, a plan is needed to monitor the quality, objectives, and timelines. The plan will also employ processes such as workflow analysis and job combination to harvest savings. A thorough implementation will transfer knowledge to system users. When the project is complete, employees must be capable of using the tools the new system provides. The users must also know what to do in cases when the process fluctuates. Most failed systems result from poor quality implementation. ERP is simply a tool
Tools that people do not know how to use can be as useless as having no tools at all
Which of the three basic attributes is most important when considering an ERP purchase?
All are important; depending on the project, the level of importance might change

41. ERP AND SME MARKETS
ERP is no longer the purview of large organizations.
In the hopes of expanding their client base, many large-scale ERP vendors, such as SAP and Oracle, are attempting to enter the small to medium enterprise (SME) market
Discuss how the SME markets differ from the large-scale markets.

42. OPENING CASE QUESTIONS Shell Canada
How did ERP help improve business operations at Shell Canada?
How important was training in helping roll out the system to Shell Canada personnel?
How could extended ERP components help improve business operations at Shell Canada?
What advice would you give Shell Canada?
How did ERP help improve business operations at Shell Canada?
ERP systems at Shell Canada help the company integrate and manage its daily operations that span from production (wells and mines) and processing (processing plants) to logistics and accounting (scheduling oil trucks and managing retail gas pumps)
For example, the ERP system has helped the company’s production process by reducing and streamlining the previously highly manual process of third-party contractors submitting repair information and invoices.
How important was training in helping roll out the system to Shell Canada personnel?
Employee training was important for two reasons. First, it increased employees’ acceptance of the ERP and second, it increased their intentions to continue using the system on a daily basis
How could extended ERP components help improve business operations at Shell Canada?
Answers will vary by student. One key point to focus on is that using extended ERP components (Business intelligence, Customer relationship management, Supply chain management, E-business) requires coordination between systems so ideas that combine operational tasks with CRM, SCM or E-business tasks should be mentioned.

43. CLOSING CASE ONE Confusing Carbon
How can companies help reduce carbon emissions?
How can finding alternative energy sources help reduce IT energy consumption?
How can labelling IT equipment green help promote green initiatives?
Why do global organizations need to be concerned with green or social entrepreneurship initiatives?
What ethical issues are associated with green technology?
How can companies help reduce carbon emissions?
Answers will vary but the key components are that are a focus on not only energy reduction but the sources of energy to less carbon intensive form of energy. Ideas range from more fuel efficient fleets to less transportation in the supply chain.
How can alternative energy sources help reduce IT energy consumption?
Alternative energy sources do not reduce IT energy consumption but can help reduce the carbon footprint of IT energy consumption.
How can labelling IT equipment help promote green initiatives?
Answers here will vary but the key idea is that it might make consumers more aware of the environmental impact of the IT equipment.
Why do global organizations need to be concerned with green or social entrepreneurship initiatives?
There are numerous of these initiatives around and the major concern for global organizations is that the key that most of these organizations work with is being local, like the idea of eating food produced in a 160 kilometre radius of your home or supporting local producers since the impacts on the environment of transportation is reduced significantly.
What ethical issues are associated with green technology?
Answers will vary but the biggest ethical issue is whether or not it is actually green, there are some many factors in the determination of a “green” product that is it very difficult to proclaim something as “green”.

44. CLOSING CASE TWO Campus ERP
How could core ERP components help improve business operations at your school?
How could extended ERP components help improve business operations at your school?
How can integrating SCM, CRM, and ERP help improve business operations at your school?
What lessons can be learned from this case in terms of dealing with the challenges of implementing an ERP information system at your school?
1. How could core ERP components help improve business operations at your school?
Core ERP components include the traditional components included in most ERP systems and they primarily focus on internal operations. Student answers to this question will vary. The important part of their answer will be their justification for why the ERP components will help improve business operations at your school.
2. How could extended ERP components help improve business operations at your school?
Extended ERP components include the extra components that meet the organizational needs not covered by the core components and primarily focus on external operations.
Business intelligence – describes information that people use to support their decision-making efforts
Customer relationship management – involves managing all aspects of a customer’s relationships with an organization to increase customer loyalty and retention and an organization's profitability
Supply chain management – involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability
E-business – means conducting business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners
Student answers to this question will vary. The important part of their answer will be their justification for why the component will add value to your school.
3. How can integrating SCM, CRM, and ERP help improve business operations at your school?
Most organizations piecemeal their applications together since no one vendor can respond to every organization’s needs; hence, customers purchase multiple applications from multiple vendors. For example, a single organization might choose its CRM components from Siebel, SCM from i2, financial from Oracle, and human resources from PeopleSoft. These applications must be integrated in order to gain an enterprise-wide view of the information.
Integrating SCM, CRM, and ERP will give a 360 degree view of information. Being able to see all student, supplier, partner, etc. information in a single place will help the university operate more efficiently and effectively.
4. What lessons can be learned from this case in terms of dealing with the challenges of implementing an ERP information system at your school?

45. CLOSING CASE THREE Intuitive ERP
How well do the components of the Intuitive ERP software product align with the ERP components described in this chapter?
What advantages did Fibre Connections and Westwinn Group Corp. realize with the introduction of Intuitive ERP? How well do these advantages resonate with the benefits of ERP described in this chapter?
How well do the components of the Intuitive ERP software product align with the ERP components described in this chapter?
The Intuitive ERP components align closely with the components, core and extended, described in this chapter. Fewer details are available about the accounting components other than indicating financial business processes but students should be able to recognize that Intuitive provides a full-feature ERP system.
What advantages did Fibre Connections and Westwinn Group Corp. realize with the introduction of Intuitive ERP? How well do these advantages resonate with the benefi ts of ERP described in this chapter?
Advantages:
Labour costs:
they saved over 250 hours per month of employee time by eliminating duplicate data entry
they doubled production without adding more administrative staff to handle the volume.
Inventory costs:
they saw an instant increase in order and inventory accuracy; they managed to reduce inventory stockouts to almost zero
they saw improved accuracy in their bills of materials and shop picklists
Accounting costs:
they were able to know exactly what to purchase and when
HR costs:
they were able to cross-train staff more easily since everyone used the same system

46. CLOSING CASE THREE Intuitive ERP
The successful implementation of Intuitive ERP described above does not speak of any negative outcomes or drawbacks of introducing a new enterprise-wide information system in an organization.
What challenges do you envision would occur in a company that decides to introduce such large-scale change? What drawbacks, if any, are there in adopting a software solution from a single vendor that serves such a critical and important role in an organization? How could one mitigate or lessen these drawbacks?
3. What challenges do you envision would occur in a company that decides to introduce such large-scale change? What drawbacks, if any, are there in adopting a software solution from a single vendor that serves such a critical and important role in an organization? How could one mitigate or lessen these drawbacks?
Answers will vary.
Some key points:
Large scale change, attempted all at once, is exceedingly risky. The modular nature or ERP systems makes it easier for businesses to implement an ERP incrementally to reduce risks.
The risk in adopting software from a single vendor is that the organization loses flexibility in making changes in the future if the vendor goes out of business or decides to drastically increase prices.
These risks are hard to avoid! They can be mitigated somewhat by using software from more than one vendor, but this increases training, customization, and coordination costs. (Figure 6.9 lists other risks)