ERP project are expensive and risky. Why did Keda embark on a ERP implementation project?

Keda Industrial Company Ltd. had a broad product offering ranging from building material processing to
energy resource planning. Keda had also provided plant design solutions and technical consulting services
to its clients. This versatility in Kedas offerings led to low sales volumes with high customization in offerings
and high margins.
Before implementation of ERP, the company had several autonomous business functions like R&D,
inventory management, logistics, marketing etc. The company encouraged an unconventional working
culture where they swiftly adapted to new processes. It had projected itself as a product and business
management innovator. A de-centralized decision making management structure invited duplication of effort
in the company. The company also lacked strategic goals and roadmap towards business function
integration through computerization. The existing MRP-II system lacked support for multi-plant operations
and the maintenance support from the vendor had also ceased.
ERP projects can be justified in terms of cost-effectiveness and business benefits. The business
justification for the project in Kedas case are the following.
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Reduction in costs by removing redundancy in processing tasks and integrating disconnected

business units and thereby enabling faster information flows.
Improved decision making in terms of accurate and timely product cost and profitability
assessment.
Improved material management processes.
Improved assessment of processes in terms of contribution to the business.
Optimized utilization of resources to meet demand and reduction of waste in processes like
production delays.
Gain competitive advantage in terms of managing diversification efforts by supporting multi-plant
operations.
Urgent replacement for the de-commissioned MRP-II system.