2.

Using the information provided and based on your knowledge of ERP, further expound on the

advantages and disadvantages of the alternatives Ryan identified. Are his assumptions accurate?

Alternative 1: Avail ERP system through Financing program offered by the one of the most popular

and expensive ERP vendors – SAP.

Advantages:

 The company is allowed to pay using flexible payment terms and even postpone their first

payments and maintenance payments up to one year.

 Once purchased, the company’s problem in integration of each department and resource

planning will be solved.

 The data storage will be centralized and will improve the maintenance of data.

 It will make it easier for order tracking, inventory tracking, revenue tracking, accurate sales

forecasting.

Disadvantages:

 The cost it will incur in training the employees, switching of database and maintenance to the

ERP system

 It will take time to familiarize the employees and adapt the new system.

 The cost savings/payback may not be returned immediately after the ERP implementation.
Alternative 2: Module-based implementation of ERP system. Instead of acquiring the complete

ERP system which consists of 11 modules on average, Ryan proposed to purchase one or two

modules at a time to be used in inventory management and logistics and distributions.

Advantages:

 The company will deal with the issue in inventory management and logistics and

distribution. That will be helpful to address the issues that they are having.

 Since it is module-based, the cost it may incur will be lessening than purchasing the

complete system.

 The risk of using the new system is lower.

Disadvantages:

 It will prolong the implementation period that might affect the company’s productivity.

 The cost it will incur for the training of employees.