Review Questions:

1. What are the steps in purchasing an ERP?

The steps are vendor research and informational gathering, decide on functional requirements and IT

criteria, request information from vendor on features, review information with company's functional

requirements, request bid from vendor, review and Eliminate vendors not suitable, negotiate with

selected vendor on price and functional requirements, come to an agreement and prepare licensing

agreement.

2. Who generally needs to be involved in the ERP selection process and why?

Everyone in the organization needs to be part of ERP implementation. ERP implementation affects

everyone and by keeping an open line of communication it will help everything run as smooth as it can

possible.

3. What are the key components in the contract negotiation and licensing?

The key components in contract negotiation are to evaluate the company's functional requirement and

financial resources with the vendor's features and price. Then formulate a plan to make a successful ERP

implementation.

4. Why is it important in the request for bid process to make the vendors reply in a specified

format?

By formatting the request for bid the vendor understands directly what the company wants and needs

for ERP implementation. They also understand the who, what, why, and when of the selection process.

5. Why is communication important in this phase?

Communication is important because vendor selection involves negotiation and informational gathering.

Without communication there is no way ERP system implementation will work. Without clear

communication the vendor can mis-interpret requirements and not provide the client with the business

process software to meet their needs.

6. What is the difference between an RFI and RFB?

RFI is a formal request of information made by a company to a vendor. The information should include

both the vendor's features and the compatibility of these features with user requirements. RFB is a

formal request of bid which explains who, what, where, when, and how a vendor will be selected and

the ERP system will be implemented.

7. What are the benefits of a bidding process to purchase an ERP?

The bidding process allows vendors to compete for the best price, producing a more affordable ERP

system implementation and more flexible vendor to the functional requirements of the company.

Discussions Questions:

1. As Welch’s Foods narrowed down the vendors in their quest to purchase an ERP, discuss the

steps Welch’s Foods took to get the best price.

Welch’s’ food have narrowed down their ERP selection between SAP and Oracle. Although they have

already decided which vendor they will use, they used the opportunity to get a discounted price as both

vendors wanted the business by getting both vendor into a bidding war. At the end, they have chosen

Oracle not just because of the discounted price but also the functionality, ease of implementation and

flexibility.

2. Describe the components of TCO and why it is difficult to use in comparing ERP systems.
Total cost of ownership (TCO) is the total cost of implementing an ERP system from purchase to ongoing

support or maintenance. It includes identifying and researching all aspects of a package that the vendor

is selling as well as the platform that the hardware and software uses. This information can be obtained

through the use of internet. It is difficult to use TCO in comparing ERP systems because its accuracy in

ERP systems have been marginal. In my opinion it is also because different vendor uses different

platforms, some of them uses a powerful hardware and software to provide the service and some

vendor use a standard platform to be able to meet the organizations requirements. It is worthwhile to

include this in the selection process

3. Defined and documented functional requirements are a part of the bid process. Discuss why this

would be beneficial in the selection of an ERP system even if a bid is not required.

Defined and documented functional requirements is beneficial in selection of an ERP system even if a

bid is not required because it will clearly show what functions and system specifications are required

and how it matches the organizations current process. It will also match what ERP systems are out there

in the market. It will also keep organization on track of what is required and what is not. For example, if

an organization does not have a clear functional requirements, it might missed some of the functions

that the ERP system need to perform or they will end up buying an ERP system too complicated to what

they require. It will be a waste of money and time