Question

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. 2. Describe the components of TCO and why it is difficult to use in comparing ERP systems. 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.

Answer 1

Answer:

Welchs’ food has chosen their ERP selection between SAP and Oracle.  Although they have already decided which vendor they will use, they used this opportunity to get a lower price as both vendors are interested in the business by getting both vendors 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.

Explanation:

The total cost of ownership (TCO) is the total cost of implementing an ERP system from purchase to ongoing support or maintenance.  

It is difficult to use TCO in comparing ERPY systems because its accuracy in ERP systems have been marginal.  It is also because different vendors use different platforms, some of them uses a powerful hardware and software to provide the service and some vendors use a standard platform to be able to meet the organizations’ requirements.  It is worth to include this in the selection process.

Defined functional requirements is beneficial in selection of an ERP system even if a part is not required because it will clearly show what functions and system specifications are required and how it matches the organization current process.