The ERP program of an enterprise
Question 1:
The ERP program of an enterprise is the central engine for your organizational efficiency. If it succeeds, the performance, competitiveness, and agility will do likewise. Nonetheless, there can be an inconvenience to a brand new program or an upgrade both physically as well as financially. Take the risk when determining whether the change is necessary or not to last. Therefore, my advice to Macharia is that the organization should look to upgrade the ERP system rather than getting a brand new one. A brand-new ERP program for a mid-size company would range from 5 to 6 figures (USD 400,000 plus USD 200,000 in this case) and takes eight months or more. This is a period of investing in both capital and time. Upgrading the existing system to a newer version may be cheaper and quicker. However, if a new version fulfills the requirements, saves the company’s time, and provides numerous improvements, it is advisable to throw everything out and start from scratch. In Macharia’s case, the system has no significant challenges. Therefore, the company should upgrade the existing system to accommodate its growth. Upgrading the system will ensure that the company can open branches around East Africa, which is one of the main reasons Abbas thinks the company should get a brand new system.
Question 2:
The company should improve the B1 system rather than getting A1. Kariuki highlights that other large entities are on B1 because it is cost-effective. This indicates that the system is capable of handling the flaws that Abbas has outlined once it is upgraded. An upgrade will help the company save time and reduce expenses. Abbas highlighted that over the past four years, the organization had done numerous upgrades on the system, and it had cost significant amounts. Although it may seem the system is out of service, it is an indication that the ERP upgrades were not conducted up to par. The competitors that Abbas outlined have already done the extensions to other countries, which is what Macharia’s company is targeting in the near future. It is advisable that the organization to carry out a well-developed upgrade on B1, which will allow them to expand as discussed and reduce risk. After successful expansion, the company can now consider purchasing A1 similar to what their large competitors have. A past meeting held with Redlock indicated they would deliver. Also, the company is already experiencing financial difficulties. Therefore, it is not the right time to spend money and a new system that could potentially overrun the budget.
Question 3:
My decision that the company needs an upgrade only and not a new system is based on the company’s financial situation and the performance of the current ERP system (B1). The company is struggling financially, and the need for a new system is not urgent. The company needs to liaise with Redlock to come up with a strategy to ensure a successful upgrade. Abbas states that the company is growing, and it is risky to build it on a small ERP system. As per Abbas’ assessment, the system’s usage is not fully utilized. The problem he outlined were as a result of failure for the organization to maintain the system efficiently, low user adoption, and a lack of training and support. This ensured that the organization was not in a position to get the most out of their current system. As a result, Zaidi needs to concentrate on the current system. First, it should upgrade the system to enable its growth. Second, it should provide sufficient training for young and highly computer literate employees. As the employees understand the system, they will help Zaidi get the best out of it and eliminate the challenges Abbas noted in his assessment.