Enterprise Resource Planning HW - Research Paper Example

The paper concludes with the most practical strategy to guarantee that the best ERP option is made available according to a company’s business needs. Enterprise Resource Planning System 3 Enterprise Resource Planning System One must consider the scale the drive “Enterprise Resource Planning” (ERP) vendors in order to understand these vendors’ sales tactics. Millions of dollars are invested by big players such as Oracle/PeopleSoft, SAP, Microsoft, and SYSPRO --- to name some --- to develop ERP systems (Dowlatshahi, 2005, p.3745). For these vendors, CD copy of the system is just minimal capital; therefore closed deals for implementations of these systems gain them absolute profit.

It should be of no surprise to see these vendors exhaust all means to close deals with potential clients, since there is a lot of profit at stake (Fulla, 2007, p.35). Some companies report being given trips to the vendor’s headquarters, luxurious meals and accommodations, and transport by stretch limos (Dowlatshahi, 2005, p.3747). These are all part of a vendor’s strategy in wooing clients to buy their ERP system. Basically, these ERP systems are similar in their fundamental functionalities in business processes management.

Therefore, to sell a product, vendors must establish their product’s superiority over other ERP systems available in the market. The danger here is the vendor’s inclination to make outrageous claims regarding their ERP system. Some vendors publicize the advanced functionality of their system, some vouch for the ease of use, while others offer money-back guarantees of up to millions of dollars if their system fails to double other company’s ERP system performance (Fulla, 2007, p.36). ERP vendors even try to sell extra technical and consultation support aside from their software licenses.

Final quotes may include consulting and programming assistance of up to thousands of hours. However, companies should be aware that there are usually fees for this consulting assistance, and it may be easier to find cheaper open market services (Fulla, 2007, p.38). Enterprise Resource Planning System 4 Choosing a Vendor The ERP market has developed to make the products provide the fundamental needs of a typical business. For instance, the big players have general ledgers as well as purchase and sales ledgers than they can offer to financial departments of several companies.

However, these standardized systems create confusion among buyers. This is why a vendor’s reputation plays a vital role in the selection of a system to be implemented in a company. There are helpful criteria that aid in addressing the major issues in evaluating which vendor to buy from. First, the vendor should be able to offer live demonstrations. A previous survey showed that a good demo is seen as the most useful criteria in choosing the correct ERP system for the company. Vendor policies should also be given consideration, particularly regarding version upgrades or system updates.

Vendors should also be able to present a list of solid references that will vouch for the excellent performance of their proposed system. On this part however, buyers should request for information on failed implementations by the vendors. Areas of failure may be more worthy to evaluate compared to areas of successes, which most vendors will flaunt. Credibility also plays a vital role in choosing the appropriate system for a company. For example, SAP