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Chapter 6 • Software and Vendor Selection 177

•A business must deal in facts with every is the basis for setting implementation
step of purchasing an ERP system. The pur- expectations. This is very important
chase decision will be made based on data during the implementation phase. During
by gathering information, researching ven- a project you will often find yourself
dors, documenting business processes, and going back to the original documents for
reviewing vendor bids. clarification, support, and reviewing
•Knowing detailed information on ERP sys- decisions.
tem functionality and business requirements

Exercises

1. Research two recent purchases of ERP systems, the recently purchased an ERP, and review with them
processes used to select a vendor ERP, and the the components and how well they addressed
level of implementation success for each. each area.
2. Identity the components of an ERP license and
why each is needed. Contact a company that

Review Questions

1. What are the steps in purchasing an ERP? 5. Why is it important in the request for bid process to
2. Who generally needs to be involved in the ERP make the vendors reply in a specified format?
selection process and why? 6. Why is communication important in this phase?
3. What is total cost of ownership (TCO), and why 7. What is the difference between an RFI and RFB?
should it be a part of the ERP selection process? 8. What are the benefits of a bidding process to
4. What are the key components in the contract purchase an ERP?
negotiation and licensing?

Discussion Questions

1. As Welch’s Foods narrowed down the vendors in 3. Defined and documented functional requirements
their quest to purchase an ERP, discuss the steps are a part of the bid process. Discuss why this
Welch’s Foods took to get the best price. would be beneficial in the selection of an ERP
2. Describe the components of TCO and why it is system even if a bid is not required.
difficult to use in comparing ERP systems.

CASE 6-2
Real-World Case
Enterprise Solutions for Fruit and Vegetable Beverage Manufacturing
THOMAS R. CUTLER

Fruit and vegetable beverage manufacturers face a set of unique issues from all other
beverage sectors. From safety to organic technology, solutions rarely address the gamut of
the idiosyncratic requirements.