“It is simply ridiculous! The pricing is too much!”

14 Sep

Enterprise Resource Planning

1. Jayashri Enterprises is a manufacturing firm involved in production and selling of PVC cables. It is located at outskirts of Mumbai, India. It has got one manufacturing plant and is looking for opening a new plant soon. Jayashri Enterprises has been using Tally as an accounting package and MS-Excel for recording other information. Introduction of GST has triggered the discussion regarding ERP implementation in its recently concluded Board meeting. The MD of the firm has heard about ERP but not sure about ERP functionality. She has also heard that ERP solutions are too expensive but nowadays open source ERP software are also available, which can be implemented at much lower cost. She has invited you to explain what ERP is and how it would be useful for her firm. What advice would you give her?
2. You are consultant to Jagat Facility Management Services. This firm has over 100 clients and more than 2000 employees. You have implemented the ERP software for this company. Explain the methodology that you have adopted for this firm. Also share the lessons learned.
3. “It is simply ridiculous! The pricing is too much!” This was the reaction, which Ms Phatima Bidarkar received when she shared her consulting fees. “Why we should pay so much for consulting services when the ERP software comes for free?” A question followed the initial reaction. Ms Phatima Bidarkar started her career as SAP functional consultant with a large manufacturing enterprise, which had implemented SAP ERP. While working on fine-tuning the ERP implementation, she also learnt how it is important to do proper Business Process Reengineering (BPR) to get maximum advantage of ERP implementation. After working for five years there, she started her consulting company where she emphasized the need for BPR before and even after ERP implementation. She got her initial business from the customers and suppliers of her former employer as her employer served as a great reference for her work. Since most of these firms were small businesses, she started offering her services for implementing open source ERP software called ERPNext. Recently Ms Phatima Bidarkar started to do cold calling for getting new customers. That is when she started getting resistance for pricing of her consulting services. Since she used to offer BPR services in addition to ERP functional consulting services, she couldn’t reduce her prices. But she was equally worried that she may need to abandon the SME market segment if she sticks to her pricing.
a. Should Ms Phatima Bidarkar reduce her consulting fees? If yes then explain how and if not then explain why not.
b. Is BPR needed for SMEs before implementing ERP? If yes then explain why and if not then explain why not.

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