Preparation Process

5.2.1.2.1 Engagement of Supervisory Consultant

Two months after joining, the GM hired a part time consultant that he had worked with previously, to assist in the selection process. In a couple of short meetings, the GM shared his thoughts with the consultant regarding what he thought was required in the company. The message from the GM was clear in that he urged the consultants to not get trapped by endless functionality comparisons in order to save energy for the implementation itself. The consultant took the lead in this process, as per the directions from the GM. He also stated clearly that, as GM, he was not interested in becoming involved in selection discussions until the consultant had shortened the vendor list to three vendors only for the final comparison.

5.2.1.2.2 Demo Sessions by ERP vendors

After the consultant shortened the list to three vendors, the GM requested the nomination of various end users from different departments and units to attend the demo sessions. The GM attended the first session with each vendor to stress the importance of end user feedback in the decisions to be made. He also noted that attending these sessions represents valuable knowledge and an increase in the market value of the member who was actively involved in the process.

During demo sessions of the first product, the vendor consultants admitted that standard features of the system do not comply fully with the local rules and regulations according to labour law. Additionally, they mentioned that despite the fact that the project module is not part of the remit, labour costing data of the projects will need to be captured with alternative solutions needing to be provided. Demos and the discussion of these consequences revealed that the employee master had poor details, and was missing important fields like GOSI (General Organization for Social Insurance) and was very weak in manipulating employee benefits such as tickets.

During the demonstration phase, it was understood that there is no issue at all in running the system remotely. Therefore, since its inception, all ERP servers for all companies and branches have been located in the head office. After the demo sessions were completed, only two vendors were requested to submit their proposals. The first vendor was ranked as the top ERP product that year, while the second is known as the

best fit for medium organisations; it was largely cited as an easy to use and easy to implement product.

5.2.1.2.3 Selection Final Decision

A meeting was called by the GM, with the Vice Chairman of the group, the Finance Manager and the ERP consultant. The GM summarised the discussion, which concluded that the comparison has been limited to two products:

1. The first one satisfies the long term plans of the organisation as the product has advanced functionalities that covers not only the existing practice and business but can also meet future advanced requirements.

2. The second product is likely to satisfy the short to medium term plans only. The product functionalities meet the existing and probably the midterm business requirements.

The Vice Chairman supported the first choice. A letter of intention was sent to the proposed ERP vendor. DiversCo decided not to purchase any add-on software applications and rely only on ERP modules. The selected modules include finance, distribution and HR. Project and manufacturing modules were not included in the project scope.

5.2.1.2.4 ERP Project Announcement

The general manager directed the supervisory consultant to prepare a presentation on what has been accomplished in the ERP project so far. The general manager requested the administration manager to book a large meeting room in a professional area such as a hotel or a convention centre for a full day. The main agenda was to present the ERP project to the entire DiversCo companies and branches. The invitation was extended to all executives, middle managers, senior staff, salesmen, accountants and personnel. The agenda included one session presented by the supervisory consultant to demonstrate the basic ERP concepts and the progress made to date. All the remaining sessions were presented by the GM.

The GM developed and announced two more strategic initiatives alongside the ERP initiative. These are summarised in the table below.

The event concluded that all organisational members are expected to extend their support to ensure that the ERP project is a success. Further emphasis was placed on end users, and as such, these end users will need to attend full demo sessions and contribute positively in these sessions, with their honest feedback.

Table 5.1 Three initiatives in parallel with ERP – DiversCo No Initiative Name Description

1 COMMUNICATION A project name for implementing electronic email services

2 BASE ERP project name. The name “Base‟ was chosen to establish that this is the foundation of the information systems infrastructure 3 VIAGRA To spin-off companies and branches in to limited liability

companies managed by a holding company; each company has its own operational management and legal identity. The name "VIAGRA", inspired by the medicine, aims to inspire an immediate and massive impact of the project to the business

5.2.1.2.5 Final Negotiation and Contract Preparation

The selected vendor sent a draft agreement to DiversCo, whom, under the direction of the GM, forwarded it to the DiversCo lawyer for review. The GM forwarded a copy of his previous ERP contract, that he implemented before joining DiversCo, to his consultant. A few days later the DiversCo lawyer sent his suggested agreement to the GM who forwarded it to his consultant. The consultant found that the revised version of the contract did not include any issues related to core implementation activities, such as training, testing, data migration, etc. The GM directed the ERP consultant to draft his own version that incorporated related clauses from the three available agreements (i.e., Vendor master agreement, DiversCo lawyer agreement and the agreement brought from the other client). A few weeks later, the DiversCo ERP consultant prepared the draft contract and sent it to the GM for review and comments. The GM requested a fixed price contract and to tie payments for the system with the rate of progress of its implementation. A couple of negotiations took place between DiversCo & ERP until the best and final offer was provided by the ERP vendor, the final contract was prepared and was then signed by both parties.