QUESTION 2 Enterprise Resource Planning Systems

Paul Williams grew up working in his father's supermarket Shop and Save. For years they owned only one business outlet located in Linstead, St. Catherine. Paul completed his master's in business administration in 2017 and for the past three years has been trying to encourage his father to expand the business into other major towns in Eastern Jamaica. Two years ago, he was successful in getting his father Harry to computerize the operations of the Linstead store and he felt that the next step should be business expansion.

Last month, the family purchased a store in Ocho Rios that would provide the ideal location to accommodate the first step in the expansion process. It would eventually become the head office for Shop and Save in the future. While doing his post-graduate studies, he met Brian James, a fellow student in the program. Brian was an ERP consultant that worked with a major US firm and at the time had only two years of experience. Brian has been trying to sell Paul on the idea of leading the team on implementing an ERP system that could link both the Ocho Rios and Linstead stores. Paul is aware of the risks involved in developing such a system and is having discussions with his father about hiring Brian and his company to do the implementation.

Required:

In the discussion with his son, Mr. Harry Williams had concerns, some of which are mentioned below. He has approached you to clarify the following issues, so he can better understand the risks involved in ERP implementation.

a. Paul said the current system was scalable. What does that mean and what are the issues surrounding it? (8 marks)

b. I am just getting used to the new system that was installed two years ago, and we had to spend a lot of money on training. What is TCO and what are the risks associated with it? (7 marks)