The Legacy System For Modern Erp Systems

1587 WordsSep 10, 20157 Pages
But if an entity were to consider moving from a legacy system to an ERP system it would face a lot of issues by itself and then there is a trade-off between which issues to tackle whether it is the issues that one has to face in the current business climate because of the difficulties presented by the legacy systems or should they face issues that are related to integrating the legacy system to modern ERP systems. The decision of the trade-off will definitely be primarily based on the costs incurred to make such a change and then it would have to be judged against the benefits that the organisation would accrue if it were to make such a move. Also development efforts often exceed the time that is initially estimated and hence the costs…show more content…
The initial budget was $200 million. Further, when we try to see what they were exactly trying to achieve through implementation of ERP, we see that they wanted to consolidate the operations so that they could leverage the size of Nestle which was huge and also simultaneously gain buying power. Before the implementation took place, the way Nestle USA worked was each factory negotiated its own deals with the vendors and also named the same product with different nomenclature. In reality what happened was a product like vanilla was ordered by 29 Nestle factories at 29 different prices and worse that all of it was purchased from the same vendor. ERP was supposed to solve this problem. Nomenclature was also to be unified so that management could get a hold on what is being purchased from where and at what cost for all the factories and then use its leverage for negotiation with vendors. Before implementation, demand forecasting too was vague. Sales person would give a number to the demand planner and then he would give the factory another number thinking that the sales person did not understand anything and then factory would think that the demand planner did not understand anything again and hence would change the number again according to their number. SAP would
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