Chapter 5

Goya Order Management

System Example
Thomas Case
Michael Cuellar

Information & Enterprise Systems in Today's Businesses 1

The Situation
• Goya Foods is a product centric distribution company. They buy and sell
Latin American food products. They import largely into the US.
• Goya has decided to implement a new order management work system. In
this work system, operating under the corporate policies and using the
existing information system infrastructure, new activities and technology
will be implemented to improve the process of taking, fulfilling and
collecting payment for orders.
• They have decided to implement an ERP system to be the supporting
technology and will need to acquire one to support the work system. They
have defined the project as one in which they will need to get an ERP
system and implement it to support the order to cash work system.
What is the First Thing Goya Needs to Do?
System Definition
• The point is to “define the system”
• What it is supposed to do
• What the deliverables are
• The parameters around which you have to work
• What is in the scope of the system and what is out
Scope Document
• Objective: To select and implement an ERP system to support the new order management work
system
• Deliverables: (What the user gets)
• Implemented Order Management System
• Training for the Users
• Data converted from old system to the new system
• Technical Parameters (Non-functional requirements of the system)
• Must use existing PCs on desktops
• Must operating in a Windows 10 environment
• Must use an Oracle Database
• Limits (How much of something will be done)
• The system must be able to store 100,000 orders
• The system must be able to support 50 users simultaneously
• Exclusions (What is not in the system)
• Accounting transactions will be handled by the accounting system
• We will outsource all development but we will management that development
The Next Thing They Do is ….
 (SDLC)

Information & Enterprise Systems in Today's Businesses 7

Requirements Document
• Functional Requirements of the System
• Maintain Orders
• Create
• Change
• Cancel
• Pick Orders in the warehouse
• Remove items picked from available inventory and assign to an order
• Ship Orders
• Mark orders as shipped
• Generate invoices for shipped orders
• Collect payment from the customer and record as paid
• Non-Functional Requirements
• Must process each transaction within 1 second
• Must handle 10000 orders a year
• Be able to process 50 orders simultaneously
The Next Step is
Determine How to Acquire the System

Information & Enterprise Systems in Today's Businesses 10

 Determining the Acquisition Approach
• To take the decision we need to answer these key questions:
• Are there existing packages?
• How well do they match our needs?
• Do we have the skills needed to implement the software?
• Do we have the skills needed to modify the software?
• Is in house custom development an option?
• Do we have the programming skills?
• Do we have custom development project management skills?
• Do we have the technical infrastructure needed to run the software?
• What upgrades or enhancements will be required?
• What external help is available to assist with software selection, modification, development, and
implementation?

Information & Enterprise Systems in Today's Businesses 11

First We Collect Information
 • Consulting agencies – the “Big Four” and
numerous other consultancies assist clients with
software selection and implementation.
• Research firms – such as Gartner and Forrester
research and publish white papers comparing
the capabilities of business software packages.
• Trade publications such as CIO and
ComputerWorld publish articles on business
Determination software packages and trends.
Process • Business periodicals such as Forbes and Fortune
Information and HBR frequently publish articles on
technology and software trends.
Sources • Contacts within the industry – determining what
software packages are used most widely in the
organization’s industry can also provide insights.

Information & Enterprise Systems in Today's Businesses 13

Information from Research firms
• Here is a Gartner report on ERP systems:
https://www.gartner.com/reviews/market/single-instance-erp-for-pro
duct-centric-midmarket-companies
Internal Capability Assessment

This involves getting honest answers to several questions

including:
Do we have the project Do we have the technical
Do we have the technical skills management skills needed to infrastructure needed to run the
needed to build the work system? oversee in house development of software packages? Are upgrades
the work system? needed?

Once the organization knows what is available and its internal

capabilities, it can decide whether to build or purchase the
software and what it will take to make it work.

Information & Enterprise Systems in Today's Businesses 15

What Goya Learns
• There are several packages that might work for them
• The cost of implementation of the packages will be several times the cost of the package
• This includes outsourcing of development, and consultants to advise on the implementation
• Their existing infrastructure is inadequate to run any of the packages
• Either they have the wrong operating system on their servers or
• They need to be upgraded
• Their programming staff had the skills to support their existing systems but not able to
develop new systems or modify packages.
• They haven’t implemented anything like this before so they will need help to get it done.
• They also learn about how these services are contracted and how much they usually cost
Goya then has to determine the
answers to these questions
 Which • Make versus Buy

Acquisition • It is typically less risky and expensive to

purchase a software package, but

Approach several questions should be considered.

• Are packages available that provide

Offers the at least 75% of the needed

functionality?
YES

Least Risk • Do we have the technical skills to

modify and implement the
No

at the package?
• Do we have the infrastructure
No
Lowest needed to operate the software?
• How much will it cost to

Cost? implement the software package? A lot

Information & Enterprise Systems in Today's Businesses 18

 Goya’s Analysis
Make is definitely out
They don’t have the capability
There are packages that will work
They will need help to implement a package
Their infrastructure needs upgrading
they will need help implementing
They need to do further analysis of the possibility of
outsourcing
The Engagement Practice
• Once we understand what we want, we now have to actually go
procure it.
• This part of the presentation gives us an overview of what things
should be done as part of that activity.
Request for Proposal
• The Request for Proposal (RFP)
• Document that requests vendors to provide a proposal to meet the particular
needs of the company
• Describes (in this case) the system to be provided and what it must do
• Based on the requirements analysis and the information gathered before
hand.
• The vendors develop a document that describes the system that they
propose and how it meets the requirements
• Includes the price that the company will need to pay
Evaluation
• The company evaluates the RFPs and develops a short list of vendors
who best meet their requirements
• In the Government world this is often done by means of scoring
• Each requirement has a weight.
• How well the vendor meets the requirement receives a score.
• The sum of the weight time scores is the overall score of the vendor
• The top scoring vendors are on the short list
Live Test Demonstration
• One technique that is sometimes used if the Live Test Demonstration
• Each of the short listed vendors receives a set of live data from the
company
• They are to demonstrate how the system will handle the company’s
data and transactions.
• This give the company an indication of how well the vendor’s
software will in fact handle their requirements
• It also gives the users an opportunity to see the software and
understand how the process will work.
The Role of Consultants
• Goya does not have expertise in this type of project or system
• They hire consultants to help them get through this process
• They learn about the consultants through the information gathering
process conducted before.
• At this point, the consultants assist them in understanding the
capabilities of the software and in making estimates of what
customizations are necessary and how much they will cost.
• They may also assist in writing the RFP.
Negotiation
• Once a winning vendor has been decided, the contract is negotiated
• The terms and conditions of that contract should have been decided
upfront by the contracting company
• In the information gathering phase, they should learn how these services are
contracted and the general terms
• This should guide their decision making on the type of contract that they
want
• Thus there should be no real negotiation involved.
Outsourced Development
• A similar process would be done for the outsourced development
services.
Implementation
• Once the system is finished and the work system design is complete,
the process moves to implementation
• The book describes four different approaches to implementation

Parallel – both old and

Plunge (Big Bang) – old Pilot – one part of the
Phased – one part of new system are used
systems are shut down organization gets
the system is used for a period of time,
and new system is access to the new
organization-wide then the old system is
used. system
shut down.

Allows for system to be

Other parts of the Least risky, but most
Most risky; back out fully checked out
system are rolled out expensive
strategy may be before implementing it
later, often one at a implementation
needed in other parts of the
time. approach
organization.
Goya’s Implementation Plan
• Goya wants a low risk approach yet one that is not very costly
• They choose a pilot approach to meet that need
• They will implement
• first in the order management area
• Then in the warehouse
• And finally in accounting
• This approach will require them to write interfaces, code that bridges
between the old and new systems until all three phases of the project
are completed.