Blue Buddies have survived for many years on computer systems built in the late 1970s and early 1980s. As IT employees retire, top leadership fear that a major collapse in the IT systems could bring Blue Buddies to its knees. This project involves a massive replacement of the IT systems to install a new ERP system which is far more reliable, efficient and effective. The new ERP system will use best practice process embedded in the software and for some processes, little adaptation to Blue Buddies way of doing business will be possible. All the major processes are re-engineered according to established manufacturing, distribution and sales ‘best practice’. Many employees are involved in developing the detailed solutions and in training and implementation.
The full impact of this corporate project is expected to be achieved within three Rounds. It consists mainly of a reduction in all costs, including COGS. It is not expected to show benefits immediately because employees may resist the imposition of the standard best practice and also because political opposition may develop within the senior management of virtually all departments. This project is by far the most expensive one; its exact cost is given in section 6.19.