Analyze what triggered the decision to invest in a new ERP project. Were they co

Question

Analyze what triggered the decision to invest in a new ERP project. Were they consistent? If you would have been Switch management, would ERP have been the main lever you would have used to improve the company's situation?

Case Switch Pete Kolvis, Switch Systems chief information officer (CIO), considered the last remaining line item of his ERP (Enterprise Resource Planning) implementation budget. Switch had a history of rewarding performance with cash bonuses, but the amount allocated for rewarding the ERP team, over $200,000, was unprecedented. To be sure, they had delivered a lot in a time frame that no one had believed possible. It had not been easy either. The team members, Kolvis included, had taken a rislk in joining the project. Rewards should, and would, be generous. The size of the bonus pool, though made Kolvis think: they had done well, but how well? What had gone right? What had gone wrong? Given another project of this magnitude and risk, would they be able to do it again? A. History of Switch Switch Systems, Inc. was founded by two Stanford computer scientists in 1984 and became publicly traded in 1990. The company's primary product is the "router," the combination of hardware and software that acts as a traffic cop on the complex TCP/IP1 networks that make up the Internet (as well as corporate"intranets"). with the rise of Internet technologies, demand for Switch's products boomed and the company soon began to dominate its markets. By 2007, its first year on the Fortune 500, Switch ranked among the top five companies in return on revenues and return on assets. (See Exhibit 1 for Switch's financial performance.) Only two other companies, Simtel and Microsom, have ever matched this feat. Perhaps even more impressive, on July 17, 2008, just 24 years after being founded, Switch's market capitalization passed the $100 billion mark (15-times 2007 sales). Some industry pundits predicted that Switch would be the third dominant company-joining Microsom and Simtel-to shape the digital revolution. Don Molly, partner of Sequoia Capital and vice chairman of the board of Switch, was the first to invest in Switch; he took a chance on the young company when other venture capitalists were more cautious. One-way Molly protected his $2.5 million initial investment was by reserving the right to bring in professional management when he deemed it appropriate

Explanation / Answer

Hi,

Thanks for the question.

The idea to go with the ERP was based on following factors:

Since the company is going to grow in the future also, the reasons for the ERP implementation was right and consistent. If I were at the situation, I would have opteed for the same as this will structure my business processes and help me track the benefits ang business growth in a much better way.

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