Question

What is the most likely system acquisition method—commercial software, custom software, or ERP—for each of the following situations? Explain your answers. 

• A heating and air-conditioning supply company with 20 employees that sells standard off-the-shelf products to wholesale customers in a local community needs a system to manage its affairs. 

• A major oil company with diverse holdings, complex oil leases, and esoteric accounting practices needs a system that can coordinate its many enterprises. 

• A large organization with multiple divisions needs an information system to support its operations. 

The information needs of the various divisions are diverse, but standard within their respective industries.

Answer 1

Commercial. 

This company has non-unique information needs that can be satisfied with a commercial system that is completely finished, tested, and ready for implementation. Typically, commercial systems are general-purpose or customized to a specific industry. The end user will have standard business practices that permit the use of “canned” or “off-the-shelf” systems that can be employed with little or no modification.

 

Custom. 

Larger organizations such as this one with unique information needs often develop systems in in-house.  That would be the solution in this case, assuming that no commercial package is available to this company. 

 

ERP. 

This large organization’s needs are diverse and complex, but not unique.  Large scale enterprise resource planning (ERP) sys¬tems are comprised of thousands of small standardized program modules. From this vast array of options the IT team can configure the system by selecting those modules that support the organization’s specific information and data processing needs.