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Ethical Dilemma
For many months your prospective ERP customer has been analyzing the hundreds of assumptions built into the $900,000 ERP software you are selling. So far, you have knocked yourself out to try to make this sale. If the sale goes through, you will reach your yearly quota and get a nice bonus. On the other hand, loss of this sale may mean you start looking for other employment.
The accounting, human resource, supply chain, and marketing teams put together by the client have reviewed the specifications and finally recommended purchase of the software. However, as you looked over their shoulders and helped them through the evaluation process, you began to realize that their purchasing procedures—with much of the purchasing being done at hundreds of regional stores—were not a good fit for the software. At the very least the customizing will add $250,000 to the implementation and training cost. The team is not aware of the issue, and you know that the necessary $250,000 is not in the budget.
What do you do?
Summary:
A potential ERP customer has been evaluating the presumptions built into the software which is being sold. If the sale is made the person will get his quota and a nice bonus. If the sale is lost, the person has to look for another job.
The different departments have approved the purchase of the software. But after analyzing their recommendations the person finds that there are many purchases in stores which do not make a good fit for the software.
To determine: The course of action for the person.
Answer to Problem 1ED
The person must try to resolve the problem before selling the software to the customer. The person can discuss with the sales section to know about prior occurrences of similar problems and solving them.
Explanation of Solution
Course of action for the person:
The person must look to discuss the issue with the sales representative manager to know if they have encountered any similar problems earlier and how they solved it. The person may be willing to resolve the problem with the customer by sharing the development costs.
The person can look at the finance department to ask for if there is any allocation in the budget to handle such issues. The person cannot sell the software to the customer masking the shortcomings present in it. By doing so, the practice becomes unethical and becomes a bad business in the long run.
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Chapter 14 Solutions
Principles Of Operations Management
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