Vinsun Infra Engineering: Erp on Cloud or on Premise

Vinsun Infra Engineering: ERP on Cloud or on Premise

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Table of contents

1. Introduction
2. Analysis

1. Total costs of ownership
2. Comparative analysis
3. Issues and how to tackle them

1. Conclusion

Appendix

References

1. Introduction

Vinsun Infra Engineering company is an enterprise that provides electrification solutions and civil services for a huge variety of industries starting from production to telecommunication companies across India. It was incorporated in 2000 and now it is a fast emerging company with a 3 year CAGR of 29%.

However, the company has been using the inefficient methods of collecting and storing data like MS Office which worked out well when the company had smaller sizes. Furthermore, Vinsun’s industry with a project based work needs better organization processes with up to date and accurate information regarding company’s resources and planning infrastructure.

Now Vinsun faces following information issues. Firstly, there is an information overload caused by the rapid company’s growth which leads to the slow information access as it must be gathered manually creating operational inefficiencies. Secondly, the data available is not uniform throughout the organization, and, hence, very segregated which leads to lack of coordination, redundancies and errors in project evaluation. Thirdly, data is inaccurate and outdated which leads to negative NPV estimations for the projects. Fourthly, data back-up is not maintained properly increasing the probability of data lose.

To make the data storage and access more efficient and accurate, Sunil Satav, the managing director, is thinking of transitioning to ERP system and has three options of IT expansions:

- Bluechip Corporation's ERP on premise

- Codeautomation's ERP on premise

- Codeautomation's ERP on cloud.

The objective of the research is to find the most effective and affordable way to access accurate information. The following research questions are raised in the report: Whether to implement ERP or not? Whether to implement it on cloud or on premise? Which company is the best option for outsourcing data maintenance? Which challenges Vinsun will face in transitioning to ERP? How to tackle these challenges?

1. Analysis

2.1 Total costs of ownership

As it was mentioned earlier, there are three IT transition options from which Satav could choose. However, there is a significant budget limitation in decision making since Satav could set aside a budget of two to three per cent of company’s annual turnover for IT expansion. Thus, the annual budget constraint is 1,353 million units of currency (3% of 45,1 million).

The costs of all three options for IT expansion for a time period of the next five years were estimated in Table 1. For more detailed estimation refer to Table 2 in Appendix.