CDL: " The future of the firm"

The Casa del Libro case study is a great example of the types of decisions we might face in the future as possible managers and owners of businesses. CDL's decision to change ERP's was a complicated one by itself and was made more like a nightmare with the economic atmosphere that the company faced in 2001. However, the decision of whether to switch ERP's relied more heavily on the company's longterm plans or as the case mentions, "the future of the firm" than present economic conditions. As the new CEO of the firm I would have taken the following into consideration:

- Tendencies of the book market: it was clear to the CEO that the book market was transitioning to online retailing. To be a major contender and to assure future growth for the company it would be vital to have presence in this arena.

- Costs: the company had already assumed sunk costs related to the initial legacy system and the consultant fees that never went anywhere. This would be a deterrent for the company to move ahead with the project, however, the fact was the after finding the Microsoft solution the maintenance cost would be lower with the new ERP system. Taking this into consideration, why would it be better to stay with the old system if you know for a fact it is more expensive.

-Slow business activity: analyst expected business activity and thus revenues to decrease considerably in the future which might make the investment less attractive because the ROI would not be favorable. However, this could be viewed as an opportunity because employees would not be as busy as usual and would have more time to train for the new ERP and help with its development. Slow business activity could provide a smooth transition to the new system.

The movement to the online retailing is inevitable therefore do not find it useful to prolong the assimilation of the new system. I would switch to the new Microsoft ERP and take advantage of slow business activity to assure a solid implementation of the system and move the company where the growth is. The essence of businesses is to stay in the cutting edge of market trends, since this ERP is essential and brings a considerable added value to CDL, this should be the most important criterion when taking the decision of whether to implement the ERP or not. If the added value was not fundamental then maybe this type of project could be put on hold or discarded but I do no believe this is the case.