"Table 4.2.1: Different Actions Involved in the Procurement StrategiesDifferent Actions in Shane Co. Procurement ResultsProcurement StrategiesStrategiesAnalysing the activities of the A huge investment of $36M in 3 Financial Failureclients that are interested in years is such a shaking conditioncontract of the US economyDevelopment of the tender after X XanalysisThe decision made by the SAP AG was given the contract SAP failureorganisation for contractorselectionThe identification of the work Highly sophisticated point-of-sale Huge stock pile up andwhich should be carried out by and inventory management system tied up cash inthe contractor inventory, Sales declineSource: (Hodge et al., 2010)In Kimberling?s (2009) view, such a huge investment of $36M in 3 years is such a shakingcondition of the US economy was not a good option for the Shane Co. This point of view simplycontradicts with the analysis of Hodge et al. (2010) that stress upon the analysis of differentactivities as an important tool in developing procurement strategies. The decision made by ShaneCo. for giving the contract of SAP implementation to SAP AG was much more the result ofleading image of SAP AG in the enterprise software solution industry (SAP, 2013). However,Shane Co. failed to recognise the important of SAP for its business processes therefore theresults were the severe decline in the sales and huge stocks up of the inventory (Larson, 2009).Thus, the statement of Hodge et al (2010) that the overall procurement approach leads to theachievement of the required outcome is highly evident in the case of Shane that attributed itsSAP failure to poor SAP implementation but it was Shane poor business and managementapproach that partially resulted in the failure. Therefore, the right procurement strategy shouldaccompany the right procurement planning in order to implement a highly advanced system.5. Procurement Solicitation and Source Selection5.1. Solicitation ProcessSolicitation process is defined by Vater (2012) as the process of obtaining proposals and bidsfrom different suppliers for the contract against the “Reference for Quotes” RFQ and “Requestfor Proposal” RFP. Two important elements of the solicitation process are the statement of workand the project schedule and cost budget. These elements are outlined and analysed in the tablebelow:Table 5.1.1: Elements Used in the Solicitation ProcessVater (2012) Elements of Solicitation Process Details of Solicitation at Shane Co.The statement of work Highly sophisticated point-of-sale andinventory management systemThe project schedule and cost budget Cost budget for SAP implementation estimatedaround $8 million to $10 million for 1 yearSource: (Vater, 2012)From the above table it could be seen that the statement of work for the SAP implementation inShane Co. was “highly sophisticated point-of-sale and inventory management system” whichmight attracted the attention of SAP AG. The other element was the cost budget which wasestimated around $8 million to $10 million for 1 year (Kanaracus, 2009). For solicitation, aproper document or form is used by the organisation that outlines all the activities that theorganisation needs the contractor to carry out (Vater, 2012).However, the case of Shane Co. is not based on the proposal of any solicitation form. It wasrather based on the negotiation between Shane Co. and SAP AG for making the contract.However Shane Co. fulfilled two important elements of the solicitation planning which were theestablishment of the work statement and the determination of the cost budget. Wysocki (2004)uttered that solicitation planning is performed with the help of procurement unit, project teamand legal department. The findings for the failure of SAP were therefore attributed to the system integrator and management team (Bjorlin, 2009). Both of them were held responsible for poorsolicitation process and management of the SAP at Shane Co. This implies that the conviction ofWysocki (2004) is held true in the case of Shane Co. that the project team and management isresponsible for solicitation process in the organisation.5.2. Source SelectionThe source selection is the process of allocating and awarding the contract after the evaluation ofbids and proposals by different suppliers. The contract is awarded to that contractor that is mostsuitable for the company?s cost structure (Lessard et al., 2007; Wysocki, 2004). SAP AG is theworld?s leader in providing software solution for the enterprises located across the globe. It isheadquartered in Walldorf, Germany (SAP, 2013). The highly innovative and creative systemsand software of the company led Shane Co. to select the SAP AG for the SAP implementation inthe company (Kimberling, 2009).Wysocki (2004) stressed upon the evaluation criteria that are used for selecting the contractor orthe source. These criteria are based on different characteristics such team management abilities,cost, technologies, vendor location and other important attributes. In the case of Shane Co. it isdifficult to evaluate which attribute or characteristic influenced Shane Co. as the information thatis present in the review of Kimberling (2009) and Kanaracus (2009) pointed towards the leadingposition of SAP AG as the only criteria that Shane Co. considered in source selection for its SAPimplementation.According to Dowlatshahi (2005), the ERP solution has provided an excellent approach for manybusinesses to employ a highly integrated solution for performing different business activities.SAP is one of the most powerful inventions of ERP that has revolutionized the procurement,solicitation and planning processes of the business. Thus, the adoption of SAP in Shane Co. wasalso influenced by such factors because the company wanted to rebound its sales throughenabling efficient inventory management and point-of-sale in the business."