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In business, sourcing is the set of activities involved in finding, evaluating, and then engaging suppliers of goods or services. Before a business can start to manage its supply chain, as described in this chapter, it must complete a sourcing process. Ireland's Kerry Group, a supplier of food ingredients and flavors to the worldwide food industry and of consumer food products to the British Isles, requires a wide range of raw materials from many suppliers. With annual revenue of 65.8 billion (about U.S. $10 billion) in 2013, it needs a lot of those materials. With plants in 24 countries and 40 percent of revenue from outside Europe, it is impossible for the people in one plant to know about all possible suppliers worldwide, but making local sourcing decisions would reduce economies of scale. With the thin profit margins of the food industry, good sourcing decisions are vital to Kerry Group's profitability. Software to manage the sourcing process is one way to help make those decisions. Kerry Group was already a SAP customer when it chose SAP Sourcing OnDemand, having used SAP ERP systems since 2009. The advantage of obtaining a new system from its existing ERP supplier is assured compatibility with applications the company already uses. "What we needed was an intuitive sourcing system that would be completely integrated with our SAP back-office for an end-to-end procurement process,said Peter Eatios, Kerry Group's director of c-procurement services.
Problem 1: What are the advantages and disadvantages to using a third-party vendor like Qlas to deploy a new ERP system? What steps can companies take to overcome the disadvantages of relying on third-party vendors when deploying enterprise-wide systems?
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