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Tegan C.C.C Case Solution

Solution Id Length Case Author Case Publisher
1116 632 Words (4 Pages) David M. Upton, Bradley R. Staats Harvard Business School : 609038
This solution includes: A Word File A Word File

The case is about Tegan, the second-largest distributor in Europe for educational toys. The company is facing an acute problem with its accounts payable system. With the new Chinese customer on board, the company’s existing system could not manage the payables. This resulted in late payments, which was leading to decreasing profitability for the company. Tegan outsourced the development of the new accounts payable system to an organization, which after eight months, informed Tegan that instead of submission in October, the IT Company would be able to deliver the project in next August. The project was critical because of the Christmas season in December. Tegan now has four options from which one has to be chosen.

Following questions are answered in this case study solution

  1. Introduction to the Case

  2. Evaluation of the Four Options Available

  3. Reasons for the Option Chosen

Case Analysis for Tegan C.C.C

Evaluation of the Four Options Available

The first option that Tegan can exercise is to continue with Hrad as their IT Company. The major reason why Tegan was chosen was that their bid was the lowest amongst all other companies who bid for the accounts payable system project. Another reason why Hrad was a choice for Tegan is that the company has delivered previous projects to Tegan with satisfactory results, as well. The problem, however, is that Hrad was not able to depict the requirements for the project accurately. As a result, the project, which was due in December, has now been delayed until August, next year.

The next option is to choose SAP’s accounts payable module. This choice is one of the better ones for Tegan for the reason that this module has been created specifically for managing accounts payables. Therefore, the system has a better capacity and feature list to handle the complicated accounts payable system for Tegan. However, the cost and implementation time for the project is prohibitive since Tegan needs the complete system to be in running condition by December. In addition, the SAP module would be expensive to obtain, as well.

Another option that was put forward was that resources should be directed towards fixing or patching up the existing system. This is an option that does not require significant changes within the organization. The resources directed can easily start working on patching up the existing system since these resources ideally know the business well, along with the requirements for the patch. However, the problem with this option is that this will be a temporary solution to a longer-term problem since the cost versus accounts payable matching issue will remain in the longer term.

The last option that the company can opt for is to find another vendor. This option is viable in circumstances when the company has time as well as resources and cost to expend on getting the new system developed.

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