Greetings from Prabandhan’21, IIT Kanpur.
Congratulations on getting shortlisted for the case study round.
CASE:
Future Gen Management, Inc, (FGM) a $5B company founded in 1999, is one of the oldest and largest waste
management, comprehensive waster, and environmental services companies in North America. Most of its
business is in the US and Canada but has been expanding most rapidly in Mexico and Central America. While
historically the industry leader, in the past year, macroeconomic conditions have impacted profitability of
several business units, especially in the recycling area where costs have risen by 20% and resell value of
recycled products has decreased.
The company’s network includes 450 collection operations, 326 transfer stations, 240 active landfill disposal
sites, 12 waste-to-energy plants, 290 recycling plants, 120 beneficial-use landfill gas projects and six
independent power production plants. Waste Management offers environmental services to nearly 53 million
residential, industrial, municipal and commercial customers in the United States, Canada, and Puerto Rico.
FGM grew to become an industry leader mainly through an acquisition and rebranding strategy of
incorporating smaller local/regional water companies.
However, a disparate approach to IT strategy has led to FGM utilizing over 1,000 different IT, finance,
reporting, and operations systems, with poor integration to front-end user applications. This has resulted in
the company struggling to maintain a fragmented IT portfolio, leading to operational difficulties. The last
quarter was especially troublesome for the organization as data integrity issues led to the company losing two
key clients. An internal audit concluded the disparate IT architecture and governance was a material
weakness.
Historically, the organization hasn’t typically prioritized IT investments; however, the CEO – Jigar Parmar, has
requested the CIO investigate how the company can streamline its back-office IT functions to improve
operational performance and transform the business to be more competitive. The CIO has invited us to meet
and discuss recommendations on the best approach to implementing a best-in-class ERP system to
consolidate finance, reporting, and operational functions and integrate with critical consumer-facing digital
applications to enhance the “FGM client experience.”
FGM has experienced several financial advantages of expansion through acquisition rather than organic
growth. However, the lack of integration over time is starting to impact profits, market performance and is
ultimately straining existing client relationships.
Although FGM is still extremely profitable each year, there is a concern around the upward trend in
remediation cost for operation inefficiencies and various IT systems maintenance. The CIO wants to
understand how the $75M investment of an ERP system will yield future value to her company and positively
impact the net bottom-line and meet their goals for continued positive revenue through expansion.
QUESTIONS:
1. What are some key considerations for Future Gen Management in the development of a global ERP
platform?
2. What are the advantages and disadvantages of customizing a package solution versus building a custom
solution?
3. The CIO has prior experience with the finance module of CoreAcle Enterprise, which has already provided
an estimate of implementation of $75M. Consider how you would determine the value of this investment
from a financial standpoint. Approximately what would the payback period be on the investment?
4. What key factors would play a pivotal role in helping you better determine the value of the investment
from an operational standpoint?
5. What other questions would you want to ask to formulate better responses on determining the value of
the investment?
INSTRUCTIONS:
➢ Use the data mentioned above in the problem statement.
➢ Make assumptions, wherever necessary.
➢ A 10-slider(exclusive of the introductory slide) solution needs to be submitted for further evaluation.
➢ Stay tuned for further communication.
