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How to Prepare for Post-merger Integration

How to Prepare for Post-merger Integration

Going through a merger or acquisition can be an exciting and emotional time. There are many questions surrounding new roles, business channels, production, compensation and sales territories. Think of it as driving a race car and changing the engine at the same time with the driver not knowing where the road ends.

Successful M&A planning requires swift execution within the first 100 days. During the M&A integration process, there is no magical one-size-fits-all approach. Instead, we recommend a tailored approach that focuses on the desired results based on the synergies of the group. 

One Possible Pre-merger Readiness Approach

We often begin working with clients before the merger takes place. Typically, private equity (PE) firms or investment bankers work with us as we help clients determine their readiness to go through an M&A event. 

1. Internal Capability Analysis & Pre-merger Readiness

When assessing readiness, we look at the reason the company wants to merge or acquire. For example, the organization may realize a smaller competitor has better agreements with vendors and therefore a pricing advantage.

While looking at reasons, we also determine key performance indicators and conduct a SWOT analysis (strengths, weaknesses, opportunities, threats).

Once we have a good understanding of where the organization is, we document the current state and conduct a gap analysis.

During the final steps of this phase, we create a roadmap and playbook with a clear path forward for internal cleanup. This roadmap sets up the post-merger integration framework.

2. Due Diligence Phase

Many times a merger or acquisition is opportunistic in the sense that two companies come together organically and decide they may want to merge. In other words, there is no formal search for an acquisition target.

Other times, a company will spend time searching for an acquisition target with the assistance of a PE firm. In cases like this, we have found that defining strategic objectives before looking at acquisition targets helps the organization effectively assess each potential acquisition.

While the organization is defining its strategic objectives, the PE firm typically performs financial, legal, compliance and valuation due diligence while we focus on evaluating the capabilities of the organization. We assess its ability to achieve its goals, the effectiveness of its current processes, its organizational structure and its technology. 

We then compare the SWOT of the acquisition target to the SWOT of the acquirer, analyzing where there are synergies and how the two entities can grow and increase enterprise value.

3. Operational Alignment & Planning

Taking the time to perform a pre-merger readiness assessment and conduct due diligence on the acquisition target, gives clients a head start on putting a post-merger integration framework in place.

During this time, a determination is made about the type of synergies to be achieved. We also determine the speed, extent and spirit of the integration, as well as the starting point of integration, the composition of the integration team and the decision-making approach.

We then determine the amount of change management necessary by conducting a change readiness assessment and considering the degree of change.

This phase allows us to seamlessly move from planning to operationalizing the plan to swift implementation.

4. 100 Day Integration Plan Execution

Following are seven tips for executing an integration plan:


  1. On Day 0, hit the ground running with extensive readiness checklists, and identify quick wins for the integration team to focus on.
  2. Chart a communication roadmap showing who will be informed at which times about which issues.
  3. Depending on the results of the change readiness assessment, determine the implementation approach in terms of phases of execution throughout the divisions of the company.
  4. While much information is lacking in this phase and an extensive amount of uncertainty exists, communication must be constant. Concerns among employees can be quickly dispelled through frequent and clear communication.
  5. Both companies must exchange all relevant information and quickly make individual integration concepts ready for implementation.
  6. Break down the expected synergies by region and department, and consolidate your business processes, personnel and systems by evaluating gaps, synergies and skillsets.
  7. Build a project management office to coordinate all activities and increasingly integrate the line organization.

Summary of an Effective Pre-merger Readiness Approach

​Below is a general framework of the phases we have discussed and a sample of specific tasks during the lifecycle of a pre-merger and post-merger integration plan:

Click image to enlarge.

Do You Have a Post-merger Integration Team?

Many private equity firms do not have post-merger integration teams. If this describes your company, Panorama’s business transformation consultants can help you achieve a successful integration with our process integration work and our change management philosophy of looking at all areas of your business.

How to Coach Managers to be Change Leaders

How to Coach Managers to be Change Leaders

Before embarking on an enterprise-wide project, senior management should be aware of the challenges they might encounter. Some of these challenges include employee resistance to change, ineffective communication practices and poor prioritization of new initiatives.

ERP Boot Camp

Join us November 6th and 7th in Denver, CO to learn how to optimize your supply chain and transform your organization. 

Most companies are in a constant state of change, so developing and executing a change management plan should be a priority for senior executives. In fact, an organizational change management plan can increase the success of your large-scale transformation in several ways:

  • Ensuring active and visible executive sponsorship of the initiative
  • Dedicating specific change management resources and funding
  • Ensuring frequent and open communication about the change and the need for change
  • Encouraging engagement, support and participation from employees, middle managers and project managers throughout the initiative

One of the most effective of these strategies is seeking engagement, support and participation from managers. In other words, managers must be coached to become change leaders within their workgroups.

The Role of Coaching in a Change Initiative

​​Change is a very broad term. It can be simple or complex. It can impact multiple departments or only one department.

Moreover, change can be seen as non-threatening or threatening. To this end, many leaders are resistant to change. Fear of change due to the unknown implications is a common reason why managers are so resistant.

To coach fearful managers to become confident change leaders, you’ll first need to understand some definitions:

Change Management Initiative

Any project or task that applies a structured approach to transitioning a company from a current state to a future state in order to achieve expected benefits.


Partnering with employees in a thought-provoking and creative process that inspires them to reach their full potential within the context of the project.

Change Leader

A manager who creates awareness of upcoming organizational changes and encourages employees to move beyond their comfort zone.

Internal Coach

A professional coach practitioner, who is employed within a company and has specific coaching responsibilities identified in their job description.

External Coach

A professional coach practitioner, who is either self-employed or partners with other professional coaches, to form a coaching business and is hired by a company.

Once these definitions are internalized by the project team, they can begin to coach leaders to champion change leading up to an ERP implementation or a business transformation.

Leadership’s Role in Change Management

Leaders often struggle to understand their role in change management. Below are some examples of this confusion:

The Role of the Executive Team

Executives should not just view change as a “set-it and forget-it” project. Instead, they should actively and visibly participate throughout the project, so employees at all levels can witness executives supporting change.

It’s also important for executives to communicate to front-line employees the “why” behind the change. This is essential because employees are more likely to support a change if they understand the benefits to the company and themselves.

The Role of Managers and Supervisors

In the eyes of their employees, managers are the face of the change initiative. Therefore, managers should embody four specific roles throughout the project:


  1. Communicator – Managers should leverage their interpersonal relationships with their employees to communicate face-to-face.
  2. Advocate – Managers should be an advocate for the change initiative and motivate employees through their actions and words.
  3. Liaison – Managers should maintain a feedback loop between employees and executives and/or the project team.
  4. Resistance Manager – Managers should quell any resistance among their employees by responding with positive messaging.

How to Coach Managers to be Change Leaders

We recommend coaching managers to ensure they have the skills to effectively advocate for change. This coaching can take many different forms.

It can be an internal practice, in which internal coaches, or “company coaches,” use the specific coaching responsibilities outlined in their job description to educate managers on best practices, techniques and procedures to implement change. These internal coaches can be the managers’ direct supervisors, or they can be a subset of employees within a company’s HR department.

Alternatively, coaching of managers can be performed by external coaching sources, such as change management consultants. External coaches, like Panorama, are experienced in implementing change across multiple business domains.

Using external coaches is a particularly great option for a company that is seeking to train internal coaches as well. Hiring external coaches to train internal coaches can create long-term self-sustainability within a company—something that yields significant ROI when mapped-out for year-over-year objectives.

Educating managers how to be effective communicators and resilient leaders is the best way to instill confidence in their own ability to lead change. As most managers have experienced (or been a part of) unsuccessful change management throughout their careers, they must be provided with tools to successfully implement change.

Essential Tools for Change Leaders

  1. Communication Training – Managers must be able to effectively communicate with superiors and direct reports. More specifically, managers must be able to clearly articulate to their employees the “why” of the project.
  2. Resiliency Training – Change in business means there will be impacts on employees’ daily work and managers’ management practices. To navigate these impacts, managers must be provided with training in resiliency. Resiliency training teaches the mental, physical and emotional coping skills required to handle difficult work situations.

Why is Coaching so Important?

Being an effective change leader means knowing how to actively listen to employees, understand employees and ask questions to elicit important feedback. This type of leadership ensures employees support change and adopt new processes and/or ERP software.

Panorama’s change management consultants can help you coach managers to be change advocates who break down barriers impeding your project goals. Contact us to learn about all our change management strategies that enable faster benefits realization.

How to Become a Digital Government: 7 ERP Selection Tips

How to Become a Digital Government: 7 ERP Selection Tips

Selecting the right ERP solution for your organization is a monumental task for any industry. For public sector organizations, this is a particularly tall order.

It’s difficult to earn the support from project leadership who are changing every election, or to mobilize an aging workforce who has no appetite for change. Other challenges include documenting requirements and ensuring the chosen solution meets specialized needs.

Top 10 Public Sector ERP Systems

Public sector organizations must modernize their processes and technology to meet the demands of citizens.

We recently published a report on the Top 10 Public Sector ERP Systems to provide ERP selection advice to states, cities, agencies and tribal governments. Before you dive into the specific technologies in the report, let’s talk about the do’s and don’ts of public sector ERP selection on the path to becoming a digital government:

7 ERP Selection Tips

1. Don’t Start Meeting with Vendors Until You’ve Achieved Strategic Alignment

What is strategic alignment? For ERP selection, strategic alignment means the alignment of all stakeholders around project goals and timelines.

Let’s look at an example of how not reaching strategic alignment can sabotage the ERP selection process:

Let’s say the Chair of the county school board wants to implement a new time and attendance tracking system. She believes that teachers are spending too much time entering attendance records because their outdated system is difficult to use. She sees this as a minimal risk, high reward project that can be completed in the short term.

However, the Vice Chair wants to implement an entirely new e-learning system for all schools in the county. Both ideas are perfectly fine and will make a positive impact in the long term, but imagine how discussions with potential ERP vendors would go if these two stakeholders are not in strategic alignment.

2. Don’t Aim to Overhaul Your IT Ecosystem in One Phase

A memorable proverb says this in a different way – “How do you eat an elephant? One bite at a time.”

When implementing an ERP system, it’s best not to overhaul your entire IT ecosystem in a single roll out. Phasing out one system or business segment at a time minimizes the amount of risk introduced to your organization during an ERP implementation.

Throughout the process of becoming strategically aligned, you should have determined an overall goal and a corresponding timeline. To reach your overall goal, smaller milestones should have been discussed with their corresponding timelines.

During the ERP selection process, it’s important to share these milestones and timelines with potential ERP vendors. Some ERP systems are modular and make it simple to implement a little at a time. Others are more invasive and require a huge lift and shift to go-live.

3. Don’t Only Think of Your Immediate Needs

In the public sector, processes may seem like they’ve been the same forever. However, don’t let this mentality blindside you into only thinking of your immediate needs when selecting digital technology.

An ERP system and ERP project are huge investments both in time and money. Selecting the right system with your future in mind will set your organization up for streamlining processes and adding new capabilities down the road.

For example, today you might be looking for ERP software that can handle your payroll, HR and accounting. You choose an ERP system that has limited functionality to only meet those needs. However, a year later, your organization wants to move their customer record management into the same ERP system but discover it’s not possible without heavy modifications.

We don’t advise organizations to select the most robust ERP solution in the off chance a capability will be needed in the future. Instead, we recommend narrowing your scope down to the processes you currently support, especially if the systems supporting those processes are inefficient or outdated.

4. Do Give Small Vendors a Chance

When most people think of ERP software, one of the big vendors come to mind. SAP, Oracle and Microsoft Dynamics are all easily recognizable. These vendors built their brands over time by implementing their software in a variety of industries. To ensure their product was versatile, they established standard business processes and incorporated those as flows into their modules.

For example, in the procurement module of an ERP system workflows often can be created to gain approvals based on specified thresholds related to purchase orders. These thresholds tend to be universal, such as total amount and line amount. Other factors like the vendor on the purchase order or the buyer can also be used to determine workflow requirements.

In a public sector organization, stricter or more complicated workflows may be required. Your workflows may be dependent on the segment in the organization in which the buyer works, or the types of items or services on the purchase order.

For a non-public sector specific ERP system, this would involve some customization. For niche vendors that work in the public sector industry, this may be something already designed. In fact, smaller ERP vendors tend to specialize in one or only a few industries. These ERP vendors have extensive industry-specific experience on their resume and likely have a set of standard operating procedures designed with your industry in mind.

5. Do Document and Map Your Business Processes

To ensure an ERP solution will meet your organization’s needs, you’ll need a list of business processes that will be performed in the new system. Along with that list, high-level process maps are required to give ERP vendors enough information to perform a demo.

At public sector organizations, this can be difficult as most processes are executed based on long-time employees’ tribal knowledge. Workers with the tribal knowledge may feel it’s to their advantage to keep this knowledge to themselves, whether it be for job protection or pride.

One way to lessen this resistance is to include these workers as part of the ERP project team in the selection process. This increases information sharing and employee buy-in.

5. Do Enlist the Help of a Third Party

In the public sector, it can be difficult to choose a vendor without being influenced by bias. Even if your ERP selection process is completely fair and impartial, we’ve unfortunately come across vendors protesting to continue in the request for proposal (RFP) process because of accusations of favoritism. When this happens, your RFP process can be sidelined while any investigations take place.

This risk is one of the many reasons why more and more organizations are leveraging third party consulting firms to handle the vendor RFP process. As an independent party, the consulting firm assumes the liability in rejecting some vendors’ proposals.

For example, when we work with public sector clients, we highly advise that everything related to the ERP selection process be documented. The dates, attendees and agendas for all meetings and demos should be captured. The conditions in which you evaluate each vendor should also be documented to prove that each vendor was held to the same evaluation standards.

Mitigating risk is not the only reason you should enlist the help of a third party during your ERP vendor selection. Independent ERP consultants, like Panorama Consulting Group, are technology-agnostic, so we investigate all possibilities to find the right ERP system for your organization.

5. Do Consider Return on Citizenship

In the private sector, it’s common for organizations to calculate their ROI before an ERP project. However, with no profit margins and lack of competition, public sector organizations have a difficult time measuring ROI for a new ERP system.

Instead, there is another goal that public sector groups can strive for: return on citizenship (ROC). ROC can be described as the return on government services and social value to the citizens.

With this goal in mind, you should ensure that each ERP system considered can help you to achieve it.

Modernizing Your Organization

Our Top 10 Public Sector ERP Systems not only highlights ERP vendors suitable for public sector organizations, but it examines some of the challenges the public sector is facing that are creating a need for modernization.

If you are wondering how to modernize your own organization, you will find our report useful as it provides guidance on how to prepare for software selection and navigate selection challenges.

Panorama’s ERP consultants are experienced in digital government and digital transformation best practices. We can help you more efficiently and effectively deliver services to citizens.

How to Change Your Organizational Culture

How to Change Your Organizational Culture

The term “strategy” is one of those buzzwords that excites organizational leadership. It’s a word that lights up board room presentations and dazzles investors. However, when a company’s culture is not aligned with a company’s strategy, leaders will almost always fail to deliver on their strategic objectives.

To be most successful in ERP implementations and/or business transformations, leaders must understand how to change their organizational culture to align with their company’s strategy and related digital strategy.

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Implications of a Misaligned Culture

When a company’s culture is not aligned with its strategy, the company is susceptible to the following:

1. Poor Hiring Decisions

Each employee is a critical member of the organization. This is especially true when employees are asked to participate in strategic initiatives in addition to their day jobs.

Unfortunately, when the organizational culture is not clear to the hiring manager, or it is misaligned with the company strategy, the wrong types of employees are hired.

Our clients that have made poor hiring decisions, often experience challenges when building an ERP project team or business transformation project team. This often creates an imbalance of external resources versus internal resources.

2. Lack of Performance Management

Performance management is about coaching employees towards excellence. For example, progressive discipline policies enable managers to give feedback and warnings to employees.

However, when an organizational culture is misaligned with the company’s strategy, project team members may ignore feedback from managers and continue working toward disparate goals.

3. Employees do not Understand the Value They Bring to the Company

A properly aligned organizational culture recognizes employees who contribute to the achievement of strategic objectives.

However, when a company’s culture is not aligned with its strategy, employees are not recognized properly, or in some cases, not recognized at all. This leaves employees marching to the beat of their own drum, pursuing objectives that may not be aligned with those of the project.

Ultimately, this type of environment leaves the company at risk of paying employees for work that doesn’t directly contribute to strategic goals.

Leadership’s Role in Organizational Alignment

The ideal organizational culture should encourage openness to change, foster trust in leadership and enable teamwork. Ultimately, it is the leaders of the company who must set an example of these values for employees.

In fact, each level of leadership plays a different role in the alignment of culture and strategy:

Senior Executives

The executive-level leadership team bears the burden of establishing company culture. These leaders define the company mission, vision and values and communicate them to employees.

Middle and Senior Managers

Next in the line of leadership are middle and senior-level managers. These managers enable their departments to meet strategic objectives, and they also help determine key performance indicators. This role is helpful when it comes to being a sounding board for the executive team and communicating company goals to the front-line managers.

Front-line Managers

The last in the line of leadership to have a measurable impact on organizational alignment is front-line managers. These managers monitor the overall performance of their departments and ensure employees are achieving their assigned metrics. As this leadership group is most removed from the executive team (and sometimes, geographically, even further removed) this is where the greatest communication challenge lies.

How to Align Organizational Culture with Strategy

In order for a company to change its culture, communication must be structured as a continuous feedback loop throughout all levels of leadership. This means that from the executive level through front-line managers, everyone is fully aware of organizational goals and project goals.

Following are three steps for using communication to drive cultural change:

1. Define Objectives

To start this continuous feedback loop, the executive team must ensure the company mission, vision and values of are clearly defined. These items should be reviewed at no less than an annual basis and reworked if the strategic direction changes.

2. Communicate with Middle and Senior Managers

Once the mission, vision and values are defined, they must be directly communicated to mid-level and senior-level managers. This communication should happen not just through flyers and email but in person.

This allows for a dialogue to occur in which critical questions can be asked. More specifically, this discussion allows executives to receive feedback from mid-level and senior-level managers regarding any cultural blockers to the achievement of project goals.

Here are some examples of culture- and strategy-related questions that executives and mid/senior-level managers might discuss:


  • Which internal processes need improvement in order to achieve strategic objectives and maintain our competitive advantage?
  • What are our customer expectations and are we successfully meeting them with our products or services?
  • Are our employees trained in the skills required to meet our objectives?
  • Do employees generally trust the management team?
  • Are we able to measure, in real-time, the performance of our company at a financial level?

3. Communicate with Front-line Managers

The final piece of the alignment mission is the transfer of the strategic direction and culture from mid-level and senior-level managers to front-line managers. This discussion must happen in-person and should be aimed at translating strategy to execution.

To accomplish this, it’s important to enumerate strategic objectives and define tactical priorities for front-line managers. It’s also important to listen to feedback from front-line managers when they are asked, “What is the most effective way to achieve our goals?”

It’s All About Communication

When an employee understands the purpose of his job function and how it ties into the strategic positioning of the company, he is more apt to pursue excellence in that domain. It is this intimate understanding of one’s purpose in a company that must be attained before a company can successfully implement new ERP software or pursue business transformation.

Panorama’s business transformation consultants can conduct organizational assessments to help you understand your corporate culture and its readiness for organizational change. These assessments evaluate employees’ understanding of strategic goals and help us develop a change management plan to achieve organizational alignment.

How to Determine ERP Customization and Configuration Needs

How to Determine ERP Customization and Configuration Needs

At the beginning of an ERP implementation, your company might be of the mindset that your ERP system will go live with out-of-the-box settings. In fact, many businesses start their ERP journey with this goal in mind and with good reason – staying out-of-the-box will significantly reduce implementation cost and can keep your upgrade path free of compatibility issues.

While implementing a “vanilla” ERP system sounds easy, it’s actually very difficult to achieve. Most companies end up with customized ERP solutions, or at the minimum, a specifically configured system and several integrations.

2019 ERP Report

This year's report delves deep into the data to analyze what ERP industry trends mean for organizations now and in the future.

While ERP systems are built to meet industry standard business processes, many companies find the need to customize because standard ERP functionality doesn’t always align with their company’s unique business processes.

So, how do you determine which of your ERP requirements can be met out-of-the-box, which need configuration and which require customization? Based on our experience evaluating ERP systems across a variety of industries, we have outlined some guidelines to help you make these tough decisions. But first, let’s clarify some terminology:

ERP Customization vs. Configuration

A configuration is a setting, parameter or personalization built natively into the ERP software. A setting or parameter could be a simple flag or field or as complex as a table defining a list of rules. A personalization could be rearranging the order in which fields are displayed on a form or changing the label of a field. No coding typically is required to enable or disable these settings.

Customization, on the other hand, almost always requires changes to the system’s source code. Customizations can be new features that enhance the core software, they can be custom reports, or they can be integrations between the ERP solution and third-party applications.

Making the Decision

While every company has unique requirements, there are two things all businesses have in common: they want projects under budget and on schedule. Based on these goals, we created the below decision tree to help you decide whether a requirement should be met via out-of-the-box features, configuration or customization:

How to Use the Decision Tree

We recommend selecting an ERP system with functionality requiring minimal customization. Your RFP responses and ERP demo results can help you determine this for each of your requirements. Ultimately, though, some requirements may entail software customization, so you will need to weigh the costs and benefits of customization versus business process reengineering.

That said, let’s walk through each branch of the decision tree:

Does an out-of-the-box feature meet the business requirement?

To answer this question, it’s important to schedule an ERP demo. Business users can then determine if the demoed functionality truly meets each requirement.

For example, a business requirement may be “the ability send vendors an invoice displaying both the company billing address and the delivery address after purchase orders have been received.” If the demo reveals that the out-of-the-box invoice document only displays the billing address, then the business requirement would go through the next step in the decision tree.

Does a standard configuration meet the business requirement?

To know every setting in an ERP system and what outcome it drives is nearly impossible. This is why it’s important to write demo scripts for ERP vendors to encourage them to show exactly how their system fulfills a requirement even if it means they must demo the steps required for a configuration.

If the vendor does not demonstrate how their system can be configured to meet a requirement, there may be enough time for a question and answer session at the end of the demo.

Depending on the extent of the configuration, a follow up demo may be necessary, so the vendor can demonstrate the system with the software already configured. If the business is satisfied with the way the requirement is fulfilled, then the configuration should be documented so it can be put into testing environments and eventually production.

If the business rejects the configuration, then the next question is . . .

Do you have the budget for customization?

The answer could be a simple yes or no, but it likely will depend on several factors.

In your ERP project budget, you may have set aside some funds for customization. Depending on your customization budget, you may need to determine which requirements needing software customization are the highest priority.

Regardless of budget, how much customization is appropriate? While tailoring your new ERP software to exactly match your needs sounds desirable, it also has some consequences.

Besides the fact that customization requires design, development, deployment and testing work, customization also puts your upgrade path at risk.

For example, if you are using a cloud ERP solution where upgrades are automatic, then customizations can cause compatibility issues. In fact, upgrades may overwrite or conflict with your custom code.

If you are using an on-premise ERP solution, upgrades of customized software also are challenging. Performing capability checks and addressing issues will be another hurdle to add to the already arduous on-premise upgrade process.

If these upgrade risks don’t scare you, the customization process itself might. The development effort and rounds of testing are both time-consuming.

If you decide not to customize the software to meet a particular requirement, you have one more option:

Can you reengineer some of your processes?

While you may already have reengineered many of your processes before ERP selection, more opportunities for improvement may present themselves throughout your evaluation. This is especially true if you find that some of your requirements are not worth the time and effort of customization.

Many companies like to avoid process improvements because they know their employees will resist change. However, when the alternative is going over budget with customizations or not meeting a requirement at all, then process improvement starts to look a lot more attractive.

After all, organizational change management is always an option. Change management helps prepare employees for new processes and technology, and it is essential even for companies that perform extensive customization.

Revisit the requirement and ensure its validity

If it seems a requirement cannot be met out-of-the-box, through configuration, through customization or through process improvement, it’s time to reevaluate why the business has this requirement to begin with. Is this a requirement because it’s a restriction of the legacy system? Will there still be a need for it after go-live?

Select the Right System to Minimize Customization

Ultimately, if you’ve spent the time preparing for ERP selection, you will have clear business requirements that reflect your business’s competitive advantage and strategic goals. As a result, you won’t waste time evaluating a system that ends up needing extensive customization. Ideally, all the systems you evaluate will meet most of your requirements either out-of-the-box or through configuration.

Panorama’s ERP consultants can help your company narrow down your list to only the systems that align with your organizational goals. Contact us to learn how clear business requirements can serve as your secret weapon during ERP selection.

4 Tips for Managing Large-scale Change

4 Tips for Managing Large-scale Change

As companies become more globally interconnected, the reach and impact of their operations have scaled up to become global, as well. As a result, organizational change management projects are often no longer limited to just one region, but instead span multiple global offices.

While large-scale change management projects are fantastic opportunities to lead high-impact ventures and shift focus at a strategic level, they can prove challenging. Some issues unique to global projects include:


  • Managing local culture and language differences
  • Securing high-level sponsors to champion the change
  • Building a common methodology
  • Training local experts to build up core competencies

The Beginner’s Guide to Digital Transformation

What are the 6 secrets to digital transformation that are helping organizations build competitive advantage?

With large-scale change efforts, it can be difficult to share a consistent message with all stakeholders. Following are four tips for introducing new business processes and/or ERP software to your global company:

Tips for Global Change Initiatives

1. Designate Regional Leaders to Champion Change

When a company operates on a global scale, it’s essential to find leaders in each region who can sponsor and champion change for their respective regions.

This is important because a change champion who isn’t accustomed to a region may fail to capture important messaging. There could also be unforeseen cultural challenges, such as the emphasis on age within Korean and Japanese cultures. Sending a very young manager to communicate and affect change with executives twice his age can prove ineffective.

If your project team has a regional leader helping your project team communicate important messages, it can greatly streamline change management communication. For example, the regional leader may help translate messaging and adapt it to their culture, which not only increases employees’ awareness of the change but their support of it, as well.

While it’s true that a local champion can help share information more effectively, it raises another issue. How do you ensure all region leaders are on the same page? We recommend establishing organizational alignment. This means the company has agreed on a strategic direction, and the project team is ensuring all project decisions at a region level support the company’s goals.

2. Build a Centralized Roadmap

A sponsorship roadmap can bring together all your regional sponsors, so they communicate cohesive, consistent messages to their companies. This roadmap is used to outline stakeholders the sponsor needs to meet with, events the sponsor needs to attend and deadlines that must be met.

While this is a centralized document, sponsors can adapt messaging in a way that is best suited for their location. When culturally adapting messages, some of the most important messaging that must stay intact includes:


  • Why the change is occurring
  • The implications for the company and particular location
  • How progress is going to be enforced
  • A sense of urgency
  • What happens if change management is not pursued now

3. Establish a Common Methodology

It’s important for each region to see change management resources and tools as built for their benefit rather than a hand-me-down from another hemisphere. However, it may not be feasible to convert all documentation from one language to multiple other languages and mediums.

A regional sponsor likely doesn’t have enough time to sit down and translate hundreds or thousands of pages of documentation and training materials. This can become expensive very quickly, especially if each region has unique business jargon they employ.

This is why it’s important to establish a common change management methodology and terminology that’s shared among all regions. Sponsors will find change management resources more beneficial if their region already has a baseline understanding of the change management methodology.

4. Encourage Knowledge Sharing

For global companies that operate with tens of thousands of employees, a regional leader may not be enough to affect change at a local level. Getting more regional leaders on board is not always a feasible solution, either, since regional champions need specialized training.

Instead, we recommend relying on regional trainers to build up core competencies at all levels. Having a local resource who can educate employees equips the local workforce with the tools and knowledge to more efficiently implement large-scale organizational change.

Successful Change Management at a Global Scale

It’s clear that global projects involve a group of stakeholders comprised of multiple cultures and languages. Sharing information with these stakeholders involves far more effort than simply translating it via Google Translate.

Panorama’s business transformation consultants can help your company account for all of the regional variances you’ll encounter during a global ERP implementation or change management initiative. Contact us to discuss your global organizational needs – we’re here to help!

How to Measure ERP Benefits Realization After Go-live

How to Measure ERP Benefits Realization After Go-live

At the beginning of your ERP journey, you’ll probably discuss with several ERP vendors and consulting firms the costs associated with different ERP systems. Then, during ERP implementation, project managers will monitor business benefits and costs.

Once you’re live on a new ERP system, the measuring and monitoring does not end. This is the time to get a post go-live measurement of ERP benefits realization and return on investment.

While ROI may seem subjective, you can actually use a generic formula and common guidelines.

2019 ERP Report

This year's report delves deep into the data to analyze what ERP industry trends mean for organizations now and in the future.

What is ERP ROI and How is it Measured?

The classic definition of ROI is a percentage or ratio of the value of an investment to its cost. Here is a simple formula to calculate ROI as a percentage for any investment:

ROI = [(Value of investment – Cost of investment) / Cost of investment] * 100%

Since the value of an ERP project is subject to a variety of factors, let’s first discuss how to calculate the cost of an ERP project.

How to Calculate ERP Costs

During the ERP selection process, different ERP vendors will quote total cost of ownership based on factors like licensing and implementation costs. These amounts are estimated before implementation, so once you go live, they might have change.

Some of these early discussions may not include factors such as hardware expenses and change management costs. After go-live, we recommend looking back on the actual expenditures from purchasing through implementation and go-live. Here are a four cost factors to consider:

1. Licensing

The number of licenses needed is probably the one area of expense that won’t change much from initial quoting. However, during implementation you may stumble across scenarios where you need a different type of license than initially thought.

For example, let’s say you’re implementing a retail ERP solution for your brick and mortar stores and your headquarters. Initially, you may estimate for a more restricted license for the stores, as the thought is users will access the ERP system via a point of sales terminal for simple actions like performing sales and issuing returns.

As business processes become more defined, you discover that the stores actually need a full license to access modules such as inventory management to help customers determine the availability of product. This change in access required likely will increase your licensing costs.

2. Hardware

If your ERP software is deployed on-premise, the bulk of your hardware costs will come from acquisition of new servers and networking equipment. On the other hand, if your ERP system is hosted in the cloud, your hardware costs will be minimal. With cloud ERP systems, most hardware costs are associated with peripheral devices such as new POS terminals, payment devices, warehouse scanners, scales or printers.

3. Technical Implementation

Whether you implement in-house or outsource some heavy lifting to a consulting firm, your costs will include hours billed for activities like requirements gathering, configuration, customization, deployment and testing. Be on the lookout for less obvious expenses, like travel dollars for consultants or overtime pay for your full-time employees.

4. Change Management

Money spent preparing employees to use the new ERP system and new business processes is also a factor in total ERP cost. The hiring of external trainers or change management experts will fall into this category. Any kick-off assemblies, training classes or promotional materials – no matter how small the expense – should be included in the total cost.

How to Calculate ERP Business Benefits

Now for the more subjective part of the ROI equation: the value of your ERP project. There are many ways to measure the value of an ERP project. It varies from business to business. However, there are a few factors that are commonplace across most industries:

1. Reduced Operating Expenses

One easy metric to find while measuring your ROI is your new monthly operating expenses post go-live. Operating expenses can include a variety of factors, from the real estate and utility expenses for housing physical servers, to hourly rates and benefit compensation for your workers.

Your accounting department probably has this number on hand and is monitoring it regularly, but if you want to get a detailed understanding of how an ERP system can reduce operating costs, it’s worthwhile to dig into the specifics.

After you’ve determined the cost of each of the following three categories, add them together to get your latest operating cost. Compare this number to the operating expenses on your old system and you’ve got your first metric for the value of your ERP project.

1. Labor

Tasks and processes that used to take skilled manpower to complete can be automated or extremely streamlined with a new ERP system.

2. Logistics

One of the most common ERP business benefits is having all modules, from sales to manufacturing, integrated and pulling from a single set of data. This especially is important when it comes to logistics.

For example, imagine your old system did not have dock management functionality. Delivery drivers were showing up at your warehouse at different times throughout the day, sometimes even having to wait for an open dock.

If your new ERP system has dock management features, you can schedule pick up dates and times with your carriers and better plan your picking and shipping labor throughout the week. This can lead to less pickups which will lead to lower shipping costs.

3. Utility Costs

If you move from an on-premise ERP system to a cloud-based ERP solution, your utility costs will probably decrease. Without the need for excess physical space for servers and networking equipment (and the AC systems to keep them cool) your utility bills will decline. It may seem like a small drop in a large bucket, but every drop counts!

2. Shorter Sales Cycle

After implementation, you may notice a decrease in duration of your sales cycle. Quicker lead to sales time due to enhanced tools provided by your new ERP system is most likely the cause.

Some ERP software solutions come with enhanced customer relationship management capabilities. These capabilities are tightly integrated with the marketing, sales and logistics modules within the ERP system, making the quoting and sales process more efficient.

3. Streamlined Supply Chain and Lower Cost of Goods

Another value measurement to consider is decreased cost of goods due to a streamlined supply chain.

For example, say your veteran purchasing agents know which vendors give quantity discounts for certain types of products. This information might not be in your old system because your purchasing team considers this tribal knowledge and is difficult to input in the system.

However, if with your new ERP system purchasing agreements can be easily managed, it would be to the benefit of all buyers (newbies and veterans alike) to use the system to get the best deals.

Do the Math

Now that you’ve calculated your total ERP cost and value, it’s time to measure your ROI. Returning to our ROI equation, plug in your findings below:

ROI = [(Value of investment – Cost of investment) / Cost of investment] * 100%

Is your ROI less than expected? It could be in the way you’re measuring your total ERP value or perhaps there are potential ways to increase certain business benefits, like saving on operating costs. Maybe there’s a factor specific to your industry that’s not covered here. Also, keep in mind that ROI increases over time, some companies see the biggest return within five to ten years.

We help companies measure ROI after go-live by preparing them before implementation. We help them define key performance indicators and create a benefits realization plan. This makes calculating ROI much easier for our clients, and it can even lead to a higher ROI since it enables them to design their project plan to achieve specific goals.

Whether you’re in the early stages of your project or ready to go-live, Panorama’s ERP consultants can help your company measure (or prepare to measure) ROI. Request a free consultation to learn more.

3 Tools for Reducing Change Resistance

3 Tools for Reducing Change Resistance

Change resistance and other roadblocks can delay a change initiative– or worse yet, cause it to fail. This is why companies about to embark on a business transformation or ERP project should use change management assessments to anticipate and mitigate roadblocks.

These assessments can help you understand the impact of change, your employees’ readiness for change and what change management activities to include in your project plan. We use change management assessments to help companies reduce risk and ensure an on-time, on-budget project with a high ROI.

2019 ERP Report

This year's report delves deep into the data to analyze what ERP industry trends mean for organizations now and in the future.

We have found that the ability to identify employee resistance early in the project leads to faster ERP benefits realization. Essentially, the more time employees spend using new ERP software instead of resisting it, the more the software will benefit your bottom line.

While there are many different change management assessments, three of the most common assessments we use are listed below.

3 Common Change Management Assessments

1. Change Impact Assessment

A change impact assessment gives insight into the potential effects of a proposed change. Knowing what people and processes will be affected by change enables your team to develop a change management plan.

More specifically, a change impact assessment evaluates the impact of a change from three perspectives:

  • Consequences of making the change
  • Mandatory resource modifications
  • Effort and tasks to complete the change

The main purpose of a change impact assessment is to minimize the negative impacts of change. It accomplishes this by allowing the project team to anticipate issues, such as resource constraints, before they occur.

There are two major benefits of using a change impact assessment:

Minimizing Ripple Effects

A change impact assessment is especially beneficial for projects where quality and safety are paramount. In these projects, a small change can cause huge issues down the line.

We recommend continuously monitoring the impacts of change during the project. This will help you address issues while they’re still small.

Controlling Project Scope

On a complex project that has hundreds or thousands of intertwined processes, a change impact assessment can prevent the project scope from expanding.

How does scope expansion occur? Imagine if a developer on your team promises a change to an end-user, fails to perform a change impact assessment and ends up spending months on a single change order.

2. Organizational Readiness Assessment

The willingness of employees to support change determines on how quickly you can implement change. That’s why we use readiness assessments at our client engagements – the client needs to know if their employees will be supportive of organizational changes.

Some of our clients find that their culture is either resistant to change, or it doesn’t align with the specific changes being proposed. This knowledge helps clients develop a plan to adjust their culture and prepare employees.

There are two main reasons companies use readiness assessments:

To Identify Root Causes

Oftentimes, change resistance does not stem from ill intent, but rather poor internal communication, distrust of senior leaders or extreme organizational silos. Once you understand these aspects of your culture, you can begin overcoming resistance.

To Gain Employee Buy-in

Employee buy-in is important both during and after a change initiative.

After a project, for example, employee buy-in can mean increased ERP system usage and higher benefits realization.

During a project, employee buy-in can mean increased insight into employee needs and the ability to design business processes that benefit employees. As you can imagine, prying knowledge out of an employee worried about job security is quite difficult.

3. Stakeholder Analysis

Typically, stakeholder analysis refers to the techniques or tools used to identify and understand the needs of major interests outside the immediate project environment.

The goal of this assessment is to understand what individual stakeholders care about and what relationships exist between stakeholders. This allows the project team to avoid stepping on toes and implement changes that benefit stakeholders.

Here are two reasons to conduct a stakeholder analysis:

Stakeholders are a Key Source of Information

Stakeholders’ ideas and suggestions can help guide team members in their process improvement efforts.

Stakeholders can be Change Champions

Stakeholders who visibly support change will naturally elicit buy-in from other employees.

You Will Encounter Roadblocks

We have a yet to see an ERP implementation that hasn’t encountered organizational roadblocks. While the most noticeable roadblock is change resistance, there are usually several root causes.

Change management assessments not only identify sources of resistance but help you develop a more effective change management plan – and overall project plan.

Panorama’s ERP consultants can help you conduct change management assessments and use the resulting insights to adjust your company culture and gain employee buy-in.

Most employees have a fear of the unknown and a fear of job loss when presented with the prospect of organizational changes. Let us help you alleviate employees’ fears and fast-track your ERP system usage.

ERP Implementation Success Factors for Each Phase

ERP Implementation Success Factors for Each Phase

Successful ERP implementations are executed in phases. With each phase comes a set of deliverables, exit criteria and best practices.

Depending on the ERP implementation methodology chosen for your project, you may have more or fewer phases than what we have listed below. In our experience, there is no “one size fits all” approach.

However, there is a basic structure most successful projects follow. At a high-level, most ERP projects require a six-phase strategy: plan, design, build, test, deploy and optimize.

2019 ERP Report

This year's report delves deep into the data to analyze what ERP industry trends mean for organizations now and in the future.

Regardless of how many phases your project timeline has, or what you choose to call them, each phase has one or more critical success factors that define them. Planning for and monitoring each success factor is one way to ensure ERP success.

ERP Implementation Success Factors​

Phase 1: Plan​

One of the phases often taken for granted, the planning phase, contains the most critical success factor – KPI validation. This is where you review the business benefits and key performance indicators (KPIs) you defined prior to ERP selection.

While reviewing KPIs, you should ensure they are realistic and measurable. It also is important to ensure that your KPIs are relevant. In other words, are you measuring the right things, or just measuring something for its own sake?

These KPIs are a project management tool that will help you continuously monitor whether your project is on track to realizing expected benefits.

Phase 2: Design

The design phase is one of the more analytical phases of an ERP implementation and involves activities like business process blueprinting.

If you’ve already gathered your ERP requirements during ERP selection, then you have a good foundation for creating a business blueprint. While your list of requirements didn’t consider specific ERP functionality, your blueprint should be based on specific functionality since you’ve already selected a system.

While you may have already seen an ERP demo addressing your business requirements, it’s important to reaffirm the technical feasibility of these requirements. How do you do this? Provide your business blueprint to your ERP vendor, so they can use it to configure the ERP system in the next phase of implementation.

Phase 3: Build

During the build phase, the ERP software is configured to meet your business requirements and code is deployed to bridge functionality gaps. While quality code is an obvious success factor, there is another element that is just as important: unit test cases.

Unit test cases should be thorough and encompass not just the best-case scenarios but also the exceptions. The more unit test cases that new code passes through, the less likely bugs will be reported later in the project.

These test cases can be written by developers, ERP consultants or business analysts to test key features, but in the end, it’s the business stakeholders that must sign off on the test cases to ensure they are valid and provide accurate coverage.

Phase 4: Test​

Quality test cases are also a success factor in the testing phase. This rings true for all types of testing: process testing, systems integration testing, user acceptance testing and performance testing.

Whether you have one hundred or ten thousand test cases, the percentage of passing cases is the main success factor for this phase. The amount of high severity bugs that are remaining prior to go-live can determine your go/no go decision.

Also in this phase, performance metrics should be captured and reported. The better the performance of the ERP system, the more likely users will adopt it.

Monitoring system performance throughout the implementation (and even after) is recommended and shouldn’t only occur in the testing phase.

Phase 5: Deploy​

A solid cutover plan addressing ERP data migration is a crucial success factor in the deploy phase.

Listing all the steps required to prepare the production environment is necessary to help your team prepare for go-live. The more detailed the cutover plan, the more likely it is to succeed. We recommend including details such as who is responsible for the action and when he or she should complete it.

Another success factor in the deploy phase is end-user training. When users are prepared to use new ERP solutions, they are more likely to adopt them and less likely to report “bugs.”

It’s common that untrained users will report many bugs that aren’t bugs at all – they are instead incorrect procedures or missed training steps. Even if the incidents the users are reporting are not actually bugs, it can still be frustrating to the end-user to continually have to call the help desk.  

Phase 6: Optimize

An important success factor for the optimize phase is performance benchmarking. While you probably did performance testing in earlier phases of the project, it’s not until real users are acting in the production environment with real data that true performance can be measured. Continuing to monitor and improve performance after go-live is crucial to maximizing ERP business benefits.

Other ERP Implementation Success Factors

While we did not mention all the success factors for each implementation phase, this post should give you a high-level overview. Many of the success factors we didn’t discuss are activities that span the entire project and cannot be confined to a particular phase.

For example, organizational change management should be a continuous focus throughout selection and throughout each implementation phase. ERP benefits realization development is another continuous activity that should not be overlooked.

To learn more about phase-specific or continuous project activities, you can chat with our business transformation and ERP consultants. We have helped companies successfully execute both the technical and business aspects of their ERP projects.

(Technical) ERP Go-live Readiness Checklist

(Technical) ERP Go-live Readiness Checklist

After many months of meticulous planning, building and testing you may come to a point where you think to yourself, “We’re ready for ERP go-live!”

While it’s easy to get caught up in the excitement of completing major milestones, it’s important to be completely prepared before flipping the switch.

2019 ERP Report

This year's report delves deep into the data to analyze what ERP industry trends mean for organizations now and in the future.

We recommend using an ERP go-live readiness checklist to help you decide whether your company is truly ready for go-live. While the following checklist is not exhaustive, it does cover the technical aspects of go-live readiness:

ERP Go-live Checklist​

1. All Test Cases are Executed and Passed​

There’s a reason why ERP project plans contain several iterations and types of testing. Unit testing, process testing, systems integration testing and user acceptance testing are all designed to ensure your customizations, configurations and integrations are ready for production. Having a high pass rate on all these tests is a good indicator that you may be ready for go-live.

It’s not just the number of test cases passed that’s important – it’s also the quality and coverage. For unit testing, usually an ERP consultant or developer can create the test cases, but for the other types of tests, test cases should be approved by the business. This ensures that no surprise scenarios come up after end-users get their hands on the new ERP system.

2. There are no Remaining Severity 1 or 2 Bugs Outstanding​

If your team decides to wait until all bugs lower than severity 2 are addressed, you’ll never go live. It’s OK if you still have a few lingering bugs out there, as long as they are not severity 1 (showstopper) or severity 2 (high business impact). Even if workarounds are in place to continue executing business processes, leaving a severity 1 or 2 bug in production can create a mess of data.

For example, let’s imagine a severity 2 bug exists for advanced shipping notices (ASN). In this case, a QA tester notices that some ASNs are being rejected and not finding their way into the ERP system. As a result, a workaround is recommended to monitor the queue of rejected ASNs and trigger a resend of the failures.

Even if this workaround allows ASNs to be imported, the real issue could be that the delay in processing these ASNs is causing the financial receipt date to be off by a day or more. At month or quarter end, this could create a mess for the finance team.

That being said, you must have a plan to address any severity 1 or 2 bugs that crop up close to your go-live date. Without a mitigation plan for these types of last-minute bugs, you risk significantly delaying your go-live date.

3. Data Migration and Cutover Activities Have Been Practiced

In theater, a production never dives right into opening night without a few dress rehearsals. These are common practice because they help actors become comfortable with their lines while in costume and full stage lighting. During a dress rehearsal, issues may become apparent, which gives directors the opportunity to address issues while there’s still time.

Practicing ERP data migration and cutover activities on a pre-production environment is like a dress rehearsal.  The actors are your project team, the lines are the business processes and the costumes and lighting are the production data and environment.

While practicing data migration, you might find corrupt or duplicate data that, if it had been imported directly into production, would have contaminated the pristine environment.

4. Production Data is Staged and Ready to be Migrated

Data doesn’t always play nice. Even if you’ve practiced the migration from legacy to the new ERP software several times, it’s best not to wait until the night before go-live to perform the actual migration.

We recommend defining a cutoff date and time for when legacy transactions will no longer be considered for migration. Any new transactions past the cutoff date can be migrated over in a separate wave.

5. Your Production Environment is Ready

This one sounds like a no-brainer, but you’d be surprised how many different definitions of “ready” you’ll find amongst a project team.

The best definition of “ready” is:  the infrastructure for the production environment is in place and tuned to maximum performance. This means configurations are enabled, users are loaded and security roles are turned on. It also means integration points are defined and checked for responses.

In some cases, “ready” may also entail the purchase and configuration of any required hardware, like printers, scanners, scales, registers or payment readers.

6. The Rollout Strategy is Defined, Scheduled and Communicated

For phased rollouts, the schedule should be communicated to the impacted business units. It should never come as a surprise to users when they can no longer access their legacy tools.

For example, imagine you’re a retailer with a hundred stores across four time zones. The schedule for the first phase of your rollout might look something like this: East Coast stores are delivered new hardware on Saturday night, the hardware is configured and installed on Sunday night and they are live with the new software on Monday morning. Then, after a week in production, feedback is gathered and analyzed before the next phase.

If your East Coast stores are aware of this schedule, they will be more prepared for go-live.

7. The Support Team is Prepared

When incidents come up (and they will), you’ll need a support team equipped with all the necessary resources. This team should have access to ERP experts, business analysts, process specialists and change management champions. This ensures that whatever ticket comes through the help desk can be addressed without scrambling to find the right resource.

The process for creating and managing incoming tickets is also important to define before go-live. You don’t want added stress during post go-live because this is already a busy time.

Are You Ready for Go-live?

In addition to the above checklist, you’ll need a checklist of the people and process aspects of your project. We have seen projects fail even with a fully functioning enterprise system.

If you’re curious how our clients determine the readiness of their people and business processes, give us a call. Our ERP consultants can speak with you about our experience guiding companies through business process reengineering and organizational change management. We understand all the components of go-live success.

How to Achieve ERP Business Benefits

How to Achieve ERP Business Benefits

During ERP selection, companies typically see limitless possibilities in terms of potential improvements for their businesses. However, somewhere along the way, many projects fall short of expectations and ERP business benefits underwhelm executive expectations.

In fact, in our 2019 ERP Report many companies reported low benefits realization for benefits related to reporting, competitive advantage and technology enhancements.

2019 ERP Report

This year's report delves deep into the data to analyze what ERP industry trends mean for organizations now and in the future.

In our experience, low benefits realization is often due to a failure to define expected benefits and align the company around common goals early in the project. In other words, organizational alignment is not a priority for many companies during software selection. More often, companies are desperate to quickly find a new ERP system that addresses their pain points, so they lose sight of their business goals.

While staying focused on benefits realization is not easy, we’ve found several strategies that help companies realize significant benefits from their ERP projects. These strategies are most effective when initiated before or during ERP selection.


8 Strategies for Realizing Business Benefits

1. Understand Your Current State

You can realize many business benefits by addressing pain points in your current processes. This is why we help clients map their current state before beginning ERP selection.

During process mapping, it’s important to capture the right amount of detail. For example, you’ll need to document how long a current process takes in order to measure improvements post go-live.

As you identify pain points, you’ll find opportunities for improvement. This is the time to start thinking about how to both fix broken processes and innovate mediocre processes.

2. Outline Expected Benefits and ROI

When embarking on ERP projects with clients, we typically help them clarify their overall business goals, so they can determine how ERP software can support these goals. This leads to a discussion about business benefits – what benefits can technology deliver that support the company’s big picture strategy?

The only way you can answer this question with any specificity is by designing future state processes based on the improvement opportunities you identified while mapping your current state. We recommend designing future state processes based on both your business goals and your pain points.

While business process reengineering is a time- and resource-intensive undertaking, it enables you to quantify expected business benefits. For example, it enables you to quantify the time and cost difference between a current state process and a future state process.

Once you’ve estimated all expected business benefits, it’s time to document your findings. One of the most effective tools for documenting business benefits is an ERP business case. This tool is more than just a means to justify the project to executives. It also is used for setting key performance indicators (KPIs) and tracking them throughout the project and post go-live.

The first step in successful use of KPIs is to understand one core concept: every KPI is a metric but not every metric is a KPI. Essentially, KPIs are the metrics which best define the success of a process or function.

For example, we had a client that defined preventative maintenance on their critical equipment as the percentage of the following ratio: (Number of preventative hours performed per machine) / (Number of hours recommended by the manufacturer of the machine). They were shooting for a score above 95%, and they crafted a concise and meaningful KPI that would help them predict the future performance of critical machinery.

In addition to KPIs, a business case also should focus on estimated costs as well as expected ROI. While you can estimate ROI without focusing on a particular ERP vendor, many companies will re-calculate expected ROI once they’ve evaluated several enterprise systems. Ultimately, though, your ROI will depend more on your project execution than your choice of ERP vendor.

In fact, your ROI depends most heavily on the quality of your business case. The most effective business cases outline specific, measurable ways a new system will improve the business.

In contrast, we see many companies justifying their ERP purchase by pointing to issues with their legacy system, such as a lack of scalability or a decrease in vendor viability.

While these are legitimate reasons to implement a new system, they must be accompanied by more ambitious goals. You don’t just want to maintain the status quo – you want to innovate!

3. Ensure Organizational Alignment

Your company not only needs clearly defined business goals and project goals but also an understanding of how they tie together. Everyone in the company needs this understanding, especially executives.

To achieve this understanding, we recommend using your business case to gain executive buy-in, and then forming an executive steering committee. This committee should be highly involved in the project, especially when it comes to communicating project goals across the company and holding process owners accountable for achieving these goals.

When executives communicate how project goals tie into business goals, business benefits become more achievable. For example, a common, business-related reason that companies implement ERP software is to improve their data insights. When executives explain how technology can enable this business goal, your team is more likely to select the right software and migrate the right data. In addition, your employees are more likely to follow procedures that promote data accuracy.

4. Develop a Realistic Project Plan

One of the key lessons from our dozens of software expert witness cases is that unrealistic expectations often is one of the main causes of low benefits realization and ERP failure.

Many companies inaccurately estimate the time, budget and resources required to effectively implement an ERP system – and so do their ERP consultants, system integrators and VARs.

The best way to avoid this pitfall is to leverage an independent consultant, such as Panorama, to help define a realistic project plan. One of the ways we help clients develop realistic project plans is by benchmarking against other companies similar to theirs.

We also ensure companies include overlooked activities in their project plans, such as change management and business process management. These activities help companies realize more business benefits.

5. Focus on Change Management

You can’t realize business benefits if end-users aren’t prepared to use the new software. This is why it’s essential to communicate with and train employees as early as possible.

We use organizational readiness assessments to help clients identify resistance to change early in the project, so they can proactively address it. The organizational readiness assessment leads to the development of a change management plan that reduces change resistance and helps employees understand how their individual processes support project goals.

6. Think Twice About Changing Your Goals

Every change order, request for customization or scope adjustment must be viewed through the lens of your project goals. If it can’t be justified within the parameters of those goals, either the goals or the request must be adjusted. In most cases, you should adjust the request.

For example, you wouldn’t want to change a goal from “Standardize all accounting and finance functions across all sites,” to “Make sure A/P can access the approved vendor lists.” After all, with all the time, money and effort that goes into implementing an ERP system, you should at least try to maximize your ROI.

When you start getting internal pressure to customize your system, let your business case and ERP project plan be your guide.

7. Continually Measure Benefits Realization

Identifying gaps between projected benefits and actual benefits throughout the project helps managers understand what they are doing well and how they can improve.

Root cause analyses can identify the causes of these benefit gaps. A common root cause is end-users using workarounds because they don’t understand the importance of using the new technology. In cases like this, follow-up end-user training and enhanced communication can bridge benefit gaps.

Many companies designate KPI owners as the people responsible for measuring benefits, identifying root causes and implementing corrective action. The ideal KPI owner is familiar with the processes being measured, has a stake in their success and has the leverage to address lagging performance. In general, department managers are the ideal candidates for overseeing performance metrics for their respective departments. 

In addition to ownership at the functional level, executive ownership of aggregated KPIs at the organizational level is necessary to achieve a holistic view of performance and drive accountability.

It’s also important to measure benefits post go-live. While the ERP project team will most likely be tired and ready to move on with their lives, successful ERP projects never end.

8. Continually Improve

If your company is focusing on business process management as part of your ERP project, you likely understand the importance of continuous improvement.

Business process management is an ongoing process that continues after go-live, so your ERP system should continue to evolve, as well. This ensures long-term alignment between your people, processes and technology.

If you’ve implemented a scalable ERP solution, then long-term alignment should be achievable. However, it is not easy.

One of the ways we help clients ensure long-term alignment is by creating an ERP center of excellence focused on continuous improvement.


Now that you know how to maximize benefits realization, you’re probably wondering what type of benefits you should expect. The remainder of this post will discuss some common ERP business benefits and provide advice on how to achieve them.

How ERP Software Improves Process Integration

Within any company, there are bound to be organizational silos. Whether your company has data silos or cultural silos, implementing ERP software may be one of the best ways to break through these isolating barriers. In fact, many companies pursue ERP projects to better integrate siloed functions like customer service, production, accounting and sales.

Silos often are created is when different departments and job sites use different technology and processes for inputting and analyzing data. This inconsistency creates silos of unstandardized, unreliable data.

However, implementing an integrated ERP system enables shared data from any department to be immediately synchronized across all departments and locations. For example, if the sales department signs a contract to sell 500 units, ERP software can communicate this to manufacturing ensuring inventory can be checked and the job can be scheduled.

Silos are not just a problem in terms of data, but they can also slow down an ERP project. If your company is siloed, then different departments, workgroups and locations likely will struggle with key activities, like outlining business benefits that make sense for the whole company.

Therefore, it is essential to begin breaking down organizational siloes before ERP selection. While ERP software will help further break down silos, the foundation you lay during business process management is critical.

Following are three tips for beginning to break down organizational silos:

1. Standardize Your Processes

Your company’s different locations will have different business processes, some of which will need to be standardized. Other processes should be localized to fit the needs of each separate entity.

Striking the right balance between standardized and localized processes is crucial when a company wants to maintain its competitive advantage, which may differ slightly depending on the geographic location.

In general, though, standardization is beneficial for many business processes, especially financial processes.

2. Integrate Your Processes

We recommend an approach to business process management, called value stream mapping. This approach helps our clients depict the interaction between functions and eliminate non-value-added processes.

When improving your processes, you should involve employees from across departments to gain an understanding of the upstream and downstream interdependencies between processes.

3. Ensure Employee Buy-in

Employees are more likely to adopt processes that eliminate silos when they understand how these processes benefit them personally and the company overall.

Therefore, it is important to communicate to employees the value of cross-departmental collaboration. This ERP communication should be informed by a comprehensive organizational change management plan.

How ERP Software Improves Your Competitive Advantage

Most modern ERP software has innovative functionality in areas such as manufacturing, business intelligence and analytics. However, this functionality is likely to get watered down if your primary goal is to simply replace your current system.

How can you ensure you’re gaining competitive advantage from your ERP software? The answer is business process reengineering.

Business process reengineering is most effective when conducted before ERP selection. This ensures you don’t blindly adopt an ERP vendor’s industry best practices but only adopt them where they improve your competitive advantage.

In many cases, industry best practices may decrease your competitive advantage because your competitors who’ve implemented a similar system may be using the same best practices.

While improving your processes, it’s important to look for inefficiencies in your customer- and revenue-related business processes to identify opportunities to improve your competitive advantage.

Once you’ve documented your future state and gathered your ERP requirements, you can begin contacting ERP vendors. When helping clients evaluate vendors, we ensure clients have clear goals and priorities, so they know what to look for in a system.

For example, if a client knows that customer experience transformation is a priority, they’ll know to focus on ERP vendors’ CRM and advanced demand planning functionality.

If you’re hoping to improve your competitive advantage through ERP software, then it’s important to focus on CRM functionality and other functionality related to the customer experience. In fact, competitive advantage is a high-level business benefit that is typically achieved through more specific business benefits, like improving the customer experience.

How ERP Software Improves the Customer Experience

Good customer relationships don’t just happen. They are a byproduct of strategic processes at several stages of the engagement continuum. Each of these processes should be managed by an integrated ERP system.

Here are five ways an ERP system can improve the customer experience:

1. Customer Management

Managing customer relationships is a vital component of the order-to-cash process. The best way to handle customer relationships, especially for mid-size and large companies, is to look for an ERP vendor that incorporates master data management (MDM) and customer relationship management (CRM).

While the MDM and CRM can be used together, they could also be two different modules with two distinct purposes.

An MDM module can ensure consistent and reliable customer information is gathered, housed and retrievable by internal stakeholders. That information can include key pieces of data such as order history, company history, credit information, locations, key contacts, annual revenue and more. It can be thought of as a catalog of all relevant data about that customer.

The challenge many companies have when implementing an MDM module is compiling all necessary data from each customer. The information may already exist in some form but could be scattered in various locations and formats.

If information is scattered, then identifying and consolidating that information into a single resource is necessary. Once consolidated, that information is available to all internal stakeholders and modules through integration.

While MDM compiles overall data about a customer, a CRM solution enables sales staff to track prospect and customer interactions in order to identify opportunities. For companies that have more than a handful of customers, manually tracking of every interaction is nearly impossible.

Only a CRM system can consolidate trends, opportunities, preferences and financial data. This allows companies to better plan revenue projections and budgets.

Many of our clients are seeking better data insights that they can use to improve the customer experience. We often walk these clients through business process reengineering to ensure their processes are aligned with their digital strategy.

2. Order Management and Fulfillment

An order management system (OMS) allows companies to track the status of every customer order at every stage. By understanding when orders are being entered as well as how and when they will be fulfilled, a company can better manage customer relationships.

An OMS can also help a company manage different shipping options, warehousing and multiple currencies. During ERP selection, be sure to look for a system that can . . .

  • Improve customer relationships – The customer experience can be greatly enhanced by enabling a better ordering process, faster delivery and more accurate invoicing. The more enhanced the experience, the more confidence customers will have when placing an order. If an issue with an order does occur, an OMS allows staff to quickly identify and correct the problem.
  • Maximize working capital and cash flow – An OMS reduces errors, increases the speed of order fulfillment and enables more accurate billing. As a result, a company can experience improved cash flow and greater working capital.
  • Enhance supply chain efficiency – An OMS can provide valuable insight into inventory, workflow, pricing and market trends. This can lead to greater organizational efficiency and facilitate proactive decision making. From a supply chain perspective, an OMS may help reduce costs due to leaner inventories and an understanding that products and materials can always be sourced quickly from other reliable providers.
  • Improve staff management – By allowing customers to place orders online in a way that is connected to an ERP solution, the company can better manage its staff. Automating the ordering process will funnel customer requests into the operation where resources are then allocated to ensure the operation is properly staffed. Handling orders this way enables companies to better meet customer expectations.

3. Credit Management

Incorporating a credit management component into your ERP system allows for transparency, helping you adhere to an approved set of terms for each customer. Without such a credit management policy and overall credit philosophy incorporated into an integrated ERP solution, companies put themselves at greater risk by possibly extending credit terms to customers that may be unable to pay.

While many companies mistakenly place the responsibility solely on customers for unpaid debts, quite the opposite should be true. It is often the lack of a clear credit policy within a company that results in late or unpaid invoices.

In the same way that fences make for better neighbors, a clear and actionable credit policy incorporated into an ERP system makes for better customer engagements.

4. Invoicing and Accounts Receivable

When submitting invoices to customers, leveraging technology and incorporating some form of automation is preferred over manual submission. Automation allows for better tracking and helps companies get paid more efficiently.

A robust ERP solution should incorporate some form of invoice automation, ideally via a method that submits the invoice directly into the ERP software. This helps eliminate errors and delayed payments.

ERP solutions can provide comprehensive accounts receivable reporting, tracking the progress by which invoices are submitted and ultimately paid. This capability can help companies identify and eliminate possible invoicing errors well before they get to the customer.

5. Payment and Cash Application

Almost no other segment of the order-to-cash process requires more attention than customer payment and cash application. These two processes are vital to the health of every business. Leveraging ERP software that can manage these two areas will go a long way in ensuring on-time customer payment and accurate application of that payment to a customer’s account.

While the payment process may sound straightforward, it’s a challenge for many companies. Even after a new system is implemented, optimized processes may be difficult to maintain. This is because employees often resist new processes and cling to the old way of doing things. We employ change management techniques to help clients mitigate this challenge.


Here are three ways to ensure your new ERP software improves the customer experience:

1. Understand How Data is Shared Across the Company

If the sales and marketing departments are “out of the loop,” they are missing key metrics that can be used to engage customers and drive sales.

We recommend collaborating with key stakeholders to ensure they provide input on the data they need and can devise ways to make the most of this data.

2. Ensure Data is not Just Focused on Existing Customers but Also Potential Ones

Modern ERP systems allow you to track how potential customers are engaging with your company across a variety of platforms. Using this information, you can deduce how that engagement is leading to sales.

In an ideal world, this information wouldn’t be trapped in the marketing department but available across the company via an integrated ERP system. This data visibility would allow your company to improve processes to best meet customer needs.

3. Track and Communicate Metrics That Differentiate Your Company

It’s important to look at metrics not just in terms of how they impact your company but how they impact customers.

For example, metrics like time and cost of production or customer service response times directly impact customers. Communicating these metrics to customers should be a priority for your marketing, sales and customer service teams.

How ERP Software Improves Operational Efficiency

Many companies have a hodgepodge of inefficient business processes and legacy systems. New ERP software can often fix these problems, but only if you define and improve your processes before ERP selection.

Defining your future state – along with performance metrics and transition plans – will ensure you realize business benefits related to operational efficiency.

Here are just a few examples of areas where companies often increase efficiency as a result of their ERP project:

1. Data Entry

ERP software can automate data entry. This is beneficial because manually entering data not only takes copious amounts of time, but it puts companies at risk for several other inefficiencies. These include data inconsistencies, data silos and difficulty providing timely compliance reports.

2. Inventory Cycle Times

If you’re holding too much inventory, ERP software can help you more accurately predict demand. This can help maximize resources and cash flow.

3. Customer Relationship Management

When you implement an integrated ERP system, many functions are combined into one platform. This means employees spend less time researching questions for clients, less time switching between systems and less time tracking down invoices and payments.


Overall, the automation of manual tasks and the improvement of inefficient processes can result in significant labor cost savings.

In addition, efficiency can increase employee morale. While this seems ironic considering employees’ fears that they will be automated out of their jobs, it actually makes a lot of sense.

In fact, instead of reducing headcount as a result of automation, many companies reallocate employees to higher-level tasks. In other words, mundane tasks become faster and easier giving employees more time to focus on more engaging work.

While employee morale may be a bit tougher to measure than most business benefits, you can always measure your turnover rate and absentee rate to get an idea of employees’ work satisfaction. A reduction in both of these areas equals cost savings. This is not to mention that happy employees are more productive, leading to additional efficiency gains.

How ERP Software Improves Regulatory Compliance

While Sarbanes-Oxley (SOX) and regulatory compliance are often one of the last things on the minds of CIOs, it becomes very important when it’s time for that first audit of your business operations and systems. For this reason, it is important to design processes that promote compliance, and find an ERP system that can support these processes.

Fortunately, most ERP systems are pre-configured with best practices for the regulatory needs of a variety of industries. However, an ERP system alone will not ensure compliance. Your company also needs to focus on business process management.

Here are three tips for ensuring your ERP system meets your compliance needs:

1. Consider Compliance When Mapping Your Processes

Business processes need to be defined in a way that ensures that financial oversight, segregation of duties and other compliance needs are addressed.

We’ve seen too many companies treat SOX and regulatory compliance like an afterthought, only to have their auditors raise red flags after the system is already in production.

This challenge is further magnified by the fact that most modern ERP software solutions are very flexible and can perform business functions several different ways. Some of those processes are going to be compliant with your compliance needs, while others are not.

2. Focus on Change Management

Contrary to popular belief, ERP systems can’t always force compliance. While they can make it easier to enforce segregation of duties, financial oversight and approval workflows, they can’t close off every possible loophole.

Fortunately, there are several change management activities that can help employees understand the need for compliance and help enforce new processes.

Our clients have found their business processes to be much more efficient and compliant as a result of the change management guidance we provide.

3. Involve Your Auditors Throughout the Project

Just as executives and employees need to support the project, your internal and external auditors also need to have buy-in.

For example, auditors should validate key process controls during the testing and user acceptance phases of the project. In addition, auditors should perform a formalized compliance audit as part of a post-live benefits realization audit.

How ERP Software Improves Business Intelligence

Many ERP systems provide business intelligence by gathering data and organizing it into actionable analytics. This business intelligence can provide better insights into your company’s financial position and help you make informed decisions. Not only does this result in increased capital, but it can create a company culture of visibility and trust.

We recommend looking for business intelligence functionality that ensures data integrity and increases data visibility between departments.

How do you make the most of business intelligence? Following are five tips:

1. Develop a Data Migration Strategy

Many companies focus on simply migrating old data from their legacy systems to the new ERP system. However, it’s important to ensure that the data in the new system supports new business intelligence capabilities. This is not possible without a strong ERP data migration strategy.

Developing a data migration strategy helps you identify and locate essential data that doesn’t exist in your legacy system. For example, your legacy system may not have the historic sales information in the format required to support advanced demand planning.

2. Understand What Insights Different Stakeholders Need

When deciding what data to migrate from old systems, we recommend focusing on both business- and technology-related data.

This is important because CIOs often have a very different vision of business intelligence than other executives. While CIOs focus more on internal support types of metrics, such as average system downtime, CFOs and COOs are more concerned with inventory levels and other more business-driven metrics.

3. Focus on Business Process Reengineering

Just because business intelligence capabilities deliver more possibilities doesn’t mean the capabilities themselves will deliver the actual results. In fact, business process reengineering is the real key to driving data insights.

Business process reengineering is important because it ensures processes are designed to ensure the right data is being captured and utilized. 

While real-time data can help you optimize your supply chain management, it can only do so if the right data is flowing to the right people.

4. Focus on Change Management (Again)

This bears repeating a third time because it’s that important. When it comes to business intelligence, change management is important because employees need to adopt new processes to enable new data insights.

For example, if you want data to drive better customer insights, then employees touching the customer experience need to be equipped to take advantage of these insights.

5. Carefully Evaluate ERP Vendors

It is important to understand whether your ERP system has robust business intelligence capabilities.

Some ERP vendors have light reporting capabilities that they oversell as true business intelligence tools. Other vendors have strong capabilities enabled by bolt-ons. Still, others have built-in business intelligence.

What Benefits are You Expecting From New ERP Software?

Most of our clients pursue ERP projects to address inefficient business processes, ineffective technologies and subpar customer service. These challenges are especially ubiquitous in companies that have experienced organic growth or growth through acquisition.

Whatever challenges your company is facing, it’s important to determine if these challenges warrant an ERP implementation. In other words, you should quantify your expected business benefits to determine if they outweigh the costs. You also should set KPIs and measure business benefits throughout the project to continually ensure the project will deliver a high ROI.

Panorama’s ERP consultants can help you develop a business case, align your company around expected benefits and measure benefits realization. We’ll help you maximize your ROI by ensuring a strong focus on benefits realization early in the project.

5 Customer Experience Transformation Tips

5 Customer Experience Transformation Tips

A great customer experience is not something that magically happens. It’s a mindset that’s built and reinforced by optimized processes and easy-to-use systems.

In terms of optimized processes, we’re not just talking about customer-facing processes, as customer-facing employees don’t spend all their time speaking with customers. We’re also talking about the transactional processes that happen behind the scenes.

These processes should be optimized, too. This is essential because when employees are frustrated with poorly designed processes and technology, customers notice. In addition, customers experience this frustration themselves when self-service portals are not optimized.

The Beginner’s Guide to Digital Transformation

What are the 6 secrets to digital transformation that are helping organizations build competitive advantage?

The key to customer experience transformation is designing optimized business processes and implementing digital technology that supports these processes. More specifically, here are five tips for improving the customer experience at your company:

5 Ways to Improve the Customer Experience

1. Streamline the Processes of Customer-facing Employees

In many companies, customer-facing employees interact with a bevy of different enterprise systems, some of which are decades old or cobbled together. As you can imagine, trying to navigate through legacy software with inflexible options can cause significant frustration.

Many companies also have inefficient processes. While employees often become complacent with these processes, frustration inevitably arises during busy periods. For example, if a task takes days instead of hours, this inefficiency becomes more noticeable with a heavy workload.

Inefficiency is a problem that can be solved by focusing on business process management and allowing employees to provide input. This shows employees that you care about their pain points, and that organizational changes are meant to make their lives easier.

Giving employees the opportunity to suggest improvements is important not just for morale but for successful process improvement. After all, the employees who complete processes day-to-day are more familiar with the pain points than their manager is.

2. Eliminate Organizational Silos

The dream of many business owners is to lead a company that works together to achieve the same goals. The sad reality is that many companies have departments that operate in silos.

Silos generally manifest as companies create new teams around critical business functions. This effort often neglects the customer experience in favor of achieving a financial goal. As a result, different teams have different goals and benchmarks.

Ironically, when the customer experience at a company begins to suffer, the company often creates a new team called the “Customer Experience Team.” This team is just another silo.

What’s a better approach? Instead of making an individual team responsible for the entire company’s customer experience, consider making customer experience a priority for all business units. We recommend creating customer-focused metrics for every department and designating process owners to hold people accountable. This is the first step towards abolishing silos that damage the customer experience.

Abolishing silos improves trust and increases employees’ willingness to share important information. As a result, you will uncover more opportunities to improve the customer experience.

3. Empower Customer-facing Employees

A frustration that many employees have is the feeling that they must ask permission before acting. To address this frustration, it’s important to create a culture that encourages decision-making and process improvements at an individual level.

One of the best ways to empower employees to be proactive is to create incentives. In other words, consider rewarding employees for actionable suggestions.

In addition, your company should encourage employees to troubleshoot errors and solve inefficiencies on their own. Overtime, hundreds of incremental process improvements can result in significant cost savings.

While employees have many insights that mangers don’t have, they are bound to make mistakes. Not every improvement will be beneficial. It’s important not to punish these mistakes or you may dissuade employees from being innovative.

Instead of punishing the employee, make it a learning experience. Analyze what happened, why the problem occurred and what safeguards can be put in place to prevent a similar issue from happening.

Another reason to empower employees to suggest or make changes is that they hear the most customer feedback. This feedback is especially valuable when it comes to improving customer experience online.

In particular, it’s important to listen for feedback pertaining to the ease-of-use of the various channels customers use to interact with you. In addition, you should seek to understand the types of channels customers prefer to use.

4. Improve Employee Training​

When was the last time your company’s new employee training book was updated? While it may not be feasible to update this resource in real-time, it is feasible to review and update your end-user training on a quarterly or annual basis.

During these reviews, you should assess what employees are doing in the field versus what they are being taught. This is important because there could be better processes being used in the field. When new employees understand these better processes, they are more likely to exceed customer expectations.  

You should consider updating not just the content of your training but your training methods. One especially effective method is facilitating mock sessions with fake customers. This creates a safe environment where new employees can practice answering questions or running through scenarios.

5. Leverage Analytics

One of the most important aspects of providing a positive customer experience is ensuring employees have access to accurate data. In fact, analyzing customer data gives you the opportunity to provide customers with a more personalized digital customer experience.

For example, understanding the services most valuable to customers can give you a reason to expand upon a particular service offering. In other instances, you can use customer data to craft more successful promotions and better-targeted advertisements.

Accurate data is also useful to managers, as it allows them to monitor the performance of their employees. If one employee routinely belittles clients, then removing them can prevent poor reviews and the loss of customers. On the other hand, if one employee is consistently outperforming their peers, then it’s important to understand what they’re doing, so you can improve your processes.

Obtaining accurate, real-time data can be difficult without a modern ERP system. We recommend carefully evaluating ERP vendors’ customer relationship management (CRM) functionality to find the system that best supports your needs.

Optimized Processes can Improve the Customer Experience​

Positive customer experiences are the result of integrated, optimized business processes. This means processes that make both employees’ and customers’ lives easier.

While business process reengineering is an arduous project, the good news is that employees can help suggest solutions. Customer data and feedback also is helpful when improving processes.

Panorama’s digital transformation consultants regularly use their process improvement expertise to enable companies to anticipate customer needs faster than their competitors. We take the time to understand customer journeys, and we can help your company create a customer experience that is memorable – for the right reasons.

5 Change Management Communication Tips

5 Change Management Communication Tips

How do you define business transformation success? Does it mean your project was on-time and on-budget, or does it mean more than that?

Just because you adhered to a budget and timeline doesn’t mean your project succeeded. If everyone was working toward the same goal during the project and continues to do so, this is more characteristic of a successful project. In other words, organizational alignment both enables and signifies success.

2019 ERP Report

This year's report delves deep into the data to analyze what ERP industry trends mean for organizations now and in the future.

Organizational alignment is a topic we often mention in our blogs. Today, we’ll discuss one key strategy for achieving this alignment: change management communication.

How to Communicate With Employees to Ensure Business Transformation Success

1. Build a Project Team

When it comes to large-scale projects that involve many stakeholders, it’s essential to form a project team. Part of this project team should include an organizational change management team responsible for determining employees’ change readiness and developing a change management plan.

We recommend designating change agents as key influencers within the change management team responsible for executing many of the communication activities of the change management plan.

2. Communicate Early​

It’s far easier to obtain employee buy-in when they understand that the project is an opportunity to improve the company and their individual jobs. As such, your change management team and executives should communicate the nature of change long before it happens.

For example, how significant is the change, and how will employees be impacted? Why is the change necessary, and what improvements stand to be gained?

3. Listen to Employees’ Concerns

We have found that both top-down and bottom-up communication help ensure organizational alignment prior to an ERP implementation or business transformation.

Bottom-up communication is especially important because end-users may have insights that senior leaders don’t have. End-users have this insight as they are the ones performing the business processes.

In addition to insights, end-users will also have concerns. These should not be taken lightly, as employees respond much more positively to change when they know their concerns are seriously considered.

Every client we’ve worked with has had several employees who initially resisted change but became supportive of the project once they had the opportunity to communicate their concerns. This communication often took place one-on-one, but sometimes was facilitated through “town hall” meetings.

4. Manage Issue Escalation During the Project

Once the project is underway, bottom-up communication should not stop. In fact, projects without a communication hierarchy can get derailed by an inconsequential problem if end-users don’t understand how to communicate issues and to whom.

For example, let’s say that during a software upgrade for a system at an asset management firm, a calculation error is discovered in a test environment. End-users escalate the issue to the Chief Risk Officer (CRO). However, the CRO is not tech savvy, so he misinterprets the bug as something that affects live operations. He then shuts down trading operations to investigate the issue. This decision could potentially cost a firm millions of dollars.

5. Share Key Information During the Project​

Just as bottom-up communication should continue after the project commences, so should top-down communication.

Relevant information to communicate might include details about upcoming milestones or findings from previous milestones. For example, what business benefits did the company realize from the first phase of the project?

Continuous communication about project goals also is essential for maintaining employee engagement. As project challenges arise, buy-in naturally fluctuates, so it’s important to repeat key messaging to convey why the gain is worth the temporary pain.

How do Employees Perceive Change?

Effective communication requires an understanding of employee perceptions. In general, employees perceive change as something negative.

If your change management approach is to succeed, they must put themselves in the shoes of a typical end-user. From this perspective, change may seem like a cost-cutting measure aimed at eliminating staff. Additionally, new responsibilities may seem intimidating and cause you to feel inadequate.

Considering these fears, it’s important to develop a comprehensive change management plan with a strong focus on employee communication. We have found that poor communication only serves to increase employees’ fears.

Panorama’s ERP consultants understand that employee buy-in is essential to business transformation success. We can help your company align employees around common goals by building a communication-savvy change management team.

8 ERP Software Selection Process Best Practices

8 ERP Software Selection Process Best Practices

Selecting the right ERP software for your company can lead to numerous business benefits. However, achieving these benefits entails an awareness of software selection process best practices.

According to our 2019 ERP Report, only 8% of respondents were dissatisfied with their choice of ERP vendor. Vendor satisfaction typically indicates that a company chose a system that resulted in measurable ERP business benefits.

2019 ERP Report

This year's report delves deep into the data to analyze what ERP industry trends mean for organizations now and in the future.

Clearly, the secrets to successful selection are spreading like wildfire. If you haven’t heard them, we’ve outlined them for you here.


Here are eight best practices from our experience evaluating hundreds of ERP systems for our clients:

1. Don’t Assume You Need A New ERP System

If your business strategies or business processes are flawed, even the most advanced ERP system will be useless.

For example, if you want to improve your customer experience, you don’t necessarily need a new ERP system. In fact, there may be more cost-effective and lower-risk options, such as improving processes, redesigning your organizational structure or consolidating your global supply chain.

When you don’t assume you need new ERP software, you’re more likely to look for specific justifications for ERP since you’re not assuming it’s an obvious choice. Specific justifications are exactly what executives need when deciding to invest in ERP.

So, consider ERP as an option, not a mandate. Then, you will be motivated to outline specific benefits you hope to attain. In other words, you will be well on your way to developing a compelling business case.

A business case should not only outline business benefits but costs, as well. These might include hidden costs, such as internal project resources, data conversion and lost productivity immediately following go-live.

While you may want to contain costs, it’s more important to be realistic as this will ensure an on-time, on-budget project. A business transformation is one of those situations where you get what you pay for, so you should defend what you need to spend and not feel guilty about it.


2. Don’t Forget About Your Incumbent ERP Vendor

We regularly work with clients who want nothing more to do with their current ERP solution. In many cases, end users have an overwhelming impression that the old system doesn’t work. 

The reasons for this perception often have little to do with the software itself. More often, discontent is related to the fact that the system was poorly implemented, employees were not adequately trained or the business processes are broken.

Before end users convince you to invest in a new system, you may want to consider some reasons to stick with your incumbent ERP vendor:

Upgrading your ERP software can provide immediate business improvements.

Most ERP vendors make several enhancements throughout any given year, so if you are even just a year behind on upgrades, you may be missing out on key functionality that may address your current pain points.

Several software vendors have acquired other enterprise or point solutions.

ERP vendors have achieved growth through acquisitions over the years, so your current vendor may have products in their portfolio that you are not aware of. In addition to core ERP software offerings, many vendors are acquiring and integrating advanced point solutions that could extend the functionality of your current enterprise system.

An upgrade can yield more cost savings compared to a replacement.

The cost of keeping a customer is lower than losing a customer, so your vendor may be willing to make many concessions on the cost of software licenses, maintenance and upgrades. Another reason upgrades can be less expensive is because your employees are familiar with the current system, so you will likely save on training costs.

Considering your current ERP vendor as a viable option provides more negotiating leverage.

Other vendors competing for your business will know that you don’t have to switch solutions to benefit from a modern ERP system. Therefore, they are more likely to reduce their costs to compete with a viable incumbent. They also understand that the potential cost savings of staying with your current vendor are enticing, so they may offer cost savings, as well.

3. Focus on Business Process Management

Some companies select the vendor with the slickest ERP demo and the coolest features. However, when they begin implementation, they quickly realize that the solution doesn’t meet their business needs.

Then, one of two things usually happens: 1) the company changes the way it does business so their processes work within the ERP system – which often means losing the processes that give them competitive advantage, or 2) the company customizes the software to fit its processes, which is extremely expensive and time-consuming – not to mention these processes may be flawed to begin with.

Preserving competitive advantage and minimizing customization are two reasons many companies begin selection by defining business goals, aligning stakeholders and mapping business processes.

Process mapping also is an opportunity to improve your operations and determine business requirements for a new ERP system.

What is a business requirement? Here are some examples:

  • The ability to handle multi-currency
  • The ability to track work in progress
  • The ability to define discounts based on a contract assigned by a client

Software requirements gathering can be time-consuming, especially if you have multiple business units and multiple global locations. We recommend gathering ERP requirements for each location, while identifying which requirements can be consistent across locations and which should be unique.

This can be especially challenging for public sector organizations pursuing digital government initiatives, as process documentation is often lacking and tribal knowledge is the norm.

Business process management not only entails requirements gathering but also requirements prioritization. It’s important to prioritize requirements because no ERP system can address every business requirement.

When prioritizing requirements, you should involve employees from all departments to determine the most important requirements based on business value:


  • Must-have – Provides significant business improvements in terms of revenue, strategy and compliance and maintains basic functions of the business that “keep the lights on.”
  • Value-added – Beneficial to improving business processes but not critical.
  • Nice-to-have – Makes employees’ jobs easier but won’t necessarily provide significant business process improvement.

4. Consider Multiple Criteria

There are several other criteria besides business requirements, that you should consider in your selection project:

Organizational Alignment

The main reason you should be considering a new ERP system is to help you achieve your business goals. This should be the central focus of your selection process.

Technical Fit

It’s important to understand what servers, databases, PCs, etc. will be required to support any potential ERP solution.

IT Strategy

How does the technology of the potential ERP system align with the technology and infrastructure within your IT department?


While it’s in vendor sales reps’ best interests to downplay costs, it’s your job to validate their estimate. Does it include annual support fees and implementation costs?

Vendor Viability vs. Level of Service

On one hand, it is good to do business with an established vendor that you know will be around to support you in the future. On the other hand, there is value to doing business with a less established ERP vendor that may provide better service than a larger firm.


A vendor’s customers can serve as great references for evaluating the vendor’s products, support and services. Be sure to do your due diligence, read case studies and ask for references from customers with business needs similar to your own.

5. Set Realistic Expectations​

Your new ERP system should support your company for up to a decade, so it’s important to mitigate risk by setting realistic expectations.

In terms of timeline, remember that ERP projects rarely take as little time as software sales reps say. To get a more realistic estimate, we recommend developing an ERP project plan that includes activities beyond what vendors typically deliver. These activities might include overlooked items, such as business process design, configuration and customized end user training.

ERP implementation plans should always include training, communication and other organizational aspects critical to a successful project. For example, conducting an organizational readiness assessment prior to ERP selection will help you identify pockets of resistance and determine necessary change management activities.

Another aspect of setting realistic expectations is mitigating risk. We’ve all heard of the technical glitches that shut down shipping at Fortune 500 companies for weeks. This happens all the time at companies of all sizes. In addition, time and cost overruns are a common occurrence, as seen in our 2019 ERP Report.

In light of this grim reality, it’s important to develop a risk management plan that includes contingencies for ERP failure.

Being realistic about vendor sales hype also can help you avoid ERP failure. For example, how many times have you heard one of the following statements when researching ERP solutions?

  • “We have the largest market share in your industry, so we are the right fit for you.”
  • “Our software is cheaper and easier to implement than other ERP solutions.”
  • “The whole industry is moving toward our type of solution, so you should, too.”

While some of these statements may be true in some cases, relying too much on broad generalizations is risky. Your company is too unique for any of these statements to have any bearing on your decision.

Panorama helps clients manage sales hype. We ask clients questions, such as . . .

  • How are your business requirements different from those of your peers or competitors?
  • How much time and money is it really going to take to fully implement ERP as a business solution, not just a piece of software?
  • What are you trying to accomplish with your ERP solution?

These questions help clients delineate between sales hype and reality. This is important because we know how powerful sales hype can be. In fact, gut instinct is a common decision-making mechanism for most humans.

For example, some executives select software based on what competitors have chosen. Other executives have had a previous experience with a particular vendor and are partial toward that vendor.

Separating fact from fiction and business rationale from emotion often requires an independent assessment from a third party, like Panorama.

6. Don’t Forget About Your Millennial Employees

Have you ever considered which of your employees (non-decision makers) will have the greatest influence your ERP software selection? It may not be who you expect.

The largest generation in the American workforce is the Millennial generation. Depending on your industry, they likely comprise about 35% of your workforce. Naturally, this generation’s preferences and propensities will significantly influence your ERP software selection – if you put any weight on user experience when making IT decisions.

User experience is an important consideration during ERP selection as end-users across departments and across generations will use the new software. You have a lot of people to please.

While people pleasing isn’t generally a fruitful pastime, the rules change when it comes to ERP software. Your evaluation criteria should consider user experience as a factor equally as important as functional requirements and total cost of ownership (TCO). The risks of not considering user experience include low employee morale, low system usage and process inefficiencies.

The influence of the Millennial generation isn’t relegated to its size – its unique characteristics also contribute to its power. Millennials are “digital natives,” meaning they’ve never known life without digital technology. This unique characteristic makes them critical of technology that doesn’t meet their expectations.

For example, Millennials expect software to be intuitive, much like their favorite social media platforms. Their familiarity with social media also primes them to expect software features that promote collaboration.

They also expect accessibility – your ERP software better be mobile-friendly. If it takes more than two clicks to navigate somewhere, they may throw their laptop across the room.

If you want to gauge the more specific needs of your workforce, you can conduct anonymous surveys, encouraging employees to provide honest answers.

Many ERP vendors have accommodated Millennials by building user interfaces that resemble social media platforms, adding social collaboration features, improving their mobile-compatibility and reducing users’ click-fatigue.

Deciding to implement modern ERP software is the first step to meeting the needs of your Millennial employees. However, many companies avoid ERP projects because their legacy applications are “fit-for-purpose,” and seem too expensive to migrate.

Some of these companies resort to time-consuming workarounds to please Millennials. They’ve built new front-end applications to improve the usability of their software, while overlooking inefficiencies throughout the ERP software solution.

Meeting the needs of Millennial employees not only requires careful software selection, but it requires a focus on organizational change management. This should start during the selection process in the form of communication.

Even if you select the best ERP system for Millennials, they will still be resistant to it unless you communicate with them before implementation. This ERP communication should include details about project goals and potential process changes.

7. Carefully Manage ERP Vendors

Don’t let vendors control the selection process. If your vendor is exhibiting any of the following behaviors, consider it a red flag:

  • Insists on conducting the demo and evaluation process their way, rather than your company’s preferred way
  • Controls the tempo and pace of the evaluation process by requesting that they demo last or at a later date
  • Bypasses working with your selection team, and tries to work directly with executives
  • Creates doubt by criticizing your project team’s approach
  • Cries foul by expressing concern that they don’t have enough time to prep or don’t agree with the selection process

These patterns are generally more common when the ERP vendor feels they are at a competitive disadvantage.

The following methods can be very effective in diffusing vendors’ attempts to control the selection process:

Ensure Vendors Understand Your Business

We recommend sending a request for information (RFI) to all the vendors on your long list. You should also provide vendors with a demo script to ensure they focus their demo on how their solution meets your company’s requirements.

Allow Vendors Access to Your Company’s Key Employees

While many sales reps prefer to build strong relationships with your executive team, they should also interact with your subject matter experts. Without this relationship building, key employees may refuse to participate in the selection process.

Evaluate Vendor Responsiveness

The ERP software you select should come from a vendor that listens and responds to your company’s needs. If a vendor is responsive during the sales process, they are likely to be responsive during implementation, and this is where engagement is especially important.

Remember That You Are the Customer, Not Them​

Whatever heartache a sales rep expresses, it is important to remain firm, have confidence in your evaluation process and demand that they earn your business on merit. You are not expecting too much by asking a vendor to demo their ERP system against your business needs rather than simply presenting their canned sales demos.

Coach Executives to Deal With Vendors

It is very likely that at least one vendor will bypass you at some point in the process and go straight to someone higher in the company. Your executive team should be coached on how to handle reps when they call. This might mean redirecting inquires to the ERP project team.

Let a Vendor Walk if Necessary

If a vendor thinks their chances of success are slim, they may walk away from the deal. Your company should allow vendors to self-disqualify. After all, it’s a bad sign if a vendor doesn’t have confidence in their product’s ability to compete.

Negotiate Aggressively

Some vendors will tout their discount rates when first showing you price tags. Don’t be fooled! There are always ways to negotiate even lower license fees and even better maintenance terms. Focus your ERP negotiations not just on short-term costs, but also on longer-term costs, such as future licenses, additional modules and long-term maintenance.

Clearly Define Scope

Make sure you understand what the vendor is and is not responsible for during implementation. For example, who is responsible for ERP data migration and end user training?

Find the Best Implementer

As strange as it sounds, software companies aren’t always the best implementers of their own software. In fact, you can often find better implementers at a lower cost by hiring a value-added reseller (VAR).

8. Hire an Independent ERP Consultant

Unfortunately, many ERP consultants are too quick to make recommendations based on biases, kickbacks from ERP vendors and lack of knowledge of various software solutions.

Independent ERP consultants, on the other hand, bring a neutral point-of-view to the selection process.

In addition to being independent, consultants should have experience in your industry. Industry-specific experience has many benefits for your company. For example, it enables consultants to determine which of your processes should be standardized and which should be differentiated.

An independent ERP consultant, like Panorama, will help you follow all the best practices outlined in this post. We’ll help you find an ERP system that aligns with your business goals.

5 ERP Post Go-live Optimization Tips

5 ERP Post Go-live Optimization Tips

Your ERP project team has crossed the finish line – you’ve gone live! All that’s left to do is support the production environment, right?

Not quite. Post go-live optimization is a phase that should be included in your ERP project plan and is often overlooked. During this phase, you should be supporting users in the production environment with training, communication and issue resolution via your support team.

This phase is essential because the first impression of a new ERP system and your IT department’s ability to support it set the tone for user adoption.

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While there is no “one size fits all” approach to post go-live optimization, we’ve compiled five tips and tricks from our experience that can maintain your momentum after go-live:

5 Tips for Post Go-live Optimization

1. Be Proactive, Not Reactive

Even if users are not reporting system slowness, we recommend measuring system performance anyway.

Your IT department may find performance issues before users begin to notice. Fixing these issues in a timely manner can lead to better user adoption in the long run.

In addition, early detection of performance problems allows you more time to investigate the root cause and fine tune your infrastructure. It’s better to find these issues before more transactions bog down the system and more users come online.

Another way to be proactive is to monitor interface and batch job error logs. Again, the key is to identify any issues before an end user does. For example, by monitoring error logs, you may realize that purchase orders are not being updated with delivery information before a buyer notices and opens a ticket.

During implementation, interfaces may have passed all rounds of testing, but with live data and a multitude of new users in the system, there are likely scenarios that were not tested and could be causing issues in production.

Taking proactive measures to keep the system stabilized leads to better user adoption and presents an opportunity to train your support team on what to monitor and how.

Having a strong post go-live support team is critical in optimizing your live ERP system, which leads to our next tip.

2. Assemble Your Team and Streamline Their Processes

Prior to go-live, your support team should have been ramping up to prepare for the post go-live phase. However, once the system is live, this training shouldn’t stop. We recommend arming your team with any and all available resources, such as additional training materials, sandbox environments and top-level support.

Ensure your support team has a good mix of ERP experts, business analysts, process specialists and change management champions. When you have a wide range of expertise, whatever ticket comes through the help desk can be addressed without scrambling to find the appropriate resource.

For example, you could have a security or access issue bucket where users can report an incorrect security assignment that prevents them from accessing the ERP system. These issues can then be routed to the security team without having to pass through the eyes of a business analyst.

Another example is a training bucket for when users open a ticket for a process that is working as designed but users were not properly trained on it. These can be directed to the organizational change management team who can train users on correct protocol.

Categorizing tickets is just one trick for streamlining the resolution process. Anything you can do to optimize their process will help you more quickly stabilize the ERP software.

3. Dig Into the Data

Just like monitoring error logs, keeping an eye on production data can help identify issues before they become a bigger problem.

For example, let’s say during ERP implementation you assumed that order entry clerks would create a system record for a new customer before placing an order for them. You even defined this in a business process flow and recorded this in the training documentation.

However, now that your ERP system is live, you’re starting to see several sales orders with no customer name. The assumption made during the ERP project impacted downstream processes, such as customer retention and marketing campaigns. Without customer records, these downstream processes will have no data to act upon.

Identifying and addressing data issues can optimize your ERP solution a few different ways: it can identify process changes that employees prefer over what was implemented, it can reveal which users or business groups are not properly trained, and it can help identify configuration problems that allow users to enter invalid data.

In our experience, data issues can be minimized by developing a data migration strategy early in the project. Our clients have found that this not only minimizes post go-live data issues, but it makes these issues easier to address.

4. Communicate, Reiterate, Repeat

Your change management team should ensure end users know the key dates of when to stop transacting in one system and when to start in the other. This team is also responsible for ensuring that training documentation and additional help information (such as the process of opening a support ticket) is easy to find.

Communication lets end users know they are not alone. Key messages should be repeated as needed to reach the widest audience because, when it comes to organization-wide changes, there is no such thing as over-communicating.

5. Listen for Feedback

When users call into the support desk, they likely will have some insight into how they thought the enterprise system would work versus how it was implemented. Your support team should listen to these users and capture their feedback. This feedback provides insight into how to optimize the ERP software.

Visiting with the user base can also prove enlightening. For example, in the retail industry, imagine leaving the headquarters (where the majority of the ERP project took place) and visiting the stores that are live with the new system.

You might witness an employee and customer interaction where the employee checks the inventory for an item and finds it’s not available at the current location. The customer asks if it’s available at another location, but the employee says that the system doesn’t show that information. Frustrated, the customer leaves.

It’s easy to see that inventory visibility across stores was not a top priority during implementation. However, this first-hand account has made it clear that it should be a priority moving forward.

Analyzing and acting on feedback is an important step in realizing more business benefits from your ERP system. Capturing feedback systemically and converting comments into requirements is a good first step to optimizing your new ERP system in a subsequent phase.

Continuous Improvement

Have your ERP vendor and ERP consultants left you stranded after go-live? Panorama’s ERP consultants can pick up where they left off and equip your team to proactively address technical and process issues. We’ll also empower end users to report issues and identify opportunities for improvement. Contact us to learn how we can help your company realize long term ERP benefits.

8 Tips for End User Training

8 Tips for End User Training

Most people dislike change. This makes implementing organizational changes difficult.

If your company is about to undergo significant organizational changes, then preparing employees is the best way to mitigate change resistance. In fact, a comprehensive end user training strategy is an essential component of an effective organizational change management plan.

Unfortunately, less than half of companies in our 2019 ERP Report included customized training as one of their project activities.

2019 ERP Report

This year's report delves deep into the data to analyze what ERP industry trends mean for organizations now and in the future.

So, how do you develop a training strategy to prepare team members for an ERP implementation or business transformation? We’ve compiled eight tips that can help you:

1. Ensure Executives are on Board.

Executives should understand the importance of change management and understand what activities are necessary for change management success. It’s especially important to set realistic expectations around employee training in terms of budget, timeline and resources.

2. Assume You Have Underinvested in Training.

We have yet to be involved in a project where the company spent too much time on training. Rather than looking for ways to save money by cutting change management activities, you should look for ways to help employees feel comfortable with change. This will actually decrease your overall costs and increase your ROI in the long-term.

3. Start With Business Processes.

Before designing a training program, we recommend documenting business process changes. Only then can you determine the impact of change on employees and the knowledge gaps that need to be filled.

We use change impact assessments to help our clients connect the dots for their employees in terms of the way things work now and how they will work in the future.

4. Begin Training Early.

There is a common assumption among project managers that employee training should be conducted a few weeks before changes are rolled out. Instead, employees should receive multiple rounds of training well before they are expected to adopt new processes and/or technology.

While it is tempting to train employees in one session, this is never a productive practice. Regular training sessions ensure employees retain information and learn to use new software functionality as it is rolled out over time.

5. Customize Employee Training.

Everyone learns differently, and a one-size-fits all approach leads to broad skillsets with holes in understanding. The ideal solution is to offer individualized training. This helps you address individual roles and skill levels.

One tool you can use is a change impact assessment. This helps you identify how change will affect each employee and guides you in developing individuated training plans.

6. Use Employees as Trainers.

As business owners, you may not always know the details of every employee’s job. This is why it’s a good idea for a managers and subject matter experts to take on the role of trainer.

This peer-to-peer learning technique is especially effective in large organizations. Employees can each be assigned a coach who understands their role and provides personalized feedback.

At Panorama, we design train-the-trainer programs for many of our clients implementing new ERP software. This helps them efficiently train employees on new business processes and technology.

7. Use Mobile Technology.

Much of today’s workforce works remotely. Training these employees can present a challenge.

However, incorporating mobile technology in your training strategy ensures remote employees receive effective training.

Popular apps, like Slack, can improve training through gamification. In other words, you can test employees’ knowledge via quizzes and games. This leads to higher engagement and memory retention.

Microlearning is another mobile-friendly technique that breaks training content into a smaller, more manageable pieces. This often includes short videos that employees can watch at their own pace.

Geo-fencing is one mobile technology you can use for microlearning. It is a location-based service where mobile phones use GPS, Wi-Fi or cellular data to trigger a programmed action when an individual enters or exits a virtual geographical boundary.

While traditionally used by companies for marketing purposes, some companies are using geo-fencing for microlearning. For example, field employees who work with compliance-related issues can be sent push notifications reminding them to conduct specific checks.

8. Combine In-person and Online Training.

While many employees find that in-person training is the best way to learn, it can be difficult to hold employees’ attention without incorporating online training materials.

Using multiple teaching methods, such as pre-recorded videos and demonstrations, can keep employees engaged during in-person training sessions.

When employees inevitably forget concepts over time, online resources, again, become useful. Many ERP vendors have user communities that provide ongoing support to end users.

Online training is especially effective for Millennial employees. Traditional classroom-based training alone won’t cut it with this group.


Effective Training Programs

Developing an effective training strategy will ensure the success of your ERP project or change initiative. In fact, we have found that employee adoption is one of the main drivers of benefits realization.

This is why Panorama’s ERP consultants design comprehensive change management plans for companies and prioritize training early in the project. If you are planning for major changes at your company, let Panorama help you develop a strategy for success.

ERP vs. CRM: What’s the Difference?

ERP vs. CRM: What’s the Difference?

In a time where businesses are undergoing major business transformations to stay competitive in a modern marketplace, companies are looking to ERP software and CRM software to make that dream a reality.

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The two software suites are often discussed concurrently, making it difficult to understand the difference between them. If your business is trying to decide whether to implement a standalone customer relationship management system or a full ERP system, it’s important to understand some of the main differences.


ERP vs. CRM: A Real-world Analogy

A simple, non-technical analogy to describe the difference between ERP and CRM software is the contrast between a cruise and a traditional vacation. Let’s say you want to take a vacation to the Galapagos Islands.

On a cruise vacation, transportation to and from the Galapagos is provided. Your lodging, food and entertainment are all included as well. The cruise line is aware of your itinerary while on the boat and informed of the scheduled times onshore. You could say your vacation plans are managed end-to-end by the cruise line with all activities and timelines seamlessly integrated – just like an ERP software solution.

While your plans are easily managed by a single entity, you may feel like you’re not getting the most out of the onshore excursions. Instead, a traditional destination-based vacation may be what you’re looking for.

Like CRM software, specific tourist sights allow you to get the most out of your vacation. If you spend a good portion of your trip in the Galapagos, you may want to seek out the best attractions and tour companies. This is similar to the specificity of a CRM system.

Some people’s ideal vacation would be a mix of both options. Here you have the best of both worlds – a specific destination where you can take extensive tours and a cruise line to show you multiple destinations for a single price.

CRM Systems: What You Need to Know

CRM software’s core functionalities involve managing potential and current customer relationships. Powerful marketing tools like social media management, online promotional campaigns and automated emails are part of the CRM suite that fuels lead generation.

Once leads become customers, CRM software also manages the sales order creation and support processes, like help desk and call center. Business analytics, such as purchasing trends and loyalty metrics, are other out-of-the-box features.

At a high-level, most CRM software contains the following feature sets:


  • Marketing
    • Automated marketing emails
    • Online campaign management
    • Social media management
  • Lead management
  • Sales support
    • Call center
    • Order confirmation
    • Fulfillment inquiries
  • Purchasing trends and analytics
  • Loyalty management

ERP Systems: What You Need to Know

In contrast to CRM software, enterprise resource planning (ERP) software has a wide-ranging set of capabilities across all business operations. From managing payroll for your company’s employees, to creating a bill of materials for the goods you sell, this software system is designed to run your business from end to end without additional software packages.

This software is often used for its financial capabilities, including accounts receivable and payable as well as month, quarter and year-end reporting. ERP systems typically have the following modules:

  • Accounts receivable
  • Accounts payable
  • Sales and marketing
  • Purchasing
  • Human resources
  • Inventory management
  • Warehouse and transportation management
  • Product management
  • Planning and production

Some ERP software is more specialized for specific industries, such as manufacturing or retail, and may have richer capabilities in those areas. A thorough comparison of several vendors is necessary during ERP selection as each system has its own strengths and weaknesses.

We advise our clients that their software of choice must meet the majority of their ERP requirements to minimize the amount of custom code.

Overlapping Features Between ERP and CRM

Because ERP applications also contain customer management and sales functionality, there are a few areas in which the two software suites overlap.

Most ERP software allows a business to maintain customer data, create marketing campaigns, build quotations and generate sales orders. However, when it comes to supporting the marketing campaigns or tracking sales trends, CRM software has much richer capabilities.

Should You Select ERP or CRM?

This answer depends on two factors: what are your current business requirements and IT capacity, and what are your needs in the future?

If you are looking to streamline all your processes and replace an existing suite of non-integrated applications, an ERP system might be the solution for you. On the other hand, if you need focused capabilities to handle marketing and customer management, a CRM system is probably your best bet. For example, many CRM systems enable sales reps to use real time data to personalize customer interactions.

If neither of these scenarios describe your company, and you’re considering overhauling your entire IT landscape, then you may need both ERP and CRM software with an integration between the two.

To help you decide, ask yourself the following questions:

1. Where could you find the most benefit: operational efficiency or greater sales volume?

The primary way an ERP system increases your profits is by improving efficiency. It does this by streamlining business processes and cutting overhead costs.

Compared to ERP systems, CRM systems are not as concerned with lean process improvement. Instead, the primary way CRM software increases your profits is by increasing your sales volume. It does this by empowering employees with the tools to improve customer service and make bigger sales.

Could your company achieve a higher ROI by making your business processes more efficient than by increasing your sales volume? Then an ERP system may be a good choice for you – and vice versa.

2. Do you need a new financial system?

If your answer is yes, you probably need an ERP system. Unless your company is entirely made up of a sales and marketing model where all your requirements can be fulfilled by a CRM system, you likely need a financial system of record.

3. Does the ERP’s sales and customer management functionality meet your business needs?

If not, a deeper dive into your requirements is needed to determine which CRM vendor is best for you. If there is not a CRM vendor that seems to check all the boxes, an integration between both ERP and CRM may help bridge the gap.

4. Is your business ready to tackle an ERP project?

While an ERP implementation is a massive undertaking compared to a CRM implementation, ERP business benefits are significant. If your IT department has the resources and your business has the funding for such a project, it’s likely worth the investment.

5. Does your IT department have the capacity to develop integrations?

Having a CRM system isolated from your ERP defeats the purpose of having both. Luckily, many ERP vendors are starting to ship product with almost “plug and play” configurations to integrate with popular CRM suites. While this definitely helps expedite your ERP to CRM integration project, custom code often will be required to seamlessly integrate the two.

6. Is your project a digital transformation?

This is a good question to regularly ask yourself as it not only relates to the choice between ERP and CRM but your overall digital strategy.

Companies pursuing digital transformation intend to create new business models. These companies need a scalable ERP solution with a promising product roadmap. If this describes your company, it’s important to evaluate vendors’ product and company trajectory.

However, if you’re not pursing digital transformation, then a full ERP system with a significant number of modules may be overkill for your company. Instead, a CRM system may be a better fit. It might provide you with all the functionality you need, and you won’t have to pay for unused modules.

CRM Implementation Tips

CRM implementations entail the same level of organizational change, operational complexity, business risk and technical risk as traditional ERP projects. There are several factors that can increase this level of risk, including integration with existing systems, data cleansing and migration, system stability, demand on hardware and networks, system compatibility and deployment options. 

Following are five tips for mitigating risk during a CRM implementation:

1.  Focus on Organizational Change Management

Most CRM implementation challenges are related to process and change management issues. As such, your company should ensure that sales reps are committed to project goals and clearly understand new business processes.

In our experience, salespeople can be among the most change-resistant employees because of the extra work a CRM implementation creates and the temporary pull from their commission-generating activities. A change management plan is critical to mitigating this resistance.

2.  Consider Your IT Strategy

Your CRM implementation should be part of a comprehensive IT strategy. In other words, consider how your CRM system will integrate with other systems now and in the future.

For example, it’s important to determine how the CRM system will interact with inventory management, financials, product configuration, manufacturing and other functional areas.

3.  Remember That Your CRM System Doesn’t Need to Come From Your ERP Vendor

Many of our clients begin their software evaluation process with the expectation that one single vendor will provide most or all the functionality they need. 

However, if CRM is critical to your business model and a source of competitive advantage, it may behoove you to consider a standalone CRM system to augment your core ERP software. 

4.  Understand the Integration Capabilities of Your CRM System

Simply because two systems integrate doesn’t mean they will integrate the way you want them to. For example, we have found that certain product configuration details desired by some sales teams do not integrate well without extensive customization and changes to CRM system architecture.

It’s important to understand how your CRM will integrate with other software, such as business intelligence, product lifecycle management, quality assurance and other point solutions.

5.  Don’t Bite Off More Than You Can Chew

Even though you’ll want to make a decision that’s best for your long-term enterprise solution, you don’t necessarily need to implement or even purchase various solutions all at once.

For example, one of our clients worked with us to procure and implement a CRM system in a separate phase well before they began planning their ERP project. We were able to implement and integrate their chosen ERP system in a later phase because we had previously helped them define a long-term IT strategy.

Selecting the Right Technology

Deciding between ERP and CRM software (or some combination of the two) can lead to some interesting discussions among executives and ERP project team members. It can be difficult to reach a consensus, or you may not feel confident in your decision.

Panorama’s expertise lies in understanding a company’s unique needs. Our ERP consultants will help you determine what type of technology aligns best with your business goals and digital strategy.

How to Develop an ERP Project Plan

How to Develop an ERP Project Plan

When companies decide to implement ERP software, they often jump right into ERP selection without taking the time to prepare. However, it’s important to first develop an ERP project plan based on realistic expectations.

Most vendors aren’t equipped to develop a realistic project plan because they don’t account for all the components of ERP success.

2019 ERP Report

This year's report delves deep into the data to analyze what ERP industry trends mean for organizations now and in the future.

This post will help you set realistic expectations for ERP selection and implementation, so you can develop an effective project plan.


The Importance of Realistic Expectations

We’ve found one of the most common causes of ERP failure is unrealistic expectations. Let’s look at a case study from an ERP lawsuit where legal counsel from one of the parties hired us to serve as a software expert witness:

The multi-billion-dollar company was sold a bill of goods that included software licenses and an implementation across more than 20 sites. They were told by their ERP vendor that by using industry pre-configurations, they could easily get their entire order-to-cash and procure-to-pay operations running on the new software in 18 months.

Even without knowing anything else about the company, you can guess that 18 months is extremely aggressive, unlikely and fraught with risk. So, how did their implementation pan out? Soon after the project commenced, the company found that many of its business requirements weren’t addressed by the off-the-shelf solution.

As a result, most of their processes required software re-configuration or customization. These activities weren’t accounted for in the original project plan. Less than a month or two into the project, it was already behind schedule.

The systems integrator also didn’t realize how significant the organizational change management needs were. This was a multi-site, multi-national company with different operations, cultures and business processes, so change management would have been essential. However, the systems integrator simply planned for a few employee newsletters and some end-user training a few weeks before each go live.

As the project wore on, milestones and expectations were missed, leading the executive steering committee to fire multiple project managers and team members. They put more pressure on the new team to complete the project on time, but they couldn’t succeed either.

In the end, the company was only able to get one pilot location live in three years (50-percent longer than expected). The processes were so broken, and employees were so poorly prepared that the company eventually abandoned the project and reverted to its legacy system.

Many companies, including this one, begin ERP implementation with the goal of selecting software that will deliver a high ROI. They soon realize the project is much more complex than they expected, and the benefits are much more elusive.

Why do Companies Have Unrealistic Expectations?

One reason for unrealistic expectations is that many companies are mainly focused on the technical aspects of implementation. If you want to achieve expected ERP business benefits, you must account for not only the technical aspects but the people and process aspects.

It’s important to watch out for a technology-focused mindset and other mindsets that lead to unrealistic expectations. For example, how many of the following statements sound familiar?

“We’ll get this implementation done in no time.”

Software vendors are notorious for over-simplifying the implementation process. Most sales reps don’t know what it takes to successfully implement software, but they do know they want to make the sale. As a result, they downplay the time, costs and risks of the project.

Make sure you’re not basing your timeline and budget on overly optimistic estimates. Instead, use benchmarks of what other companies similar to yours have achieved, which you can find in our 2019 ERP Report.

“This is going to change our whole business.”

Our research shows that only 19% of the companies that expected to realize benefits related to competitive advantage actually realized these benefits.

Realizing business benefits requires more than expecting them. They also need to be measured with metrics closely aligned with business processes.

Realistic ERP Selection Expectations

As you begin ERP selection, you’re probably wondering how long the process takes. In our experience, selection takes a minimum of fourteen weeks. Larger companies with multiple locations typically need at least sixteen weeks to select the right system.

You also may be wondering about the total cost of ownership of new ERP software. This depends on several factors, such as the number of licenses purchased and the chosen deployment model.

It’s important to note that the total cost of ownership doesn’t just refer to the cost of the software. It also includes the cost of implementation. According to our 2019 ERP Report, which included companies of all sizes, the average cost of an ERP project is about $1.3 million.

The key to setting realistic expectations for selection is understanding the activities that should happen before you even start contacting ERP vendors:

1. Ensuring Organizational Alignment

The key to a successful ERP selection is ensuring that stakeholders across your company understand and agree with the company’s strategic goals. Once you have organizational alignment, you can then consider how you might use technology to achieve business goals.

This isn’t the time to focus on specific technologies. Instead, you should focus on establishing a foundation to help you evaluate vendors based on their ability to enable your strategy.

You also need alignment around why you’re implementing new ERP software. Many companies decide to evaluate ERP systems because their current system cannot scale to support the company’s growth. However, this reason alone doesn’t justify an ERP investment. You must be able to articulate how a new ERP solution aligns with your business goals.

In many cases, ERP software will not solve your business problems. If your business processes are flawed, even the most advanced enterprise system isn’t going to help.

If you find that ERP is not the best path forward, there may be more cost-effective and lower-risk options. Consider improving your processes, redesigning your organizational structure or consolidating your global supply chain.

2. Developing a Business Case

What business benefits do you expect to realize from new ERP software? What are the expected costs? Knowing the answers to these questions is critical to justifying an ERP investment when executives ask about ROI. (You can use our ROI Calculator for a rough estimate).

To really win over executives, your business case should outline exactly how new technology will enable your company’s strategic goals. Armed with this powerful tool, you can convince executives that new technology is a wise investment.

3. Building a Selection Team

More than a quarter of respondents in our 2019 ERP Report cited resource constraints as a reason why their projects took longer than expected. In addition, more than a quarter cited these constraints as a root cause of their budget overruns. It’s likely that many companies beginning selection aren’t dedicating adequate resources to the selection process.

At this early stage, you don’t have a statement of work from a vendor, so you can’t determine all the resources you’ll need on your ERP project team. However, you do know some of the resources you’ll need. These are your selection team members. They are involved in all the activities that precede ERP selection, all the activities during selection and many of the activities throughout implementation.

4. Mitigating Change Resistance

As soon as you’ve made the decision to implement new ERP software, you need to inform employees. You may not know what specific technologies will be involved, but it’s never too soon to start communicating the goals of the upcoming project.

As simple as this sounds, all ERP communication should be strategic, so we recommend beginning to develop a change management plan before selection. By evaluating your organizational culture and employees’ openness to change, you can develop a change management plan that guides your communication.

Our clients have found that strategic communication increases employee buy in throughout the project. This is especially critical before selection. It enables employees to provide useful input, which further increases buy in.

Employee buy-in also is critical during and after implementation. In fact, companies that experience “software issues” after implementation are often just experiencing the effects of low employee buy in. Starting change management early can maximize system usage after go live, ensuring the software brings the expected business benefits.

5. Mapping Your Current State

Many companies do not have clearly defined processes, but as they begin an ERP project, they realize the necessity of business process mapping.

It’s important to map your business processes before selection because of the dangers of out-of-the-box functionality. While out-of-the-box functionality can bring efficiency, it can only do so in areas that don’t already bring your company competitive advantage.

For example, if your company has figured out a way to ensure every widget comes off the line 25 minutes before your competitor’s widgets, you should make the software fit that process.

Mapping current state processes helps you preserve your competitive advantage by documenting specific ERP requirements. While no ERP system will address every requirement, process mapping helps you prioritize these requirements.

Process mapping also helps you determine who owns processes and data, so you know who to involve in the selection process. We recommend involving stakeholders from all departments. This collaborative approach results in process improvements that align with your business goals.

6. Improving Business Processes

While some processes may only need incremental improvements, others may need a complete overhaul. In other words, they need business process reengineering.

This is an approach to business design that focuses on breaking down functional silos and providing end-to-end process understanding. It involves thinking about the purpose of each process and the hand-offs between functions.

Ultimately, this approach builds process efficiencies that will guide your ERP selection. If a system can’t support your optimized processes, then it’s not right for your company.

While business process reengineering can increase your selection timeframe, saving this activity for the implementation phase will be more time-consuming and costly.

7. Understanding Deployment Options

Lately, ERP vendors have increased their investments in cloud and SaaS ERP. As a result, many companies who’ve been partial to on-premise software are now considering moving to the cloud.

While vendors may claim they will only support cloud solutions in the future, we have found this is purely a sales tactic. Cloud ERP is more profitable for vendors, so they provide higher compensation to sales reps who successfully sell cloud technology.

The truth is, on-premise software isn’t dead. We work with several VARs and system integrators that still sell and support on-premise solutions. These solutions are viable. In fact, some have ten- to twenty-year roadmaps, which is great news for their large install bases.

If you’re considering on-premise software, it’s important to note that you don’t necessarily have to host it on premise. In fact, you can host it in the cloud, which is convenient for many resource-constrained companies that require less IT control. In contrast, complex companies that need heavy IT control, generally gravitate toward on-premise hosting.

Some companies choose cloud hosting for some but not all their business functions. This is called hybrid hosting. In these situations, companies keep their back-office functions on-premise and host functions like sales and marketing in the cloud.

Different deployment options each have their risks and benefits. Your decision should depend on your company’s unique goals.

8. Developing an IT Strategy

In addition to deployment options, there are several other IT strategy decisions to make before ERP selection.

For example, you’ll need to determine an integration strategy – do you want a single enterprise system or several best-of-breed systems? While best-of-breed ERP systems can help you build competitive advantage, they also can create technical complexities, integration challenges and data issues.

Many companies implement single ERP software solutions because they enable standardization, which can reduce change resistance. However, single ERP systems don’t allow you the flexibility to choose the best software for each of your functional areas. This means you might need more software customization, which is costly.

Before developing an IT strategy, you need to understand your company’s strategic goals. This gives you a lens through which to evaluate your current IT systems and infrastructure. Understanding your current state is essential as you’ll need to determine how new ERP software will integrate with your current IT infrastructure.

While assessing your current state, you should ask stakeholders from across the company what needs to change to enable business goals.

Focusing on strategic goals keeps you focused on the big picture. For example, when selecting best-of-breed software, one mistake many companies make is looking for software for one particular functional area without considering other areas.

While all your business functions may not be in need of improvement at this current juncture, they likely will require new technology in the future. The functional area you’re focusing on now needs technology that will align with technology you implement in the future. If you define your long-term IT strategy, you will know what to look for in a standalone CRM system or HCM system.

9. Developing a Data Migration Strategy

ERP data migration is often put off until the end of the project. After all, how hard can it be once the system is designed and tested?

Actually, it can be quite difficult. Data doesn’t always map correctly, and the system doesn’t always handle the volumes of data it needs to. In addition, decision makers aren’t always clear-headed enough at the end of a project to decide what data to move to the new system.

This is why it’s essential to develop a data migration strategy before software selection.

Realistic ERP Implementation Expectations

The first step to setting realistic expectations for an ERP implementation project is understanding the scope of change. You also should determine the role technology will play in your project.

At one end of the change spectrum, technology is used to support existing processes. At the other end of the spectrum, technology enables process redesign and supports changes to your company’s business model. In the latter case, technology is not the focus of the project. Instead, the ERP project team focuses on transitioning people and processes.

Many of our clients pursue projects focused on people and processes. Before they select ERP software, we help them define a corporate strategy. We also help them design new business processes to support this strategy.

Reengineered business processes mean new roles and responsibilities for employees. Companies at this end of the change spectrum should expect to spend a significant amount of time and money on business process management and change management.

If you’re not sure what level of change your project entails, ask yourself why you’re implementing new technology in the first place. Maybe you’re changing your business model or expanding into new markets. If so, your ERP project could be more aptly called a business transformation – an initiative that entails significant changes to people and processes.

Once you’ve determined the scope of change, how can you ensure your expectations are realistic? Following are eight best practices we use with clients:

1. Develop a Business Case

Companies use business cases to justify their ERP investments by estimating their return on investment.

If you’ve already defined your strategic goals and identified opportunities for improvement, you have a good starting point for developing a business case. Based on this information, you can estimate the cost savings you’ll see from automating a manual process and tie this back to one of your business goals. This is the type of information executives like to see when evaluating a business case.

While committing to a precise dollar amount can be risky, you can have confidence your estimates are achievable by benchmarking against projects at similar companies. Objective project audits from an independent third-party, like Panorama, also can give you confidence that your estimates are achievable.

So, what performance metrics are important to your business? These should be included in your business case and used as key performance indicators throughout the project.

2. Communicate With Executives

Presenting a business case to executives should not be the only communication you have with them throughout the project. Executives should be involved in other project activities, especially areas like change management.

Executive involvement not only increases employee buy in, but it ensures executives maintain realistic expectations. We recommend regularly meeting with executives to update them on issues that might affect expected results.

3. Don’t Believe Sales Hype

Vendor sales reps are notorious for giving anecdotal examples of the one in a hundred customers that implement in a short period of time. However, those examples are rarely relevant to your organization.

Vendors are only providing one data point out of thousands of ERP projects each year. This is hardly the type of statistically significant data you want to bet your ERP investment (and career) on.

4. Consider Internal Staffing Needs

While internal resources are critical to help with process design, system testing and a host of other activities, few vendors fully understand how many internal resources you’ll need.

As you’re building your own implementation plan, it will become clear what internal resources you need for each project phase.

5. Ensure Strong Project Governance

Implementations often take longer than expected because the implementation team isn’t leveraging effective project controls or instituting the appropriate project governance.

Customization requests, scope increases and other unexpected scenarios can cause your timeline to slip. However, project governance enables your team to quickly analyze and approve/disapprove requests.

6. Account for all Essential Activities

Many companies overlook essential activities, like business process testing. We recommend testing your business processes early to ensure they have been clearly defined in the new system.

Another activity that many companies don’t account for upfront is reviewing vendors’ statements of work. It requires time and resources to ensure estimates include essentials, such as support and maintenance fees. Analyzing estimates to ensure you’re comparing apples to apples is also time intensive. Many companies hire an independent ERP consultant to compare statements of work and negotiate with vendors.

Other activities you might overlook include:


  • Distributing workshop guides to prepare employees for requirements gathering workshops
  • Working with functional leads to validate requirements and schedule ERP demos
  • Meeting with your vendor for an organizational design session
  • Reskilling employees whose jobs will become automated
  • Designing and conducting customized end-user training
  • Conducting multiple iterations of conference room pilots

7. Regularly Adjust Expectations

While you may have defined initial time and cost estimates during ERP selection, these will need to be refined once you begin implementation.

As mentioned above, you will likely be faced with scope changes and other requests throughout implementation. In addition, your company will undergo normal organizational changes unrelated to the project, such as staff turnover.

Our clients often find that they need to reevaluate goals, adjust timelines or alter resource allocation to ensure future milestones are not adversely affected.

8. Don’t Forget About Post Go Live

Many implementation activities are actually ongoing activities that continue after go live. For example, the need for training does not disappear after go live. Employees often change roles and turnover is inevitable, so new employees and reassigned employees will need training.

Another reason that ongoing training is essential is that software functionality often is rolled out in phases. Many of our clients – for a variety of reasons – implement basic functionality right away and save more advanced functionality for later.

Measuring benefits realization is another activity that should continue after go live, as many benefits are not fully realized until years after implementation. It’s also important to continuously look for new ways to realize business benefits from your ERP system, even after the project is “over.”

It’s Never Too Early to Begin Developing a Project Plan

Before you begin ERP selection, you should take the time to set realistic expectations and begin developing a project plan. Panorama’s ERP consultants can help you account for all the essential activities required for a successful project.
5 Roles of a Business Process Owner

5 Roles of a Business Process Owner

One of the most challenging aspects of managing a company is assigning roles and responsibilities around business processes. This is challenging because processes often span multiple departments.

When a process spans multiple departments, this often means that individual departments only understand a small portion of the process. Without knowledge of how a process fits into the bigger picture, it can be difficult to identify opportunities for improvement. It’s also difficult to suggest process improvements when it requires approval from multiple departments.

Fortunately, assigning ownership of certain business processes to key employees can enable process improvement without creating cross-departmental friction. These key employees are called process owners.

A process owner is responsible for managing a process from end-to-end. Their responsibility includes implementation, maintenance and improvement of this process. Process owners are most effective when they understand how their process interacts with upstream and downstream processes.

Assigning process ownership is a business process management best practice that many consultants recommend. Unfortunately, according to our 2019 ERP Report, less than half of companies use consultants for business process management services.

2019 ERP Report

This year's report delves deep into the data to analyze what ERP industry trends mean for organizations now and in the future.

If your company is about to begin a process improvement initiative or an ERP implementation, it’s important to understand the roles and responsibilities of a process owner:

5 Roles of a Business Process Owner

1. Be Data Driven

To help your process owners become more data-driven, we recommend implementing technology with strong business intelligence functionality. This is important because process owners don’t have time to manually gather process performance data.

Many modern ERP solutions have business intelligence powered by artificial intelligence, which enables predictive analytics. This can warn of early failures or declining performance. It allows process owners to quickly identify bottlenecks and opportunities for improvement.

Once your process owners have access to data insights, you can hold them accountable for suggesting process improvements, determining key performance indicators and measuring business benefits.

2. Create and Maintain Documentation

The “bus factor” is a risk metric that measures the impact on a business if an essential person disappears. In other words, what happens if they get hit by a bus?

If a process owner disappears, can the company still function? While a process may still be able to be executed, there will be no one to monitor performance or resolve issues.

Process documentation can mitigate the bus factor. Effective documentation allows anybody to manage, troubleshoot and complete a process without asking the process owner for guidance.

When we work with clients, we ensure that process owners are tasked with developing clear and simple documentation. In addition, we ensure this documentation is updated as processes evolve.

3. Understand the Big Picture

Process owners need to understand how their processes fit into the grand scheme of the business. This is especially important when it comes to process improvement because it gives the process owner insight into what outputs are commonly used downstream. Reengineering a process around a rarely used output is not a good use of time.

Process owners should always be asking themselves:

  • What processes feed into my process?
  • What downstream processes rely on my process?
  • What is strategically important about my process?
  • What part of the business does my process contribute to?

No individual process operates in a silo. In fact, process changes often disrupt systems and processes downstream. When process owners understand this, they can help the company develop a change management plan that ensures a smooth transition for affected employees.

4. Provide Visibility

Process owners should work with other stakeholders to develop a process map of how processes feed into each other and what inputs or outputs are involved. This provides visibility into how processes operate, what groups are affected and who should be alerted of problems.

Process maps are useful in many scenarios. For example, if an employee sees a failure in a process and understands the downstream processes that are affected, they can warn the process owner in charge of those systems. This gives the process owner time to fix the problem, work around it or push back timelines.

Process maps are also useful when a company is gathering ERP requirements. Requirements gathering sessions are essential for a successful ERP selection.

5. Empower End Users

An excellent example of this mindset is illustrated in the Japanese phrase, Kaizen, meaning continuous improvement. Toyota is a company that embraces Kaizen principles. This means employees at every level of the company can make process improvements. While these improvements may only be tiny changes on a shop floor that save seconds, many small tweaks combine to make a noticeable impact.

Empowering employees to make small changes can result in significant business benefits. After all, end users are the closest to the work they do. In fact, no amount of management expertise can replace the knowledge that day-to-day experience creates.

Finding Effective Business Process Owners

Whether your company is implementing a new ERP system or focusing on business process reengineering independent of technology, process owners are essential.

Panorama’s ERP consultants can help you identify effective process owners and provide them with the tools and expertise to improve your processes and competitive advantage.

An Overview of Software Requirements Gathering

An Overview of Software Requirements Gathering

Baseball great Yogi Berra used to say, “If you don’t know where you’re going, you might not get there.” This quote has survived through the years because it holds an undeniable truth: you need to have a goal in mind, or you’re likely to miss your target.

This saying can be applied to countless circumstances in life, and an ERP implementation is no exception: before you commit your time, resources and money to an ERP project, you need to have a clear picture of where you want your business to be in the future.

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The first step in determining where you want to be is to understand where you are. This necessitates the documentation of ERP requirements.


8 Benefits of Software Requirements Gathering

1. Risk Mitigation

Some companies expect that implementing an ERP solution out of the box will transform their business. However, our experience and research show that a contributing factor to ERP failure is a lack of focus on business process management.

In fact, according to our 2019 ERP Report, more than half of companies don’t use ERP consultants for business process management guidance, and many of these companies don’t realize the ERP business benefits they expected:

Click to Enlarge

2. Process Improvement

While many companies implement software systems with the intent of improving business processes, they often end up with an ERP software solution that replicates their legacy system’s inefficiencies.

When we work with clients to improve their processes, we emphasize the importance of understanding employees’ pain points. We also help clients identify inefficiencies by using Six Sigma, value stream mapping and other business process management tools and methodologies.

3. Documentation and Clarity

Another advantage of requirements gathering is process documentation. Many companies have little to no process documentation – no statistics, no process flows, not even job descriptions for the roles in each department.

This often happens as a result of having a highly tenured workforce. While a tenured workforce can be an overall asset, it can be difficult to document processes because everyone works from what’s in their brains.

Process documentation of current and desired state processes reduces the amount of time needed to train employees. We recommend documenting processes in a way that defines who is impacted and how, so you can define a training strategy and ERP communication plan.

Process documentation also can help you propose new processes to executives and end users. This helps you achieve organizational alignment around project goals.

4. Employee buy in

When employees start hearing about an upcoming ERP project, they generally become fearful. While resistance to change is a common phenomenon, you can mitigate it by involving employees in requirements gathering workshops. This can mitigate change resistance because employees are less likely to resist changes when they are allowed input into process changes.

Requirements gathering workshops also are an opportunity to document change impacts for specific departments and roles, so you can prepare employees for change, thus reducing their fear. We help clients document change impacts, so they can develop a comprehensive change management plan.

5. Competitive Advantage

While some processes, such as general ledger, are not sources of competitive advantage, other core functions may differentiate your organization from competitors. For this reason, it is not always advisable to adopt out of the box functionality that easily can be replicated by others in your industry.

Requirements gathering identifies processes that need to be maintained and protected from standardization. This is important information to have when headed into an ERP selection.

6. Successful ERP Selection

Many vendors oversell their software’s industry best practices. While their software may improve business processes, they still need to be defined in the context of your company’s operations.

Let’s say your company has found that the most efficient and cost-effective pick, pack and ship method is to print labels for customer orders, pick according to the labels and load shipments directly onto the truck.

However, the software you’re considering employs a “best practice” for pick, pack and ship that is quite different. Instead of being a best practice, this method would be a step backward for your organization.

The problem with gathering software requirements after purchasing software is you’re faced with a tough decision when the software can’t meet a must-have requirement:

1) Invest millions of dollars in reconfiguring your company to account for the vendor’s best practice


2) Spend considerable time and money customizing the software to accommodate your requirements

To avoid this dilemma, we recommend gathering requirements before software selection and using those requirements to write ERP demo scripts.

7. Faster Implementation

Most modern enterprise systems are flexible, so even a simple workflow is likely to have multiple variations. In cases like this, it’s not enough to say you’re simply going to adopt the software’s processes.

If you do this, technical consultants or the software development team will have to make decisions for you, which is costly and time-consuming. It’s more cost-effective to make process decisions on your own dime.

8. Understanding of ERP Success

Requirements gathering is an opportunity to define key performance indicators that allow you to track your achievement of business benefits. This is important for tracking benefits during implementation, determining your ROI after implementation and continuing to realize benefits for years to come.

9 Tips for Requirements Gathering

1. Understand Your Business Goals

These often include goals regarding real-time data or the customer experience. All stakeholders should be aligned around these goals, so you can determine what process changes are necessary to achieve them.

2. Involve the Right People

The people involved in requirements gathering should be subject matter experts (SMEs) with an in-depth understanding of the processes within their own departments.

It’s important to remember that the SME is not always the manager. While a manager might tell you how a process should be done, an employee who has actually performed the process might have insight into what actually works best. 

We recommend including SMEs from every functional area, so you can understand pain points and inefficiencies across the organization. A cross-functional group will ensure you don’t record repetitive requirements. This also helps you garner the perspective of different people with the same inherent issues.

Your requirements gathering team is an important part of your ERP project team and ideally will be involved in other implementation activities, so it’s important to choose a team with the right personalities and skillsets.

3. Develop Workshop Guides

Prepared participants result in productive meetings. As such, it’s important to create and deliver workshop guides that tell participants what to expect during the workshop and provide questions for them to mull over beforehand.

We use workshop guides with clients because they help establish a common goal and keep participants focused.

4. Start With Process Mapping

A process map for a particular process might look like this: “Receive order from website EDI > transfer order to picking > deliver product.”

Requirements, on the other hand, look like this: “The ability to integrate with third-party website EDI; the ability to display a list of products that need to be picked from the warehouse; the ability to mark products as picked; etc.

As you can see, the ERP requirements flow from the process map. You can’t document ERP requirements without first mapping your processes.

5. Don’t Forget About Process Improvement

As mentioned earlier, business process reengineering is an essential step before software selection. This is because ERP software is simply a tool used to enable process improvements, not force them.

While ERP vendors provide best practices for your particular industry, you also should look at best practices from other industries to find unique insights.

We recommend using Six Sigma tools to define your own best practices and competitive advantages that you don’t want replicated by industry peers.

6. Prioritize Requirements

No ERP system will address all your requirements, so you must determine which are most important to your business.

There are many ways to prioritize ERP requirements, as described in an earlier blog post, but here are three useful categories:


  • Must-have Requirement: This will provide significant business improvements.
  • Value-added Requirement: This will be beneficial to improving processes but not critical.
  • Nice-to-have Requirement: This will make employees’ jobs easier, but it won’t provide significant process improvement.

7. Allocate Adequate Time and Don’t Waste it

Requirements gathering can bring additional responsibility to already overworked employees. As such, it’s important to stay focused on the goal. There’s a fine line between being thorough and allowing a free-for-all discussion that wastes time.

Requirements gathering workshops typically take between two to three hours per functional area. It’s better to over-estimate the time necessary in order to eliminate the need for a follow-up session.

Follow-up sessions tend to break the flow of thinking and collaboration. This can result in weaker requirements. The exception is follow-up sessions conducted after all requirements have been gathered. These follow-up sessions are actually useful as they can bring more clarity to any confusing requirements.

8. Ensure the Right Level of Detail

Take a simple task, such as order entry, and ask questions about it to identify who will execute the work, what’s the expected outcome, etc.

Sample Questions to Ask About an Order Entry Process

  1. How do we receive orders (EDI, fax, hard copy, phone)? What percentages does each account for?
  2. How many orders do we receive every day?
  3. Who receives the orders?
  4. Are the orders edited?
  5. How many active customers do we have?
  6. How many orders do we receive from new customers?
  7. How many orders fail in EDI?
  8. How many orders cannot be entered without further research?
  9. How long does it take to enter an order?
  10. How many orders fail credit checks, and how long are they on credit hold?
  11. What is our processing time from receipt to shipment?
  12. How many orders have multiple lines?
  13. How many orders can be filled complete on the first pass?
  14. Can we promise ship dates at order entry time?
  15. Can we verify pricing at order entry time and match to the price the customer sent?

Essentially, you want to document the end-to-end processes, including all the handoffs and touchpoints. We recommend organizing processes into swim lanes according to the responsible employee or department.

9. Follow-up

A follow-up session need not be a lengthy session, but it should go through every technical and functional requirement to verify that each was understood correctly. All the same stakeholders should be included, so they can validate that what you put on paper is what they meant.

Business Requirements = Business Benefits

Companies that take the time to define their business requirements before ERP selection are more likely to realize measurable business benefits from their ERP projects.

However, requirements gathering is complex and time-consuming, so many companies forgo it to accelerate their selection. Still, some companies take the time to gather requirements and often hire ERP consultants to ensure a more seamless requirements gathering experience.

Panorama’s ERP consultants take the time to understand your company’s competitive advantages and business goals. We assist in mapping your current state and future state, and we make recommendations from not only your industry’s best practices but also other industries’ best practices.

Most importantly, we ensure ERP vendors understand your list of requirements and ensure they deliver ERP demos that help you select the best solution.