If you’re about to begin ERP selection, you’ve probably asked yourself, “What types of ERP systems are there?” Well, you’re in luck because, today, we’re going to answer this question at length. First, it’s important to understand some of the different ways enterprise resource planning (ERP) systems are categorized. Full ERP vs. industry-specific ERP and cloud ERP vs. on-premise ERP are two examples.
The distinction between full ERP vs. industry-specific ERP comes down to whether the system is designed for a variety of industries or is specialized to just one or two. The distinction between cloud ERP and on-premise ERP lies in how the system is installed and maintained.
You can also categorize ERP systems based on the size of business they target. We use the terms Tier I, Tier II and Tier III to differentiate between systems based on the revenue and complexity of the companies they’re targeting.
This report provides ERP selection guidance to organizations across all industries that are evaluating ERP systems. The vendors featured in this report were chosen based on the strength of their functionality across a variety of products.
Now that you understand the types of ERP systems, let’s explore what specific systems fit into these categories.
While there are hundreds of ERP systems on the market, we’re going to highlight some of the strongest based on our client experience.
These systems are designed for large corporations with more than $750 million in annual revenue. Most enterprises of this size are complex, either due to complex business processes or complexity in their entity structure and consolidation needs. Tier I applications address multiple industries and scalability.
This system relies on a global network of data centers all managed by Oracle. This allows applications to easily be extended to the cloud. The system also integrates machine learning and AI into finance applications, giving finance leaders better insight into their business.
This system gives users actionable insights, enabling them to make informed business decisions. The system also reduces data sizes, which frees IT resources to focus on higher-value activities than maintaining legacy databases.
If you’re interested in the differences between SAP and Oracle, be sure to read our SAP vs. Oracle post.
This is another cloud-based system that provides functionality for aftersales service providers, distributors and a variety of manufacturing verticals. It has the flexibility to manage mixed-mode and complex value chains.
These systems typically serve small to midsized companies with $250 million to $750 million in annual revenue. Companies of this size may encompass multiple industries and multiple business units.
This system was recently re-built in Azure technology, making it a pure SaaS model with other deployment options. It has a strong ecosystem of independent software vendor (ISV) channel partners providing “last mile” functionality.
If you’re currently running Dynamics AX and are considering an upgrade to Dynamics 365, be sure to read our post, Dynamics AX vs. Dynamics 365.
This pure SaaS ERP system has the ability to scale in order to serve customers ranging from public companies to startups. It includes specialized functionality such as multi-dimensional analysis and industry-specific KPIs that can be accessed in real-time dashboards.
IFS ERP is a cloud-based system that’s perfect for consumer packaged goods companies with a global footprint. It also is strong in accounting as it offers modes for asset management as well as company-wide project management.
This leading human capital management software provides advanced functionality for human resources functions, like recruiting and talent retention. The vendor is continuing to develop and strengthen its ERP functionality, especially in the area of financial management.
This is a scalable and flexible ERP solution with the ability to manage manufacturing operations. It provides multiple deployment options, including a SaaS option. It is built on Microsoft platform, making it easily configurable.
These systems typically serve small to midsized companies with $10 million to $250 million in annual revenue. These companies usually represent only one industry and have a single entity to manage.
NetSuite is another cloud-based ERP software. It provides pre-configured workflows, dashboards, functional roles and KPIs, which enable rapid implementation.
This comprehensive cloud-based solution provides functionality for the manufacturing industry. It has functionality for repetitive manufacturing and provides capabilities for simplified implementation.
This software enables wholesale distributors to detect trends and monitor inventory demand. It also gives companies the ability to maintain a lean supply chain and implement new digital strategies.
This is a niche ERP system for manufacturers in make-to-order, assemble-to-order and engineer-to-order environments. It also provides human capital management functionality as well as customer relationship management features.
A flexible and scalable solution for managing a business of any kind, this software can improve your company’s sales and optimize your supply chain. It is built on best practices from Microsoft NAV, GP and SL.
SYSPRO provides a single ERP product with the ability to support process, discrete and mixed-mode manufacturing. The system includes a machine learning designer allowing non-technical users to easily design their own AI models.
This solution is specifically designed to resolve the operational and regulatory needs of discrete manufacturing firms. It provides functionality that allows tracking of shop floor activities, completions and statuses.
There are hundreds of software providers in this tier serving mostly small businesses. However, there are also some very robust point solutions with niche functionality that are often used to supplement a larger ERP system.
This system provides financial functionality for retail, manufacturing and distribution companies. It is great for global companies as it has the ability to adapt to multiple currencies and locations.
ASC is a supply chain management software that easily integrates with an existing ERP system. It is great for warehouse management as it has the ability to utilize mobile, real-time devices at the point of activity. It also is able to eliminate batch-mode reconciliations.
Designed for the public sector, this ERP vendor provides niche applications that can be implemented out-of-the box. The numerous, pre-defined best practices enable rapid deployments.
This solution also has many pre-configured best practices for specific industries. These include professional services, public sector, higher education and non-profit. The vendor has a strong focus on user experience and building strong client relationships.
Plex’s ERP+MES suite is a multi-tenant SaaS ERP solution built exclusively for manufacturers. The system can connect to shop floor equipment, third-party enterprise systems, EDI transactions and mobile or wearable devices.
Once you understand your company’s goals, you can determine what type of ERP system will help you get there. While this list is a great start, it is by no means a complete list of all the ERP solutions we have found to be strong in functionality.
Panorama’s ERP consultants can illuminate more options for you, and help you understand complex terminology and imprecise buzzwords. We also can help you optimize your processes, outline your ERP requirements and select an ERP system that supports the company you want to become.
If this sounds helpful to you, request a free consultation below.
It’s no secret that enterprise resource planning (ERP) software is a great way to consolidate your business functions. It also can reduce process times, increase collaboration and centralize data throughout the enterprise.
Clearly, ERP systems have a wide range of benefits, but how can you convince executives to see eye-to-eye with you? What arguments will you need to make and back up?
This report summarizes our independent research into organizations' selection and implementation decisions and their project results.
Here, we’re going to help you develop a solid business case for an ERP implementation that’s sure to convince your boss to invest in new ERP software.
Before you can talk about the reasons you want to implement a new business system, you’re going to need to prove that there are issues with the way your business is currently operating. After all, executives won’t want to pay for a system change unless they see that the old system is causing issues.
We recommend beginning your business case by discussing the issues your business is currently experiencing. For example, you may be experiencing data inconsistencies that lead to late shipments.
If this is the case, explain how ERP software integrates multiple functions into one system, meaning purchasing, manufacturing, distribution and sales all have access to the same, real-time data.
Once you understand the pain points of your current system, it’s time to ask executives what overall changes they’d like to see in the business. You can use this insight to determine what ERP benefits to highlight.
Do executives want increased visibility across the organization? Then, talk about the advanced reporting capabilities of modern ERP software.
Do executives want to the transform the customer experience? Talk about how CRM functionality can personalize touchpoints along the customer journey.
Now that you’ve shown executives some high-level benefits, it’s time to provide more detail by quantifying specific ERP business benefits. This tells executives that you’ve done your research and can speak their language.
When we help clients develop business cases, we encourage them to ask employees about their pain points. These pain points often can be quantified in terms of their cost to the business. For example, many clients have employees performing manual processes that could be streamlined through automation, saving the company money.
As with all business ventures, ERP projects and digital transformations have risks. Executives are likely going to recognize these risks and ask you if the potential benefits are worth the possibility of failure.
The best thing you can do here is to acknowledge the risks, and show how you plan to mitigate risk, through best practices, like focusing on organizational change management.
Have change management initiatives failed in the past? Discuss the lessons learned from these failures and how you plan to apply these to the next initiative.
Just as executives are concerned about risk, they are also concerned about cost. ERP projects can cost millions of dollars and can last years.
There’s no reason to hide these estimates from executives – they’ll find out eventually. It’s best to provide realistic benchmarks based on your project scope, company size and industry. This allows you to demonstrate how the benefits of ERP outweigh the costs. In other words, what is the ROI?
Similarly, realistic timeframes help executives understand when they can realistically expect to recoup costs and see benefits realization. According to our 2020 ERP Report, companies take an average of seven months after go-live to recoup costs.
When developing benchmarks, we don’t recommend relying on time and cost estimates from ERP vendors alone. These estimates often do not include success factors, such as comprehensive organizational change management and business process management.
In your discussion, it’s also important to acknowledge some of the alternatives to implementing an ERP system, such as business process reengineering. In fact, we often find that employees’ pain points are more related to process issues than technology issues.
While this may not be the case for your organization, you’ll still want to show that you’ve considered this possibility because executives like to see that you’ve investigated less expensive options.
If you do find that process issues may be more of a problem than technology issues, it can be helpful to hire a consulting firm that doesn’t force you toward a new ERP system when process improvement may be a better option in the short-term.
Key performance indicators (KPIs) are a set of concrete measurements that a company uses to track its performance over a period of time. While building a business case, it’s important to create KPIs for each of your expected benefits.
KPIs give you a quantifiable means of measuring performance and provide an indicator of how well your new systems and processes are working. If KPIs are not being met, you should reassess your ERP project plan to determine if you’re following ERP best practices.
If you use these tips to craft an ERP business case, you’re likely be met with open-mindedness. However, this may not happen right away. Be patient and keep quantifying those benefits!
Panorama’s ERP consultants can support you in your quest to convince executives. Request a free consultation below to learn about some of the quantifiable benefits that can be used in a business case.
Today, we released our 2020 ERP Report analyzing trends from the past year and looking toward the future to determine what these trends mean for ERP projects in 2020. One conclusion at which we arrived was that an in-house implementation of ERP can mean a less intense focus on organizational change management.
Fortunately, an in-house ERP project was not the preferred choice of companies in our study. In fact, 78% of companies used some type of consultant to assist with their ERP projects, and 51% of these companies sought change management guidance from a consultant. Of those seeking change management guidance, almost all dedicated a moderate to intense focus to change management.
This report summarizes our independent research into organizations' selection and implementation decisions and their project results.
In our experience, change management is not the only ERP success factor companies overlook when doing an in-house ERP project. They also overlook success factors like business process reengineering, strategic alignment and data migration.
Companies overlook these success factors in an effort to trim their project budget, but the main reason is that they lack relevant expertise. In other words, they don’t focus on all the components of ERP success because they refuse to seek expert guidance.
Enterprise resource planning (ERP) didn’t come around until the 1990s, but its foundation came about in the 1960s. Back then, it was known as inventory management and control.
In the 1960s, a greater focus on factory output began. To help increase production, computing solutions were created. During this time, software developers focused on creating applications to handle inventory management.
By the 1990s, these solutions evolved to handle all aspects of business, including accounting, human resources, customer relationship management and more.
We now find ourselves in 2020 – a time where ERP software is not simply a means to automate processes but to create digital business models. This is known as digital business transformation.
According to our 2020 ERP Report, almost half of companies (43%) describe their project as a digital business transformation as opposed to an ERP implementation. While respondents were only given these two choices, most companies actually fall somewhere along the spectrum between a basic ERP implementation and a digital business transformation.
Regardless of the type of project you’re pursuing, it’s important to seek third-party guidance.
If any of these statements are true of your company, consider hiring outside experts to help you achieve your project goals:
Most companies lack the expertise and experience to handle an ERP project. As a result, they face a huge learning curve.
They don’t know how to differentiate between the hundreds of ERP systems on the market. They also don’t know about all the people and process activities essential for ERP success, such as business process management.
ERP consultants with business process management expertise can help you map your processes, improve inefficiencies and identify your highest priority ERP requirements. Fortunately, 86% of companies in our report focused on business process management as part of their ERP project.
ERP systems are constantly evolving, and it’s challenging to stay current with the latest changes unless it’s your job. Therefore, we recommend supporting your ERP project team with not only business experts but technical experts, as well.
ERP consultants can support your project team with their knowledge of features, functionality and technical considerations for a wide range of ERP systems. In contrast, an internal team can take far longer to select an ERP solution, and they may fail to gather requirements that help ERP vendors understand the unique functionality the company needs.
The technical implementation of ERP software also can be challenging without the right expertise. For example, many ERP vendors do not focus on data migration. However, this is a difficult and time-consuming activity that must be initiated well before implementation. As a result, it’s important to hire an implementation expert with data migration experience.
The need for implementation guidance was evident in both this year’s and last year’s ERP Reports. However, there has been a 10% year-over-year decrease in companies seeking ERP selection guidance from consultants.
If you use an internal team for your ERP project, you won’t get an outside perspective based on broad experience and best practices.
ERP consultants have lessons learned from several ERP projects across a variety of industries. As a result, they make no assumptions about the way your business should run. In other words, they are not attached to the idea of doing things a particular way just because it’s the way things have always been done.
For example, many of our clients include their incumbent ERP vendor in their shortlist. They may want to maintain a good relationship with their vendor, get discounts for staying with them, ensure an easier implementation or keep employees happy. Whatever the reason, they shouldn’t assume their incumbent vendor is a good fit for their business goals.
An open mind and an outside perspective are essential if you want a system that can support the business you are today as well as the business you want to become. Therefore, it’s important to hire a consultant to evaluate your enterprise strategy and outline expected ERP business benefits. After all, an ERP project is an opportunity for innovation.
It appears that companies in our 2020 ERP Report understand this concept: 63% of companies outlined expected business benefits before implementation, and 61% realized these benefits to the extent they expected after implementation.
Most companies lack sufficient internal resources for an ERP project because they’re either short-staffed or lack the necessary skills.
If you’re short-staffed, you won’t be able to take employees away from their day jobs unless you backfill these jobs. ERP consultants can mitigate this challenge by providing additional project resources and finding appropriate backfill resources.
In addition to being short-staffed, many companies’ staff lacks ERP project expertise. In cases like this, companies struggle to develop an effective ERP project plan and successfully transition employees to new processes and technology. These companies would benefit from hiring ERP consultants because they can show department managers how to involve employees in project activities.
Consultants also can show project team members how to communicate with employees about organizational changes. Unfortunately, only 30% of companies in our study communicated with employees before ERP selection, despite the fact that most used consultant guidance.
This is probably a good time to mention the importance of not just hiring consultants but hiring the right consultants. While a mediocre consultant may be able to ensure a strong focus on change management during and after ERP selection, the top ERP consultants ensure a strong focus on change management before ERP selection.
We follow this methodology because it makes employees feel more involved in the project. In fact, many employees should be directly involved in planning activities, like software requirements gathering.
Your project team may not be able to grasp that an ERP project is a business project rather than a technology project. It’s an easy line to blur, as an ERP project does require technical knowledge.
However, it also requires a knowledge of business strategy and people management. In addition, you must understand the various functions of your business and how they interconnect with each other.
An ERP consultant with change management and business process management expertise understands the importance of aligning people, processes and technology. They know that real ERP business benefits come from optimized processes and end-user buy-in.
If there’s any doubt that people and processes are just as (if not more) important than technology during an ERP project, then take a look at these findings from our report:
ERP projects require an intense focus on organizational change management. Fortunately, the percentage of companies reporting a moderate to intense focus on change management has increased since last year.
This increased focus on change management was accompanied by stronger benefits realization as well as fewer budget and timeline overruns. You can download our 2020 ERP Report to learn more.
In the meantime, you can request a free consultation below to learn about Panorama’s comprehensive suite of service offerings. Our trusted and unbiased ERP consultants understand both the technical and business aspects of ERP projects.
Before you create an ERP project plan, it’s important to know how to measure success. This is why KPIs for ERP implementation are essential. You should measure these key performance indicators (KPIs) over the course of your ERP implementation as well as post implementation.
While there are many different KPIs you can measure, some are more essential than others. We recommend starting with these:
One of the biggest reasons businesses invest in ERP software is to establish a better connection with new and existing customers. This is why customer experience metrics should be among first metrics you measure.
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ERP systems organize and streamline your business resources, which improves the business functions related to customer service. For example, if you own an eCommerce business, ERP can organize vital information such as orders and shipping. When your customers’ orders are processed shipped on time, you improve customer experience.
Consistency is also essential to customer service. It’s important to continually deliver a positive and familiar customer experience to ensure customers return to your business. You may lose a devoted customer if their order is shipped late and your support team doesn’t effectively handle the situation.
While customer experience transformation may seem like a nebulous term, it actually is very measurable. The best way to measure customer related KPIs is to listen to your customers. Explore your online reviews and send out a customer survey. You’ll also want to measure how many new customers you’re gaining and how many customers you’re retaining.
Inventory turnover metrics measure how much inventory is sold during a certain period of time. ERP software can increase inventory turnover by providing better visibility and enabling automation.
For example, if you consistently have excess inventory of a particular product, your ERP solution can estimate how much of this product you actually need to stock in the future. It also can make predictions based on buying behaviors that humans would take hours to detect but an ERP system could detect in a matter of seconds.
To measure inventory turnover as a KPI of your ERP project, you can divide your sales by your average inventory.
To ensure your ERP system is delivering expected business benefits, it’s essential to track your project margins for the services you deliver. An ERP system can improve these margins by automating processes, reducing labor costs, simplifying your budgeting and optimizing your use of resources.
Some of the metrics you’ll want to track include estimates, budgets, invoices, bookings, completion, milestones, labor, expenses and materials.
While IT is a necessary part of your business, there are many ways your IT may be costing you too much. This can include subscription costs, hardware costs, hosting fees and maintenance fees.
Many companies are able to reduce these costs by implementing the right ERP system. For example, your legacy system could be costing you a tremendous amount in maintenance fees because you have to hire specialized resources to keep it functioning without ERP vendor support.
However, after implementing a modern ERP system, you find that the system doesn’t need extensive customization to work for your needs. In addition, you find that upgrades are no longer a headache. These cost savings can be quantified and measured as KPIs.
After implementing a robust ERP system, you likely will experience revenue growth. There are two reasons for this: reduced costs and increased sales.
ERP helps you reduce costs by optimizing your business processes and increasing your operational efficiency. ERP also gives you access to real-time data that you can use to make smart business decisions that cut costs and increase sales.
Many businesses do not have access to accurate, real-time data. As a result, they implement ERP to achieve data consistency across departments and obtain insights that enable proactive decision-making.
While the business intelligence capabilities of ERP systems vary in terms of complexity, you will find many systems have advanced business intelligence.
For example, in terms of the factory floor, ERP systems with advanced business intelligence can show you what machines will soon be due for maintenance. This enables you to minimize downtime and set realistic expectations for customers.
One ERP project KPI you might measure related to real-time data is how much you are able to decrease machine downtime.
ERP helps improve your purchasing power by maximizing your necessary business purchases while lowering costs.
You can achieve this by using your ERP system’s supplier performance management capabilities to identify points of weakness and negotiate better terms with your suppliers. You also can aggregate your supplier list to streamline your purchasing and increase efficiency.
In addition, you can use ERP to analyze your suppliers and determine which ones are costing you more than necessary. If a supplier is costing you too much money, you can take action to find a cheaper source.
One ERP project KPI you might use is how much you were able to reduce material costs through increased negotiating power.
If you’re selecting new ERP software, then setting KPIs is essential. The best place to start is with a clearly defined enterprise strategy, an outline of the ERP business benefits you expect and a baseline of your existing performance.
Panorama’s ERP consultants take the time to understand your business goals, so they can help you set KPIs that matter and achieve measurable business results. Request a free consultation below to start talking about your vision for your company’s future.
Whether you’re a B2B or B2C retailer, the ability to sell your product online is critical to reach new customers and stay competitive. At first, online retailing may seem less complicated than running a traditional brick-and-mortar storefront, but eCommerce simply has different challenges than traditional retailing. This is why investing in the right eCommerce system for your business is an important step to establishing an online presence.
eCommerce system scalability is as important as ERP software scalability.
Once you have established a solid online presence using your new eCommerce system, the hopes are that your customer base will grow, and your sales will increase. With this growth, however, comes concern about the scalability of your IT backbone. Asking about the scalability of a potential eCommerce system up front is a great way to prepare your business for the future.
SaaS eCommerce systems are becoming increasingly popular due to their scalability, amongst other benefits (see our post, 5 Benefits of SaaS ERP for Forward Thinking Companies). SaaS eCommerce systems put the responsibility for hardware and infrastructure requirements on the vendor, making it easy for you as a subscriber to grow your business.
This report provides ERP selection guidance to organizations across all industries that are evaluating ERP systems. The vendors featured in this report were chosen based on the strength of their functionality across a variety of products.
The ease of adding additional features to your site is something else to consider. For example, when you first roll out a new eCommerce system, you might not offer the ability for customers to track the shipping status of their orders. However, after being live with a stable system for some time, you want to add this feature.
Fortunately, scalable eCommerce systems make it easy to integrate with third-party applications (like shipping carriers). This could be in the form of plug and play integrators or tools for developers to create custom integrations.
An online catalog of all your products with photos and descriptions is only one part of the equation of selling online. Receiving payment for your sales is another part. Most eCommerce systems don’t actually process payments for customers at check out.
This is where payment gateways, sometimes called payment connectors, come into play. These gateways connect eCommerce systems with credit card companies (Visa, Mastercard, AMEX, etc.) and other forms of electronic payment.
It may come as a surprise to some, but some eCommerce platforms don’t come out-of-the-box with payment gateways. Development is required to connect your eCommerce site to payment processors for all the different payment methods you want to accept.
Therefore, when evaluating your eCommerce system options, make sure to ask which (if any) payment gateways are already integrated to the platform. Systems with integrations to all major credit cards may come with at a steeper cost, but it may be more cost effective than building a custom payment connector to each payment method.
First off, what are multi-channel capabilities? Multi-channel retailing is when consumers can buy products from a company across different sales channels such as through an eCommerce website, in a brick-and-mortar store, by phone or with social media markets. Multi-channel capabilities are those which allow business operations to efficiently function across channels.
Here’s an example – let’s say you have three brick-and-mortar stores within the greater Seattle area, an online store and a call center where customers can purchase your products. A customer is browsing your website and decides to check out with their purchase.
Your eCommerce system (perhaps integrated with an ERP system) finds that inventory is available in your distribution center and in one of the Seattle stores. Recognizing that the customer is located in the Seattle area, your eCommerce system can give the customer a choice – pick up in person at the Seattle store or have the goods shipped directly to their home. The customer opts for shipping and completes the checkout process.
The next day, the customer is called for a last-minute business trip and will leave town before the package arrives. They call into your call center where your call center rep pulls up the customer’s order and changes the delivery to an in-store pick up instead.
This demonstrates the type of multi-channel capabilities you should look for in an eCommerce system: cross-channel inventory lookup, buy online/pick up in store functionality and order recall and edit capabilities across channels. With retail giants like Walmart and Target empowering customers to buy and return across multiple channels, the modern-day consumer is coming to expect this convenience.
Customers participating in online shopping are using several different device types to visit eCommerce sites. From laptops to tablets, smart phones to smart TVs, your eCommerce site must be easy to read and use, no matter the device.
When selecting an eCommerce system for your business, test out the user interface (UI) for yourself to see if it’s intuitive to navigate and use. Access a demo system on a variety of devices and ensure the drop-down menus are legible, scrolling is easy and your images are sized correctly.
According to the website Outerbox.com, “During last year’s busy holiday shopping season, a third of all online purchases came from smartphone users.” This demonstrates the importance of a good mobile experience and gives organizations a reason to focus on customer experience transformation.
A common issue, very annoying amongst mobile shoppers, is the difficulty of pressing small buttons to navigate pages of a digital product catalog. Imagine a new customer navigating your eCommerce site from a smartphone. They’ve added an item to their virtual basket from page one of the catalog and they are continuing to browse. On the bottom of the page are hyperlinks to move back and forth across pages.
Because the hyperlinks are displayed as the same size on a smartphone browser as they are on a laptop browser, they are difficult to click with precision. The customer is not able to move to page two of the catalog. They are frustrated and abandon their shopping cart – a lost sale due to a difficult UI.
What’s worse is that customers tend to go to competitors after a bad experience. Again quoting Outerbox.com, “Statistics show that 40% of users will go to the competitor after a bad mobile device experience.”
Website personalization is also a factor to consider. The ability to add a blog to your site while leveraging SEO can drive traffic to your website. Branding your site to match your company aesthetic may be limited in some eCommerce applications, so ensure to ask about personalization capabilities if this is important to you.
Lastly, consider your monthly IT budget. The cost of an eCommerce system varies and, of course, depends on its technology (traditional system vs. SaaS). This includes the actual cost of the software (for traditional platforms) or monthly subscription fees for SaaS eCommerce. It also typically includes implementation and maintenance costs.
Sometimes, eCommerce systems also charge for the number of pages your site contains. If you have an extensive product catalog and a blog with hundreds of articles, you could be paying more than the average business.
It’s not only the cost of system itself that should be weighed but also the fees associated with transacting on those platforms. For example, processing fees for using different types of electronic payment may be incurred per transaction. These transactional charges plus monthly subscription fees, percentages of sales and any maintenance costs should be considered when calculating the monthly or annual price.
You also should consider ROI. An eCommerce system is only as good as the data it runs on. Integrating your eCommerce system to ERP software is a proven way to get the biggest bang for your buck. Even if you don’t undertake this project immediately, consider budgeting enough funds to implement an ERP system and conduct ERP data migration in the future. Several popular ERP systems already have an integrated eCommerce solution which makes getting accurate inventory positions and shipping information easy.
Just like with a typical ERP selection, it’s important to map your business processes and understand the customer journey before selecting an eCommerce system. If there are any opportunities for improvement, Panorama’s ERP consultants can help you find them. Request a free consultation below to learn about our business process reengineering services.
It’s undeniable that an enterprise resource planning (ERP) implementation or upgrade is high on the priority list for many forward-thinking companies. Pair this with the adoption of software as a service (SaaS), and you’ve got a business transformation strategy that will stay relevant way into the 2020’s.
The phrases “ERP in the cloud” and “SaaS ERP” can be used interchangeably as both are used to describe an ERP system that is accessed by your company but hosted by a third-party vendor. Typically, the vendor hosts the system in their cloud, which is is called cloud hosting.
Many established ERP vendors are transitioning away from the on-premise model of software deployment and are making the move to SaaS. This gives companies in the market for SaaS ERP plenty of choices.
This report provides ERP selection guidance to organizations across all industries that are evaluating ERP systems. The vendors featured in this report were chosen based on the strength of their functionality across a variety of products.
ERP software scalability is important. To put this in perspective, think about buying a house. When you buy a house, you’re stuck with the foundational blueprint and corresponding square feet it came with. If you want a change, the only route is to start construction work to add an extension or completely remodel – both monumental undertakings. Buying a house is a huge investment which you’ll have to live with for several years at minimum, much like purchasing infrastructure to host an on-premise ERP system.
However, with SaaS ERP, this long-term commitment doesn’t exist. Working in the cloud allows companies to scale up or down as necessary, without interrupting daily operations. In other words, the SaaS ERP sales model allows companies to purchase more storage space or additional environments if their requirements change. Even if your cloud-based ERP system is already implemented, adjusting the solution is flexible – like adding on an EDI solution or integrating to an eCommerce platform.
Let’s look at an example of flexibility and scalability of SaaS ERP with a mid-size steel manufacturing company: Imagine this company implemented a SaaS ERP solution last year. They spent several months retiring their legacy systems running their shop floor, procurement and time tracking systems, and transitioned everything over to the new ERP system. They’ve been live for almost a year, and things are going smoothly.
Now, imagine it’s just been announced that they’ve acquired a company that specializes in manufacturing aluminum. As an IT department, it’s understandable that they’d want this new group to also use the new ERP system.
If their infrastructure was on-premise, it would require some analysis to understand the hardware required to get this new company up and running, and possibly some downtime for the production environment of the existing company.
However, with SaaS ERP, they can simply contact their cloud partner and let them know they need an additional instance, or they need to create a new legal entity in their production environment.
To stay competitive in an era of modern business, a company may need a digital transformation. A significant part of this transformation includes allowing workers to do their job on the go. This includes access to ERP software to submit quotes, look up on-hand inventory or enter time and expenses.
With traditional, on-premise ERP, a user would need to be on a private network to access the ERP application and have a machine with the software installed (or ability to remote into a machine). This constraint limits the times and places a user can access the ERP system. SaaS ERP, on the other hand, empowers business users to do their job using almost any device.
For example, imagine you are a field service technician sent to a customer site to evaluate a reported problem. Since this is just an evaluation, you brought minimal equipment, which doesn’t include your company laptop.
After speaking with the customer, you realize that their issue can be solved with a simple part replacement. Understandably, the customer wants to know the availability of the part and how soon it can arrive. With SaaS ERP, you could use your mobile device (like a smart phone) to open a web browser and access the system to look up the inventory position of the needed part and then order it.
The example above is just one of many situations that show how SaaS ERP can empower your employees to do their job confidently anytime, anywhere.
This also can help you achieve the ERP business benefit of increased customer satisfaction. Customers appreciate – and expect – speedy responsiveness and the ability to get help on-demand.
If you’re in the cybersecurity industry, the previous benefit “access from anywhere” can sound more like a threat than a benefit. Fortunately, this is something SaaS ERP vendors are very aware of. When you subscribe to SaaS ERP, you are also subscribing to a cloud service that comes with its own security advantages.
Cloud providers serve many customers across a variety of industries, and a data breach or attack would be detrimental to their business – losing the trust of their customers and tarnishing their reputation. Because of this, cloud providers invest greatly in hiring cybersecurity experts and advanced tools for constant monitoring.
SaaS ERP vendors also have defined and practiced responses to large-scale attacks, meaning that if a breach did occur, both your company and your cloud provider would be responding in full force.
Along the lines of our next benefit, cloud-based ERP security also comes with automated patching. SaaS vendors are quickly adopting the automatic upgrade method for maintaining their ERP products and these automatic upgrades can include security patches to keep up with the latest cybersecurity threats.
It’s common for companies to want new functionality from their ERP platforms but delay upgrades because “it’s not the right time.” However, upgrades are simpler with SaaS compared to on-premise ERP.
With an on-premise ERP system, upgrades are sometimes a whole new implementation lasting several months and with hours of downtime in production. This is why companies delay upgrades – to plan and prepare for the big task ahead. Another hurdle is that, occasionally, an ERP update also means a hardware update.
With SaaS ERP, upgrades are pushed out regularly by the ERP vendor. Typically, there is a release cadence to determine the upgrade timing. For example, there may be a minor update every four months and a major release every year.
Customers can choose to delay upgrades, but only for a certain, negotiated amount of time. This indirectly helps keep licensing and support costs low for the vendor’s customer base, as the ERP vendors only have to support so many versions of the application.
Another way to understand SaaS ERP from a consumer perspective is to think about the apps you use on your smartphone. Let’s say you download your bank’s mobile app. You can access your accounts and perform functions like checking your balance without having complicated financial software installed on your phone.
When your bank has updates for the app, you are either notified of the available update or your app is automatically updated (based on how you opted in). This update can contain minor bug fixes or massive changes like added functionality.
These automated updates are part of a new software deployment model and are something that SaaS ERP vendors offer with their service. Constant updates with the latest functionality, security and bug fixes will help companies stay on the leading edge of innovation.
Over the past decade, several studies have proven that the total cost of ownership for cloud-based solutions is significantly less than on-premise systems. This is largely due to the cost of infrastructure acquisition, installation and maintenance being shifted from the company running the ERP software to the SaaS ERP provider.
Another factor that helps companies using SaaS save money is the minimal internal IT support needed. With cloud ERP software, the cloud vendor performs many maintenance and support tasks that typically must be done in house if you have an on-premise ERP.
In other words, using SaaS ERP allows you to refocus your IT staff on other projects, reducing support costs for your ERP system.
As with any ERP selection decision, the way you choose to deploy your software has everything to do with your business goals and nothing to do with marketing gimmicks.
If the benefits outlined above make sense with your enterprise strategy, then SaaS ERP may be the right decision for your company. However, on-premise ERP is still a popular option that enables innovation for many forward-thinking companies.
Panorama’s ERP consultants can help you select an ERP solution and deployment model by mapping your business processes and identifying opportunities for improvement. Request a free consultation below.
2020 has arrived, and with it, an ongoing debate continues about enterprise resource planning (ERP) software and if it can manage bill of materials effectively and efficiently? It seems the industry changes its mind about the answer to this question depending on which way the wind is blowing. However, our answer to the question, Is ERP good enough to manage bill of materials (BOMs), is quite simple: Yes, ERP is good enough to manage BOMs, but you do need to have the right ERP solution.
To prove the point that you need the right ERP solution for your bill of materials, you have to start at the beginning in understanding what a bill of materials is and how having the right ERP solution provides a way for you to manage BOM effectively.
Bill of materials is a list of manufactured and raw materials needed to build an assembly of more than one manufactured part. BOMs are hierarchical with the top level representing the finished product, which can still be at a sub-assembly level or at a completed one. If you have a BOM that’s representative of a sub-assemblies, it is a modular BOM.
There are also what’s called a bill of materials “implosion” that links pieces that serve as components to a major assembly. On the opposite end of the spectrum, you can have a bill of materials “explosion” that breaks up the assembly or sub-assembly into multiple component parts.
If you don’t have an accurate BOM, the result is a manufacturing process that becomes inefficient due to inaccurate information. Almost every product efficiency rating or financial report completed with an inaccurate BOM will end up costing the company a lot of money when the mistake is found. An inaccurate BOM causes a trickle-down effect because knowing where your healthy margin line is in the sand can mean the difference between your business being successful or failing.
This report provides ERP selection guidance to organizations across all industries that are evaluating ERP systems. The vendors featured in this report were chosen based on the strength of their functionality across a variety of products.
ERP software standardizes manufacturing and support processes, so it’s not surprising that ERP and BOM are a natural manufacturing and industry fit. In fact, it’s through BOM that ERP software was first used as an inventory control system in the 1960s, although it was called material requirement planning (MRP) at that time. MRP evolved into ERP when business modernized and became digital.
ERP software was devised to integrate and automate all the data management needed for a company’s business processes. It is a common database with one streamlined system that helps refine processes in a company. The result is increased productivity levels across the board in manufacturing processes.
The biggest difference between discrete ERP vs. process ERP is in how the manufacturing process system is broken down. Discrete manufacturing is for when you have distinct or identical products. Think of an assembly line with washing machines. If you’re filling a specific order, it’s easy enough to do because the product is easily identifiable.
Process manufacturing can’t use a standardized solution for assembling pieces because each one is different. Each piece is characterized by a formula or recipe for refining, separating, integrating or causing a chemical reaction between various ingredients so you can commoditize the product. Think of products like paint or gasoline. The end product can’t be unassembled to its original raw material form.
ERP software is beneficial in process manufacturing because one capability that ERP software provides is making formulation breakdown possible. In fact, when ERP solutions are properly implemented, they can help increase a company’s efficiency and optimize performance.
In our Manufacturing ERP Vendor Showdown, the Oracle ERP Cloud demo included a great overview of the system’s bill of materials functionality:
Formula recipes and bill of materials work for similar purposes but aren’t interchangeable. Many manufacturers misinterpret the meaning of each, which means the ERP solution they select may not work well for them.
The bill of materials in discrete manufacturing is fixed. You can use the same material for the same thing repeatedly which means your bill of materials is almost set in stone. The discrete manufacturer relies on a bill of materials because it lists and brings together the raw materials, sub-assemblies, parts, numbers and other relevant data that allow for the production of the end product.
Process manufacturers, on the other hand, must have the recipe or formula to make their end product. Because process manufacturers rely on mixing ingredients and getting the specific details about how much and which ingredients are correct, they need the formula recipe.
For example, if a manufacturer makes soup and they sell some soup in small cans to small restaurants and some soup in large cans to the larger restaurants, then the manufacturer must have two different recipes. The size of the soup containers determines which soups ingredients are used and how much soup is used for the end product assembly.
There are certain considerations that need to be taken into account when selecting an ERP system for bill of materials. It’s important to note that ERP solutions are designed to handle discrete manufacturing and process manufacturing bill of materials very differently. For discrete products, each has a serial number while process products are tracked by variables like weight, volume and lot numbers.
ERP software can work for both. For instance, ERP used in process products can give you tracked production costs, generate what-if manufacturing financial scenarios, construct quantity and break down relationships between assemblies into percentages.
When you need to determine which ERP solution is needed for your bill of materials, our clients often use the following criteria:
We recommend gathering business requirements with your ERP project team and key employees so you can write ERP demo scripts that include your BOM-related requirements.
When you find the right ERP solution for bill of materials, it will help you track any manufacturing process, including customized one-time orders. You can even create planning BOMs so you can strategize and forecast your material needs.
BOM through the right ERP solution, enhances inventory accuracy and flow. It also helps improve your material planning and gives you strategic advantages over other companies who can’t perform the same functions as you because they aren’t using the right ERP solution. These are just a few of the ERP business benefits that BOM functionality can provide.
Many items that are found boxed up in final form went through some level of manufacturing BOM that you may not immediately realize. In fact, some of those items went through pad printing or painting before they were assembled into a final product. Only the final product that was altered by ‘paint’ is assembled into the final form.
The pre-processed part and the final ‘painted’ product are both represented on the manufacturing BOM. It’s the BOM that enables the final transition from an unfinished product or concept to a concrete object. The more complete and accurate the BOM is, the better decisions an organization will make about getting products efficiently and effectively manufactured and sent to customers.
When you select the right ERP solution in this real-life example, you get a business system that can help drive company operations, logistics, purchasing and inventory. The final result helps companies grow through supply chains that are more accurate, which results in more lucrative business decisions.
The role bill of materials is still being debated because there’s never been a consensus on the definition of bill of materials. However, one thing has been agreed upon: the right ERP solution can enable efficient manufacturing processes, and this includes bill of materials.
How do you find the right ERP solution to manage your bill of materials? Panorama’s ERP consultants can help you gather business requirements, submit RFPs to ERP vendors and evaluate RFP responses. This is just part of our ERP selection service offering. To learn more about the selection process, request a free consultation below.
Business intelligence (BI) tools have become an enterprise software staple, and it’s easy to see why: the ability to explore, visualize and share business data has made BI solutions a bedrock upon which faster, better decisions can be made.
While there’s no question that BI provides powerful and intuitive graphical analysis that serves most departments well, there is an exception: financial reporting. Simply put, the reporting needs of finance teams are highly specialized and go beyond what most third-party BI tools can deliver today.
Unfortunately, CFOs and their departments almost always learn this the hard way: in the aftermath of a BI implementation. At this point, they begin the arduous process of trying to close this “BI gap,” usually starting with generic third-party BI tools, and often ending up in frustration as they resort to dumping static data from their ERP system into Excel for manual manipulation.
This report provides ERP selection guidance to organizations across all industries that are evaluating ERP systems. The vendors featured in this report were chosen based on the strength of their functionality across a variety of products.
Many organizations are not ready for a full ERP implementation but want to make the most of their current ERP system. What these organizations need is a specialized BI tool that helps them make the most of their ERP financial reporting functionality.
To understand the problem, and how to avoid it, let’s take a closer look at why the reporting needs of finance are so different. Here are just a few common scenarios for these users:
1. When trying to reconcile accounts or identify variances, finance must be able to drill into the data at a granular level to examine balance sheets, general ledgers and subledgers. In addition, when they post an adjustment, they need to see it reflected immediately in their reports.
2. They need to run comparative reports across different time periods, over budgets and actuals, and must be able to analyze and investigate variances.
3. They need to conduct complex searches on multiple entities. For example, they need to identify discounts associated with paying accounts on time, and conversely, where it makes sense to focus collections efforts for account receivables.
This is just a small sampling in a vast range of financial use cases, but they reveal why a high degree of flexibility as well as formatting control over reporting is needed.
However, customized financial reports require strong IT support, which can lengthen the reporting process even more.
While modern BI solutions have certainly moved the needle with self-service features that allow users to create their own reports, even these tools are unable to handle the “messy structure” of financial data.
So, what’s next? IT teams often try importing data into a data warehouse with a structure that is optimized for financial reporting. Sounds like a fix, right?
Think again. This breaks the link to underlying transactions, losing one of the most critical aspects of financial reporting: access to real-time data. This means there is a time lag between data being entered into the ERP software and that same data flowing into the data warehouse and reports. At period end, when finance relies on the most current data to handle reconciliations and consolidations and produce financial statements, delays like this are unacceptable.
BI tools also struggle to handle changes to financial reporting structures. Even the slightest change to a chart of accounts will require reworking, often by IT, which again creates a major time, resource and data relevance drain.
So, we’re back to square one. This is where finance teams commonly resort to manually dumping data from their ERP solution into Excel. However, there are many pitfalls to this approach, too.
First, there’s the lengthy data download process. Second, all of this data must be manually manipulated into the required reporting structures, which must be started from scratch each time. This is onerous and time-consuming, but even more concerning, it introduces the risk of mis-keying errors.
This leads to yet another problem: because the data has been manually manipulated, errors will be extremely difficult (sometimes impossible) to track and will require a complete redo of the report from the ground up.
The issue looming over this entire approach is that it relies on static data, which means by the time finance teams create the reports in their desired formats, executives and other stakeholders are viewing numbers that are days, if not weeks, out of date.
Companies that have mastered financial reporting have learned that financial intelligence is not the same as business intelligence. Finance needs specialized functionality to handle its unique reporting demands.
Keeping these four tips in mind when choosing a BI tool or third-party reporting solution can go a long way toward helping CFOs close the “BI gap” or avoid it altogether:
As discussed, this is a “holy grail” in financial reporting, which is why it’s critical that any reporting solution provides a direct connection to the ERP system, as this enables users to work with live data. Without it, finance is not only working with a static, error-prone process, they are reporting on stale data instead of delivering the most up-to-date financial information and analysis for decision-making.
Reporting tools optimized for finance should simplify complex reporting tasks and allow a wide range of reports to be generated instantly – including financial statements, period-on-period analysis and variance analysis. This frees finance teams from a dependence on developers and IT and lets them operate at the speed business demands.
Access to live data and automated reporting from the ERP system is crucial, but these advantages quickly lose their luster if you can’t integrate data from other business-critical systems (such as other ERPs, CRM, HRM, etc.). Cobbling together data and reports from more than one source in Excel only compounds the problem that already exists with manual reporting. Ensuring a reporting tool has the ability to combine real-time information and automate reporting from multiple, disparate sources should be a priority.
Self-service reporting isn’t new, but as discussed, native capabilities aren’t an option for the intricate needs of finance. Instead, BI tools should have a deep understanding of the ERP system and its data structures so the finance team can instantly create its own custom reports and ad hoc inquiries, without detailed ERP schema knowledge or a reliance on IT.
While BI platforms are a strategic business asset, the reality is that finance teams have distinct reporting needs that are not met by many native BI capabilities. As more CFOs aim to make the leap from the legacy role of bookkeeper to strategic analyst and business partner to the CEO and other stakeholders, having the right reporting tools in place to complement BI will be vital to that transition.
Panorama’s ERP consultants can help you determine if your ERP system’s financial management and financial reporting capabilities are meeting your business needs. Request a free consultation below to learn about our Digital Strategy and Software Selection service offerings.
This post was written by Wes Gillette, Vice President of Product Management at insightsoftware.
Note: The inclusion of guest posts on the Panorama website does not imply endorsement of any specific product or service. Panorama is, and always will remain, completely independent and vendor neutral.
It’s the end of a decade, and with 2020 on the horizon, many are reflecting on the events, trends and pop culture moments that defined the 2010’s. While memes and popular music remain relevant for extended lengths of time, digital technology trends move with the quick pace of innovation. In this post, we’ve compiled a list of digital technology trends that we think will be profoundly relevant in the 2020’s.
While these trends can enhance your ability to enable digital operations, it’s important to note that pairing ERP software with these trends is one of the best ways to create new operating models.
Augmented reality is one of those trends that seem like a non-essential gimmick, but in actuality there are many practical applications for it. Augmented reality (AR) has shown significant value within the field service, manufacturing and retail industries.
This report provides ERP selection guidance to organizations across all industries that are evaluating ERP systems. The vendors featured in this report were chosen based on the strength of their functionality across a variety of products.
In the retail industry, there has been a surge in the AR trend when it comes to eCommerce. Customers now have the ability to see goods, like furniture or home décor, in their own homes, before making a purchase. In fashion, consumers are given the ability to virtually try on goods, like sunglasses.
For field service applications, AR can enhance the technician’s ability to service equipment. For example, put yourselves in the shoes of an HVAC technician. You don’t know the specs of this particular model of air conditioner by memory, so you need to rely on the manual to troubleshoot issues. After some investigation, you determine that the issue is underneath a panel. You need to point a flashlight at the equipment and use a screwdriver to tighten a loose contact, but you’re not entirely sure which contact is the correct one. Seeing as you only have two hands, referring to the manual will be a difficult task.
However, a technician wearing an AR compatible device can view the AC unit’s schematics superimposed on the physical hardware. Since the schematic is in the cloud and collaborative, it may even include notes from other technicians who have solved similar issues.
It should be noted that the usefulness of AR relies on access to AR-friendly data. Schematics for equipment should be available in a central repository that allows remote access by AR-equipped devices. This product information should be managed in a consistent manner.
This is an area where AR can leverage ERP functionality. ERP systems are already central to business operations, but ERP plus AR is a digital technology trend we think will stick around.
Companies have been using data analytics to predict market outcomes and other forecasts for decades. What makes this digital technology trend different is that popular advanced data analytic techniques are taking advantage of other trends (such as ERP data management) to provide deeper insights.
For example, let’s say your business intelligence team uses a regression analysis algorithm to predict what other items an online shopper may be interested in based on his or her order history on your eCommerce site. In the past, one particular online shopper bought a nine-iron and a putter from your online golf shop.
This shopper is now browsing your site again and based on your data from other shoppers who have made the same purchase in the past three months, your data analytics algorithm predicts he might be interested in a new hybrid club. Your eCommerce site receives this insight and displays an ad for the popular hybrid club.
This scenario requires quality, real-time data from an ERP solution to provide these insights. If you’re implementing new ERP software, we recommend focusing on ERP data migration as early as possible to ensure accurate customer insights.
A popular subset of advanced data analytics is artificial intelligence (AI) and machine learning. While AI is the brain behind those humanoid type robots that we see in science fiction films, in more practical use cases, AI can help companies transform the way they interact with potential and current customers.
For example, the use of chatbots has been on the rise to supplement level 1 support in customer service desks. If the data collected from your company’s help desk has found that more than 90% of calls taken could have been answered with a simple response, a chatbot may be a good solution to aid in shorter wait times when customers call.
AI models require clean data to learn and grow from. This is where data from an ERP system can be taken to the next level to provide richer insights and enable customer experience transformation and supply chain optimization.
IoT is an acronym that was frequently heard in the late 2010’s and continues to be a digital technology trend on the rise. It was not invented, per se, in the past decade, but it did gain popularity during this time thanks to innovations in miniaturization of modern electronics.
IoT can be defined as a system of devices connected via a network with the ability to transmit data across the network without human interaction. There are many use cases for how IoT can transform business models, in almost every industry.
In academia, researchers can place sensors on roadsides, on top of buildings and even in rainforests to gather data on the environment. Data from these sensors can transmit to an ERP system where the information can be analyzed and turned into meaningful statistics.
For everyday consumers and in the public sector, “smart homes” and “smart cities” are becoming less science fiction and more like reality. For example, the IoT digital technology trends allows for sensors and devices in a home to self-regulate temperature or lighting. Companies like Fitbit and Apple leverage IoT to collect data from their devices that provides consumers with insight into their personal health.
In operations management, IoT increases efficiency by helping to streamline or even automate mundane tasks. A famous example of “smart warehouses” leveraging IoT devices are Amazon’s fulfillment centers. As orders are placed, the location of the inventory is found on a pallet somewhere within the warehouse. Small robots then drive pallets of inventory to where warehouse workers will pick the exact product. These robots use QR codes on the floor to determine their path of movement.
Once the items are picked and packed into boxes, they are placed on rolling conveyors where scanners automatically scan barcodes to determine which shipping label to affix to the outside of the box and which direction to sort it.
While many modern ERP systems have IoT functionality, it’s important to gather your ERP requirements first to ensure the ERP system’s basic functionality is a good fit for your processes across business units.
In addition to IoT, smart warehouses leverage another trend – robotic process automation (RPA).
According to CIO.com, RPA is defined as “an application of technology, governed by business logic and structured inputs, aimed at automating business processes.” Basically – tedious, routine tasks that have been done by a human in the past can now be processed automatically by software or a robotic machine.
This can range from the simplest of tasks, like approving an invoice for payment automatically if the dollar amount is below a specified threshold, to extremely complex actions like the Amazon fulfillment robots driving pallets of inventory to warehouse workers.
RPA by itself is a tremendous advancement in technology just in the past few years, but when RPA is leveraged within an ERP system, this is where serious digital transformation can happen.
Why? Well, ERP vendors design ERP systems to run a company from end-to-end, so imagine if these end-to-end processes could be several times more efficient by using RPA to automatically complete standard business processes.
For example, in a standard procure-to-pay business process there are several steps where purchase requisitions require approval or orders need to be sent to the vendor for fulfillment. When the mundane tasks like approvals are automated, your workforce is freed up to focus on tasks that involve critical thinking, like negotiations or human relations.
The last decade demonstrated that many companies are achieving significant benefits from ERP implementations and digital transformation. This is at least in part due to the capabilities of augmented reality, advanced analytics, IoT and RPA.
How will your company transform in 2020? Panorama’s business transformation consultants can help you determine what technology aligns with your digital initiatives and is cost effective. Request a free consultation below to learn about our digital strategy expertise and ERP selection experience.
Change is scary, especially in a business setting. From an operations standpoint, it can cause costly delays and strain the budget. From the employee standpoint, it often means extra work and fear of the unknown.
As a result, the human resources department will need to be vigilant in managing human capital during a business transformation or organizational change management initiative.
One of the critical components of effective human capital strategies is prioritizing data over the company hierarchy. This means implementing talent management protocols that fit the information that’s presented, not the status quo.
This aspect of business transformation can be exceptionally tricky for human resources. It’s essential that decisions are made strategically, rather than cherry-picking data that fits the views and values of leadership.
What are the 6 secrets to digital transformation that are helping organizations build competitive advantage?
Taking a realistic look at organizational capabilities before a transformation can be difficult. From a human capital management perspective, this might mean a more substantial change that results in restructuring and redefining roles to fit new business processes and technology. This often takes place when selling a company or entering a strategic partnership.
During large-scale change, a strategic human capital management plan should be put in place. This strategy should be proactive and predictive, using best practices in change management to prepare for the challenges ahead.
During this time, human resources (HR) managers can’t afford to be reactive. With any significant transformation, there’s bound to be pushback from employees, cultural change considerations and lots of questions. Being able to plan for these situations will help HR managers respond with calm confidence that will emanate throughout the company.
One of the best ways to gain employee buy-in during a business transformation is to make employees a part of the project and set them up for wins early on. In other words, human resources should take time to talk to managers and identify employees that have the right skill set for working on the project team.
It’s also essential to create a change management plan for the project team. All objectives and goals should have actions attached, and each action should have a clearly identified individual who is responsible for making it happen.
Fear of the unknown is one of the most significant barriers to a smooth business transformation. During this transitional period, clear change management communication with employees and stakeholders should be the number one priority.
The business must be transparent with employees and identify how organizational changes will affect them both in the immediate future and long-term. It should be obvious why the change is necessary and what it means for the business and individual roles.
Throughout the transformation, communicating timelines, metrics, goals and objectives across the company ensures employee engagement and creates a culture of authenticity.
As fear and frustration are common emotions for employees during a transformation, they’ll need a safe outlet to express themselves. Change resistance is especially prevalent during a digital business transformation, as automation efforts evoke concerns about job loss.
A key component of a human capital management strategy is advocating for employees and reassuring them that the business has their best interests at heart. In fact, human resources should create a safe platform where employees can share their concerns. Some businesses opt to use an anonymous submission platform, so employees aren’t compelled to censor themselves.
Change can have a negative effect on everyone within the business, from the C-Suite to the ground floor. As a result, HR managers will have to act as change champions, facing the project with enthusiasm and positivity. Even when there is bad news, there are ways to convey it in a way that instills hope.
One effective workforce management strategy to enact during periods of change is to reward fellow change champions. Implementing programs to recognize employees who go above and beyond during this time can be motivating for all.
During periods of business transformation, ambitious employees are more likely to burn the candle at both ends. The importance of prioritizing the health and wellness of your employees cannot be understated.
We recommend using human capital management software to enable time tracking. This will identify those at risk for burnout and reveal if there are employees available to whom you can offload certain tasks.
It’s also important to encourage employees to take time off. Mental health days and vacations can increase employees’ enthusiasm about the project by giving them time to clear their heads. By pushing for these self-care days, you improve productivity and reduce the risk of turnover and stress leave.
Time tracking can help you enforce time caps, after which an employee must take a day off to rest and reset. It’s also essential that HR managers take time for self-care, as they tend to be the frontline workers in dealing with the emotions and stress of others.
It’s rare that a business transformation ever goes according to the original plan. A day’s delay here or a long weekend there add up to push timelines beyond the initial expectations.
To prevent timeline overruns, HR managers should be tasked with managing timeline expectations for employees. This means identifying delays and being able to answer questions about how it will affect their workload.
This is another area in which it’s essential to be proactive, rather than reactive. In other words, you should identify the implications of a delay before employees start asking.
Human capital is the most important asset of any company, and management of this asset is one of the most underrated yet integral aspects of a business. With the right strategies in place, HR managers can effectively transition employees through organizational change.
Panorama’s business transformation consultants use their change management expertise to help clients achieve their organizational goals. Request a free consultation below to learn about our change management and human capital management services.
About the Author
Ashley Lipman is an award-winning writer who discovered her passion for providing knowledge to readers worldwide on topics closest to her heart – all things digital. Since her first high school award in Creative Writing, she continues to deliver content through various niches touching the digital sphere.
Note: The inclusion of guest posts on the Panorama website does not imply endorsement of any specific product or service. Panorama is, and always will remain, completely independent and vendor neutral.
Some of the best sports teams have mascots— people who inspire fans to cheer louder and root more passionately for their teams. The common purpose behind these costumed heroes is simple: funnel organizational support into a collective energy to rally their teams to success.
While most businesses do not have people dressed up like animals parading around their workplace with a microphone, there does exist a role within business that closely mirrors that of a mascot. This role is called a Change Champion.
What are the 6 secrets to digital transformation that are helping organizations build competitive advantage?
Change Champions support the company’s mission and vision by actively participating in change management initiatives. Like the mascots of sports teams, Change Champions come in many shapes and sizes—there is no one size fits all mold. They can be your most senior employee or they can be a junior employee, and they can come from any department.
Change Champions are used whenever there is a need to communicate with employees about large-scale change. However, Change Champions should not be seen as a replacement for your change leader or the existing communication mechanisms that your company uses to disseminate information. Nor should they act as a replacement for the organizational hierarchy that exists within your management structure. Rather, they should be utilized to tailor change management communication to an individual employee level.
When seeking out Change Champions for an organization, a company should look for someone who . . .
Change Champions should not be forced into the role. Employees who volunteer their time to act as an agent of change for your company are much more likely to be effective than those who are forced to advocate for the company.
You can manage change on your own, right? Well, our 2019 ERP Report revealed that less than a quarter of companies dedicate an intense focus to organizational change management. This is a sobering statistic that highlights the lack of understanding that many company leaders have of how to manage change.
While your company’s leaders might be true visionaries or have stellar interpersonal skills, implementing change is a delicate and complex process that must be handled with precision. That said, incorporating Change Champions into the change management activities at your company will exponentially increase employee buy-in to new business processes and/or technology.
It’s important to have a full understanding of when to include these individuals throughout the change management process.
This is the phase where your vision for change is created. During this phase, you will be defining current state metrics, designing the blueprint for change and projecting how the change will affect metrics after implementation. During this phase, Change Champions should be involved in project planning and provide input to and validation of the current and future state assessments.
This is the phase where you assess how the change will impact employees. During this phase, Change Champions are the frontline of your project. They utilize their network to facilitate departmental communications and identify impacts the change might have.
This is the phase where you actually begin implementing the change. It is the last and final phase where the rubber meets the road. If you have properly executed Phases 1 and 2, you will see a very high success rate in the implementation phase. During this phase Change Champions continue to advocate for the change and help address change resistance in their departments.
In the initiation stage of the change management process, the senior leaders are developing their vision for change within the company. Once they have established their vision, they should invite Change Champions to their roundtable discussions and ask them how they see the change impacting their workgroups. This ensures that specific departmental considerations are taken into account prior to the follow-on phases.
Change Champions must be able to articulately respond to the initial plans of the project team and offer their suggestions as to how the change could be more effectively delivered.
Additionally, they must be able to validate if the current state assessment and future state projections are accurate based on their on-the-ground knowledge of the company. As some of the best Change Champions are mid-level employees, they have intimate knowledge of the innerworkings of departments. This insight is valuable to the initiation phase of the change management process.
This role of a Change Champion is most prevalent in Phase 2 of the change process. Following the initial message from management about the change initiative, they must utilize their extensive network to communicate the change in a way that inspires employee engagement and buy-in. Leveraging their interpersonal skills, Change Champions tailor the change message to their employees or coworkers so these groups have a solid understanding of project objectives.
While discussing change with employees, the Change Champion must be able to perceive any impacts (positive or negative) that the project will have on employees. It is critical to identify potential impacts prior to implementation because there is still time to modify the project plan.
It is likely that if you are implementing change within your company there will be many different impacts across the company, so the Change Champion must be able to identify which impacts could be potential deal-breakers for the company and report those to the executive team.
Once the change has been planned and communicated to the team, it’s time for implementation. During the implementation phase, it is critical that the Change Champion acts as an advocate as well as resistance manager.
Being an advocate for the change does not necessarily mean that they need to stand on a chair and announce his support for the change in a theatrical fashion. Rather, they must provide support to his team throughout the change process.
As resistance is a natural reaction to change, the Change Champion must also be skilled in conflict resolution. They must be able to evaluate resistance and address it within their area of responsibility.
An effective way to simultaneously advocate for change and manage resistance can come in the form of reassuring employees that the change is in their best interest and further explaining the “why” behind the change. Support can even come in the form of helping a teammate cope with the impact that the change is having on their daily work.
The Change Champion is one of the most critical components of the change process. They are the mascot of your change initiative and rally support behind the change to remove roadblocks to achieving ROI.
Panorama’s business transformation consultants can help you incorporate Change Champions, or a team of champions, throughout your project. To learn more, request a free consultation below.
Human capital management software is a powerful tool for any company pursuing digital transformation. The main component that sets human capital management (HCM) software apart from other HR software is the emphasis on appreciating workforce value by means of training, tools, compensation, rewards and other methods.
The value of HCM solutions is significantly increased when integrated to an enterprise resource planning (ERP) system. This allows companies to seamlessly operate with integrated end-to-end processes.
For example, HCM integrated with ERP software can allow production controllers to assign qualified technicians to production orders or allow store managers to assign training to cashiers on the point-of-sale.
Many of the ERP vendors in our 2020 Top 10 ERP Vendors Report have HCM functionality within their solutions.
This report provides ERP selection guidance to organizations across all industries that are evaluating ERP systems. The vendors featured in this report were chosen based on the strength of their functionality across a variety of products.
Let’s talk about the key features that popular HCM systems typically have.
This may seem like a simple feature, but there are several benefits to centralizing all your human resource information in a single system. Workforce information like employee information, positions, titles and reporting structures can live in the same system as performance and payroll information. This consolidation of data (especially within enterprise software) can allow for advanced analytics that help you make better hiring decisions based on business need.
Here’s an example of how significant value can be added when HCM software is integrated with an ERP system: Your ERP system provides several metrics relating to your build to order time (i.e., your total turnaround time from order placement to shipment is five days).
To remain competitive in the marketplace, you want to trim this down to three days. You suspect that picking the raw materials for the production order is the slowdown in the process due to the limited number of hand trucks in your warehouse.
However, workforce analytics show that warehouse workers’ pick times are quite fast. The data instead reveals the bottleneck is in completing the production of the finished goods. Upon further investigation, you realize that you only have two technicians with the skills to complete these production orders.
Without the combined production data from your ERP system and the personnel data from your HCM system, you might have ordered additional hand trucks instead of hiring additional skilled workers.
Workday is a good example of an ERP vendor with strong HCM functionality. You can learn more about Workday in our 2020 Top 10 ERP Report and the related webinar:
Continuing from the previous example, there is an alternative solution to the problem. Instead of hiring more skilled workers, how about training other employees via online or on-the-job training?
A key feature of HCM software is the ability to grow your current workforce’s skillset by providing training. Imagine your HCM software had a mentorship tracking program. You could pair one of the seasoned technicians (in a mentor role) with another employee who wants to learn while on the job. Although the end user training is happening outside of the system, tracking their meetings and progress can keep the momentum and help determine when the goal has been met.
Some HCM software vendors also offer out-of-the-box integration to popular e-learning programs to help track employee progress and suggest additional courses based on their learning interests. These courses can be aligned with business needs for specific skills training, or even used for companywide compliance training. These tools can also be leveraged to onboard new employees in an accelerated fashion.
HCM software helps provide continuous learning opportunities to a modern workforce that has come to expect it. As companies compete to attract top talent, on-the-job career development is becoming a key differentiator. Many companies highlight this offering during recruiting campaigns, and HCM software is the backbone of it all.
The ability to support employees in improving their performance is another key feature of HCM software. Human resources can define and publish role responsibilities and promotion criteria in a centralized system that employees can also access to ensure promotion progress is fair and easy to track. Using this defined list of responsibilities, managers can leverage HCM to create and facilitate performance reviews with their direct reports.
Rewards management is a sub-category within performance management that HCM software typically handles, as well. Setting up compensation and benefit plans that are competitive in the industry help retain the top talent.
How do you know what salary range and benefits are considered competitive? Business intelligence within HCM software can help you determine this based on several factors.
Another component to rewards management is goal attainment setting and tracking. For employees in sales, the ability to see their progress towards meeting quotas can light a fire when they are behind or give them piece of mind when they are on track.
HCM software can also help proactively plan for workforce adjustments when changes in leadership and promotions occur. For example, imagine that you have a high performing store manager who recently applied for a regional manager position. It’s likely that he/she will get the role. When this happens, a gap will be left in that store’s management structure. HCM software can preemptively notify you so you can take steps to prepare another employee to fill the role.
If there’s one thing that can bring business to a grinding halt, it’s not paying your workforce. A complicated expense tool is a huge burden for both the employee who incurred the expenses and the accounting clerk tasked with reconciling them.
What do employees typically do with burdens? They avoid them. Adding impediments between the time it takes employees to incur an expense and get reimbursed will not improve employee morale.
Submitting, tracking and approving or rejecting expenses are common HR business processes that are traditionally met using PC-based tools. In fact, with modern HCM software, processes like submitting expenses or entering a timesheet can done via self-service time and attendance tools.
Employees now have the ease and convenience of performing their daily job functions on their mobile devices, away from the office and their computers. Giving employees this flexibility of self-service expense and time management usually results in more on-time expense reports and timesheets.
Some aspects of expense management can even be automated. For example, some HCM software offers a mobile app that allows users to take photos of expense receipts. The picture can then be scanned to extract the information a user would normally have to type into an expense report. Then, an expense report can automatically be generated, and a new line is added for the expense – all triggered from a simple photo.
Companies pursuing business transformation are also looking to update the way they attract and recruit new talent. Modern HCM software can help with this. Popular HCM systems offer a variety of features relating to recruiting, such as applicant tracking and artificial intelligence (AI).
Here is a use case for how HCM software can help find the right candidate for your open position: Your most senior product manager has recently been promoted, and you need to fill his/her position immediately for a new product launch. You need the same level of experience for the task and none of your other employees have that level of experience, so you turn to external recruiting.
With your HCM software keeping records of past candidate information, you won’t have to start from scratch with a new recruiting campaign. Instead, you can leverage AI to narrow the candidate pool down to those who have the needed skillset for a product launch, as well as the level of experience your previous product manager had.
Even if you did not find a valid candidate in your existing recruitment database, HCM software makes creating and tracking a recruiting campaign simple. Modern HCM tools allow candidates to interact with hiring managers via video chat or internal email. This helps to reach a broader talent pool instead of being limited to local candidates.
HCM software is much more than a tool to operate your HR department; it’s an instrument for helping your company invest in one of its most valuable assets – people!
Need help navigating the different HCM software options? Panorama’s ERP consultants can help. Request a free consultation below.
Potential buyers of ERP software have hundreds of systems to choose from. In fact, we track more than 250 systems in our internal ERP vendor database to help our team provide data to clients.
The evaluation process can be daunting, which is why we created our 2020 Top 10 ERP Vendors Report. Based on our experience with hundreds of ERP systems, our list of top 10 ERP software highlights the vendors that our ERP experts have found to be strong in functionality across a variety of industries, including manufacturing and distribution, professional services, retail and more.
This report provides ERP selection guidance to organizations across all industries that are evaluating ERP systems. The vendors featured in this report were chosen based on the strength of their functionality across a variety of products.
The report provides details on these vendors’ strongest products but following is a brief overview of our Top 10 list:
SAP is designed for large, enterprise type companies across the globe. While the solution set can be the longest in duration to implement, it is often built specifically for the company’s needs.
Oracle also has made its mark on a global scale. The platform is a complex set of applications that can be leveraged in basic and advanced ways. The acquisition of NetSuite by Oracle is proving beneficial for both sides. NetSuite is able to develop and offer add-on advanced functionality from the Oracle product suite, while Oracle is benefiting from NetSuite’s leading SaaS methodologies and market presence.
Microsoft has strong products for small to mid-sized companies. It is typically a good fit for companies that are already leveraging the Microsoft technology stack (i.e., Microsoft Dynamics). Microsoft is emerging and gaining market-share with many pre-configured business processes.
Infor is still emerging as a global, enterprise solution. The platform is a set of applications that can be configured to meet companies’ needs. Many large enterprise type companies are matching up well with best practice implementation accelerators.
With an emerging US market, IFS has strong end-to-end functionality. The product is a good fit for large consumer packaged goods companies with a global footprint.
With strong human capital management features, as well as a focus on financial management, the Workday solution is a robust SaaS product that is growing into an end-to-end ERP.
Epicor’s focus for research and development is on future-proofing the investment. Their partnership with Microsoft makes for an innovative solution available to the small-medium cap market.
The abas ERP system has broad capabilities for small- to mid-sized manufacturers in the assemble-to-order, make-to-order and engineer-to-order environments. abas listens to the needs of their customers and makes adjustments to their releases to meet these needs.
Deltek is a steady-paced vendor experiencing growth and cloud consolidation of their products. This vendor offers a varied set of solutions for small to large companies and has flexibility in their basic versus advanced functionality.
Sage Enterprise Management has solid end-to-end functionality. Our clients have been pleased with its intuitive user interface, and the product has high adoption rates across the market overall.
ERP projects often deliver minimal ERP business benefits because they are not aligned with the company’s strategic goals. This is because clearly defined goals help you evaluate software based on its functional fit.
For example, if your company wants to improve its customer service, one of your ERP requirements might be the ability to automatically order inventory when it reaches a certain level and automatically update this information for the sales department. With this functionality, the sales department would be able to quickly and easily provide customers with a realistic delivery date, thus improving the customer experience.
It’s important to find customer relationship management (CRM) functionality that improves the customer experience. If you’re determining what CRM functionality your company needs, you may find our ERP vs. CRM blog post helpful.
Many of the vendors in our report provide ERP software systems with strong reporting capabilities that ensure data consistency across departments and enable real-time data insights. While scheduling ERP demos, we recommend asking vendors to demonstrate their reporting functionality in a test case, using your data.
Whatever functional areas you’re hoping to improve, you should define these with the executive team before selection. This preparation is essential for many reasons, one of which is minimizing ERP customization.
This is especially important when you’re talking about buzzwords like, artificial intelligence (AI) and IoT because different vendors have their own definitions of these terms.
While some vendors may consider AI to be a system that autonomously learns and solves problems, other vendors may simply consider AI to be an automated workflow.
It’s important to understand what a vendor means by AI because the most advanced AI in ERP systems is typically expensive and complicated to fully integrate. Large enterprises with the money and resources to invest in AI may achieve long-term ROI, but smaller companies may not be able to wait this long for a payoff.
For these companies, integrating a niche application – such as robotic process automation (RPA) technology – with their main ERP, may be a better option.
Another niche application example, besides RPA, that many small to mid-sized companies benefit from is specialized cash applications. These applications can automate financial management processes, like the process of receiving a payment from a customer, applying it to the most recent invoice, entering it into the system and processing checks for validation. These applications are designed to learn and improve overtime.
For example, Dynamics 365 for Finance and Operations integrates machine learning and AI into its finance applications giving finance leaders better insight into the business.
While AI is exciting, it’s not right for every company. We recommend only implementing the technology that aligns with our short-and long-term enterprise strategy.
Many companies face resource constraints when building an ERP project team to assist with ERP selection. There are several ways to address this challenge depending on your unique situation:
These tips are only a few of the secrets to selecting the right ERP system. More ERP selection tips can be found in our ERP Selection Guide.
Your company ultimately needs to decide what section criteria are most important, then narrow down your options based on these criteria. This may or may not lead you to consider one of the top systems from this year’s list. No matter which systems you’re evaluating, the ERP selection advice in this blog post and our report is essential for finding a solution that supports your organizational goals.
Panorama’s ERP consultants have helped hundreds of companies select the right ERP system and develop an effective ERP project plan. Request a free consultation below and be sure to download our 2020 Top 10 ERP Vendors Report for vendor details and ERP selection advice.
Change is like the family minivan. It’s not the fancy sports car everyone wants to drive, but it’s necessary to accomplish your goals.
When the need for change presents itself, business leaders must understand that they have a long road of resistance ahead of them. Before starting down this road, the project team must create a detailed organizational change management plan.
There are two main types of change that can occur within an organization: incremental and transformative. It’s important to understand which change your company is going to implement as one of these is more difficult than the other.
Incremental change is based on the current state and is implemented to improve the existing way things are done. This level of change is easier to implement than transformative change because there is a baseline off which to adjust. An example of incremental change is a manufacturing environment modifying standard operating procedures, such as having employees use a different tool on a production line.
Transformative change is more difficult to implement because it is based on a future state that is mostly theoretical—it is a vision of where a company could be versus where it is today. Transformative change takes time to implement and is often met with resistance because of its focus on changing organizational culture and shaping behavior. An example of transformative change would be a company undergoing a merger that would restructure departmental information flow.
A change management plan is an outline that informs the use of processes and tools for managing the people side of change. The importance of change management lies in the fact that your employees – or end-users – determine the success of your project.
Some of the key aspects of an effective change management plan include a communication plan, a sponsorship roadmap, a resistance management plan, a coaching plan and a training plan. More specifically, a change management plan should fulfill the following purposes:
What are the 6 secrets to digital transformation that are helping organizations build competitive advantage?
It’s important to ensure that organizational changes are aligned with your digital strategy and business goals. In other words, changes should support the financial, ethical and strategic goals of your business.
You need to detail the who, what, when and how of your proposed change in a specific timeline. When will the specific aspects of your change be implemented? Who will implement them? How will they be implemented? Who and what will be affected?
A change management communication plan should have a singular goal: to ensure that your goals are transparent and your business leaders are open in their discussions about change. This includes discussion of what’s changing and why. Once you have established transparency and open dialogue, you should schedule times when you will communicate specific aspects of change.
It’s important to provide training for your managers and employees so they can learn new processes and technology. This training will likely require external resources experienced in customizing training materials based on job roles and designing refresher training at key intervals.
Change leaders are the individuals charged with championing the project from start to finish. You should select people from your management team who are outwardly supportive of project goals, are articulate communicators and are eager to share a positive message with employees.
It’s important to define change management KPIs that you can use to measure the ongoing effectiveness of the change management process. These goals should be very tactical. For example, “all employees and team members verbally agree that the change is worth the expense.”
The test of an organization’s ability to accomplish its mission lies in its ability to navigate obstacles. If, once, you have made your plan, and you find that your plan is not effective, modify the plan and continue to confront change resistance.
If leaders are able to influence employees’ perspectives and provide them with the tools to accomplish change, your company will be able to achieve its goals.
According to the authors of the book, Switch: How to Change Things When Change is Hard , people have two independent systems at work in their brains at all times: the rational side and the emotional side (some call this the left and right side of the brain).
Project managers must be aware of the impact change will have on their employees’ rational and emotional sides of their brains and use this knowledge to inform their change management plan.
Think of the rational side of the brain as a horse and the emotional side as the rider. Without the horse having emotion, there will be no motivation or energy to get things done, and similarly, without the rider having the ability to think there will be no plan to accomplish the task.
Navigating change is much like a rider navigating a horse to the finish line during a race. To accomplish change three things must be done:
Riders tend to contemplate and analyze information before deciding which path to take. The rider must be given clear instructions as to where he should go, or there is a chance he could lead the horse in the wrong direction.
It is very difficult to motivate a horse to go a direction it doesn’t want to go. Even if a rider is able to temporarily encourage the horse to cross a river once, that same behavior is not guaranteed the next time the horse arrives as a river. However, with the proper motivation, the horse will always find a way to cross the river.
To direct the rider and motivate the horse, the path must be shaped by narrowing the focus on a singular goal. For example, on a racetrack, this is done by placing barriers along the edge of the track. In writing a change management plan, this is done with clear and consistent communication.
People have a difficult time adjusting to change, so you must consider the impact change will have on employees and how they will react to it. Analyzing the impact of change will help you develop a change management plan that reduces fear and uncertainty among employees and ensures employee engagement.
Panorama’s understand that change can’t be forced. Their methodology helps companies introduce change at a pace employees can absorb without slowing down your project.
Sound impossible? Request a free consultation below to learn how we help companies remove barriers to change that are wasting precious time.
ERP implementations are massive undertakings with notoriously high failure rates. As a project manager, how do you set you and your team up for a successful ERP implementation?
Based on our experience, we’ve put together a list of technical ERP project management tips. These tips are technology and industry agnostic. They are a good jumping off point for project managers to then add their own style based on the ERP system being implemented and the dynamics of the ERP project team.
You might be thinking to yourself that this tip is project management 101. True, but have you ever experienced how quickly it can rear its head in a software implementation?
This report summarizes our independent research into organizations' selection and implementation decisions and their project results.
Here’s a simple example of how something deemed out-of-scope can suddenly find its way into your ERP project plan: The statement of work (SOW) outlines that all accounts payable business processes are in scope for the project. A list of business processes is included in the SOW, and “settle vendor invoices” is a process that makes the cut. In the SOW, it is also noted that automated workflows are out of scope. Now imagine the team conducts an ERP requirements gathering workshop and notices that several of the requirements are related to workflow. These requirements are valid as they are required to complete their business process. The business analysts or ERP consultants on your team may go ahead and configure these requirements if the ERP software can handle the requirements.
What’s the issue here? While it is admirable of the team to configure the ERP system to meet the business requirements, what is not immediately apparent is the impact this has on the project timeline. Introducing workflow to the project scope now has added hours for testing and regression testing (see tip #4). This is why quelling scope creep early on is so important and can save you from being weeks behind on your project plan.
The classic project management constraint triangle of scope, time and cost is infamous for a reason. One cannot increase or decrease a factor without proportionately doing the same for the others.
Unfortunately, since time is based on predictions of the future, it is usually the factor that is frequently underestimated. That said, when creating your project timeline, it’s important to be realistic about the schedule. If your project sponsors are adamant on having all requirements gathered in two months, but you have 12 weeks of workshops to get through, it’s time to have a reality check with your leadership to either increase the timeline or reduce the scope.
For many implementation projects, the need for more resources is common. However, adding more resources does not always solve timeline issues. In many scenarios, there are a handful of project resources (i.e., subject matter experts) that are required to attend all critical meetings. Just because there are four ERP consultants for a workstream, doesn’t mean that four workshops can be conducted simultaneously.
Creating a timeline for software requirements gathering, design and development is fairly straightforward: You can estimate the complexity of a feature in terms of design and development, and based on this complexity, you can determine approximately how many hours or days of testing is required once the feature is delivered.
However, one element almost always forgotten when building the project timeline is regression testing. Regression testing is retesting all test scripts previously passed to ensure any new development has not impacted the results. Regression testing for ERP requirements can sometimes take even longer than testing the new feature itself.
Lately, there has been a trend of automating regression testing using predefined test scripts. While this automation may save you time in executing the regression testing, it’s still important include time in the project plan to build the test scripts to program the tool.
There’s a good chance that multiple team members will be writing design and integration documents, but only a few will review and approve them.
To bring some consistency to the reviewers and approvers, we recommend sticking to a standardized template for design and integration documents. This will allow reviewers to quickly review large documents and help them zero in on complicated sections needing extensive review. This also saves time for the authors of the documents, as they will be reminded of what elements to include, such as performance considerations, security requirements and test scripts.
A weekly, or sometimes even daily, requirement for ERP project managers is to report out the project status. Since project managers cannot possibly attend all workshops and meetings, the data for these reports are provided by other project team members.
Asking for daily or weekly updates from each member of your team is time consuming for all parties involved – the business analysts and ERP consultants have to set aside time each day to write up a report, and then you as the project manager have to combine all these individual reports.
However, if your project is leveraging a DevOps tool, you can simply extract the needed data on demand to put in a report. This eliminates the need for your project team to do double work since they will already be completing and updating their tasks in DevOps.
DevOps tools have become increasingly advanced when it comes to reporting. With some tools, you may not even need to extract the data as the internal reporting capabilities may suffice.
One deliverable often overlooked or rushed through during an ERP project is a cutover plan. A cutover plan is a list of activities required to prepare the production environment for end-user use. Examples of cutover tasks include loading user IDs into the system, kicking off batch jobs, connecting hardware components to the ERP solution and starting any integration services.
Cutover plans are extremely important as there are many tasks required to get an ERP system production ready, and many are dependent on one another. As an example, consider the task of starting integration services. Most ERP systems require a user ID to identify any records created or updated via an integration. However, if the user IDs haven’t been loaded yet, this task can’t be completed. Part of creating a cutover plan is to sequence all tasks in order of dependency.
Another key success factor in building a cutover plan is building it while the system is designed. During a six-month (or longer) ERP project, you risk forgetting activities if you wait until the month before go-live to create your cutover plan. It’s best to seek input from all team members throughout the project.
Setting expectations up front with the entire team that there will be some weeks where the team works remotely prevents disagreements in the future. Ask your ERP consultant to provide a calendar of when they will be on or offsite so that critical meetings and activities can be planned accordingly.
It’s also important to establish a holiday schedule across all teams. Between your internal group, your ERP consulting partner and your ERP vendor, you may all have different holiday policies. This may seem like a trivial thing, but when it comes to supporting a live ERP system, knowing your resourcing capacity is crucial.
Employee burnout is real. All work and no fun can really bring the morale of the team down, along with the health and motivation of individual team members. It might sound counterproductive to take time away from work to get out of the office and have some fun, but there is extensive research that happier employees produce better results.
In fact, team bonding activities can help break down barriers that exist in the workplace. Team members that wouldn’t normally interact can get to know each other and what their responsibilities are on the project.
Many ERP project managers wouldn’t notice that organizational change management was left off our list, so if you did, you likely are way ahead of your competitors. Now that you understand the technical components of project management, you may be interested in one of our blogs about change management, such as How to Coach Managers to be Change Leaders.
Panorama’s ERP consultants can help your company manage the people, process and technology aspects or your ERP project. Request a free consultation to discuss different project management strategies with our ERP experts.
Imagine you are a vice president at a leading sales company. Your CEO just charged you with spearheading a project that will fundamentally change the way your business operates. You know that many projects involving large-scale change fail on the first attempt and are nervous about the prospects of success.
This report summarizes our independent research into organizations' selection and implementation decisions and their project results.
You fully understand that one of the reasons business transformations fail is because of a lack of employee engagement during the planning, implementation and follow-through phases of the project. However, you know you have a phenomenal team you can rely on to execute a successful project.
With that said, you’ve concluded that your most pressing need is to determine how to engage your team to facilitate a smooth project. This leads you to wonder . . .
To define employee engagement in the context of a business transformation, it is important to first define what it is not:
Fact: Employee engagement is the emotional commitment an employee has to the company and its strategic goals.
In other words, to be truly engaged in a project, employees must exhibit an emotional connection to the project goals. This means that they care about the project and it is not just done for a paycheck, but for their pride and the company’s benefit.
Every company has a percentage of each of these types of employees. However, the most successful companies have a disproportionate number of engaged employees.
To paint this picture, let’s draw from Psychology 101. According to Maslow’s Hierarchy of Needs, people value five fundamental pillars of themselves. From the bottom pillar to the top pillar, people require the following:
Fact: Employees are people with needs and the ultimate desire to become the most that they can be.
Therefore, it is our job to engage their need for safety, belonging and esteem, so they can achieve a level of self-actualization that delivers incredible project results.
Poor employee engagement practices cripple companies. When employees do not feel engaged at work, they are less inclined to deliver their best work.
In 2016, Gallup conducted an employee engagement survey of over 339 research studies focused on the relationship between employee engagement and performance outcomes. This analysis found that only 13% of global employees feel like they are engaged at work. In addition, it found a striking positive correlation between effective engagement and the attainment of performance objectives.
Work units in the top quartile were compared against work units in the bottom quartile, and it was found that those scoring the top half of the employee engagement ratings nearly doubled their odds of company success.
In addition, the analysis concluded that companies with effective employee engagement were . . .
Fact: Employee engagement is essential to both the overall success of a company and the success of its business transformation initiatives.
Here are five ways to improve employee engagement during your business transformation:
There is nothing more frustrating to an employee than not having the tools they need to succeed.
Fact: Ensuring your company provides the right tools to employees is one of the top drivers of engagement.
This can be as simple as sourcing the proper hammers and wrenches for automotive work or as complex as ensuring security protocols are not inhibiting the workflow of a programming team.
Just as you must provide the proper tools for your employees to succeed, you must also provide the proper end-user training on those tools.
In an era where continuous improvement is required to stay afloat in the business world, companies must remain at the forefront of advancements in their field. This can be accomplished by developing a training program that focuses on developing employee skills and knowledge.
A simple, yet effective training method is cross-training employees of different business processes throughout the company. This creates a more empowered workforce and ensures employees understand the goals of business transformation.
Did one of your employees recently have a baby? Are they going through a tough time at home? Are they are asking you for guidance on a project?
As a leader of people, you must focus your attention on the individual nature of your employees. Everyone has unique experiences, both personal and professional, and you must recognize this by conversing with individual employees in a manner that makes them feel valued.
It’s no secret that employee recognition programs inspire employee engagement. In fact, the same Gallup poll discovered that when a manager focuses on someone’s strengths, the likelihood of that employee becoming disengaged drops to 1%.
Conversely, when a manager focuses on an employee’s weaknesses, the likelihood of disengagement rises to 22%. In addition, when an employee is ignored by his manager, disengagement potential is upwards of 40%.
Fact: Recognition programs do not have to be complex or even painstakingly developed. Recognition can be delivered through conversation or even just simple certificates of appreciation.
The key is to focus on employee strengths and highlight their accomplishments that drove the business forward.
Without an organizational change management plan, you have no roadmap for engaging employees at key points throughout the project. A change management plan helps you understand employee needs and develop messaging that informs employees of the impact of change. This strategic communication reduces change resistance. Communication is also essential when it comes to employee training.
Throughout your business transformation, you must focus on engaging employees before, during and after the project. This is essential because you need to understand their pain points and how the project will truly impact their work. You will only get honest answers from your employees if they feel highly engaged and genuinely care about your company’s performance.
Once you’ve established a culture of engagement, it’s important to include employees in your initial planning sessions. This allows them to provide honest feedback and ensures they have clearly defined roles throughout the project.
Panorama’s business transformation consultants can help your company build a change management plan that enables an effective employee engagement strategy. Give us a call! We’re happy to help.
An enterprise strategy (AKA corporate strategy) is a broad term used to describe a company’s “big picture” strategy. The development of this strategy deals with issues that affect a company and is typically developed at a high level in the company (i.e. the board of directors, top management team, etc.).
To develop an effective enterprise strategy, understanding what it involves, along with common obstacles you may face, is beneficial. This is especially true when you’re considering embarking on an ERP implementation. Keep reading to learn more.
This report summarizes our independent research into organizations' selection and implementation decisions and their project results.
Before diving into how to create an enterprise strategy, it’s important to know what challenges you are likely to face. Knowing what these challenges are enables you to develop an ERP project plan designed to avoid or overcome challenges with little downtime.
If your corporate strategy team or ERP project team doesn’t adopt innovative strategies, they may fall behind market rivals. This typically occurs because there’s a bias that favors the way things have always been done.
Strategy is all about change, and you must have a change mindset to achieve this. You must plan to deal with the hesitation or opposition to change you may face.
Some strategies to reduce change resistance include finding, hiring, developing and rewarding strategic thinkers who embrace and exemplify the mindset of change. We help clients prepare for change by ensuring their project plans include critical organizational change management activities.
An enterprise strategy team usually faces tight deadlines because of the scheduled release of board meetings or earning reports. While these have little to do with the underlying challenges of the project, they impose stressful deadlines.
The externally driven deadlines may make delivering optimal results challenging. To overcome this issue, we recommend assembling teams from several sources to deliver strategic goals that meet these deadlines. You’re only agile when you develop the ability to blend and assemble the assets needed to meet goals and deadlines.
While the challenges above only represent a few of the obstacles you may face, they are two of the most prevalent that enterprises must overcome. After planning for the challenges, it’s time to develop your strategy, which, for some, is a new challenge to deal with.
Here are some tips to help you along the way:
Part of an enterprise strategy is determining short- and long-term goals for the company to meet. They can be financial goals, such as increasing company revenue by 15%, or intangible goals, such as improving company-wide morale.
By determining goals, you create a direction for everyone in the organization. After the goals are set, you can develop the strategies that can help you meet the goals. This includes what needs to be done to achieve goals and who completes them.
This planning stage provides a focused blueprint for your management team to guide the rest of the company.
It’s important to use research to fuel your planning process. Gather information about the weaknesses and strengths of your competitors to create a strategy that gives you a competitive advantage.
To create an effective enterprise strategy, you need a comprehensive understanding of your industry’s state so you can find emerging opportunities. Market research is also essential. By understanding your customers, you’ll find it is easier to attract and serve them.
All consumer needs and tastes change. For example, what customers will pay for services or products changes depending on the current economic environment.
At the core of any enterprise strategy is resource allocation. This is when difficult decisions are made regarding where to spend money and how to use the time of staff members to achieve goals and beat the competition. It’s important to allocate your resources in areas you believe offer the best opportunities.
Make sure you regularly look for new opportunities, too. The best opportunities result from a combination of your business capabilities (what it does better than the competition), and what the most critical customer needs are. You need to ensure the services or products you offer match well with a customer’s needs.
The team you assemble for the creation of your enterprise strategy is crucial. As the CEO or top-management official, it’s up to you to ensure the right people are gathered to create a strategy that helps the company achieve success.
Remember, as your company grows, business operations become more complex and may expose weaknesses in your management team. Anticipate these changes and bring in new talent while building the skills and abilities of your current team members with ongoing training and education.
While this is true for your strategy team, it also applies to all areas of your business if you want the opportunity to achieve your long- and short-term goals. For example, the right team can help you maximize ERP business benefits.
The development of an enterprise strategy, regardless of your industry, is a challenging and complex process. Many business teams cannot do this without outside help due to the complexity of the process.
If you find the development of this strategy is too difficult for your existing team, or if you aren’t sure your efforts will provide the desired growth and success, contact us. Our ERP consultants provide new customers with a free consultation to discuss your needs and begin to develop a strategy that helps you achieve and even exceed your goals.
ERP projects and business transformations are exciting ventures for executives. However, this excitement is almost always accompanied by apprehension. With this apprehension comes questions like: Will my employees reject the proposed changes? Will managers support me in this venture? Will this initiative be successful?
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For many companies, answers to these questions will only be answered days or weeks after the project begins. However, among the many items in an executive’s repertoire exists a powerful tool that can help them answer these questions before the project commences: focus groups.
Before we talk about how to conduct a focus group, let’s take a look at the definition of a focus group and some of the pros and cons.
A focus group is a gathering of stakeholders who are selected to participate in a planned discussion intended to uncover perceptions about a particular topic in a non-threatening environment. Taking a deeper look at this definition, there are some key terms that should be clarified:
This includes employees, managers, executives, customers and anyone who might be impacted by the topic of interest.
Agendas and relevant training materials must be created in advance. In addition, the meeting date must be set at a time that encourages maximum participation from the stakeholders.
The objective of the focus group is to pull information from stakeholders. There should be an open floor for discussion to encourage maximum participation.
This is one of the most important aspects of the focus group definition. The focus group must be designed in a way that allows participants to feel free to discuss potential pain points. One way to ensure this is to conduct different focus groups for employees at different levels to ensure they are not filtering their opinions due to their managers being present.
Much attention has been given to focus groups across the change management community. This is because, if orchestrated correctly, focus groups can yield valuable and actionable information. Following are some advantages of using focus groups:
While there are distinct advantages to conducting a focus group, there are some disadvantages, as well:
In order for a focus group to be most impactful, it’s important to adhere to the following six-step process:
As mentioned earlier, the focus group leader should be someone outside your organization. Often, this is an ERP consultant. Following are some tips for finding the right person to conduct your focus groups:
The atmosphere of the focus group is set by the focus group leader. It’s important to find someone unbiased who will seek to create an atmosphere where participants feel safe to speak freely.
The ideal leader never dismisses comments as “bad ideas” or “illogical” because they understand that the goal of focus groups is to gauge perceptions.
There must be a clearly established closing time for discussion, so all participants know they have a specific window in which to share their opinions. This is why it’s important to find a focus group leader who is organized enough to plan and adhere to a schedule. For example, they should be willing to interrupt (politely) and redirect tangential topics to focus on the topic of discussion.
The focus group leader must be well-versed enough in the topic of interest to react to participants’ comments. The leader must listen deeply, think carefully and be empathetic to each participants’ opinion.
The vividness effect is a well-researched phenomenon in cognitive psychology that describes how peoples’ opinions are often shaped by highly graphic and dramatic situations. This phenomenon can directly impact focus group observations and conclusions.
An example of this can be seen in group sessions where there is a very animated and emotional participant. Often, this individual can rally opinion to align with his beliefs, thereby skewing the potential for accurate conclusions.
The focus group leader must be prepared to quell this type of behavior and redirect emotion into productive conversation.
If you’re wondering how your ERP implementation or business transformation is going to impact employees, focus groups are one way to find out. This is just one of many organizational change management tools companies can use to anticipate change resistance.
Readiness assessments also are helpful. The insights revealed from using tools like this can be used to convince executives to invest in critical change management activities, such as communication planning and end-user training. These activities will help you address the concerns you uncover.
Change is never easy, but with guidance from business transformation consultants, like Panorama, you can minimize change resistance. We’ll help you prepare for and conduct focus groups, enabling you to understand and address employees’ fears.
As veterans in the mortgage lending space and as operational efficiency experts, we have seen firsthand the benefits of fully integrated ERP systems. This technology can replace a patchwork of disparate systems to make complex loan processes streamlined, while dramatically improving customer service.
The name of the game in loan process management is to drive down the cost to produce because margins can be thin. Increasing the number of files-to-employee (FTE) efficiency measure, while decreasing loan cycle time and achieving best price execution creates a more profitable lending platform and increases customer satisfaction.
Leveraging industry best practices to incorporate your loan process flow and integrate compliance, secondary marketing, risk management, delinquency analysis, payment collections, marketing and sales into one seamless platform will have a dramatic impact on your profitability.
When we speak of ERP systems, we use it as a general term for a cohesive integration of best-of-breed systems spanning the entire enterprise.
Deployed correctly, an ERP system provides the necessary data management tools to perform actionable data analysis, automate accounting processes and inform predictive analytics for secondary marketing, model repayment and default risk.
An ERP software solution also can improve customer service and optimize what and who you’re marketing to in your customer portfolio. This flexibility is important as changes in interest rates and other macroeconomic factors continuously impact the lending landscape.
Essentially, ERP effectively streamlines lending operations, reducing human error by automating many tasks and considerably reducing a lender’s cost to produce.
We have worked with many types of lenders, from federal and state-chartered banks and credit unions to retail mortgage bankers with call center origination channels. This includes traditional brick-and-mortar retail lending operations, wholesale and correspondent mortgage lenders, and even B2B “FinTech” (Financial Technology) companies.
Based on this experience, we are here to tell you that the next iteration of successful lenders will be those who can effectively automate to increase their FTE efficiency measure, decrease their loan cycle time and achieve best price execution.
Lending is a commodity business, and after all is said and done, borrowers want the best terms, the lowest rates and the fastest and least painful borrowing experience.
An ERP system can bring a lender’s disparate technology applications into one integrated system with a single source of truth (consolidated data). Having disparate systems decreases visibility into your pipeline and finances, which often prevents lenders from achieving best price execution.
We can count on one hand the number of mortgage bankers that can tell us on a loan-by-loan basis what their cost to produce is. This indicates most mortgage bankers lack loan-level accounting detail and therefore visibility into which loans are the most profitable and why.
For example, the mortgage banking industry has historically been slow to adopt cutting-edge technology. In fact, most mortgage lenders use standalone systems as their mortgage loan origination system (LOS).
In other words, they have separate systems for accounting, payroll, human resources, customer relationship management (CRM), marketing, secondary marketing, hedging, risk management, quality control (QC) and servicing or interim servicing systems.
ERP takes all of these functions and creates an end-to-end, fully integrated enterprise system. Integration enables companies to streamline employees’ workloads, which increases productivity and efficiency. Having a fully integrated end-to-end enterprise system allows all processes to be fluid with less error, leading to more closed loans and higher profit margins.
Before embarking on an ERP implementation, lenders should first improve the business processes of the entire organization by focusing on business process reengineering. This is important because most lenders have a patchwork of manual processes, causing inefficiency and an inability to detect and reduce risk in their lending operations.
Although an ERP system streamlines loan process and reduces manual entries, loan processes should first be documented and improved according to industry best practices. However, it is not possible to deploy best practices in a “one-size fits all” manner because lending operations vary dramatically in structure and complexity.
This variation in lending operations is why it is important to work with an experienced consultant, like Panorama, who understands all facets of the lending industry and has worked with a variety of different lending enterprise structures. We can help design your lending operation for maximum efficiency before guiding you in ERP selection.
There are many different ERP systems with powerful accounting suites, and these are among the most mature modules for many lenders.
A good ERP accounting module includes the following features:
A good ERP accounting module provides loan-level accounting detail that enables lenders to measure and manage the KPIs (key performance indicators) that matter most.
ERP systems are rich with data analysis tools that allow you to generate extensive reporting and deploy data learning tools that provide predictive analytics.
Imagine being able to more accurately forecast your pipeline gestation periods and default risk! This would enable better pricing execution while minimizing pipeline fall-out risk and decreasing loan defaults.
Solid data management tools allow you to improve loan performance and overall lending platform performance. Further, better visibility into loan collateral and loan pools can improve relationships with entities providing primary funding facilities, such as investors and warehouse lenders.
Marketing done right in the lending cycle can give your business a huge competitive advantage. An ERP system helps you create effective strategies that catch customers’ attention, with the added benefit of analyzing effectiveness and strategy-related returns over time.
ERP’s marketing management capabilities help you design, implement and analyze your marketing strategies and techniques. Marketing ERP modules also can help you determine the best course of action with both new and tried-and-true campaigns and messaging.
In addition, these modules enable you to analyze ad expenses and returns as well as gauge overall effectiveness of a given campaign.
Modern ERP systems can turbocharge a lender’s secondary marketing operations, having a significant impact on transactional efficiency and the lender’s bottom line.
For example, loan pricing applications can move a lender’s secondary marketing team from the dark ages of pouring over manually updated spreadsheets when determining final loan pricing for retail, wholesale, correspondent and institutional customers alike.
Loan pricing applications move teams from this scenario to the more ideal scenario of relying on real-time pricing engines powered by live credit market data feeds. These applications accomplish this by factoring in a myriad of different loan level pricing adjustors.
In other words, customized channel- and customer-specific rate sheets can be configured to update in real-time. This allows sophisticated lending operations to stay in-sync with every tick of the global credit markets. It then allows them to maximize profits and avoid losses from those nasty repricing events, like an immediate parallel shift in yield curves.
ERP applications for secondary marketing departments also enable lenders to achieve best price execution on loan sales. This is done by determining best price execution on single or “flow” loan sales. It can also be achieved by enabling efficient sale of loan production in “bulk” loan sales of pools of loans with common loan attributes that the system determines will achieve the best pricing.
The most sophisticated systems also have functionality that allows lenders who bifurcate their loan assets and servicing assets (servicing rights) to determine if they should sell their servicing rights to the same buyers as the loan assets or sell the servicing rights to different buyers for better price execution.
The system can even enable lenders to decide if they should retain the servicing rights for the lender’s internal servicing or subservicing platform based on a myriad of different inputs. These inputs are related to how the lender values servicing rights. The system considers factors such as assumptions about the lender’s own servicing operation costs and efficiencies, projected portfolio prepayment speed and credit defaults.
And did we mention that today’s secondary marketing ERP software can make the hedging process a snap? Hedging for lenders involves the purchase and sale of financial derivatives in capital markets. These transactions offset gains or losses in the value of the lender’s loan production pipeline or loan portfolio with the goal of locking in profits and preventing losses caused by price changes in the credit markets. Determining the optimal blend of derivatives to buy or sell to achieve these hedging goals on an ongoing basis is easy with modern day ERP technology.
Regulatory compliance is typically one of the most burdensome topics for lenders and arguably one of the factors that significantly affects your cost per loan all the way from loan origination through loan servicing or sale into the secondary market.
We can all surely remember when, for example, mortgage lenders were simply doing post-closing audits on loan samples as required by the GSEs (Government-Sponsored Entities). Then, TRID (the Truth In Lending Act – Real Estate Settlement Procedures Act Integrated Disclosure) came along, putting any lender that produced an inaccurate disclosure at risk. This was followed by the new HMDA (Home Mortgage Disclosure Act) requirements, which made the burden of compliance on mortgage lenders even greater.
Mortgage loan quality is now a loan-by-loan event that a fully integrated ERP system can monitor from beginning to end, alerting management to events of non-compliance at any point throughout the process.
Lenders that do not enjoy the real-time visibility provided by such advanced compliance monitoring will soon find that relationships with their credit providers, investors and secondary market partners have deteriorated when compared to those lenders who have implemented fully integrated, modern ERP solutions.
This can have significant negative impacts on a lender’s operations and profitability – from less favorable credit terms on the lender’s primary funding facilities, to impaired pricing in the secondary market. It also impacts legal and regulatory costs and can lead to fines and fees or worse!
In today’s world, competition among lenders is fierce. Everyone is fighting for borrowers and loan originators. On any given day, other lenders can offer better pricing to borrowers, but not all lenders know the value of providing automated tools to loan originators to attract and retain the best talent.
Depending on a lending operation’s structure and business model, lenders who are looking to increase their lending volume can typically do so by adding additional loan origination staff, call centers, or wholesale or correspondent lending channels. At the end of the day, more loan originators and origination channels can result in more growth and profit as you leverage your infrastructure and achieve economies of scale within your lending organization.
Today’s ERP systems makes this process easier by allowing for loan originators of all shapes and sizes to do more with less. Automated systems that manage customer information can greatly improve customer service, sales, marketing and loan originator workflows. This results in increased loan production and higher employee and customer satisfaction.
ERP provides extensive customer service management capabilities. From integrated call center automation to providing customers with online access to their accounts, ERP helps lenders create and integrate customer service functions with customer satisfaction analysis tools.
Here’s an example of the impact of ERP software combined with best-in-class business processes: A company breaks down siloed thinking to achieve operational efficiencies. This enables the company’s servicing department to alert loan originators and help them refinance borrowers at optimal times. Ultimately, this leads to mitigating the company’s portfolio run-off risk.
This may seem like a simple and common-sense practice, and while most of us in the MBA (Mortgage Bankers Association) discuss it extensively, a staggeringly high number of financial institutions, banks, non-bank lenders and servicers do not even bother with this function.
While culture is one of those “soft” business topics, it is arguably one of the most important. In lending businesses, culture is important in that lenders must operate as some of the most precise manufacturing operations. They must operate this way because every loan is a truly a unique person or business and potentially presents significant risk to the lender.
This need for precision means lenders often strive to achieve a delicate balance of customer service and due diligence for every loan originated and serviced.
Ethics play a major role in providing borrowers with information, such as loan program terms, that enable them to make informed decisions. This due diligence ensures that the lending process from origination through the sale or servicing of each loan is 100% above board.
With the right ERP system, many checks and balances can be built into your lending process to guarantee that your corporate culture values transparency to customers.
ERP enables lenders to easily streamline their business operations and lending processes, resulting in overall reduction of risk. This, in turn, maximizes profits as well as customer and employee satisfaction.
Every organization is different, and there is no perfect single solution that fits all lenders. Therefore, it is important to objectively assess how your business stacks up in terms of key performance indicators relative to other lenders in your market.
In other words, an ERP system alone is not the sole answer to transforming your lending business. After analyzing your current state performance and processes, you can start designing and moving toward an optimal future state.
There are many different ERP systems for lenders to evaluate, and most are very specialized. This is why it is important to work with an experienced ERP consultant with business transformation experience who understands all facets of the lending industry.
Look for someone who has worked with a variety of different lending enterprise structures and someone who can design your lending operation for maximum efficiency before looking at ERP systems.
Need a health or reality check on your lending operation? Looking for a sounding board that “gets it” when it comes to the lending business and lending solutions? Give Panorama Consulting Group a call and ask for Vanessa or Calvin – we love chatting about this stuff!
About Vanessa Davison, CMB
Vanessa co-founded several financial firms and served as a turnaround executive for three additional firms. She began her career 25 years ago, serving as President and CEO of a mortgage lending platform. She formulated and executed the corporate strategy successfully growing the organization from 36 employees to over 600 employees, while maintaining profit margins and diversifying the company’s sources of revenue within 36 months.
Her career has a rich history in the financial sector with many notable accomplishments in consumer and auto loans, small business loans and mortgage loans. She has worked for banks, credit unions, REITS, mortgage banks with call centers, retail, wholesale and correspondent channels. Vanessa successfully turned around CityMutual Financial by reworking the entire loan portfolio, restructuring operations and originations channels, which returned the company to profitability.
She is known in the industry for her strong acumen in lending origination, operations, compliance, underwriting, technology deployment and effective management of investors and warehouse lines. Due to her notable accomplishments in the industry, she lends her time serving as an instructor at the Mortgage Bankers Association’s School of Mortgage Banking.
She is a graduate from UC Berkeley and has completed advanced graduate programs at Harvard Business School and George Washington University.
About Calvin Hamler, AMP
Calvin is a former Wall Street finance professional turned entrepreneur, with proven results building and leading organizations of significant size, scale and complexity. He has managed both horizontal and vertical growth initiatives, and personally orchestrated and negotiated strategic mergers, acquisitions and joint ventures.
Prior to joining Panorama’s senior management team, Calvin started a de novo mortgage banking firm which grew to more than 600 employees generating $2.6 billion in financial asset production. He built an industry-leading capital markets trading operation at the heart of the firm, utilizing financial derivatives for pipeline and balance sheet hedging. During this time, he delivered the company’s loan production into the secondary market via bulk and forward sales, AoT (Assignment of Trade) and loan securitization.
Additionally, Calvin oversaw the firm’s IT staff in both the development of proprietary ERP systems and the selection and implementation of off-the-shelf ERP solutions. This ultimately orchestrated a joint venture with a startup software development firm to build proprietary middleware designed for the banking and financial services industries that is still widely used today.
Calvin is a Summa Cum Laude graduate, earning his degree in finance with emphasis in economics from the Daniels College of Business at the University of Denver. He has held a myriad of different securities licenses, including Series 7 General Securities Representative; Series 63 Uniform Securities Agent; Series 55 Equity Trader; and Series 24 General Securities Principal. Calvin is also a graduate of the Mortgage Bankers Association School of Mortgage Banking, having earned his AMP (Accredited Mortgage Professional) designation, and is a former board member of the Colorado Mortgage Lenders Association.
Every year, we conduct an independent analysis of the Tier 1 ERP vendors. The report, called Clash of the Titans, is based on data we collect from organizations implementing an SAP, Oracle, Microsoft or Infor product. This data typically includes project cost and duration metrics as well as metrics on implementation approach.
As we release our latest Clash of the Titans analysis, our readers are probably wondering which selection advice is most applicable to these “titans” of the ERP market, or as we call them, Tier 1 ERP vendors.
This report analyzes some of the notable differences between SAP, Oracle, Microsoft and Infor.
While Tier 1 ERP vendors provide systems suited for a variety of company sizes, their flagship offerings typically are designed for companies with more than $750 million in annual revenue. Most companies of this size have complex processes or complexity around consolidation and entity management.
Because of their wide reach across industries and brand recognition, these vendors have a large customer base. Examples of Tier 1 ERP vendors include SAP, Oracle, Microsoft and Infor.
If one of these vendors is on your long list or short list, we have some specific ERP selection advice for you:
Your ERP consultant will not be your only implementation partner. Your ERP vendor will also be involved in helping you strategize, implement, manage change and support the system after go-live. Some key criteria to look for in an implementation partner are vision, dedication and expertise.
Let’s look at an example to understand what we mean by vision. Let’s say you have a business requirement to print shipping labels from various logistics services before shipments leave your warehouse.
A vendor solely focused on winning the bid might tell you their software can meet this requirement, but a vendor with vision will ask related follow-up questions: Have you considered an integration with carrier services directly to your ERP system? Are you utilizing dock management to best schedule your logistics partners for pick up and drop off times?
Follow-up questions like these can mean the ERP vendor has a greater vision for what you could achieve with your ERP software. In this example, they are envisioning an integrated ERP system that not only prints shipping labels for your warehouse but also talks directly to your logistics services to know when they are coming and ensures your docks are available for when they arrive.
Dedication is a criterion that’s a little harder to determine. You want an implementation partner that will dedicate time and resources to you when you encounter an issue, despite how many other customers they are supporting.
While Tier 1 ERP vendors have thousands of customers, they still offer reliable, long-term support. You can gauge their dedication by thinking back to the RFP process – did you have a dedicated account manager or one whose attention seemed divided?
The most straightforward consideration in a partnership with an ERP vendor is expertise. Even though Tier 1 ERP vendors have a wide breadth of capabilities that are likely normalized throughout industries, it’s good to ask if they have any specific expertise related to your business.
An example of this is when a vendor teams up with an ISV (independent software vendor) that seamlessly integrates into their ERP system to provide out-of-box, industry-specific processes.
Partnerships rely on trust and communication, so it’s important to reflect on your RFP process with each vendor. Were they transparent in their pricing? Did they communicate clearly and follow up in a timely manner? If you have difficulties with trust and communication before you’ve gone all in, imagine the challenge after you’ve already paid the bill.
While some companies prefer to assemble a team of all internal resources, most companies rely on a certain amount of external resources due to these resources’ expertise.
Independent ERP consultants can provide expert resources and so can your vendor. This combined expertise can lead to successful project. However, this requires that both consultant and vendor have a practiced and proven approach.
When evaluating your vendor’s implementation approach – often influenced by your consultant’s implementation approach – it’s important to ensure it will work for your organizational goals and company culture.
Post go-live support is another important consideration. While it may seem early to think about post go-live support before you’ve selected an ERP system, support services can make or break your ERP selection.
An ERP vendor should offer several options (including a dedicated one) when it comes to support plans. With Tier 1 ERP vendors, a first level of support almost always is included with software licenses. Therefore, a more apples-to-apples comparison is to look at the first level of paid support. How many hours come with it? What are the typical SLAs (service level agreements) that come with opening issues?
ERP vendors with a wide range of capabilities tend to have industry-standard business processes built into their software. This is how they were able to gain so many customers and build their brand.
For example, in 2020 Clash of the Titans, we talk about how Microsoft’s channel partners are expanding their client base with more pre-configured, niche functionality. This likely is a contributing factor to the shorter project duration among Microsoft customers.
This is when it becomes important to ask about your ERP vendor’s customization route.
Today, ERP vendors closely monitor the customizations and integrations their customers build because their SaaS customers get regular, automatic updates that require compatibility. To prevent compatibility issues during an automatic update, it’s crucial for the updates to not overwrite any code developed for specific customers.
This is why you should ask each vendor what their customization and integration policies are and what this means for you when it’s time to upgrade.
A unique advantage that Tier 1 ERP vendors have over smaller vendors is that Tier 1 players tend to have other applications in their portfolio that complement their main ERP system.
For instance, SAP, Oracle and Microsoft all offer internally developed cloud services to host the cloud version of their ERP solutions. This makes deploying and managing your environment streamlined as you only have one vendor to deal with.
Other examples include the Microsoft Office suite of products that can send emails to and from your ERP system and Infor’s artificial intelligence solution that can help analyze the massive amount of data coming from your ERP software.
When selecting an ERP system from a Tier 1 vendor, consider what other business applications you may replace in the future. Do the ERP vendors under consideration offer those business applications? Would it be beneficial to replace legacy systems as part of your ERP project plan? What is my digital strategy, and can this vendor be my partner for the long haul? These types of questions may help you narrow down your list of potential ERP vendors.
Since Tier 1 ERP vendors tend to have thousands of live customers, they should have plenty of case studies and references for you to consider. Ask the vendor to provide a reference for one of their customers of a similar size and industry. Better yet, ask if there are any case studies on your competitors.
Leveraging these references and case studies, you can determine the kind of implementation partner the vendor is, what their implementation and support process is like and what other applications within their portfolio may add value to your ERP implementation.
Since Tier 1 software solutions have a long implementation time and often require business process changes, it’s smart to select an ERP vendor that will give your company the attention it needs.
It’s also important to find an ERP consultant that can help your company select and implement your Tier 1 system. Independent ERP consultants, like Panorama, can work with your vendor to develop a project plan that includes success factors like business process reengineering and organizational change management.
For more generalized ERP selection advice for any software tier, check out our ERP Selection Guide.
Our 2020 Top 10 ERP Vendors Report highlights the vendors that our ERP experts have found to be strong in functionality across a variety of industries, including manufacturing and distribution, professional services, retail and more.
Looking for ERP selection advice? Our report provides that, as well!
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Panorama Consulting needs the contact information you provide to us to contact you about our products and services. You may unsubscribe from these communications at any time. For information on how to unsubscribe, as well as our privacy practices and commitment to protecting your privacy, check out our Privacy Policy.
The 2020 ERP Report summarizes Panorama’s independent research into ERP customers’ selection and implementation decisions and their project results. Based on this data and our client experience, we provide insights into the most important ERP success factors for organizations desiring more than just a technology implementation.
SAP, Oracle, Microsoft and Infor each have a large market share, especially when it comes to targeting enterprise-level organizations. This report analyzes some of the notable differences between these four ERP vendors. These differences may help guide organizations in their ERP selection decisions.
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The ERP systems featured in this report were chosen based on the strength of their distribution functionality as well as the amount of research and development invested in these products.
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Deciding between SAP and Oracle is difficult. This the client needed software that would position their organization for continued growth, but internal bias put functional fit in the back seat. Ultimately, Panorama’s independence and expertise gave the client the insight necessary to make an objective decision.
Panorama Consulting needs the contact information you provide to us to contact you about our products and services. You may unsubscribe from these communications at any time. For information on how to unsubscribe, as well as our privacy practices and commitment to protecting your privacy, check out our Privacy Policy.
The ERP systems featured in this report were chosen based on the strength of their distribution functionality as well as the amount of research and development invested in these products.
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SAP, Oracle, Microsoft Dynamics and Infor each provide robust ERP systems that can transform your organization. The data points in this report highlight common challenges that implementing organizations face when working with each of these ERP vendors.