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How to Use Change Management to Increase Your ERP ROI

How to Use Change Management to Increase Your ERP ROI

Ensuring a high ROI on your ERP implementation is no easy task. Many organizations have tried to accelerate their projects by implementing out-of-the-box ERP software, minimizing process changes and cutting change management from their budgets. While this may result in higher financial returns in the short-term, it does nothing to position your organization for long-term growth.

So how do you maximize ERP ROI without reducing your project budget to the bare necessities? One answer is organizational change management. In other words, your employees will determine your ROI.

The Human Factors That Influence ROI

  • Speed of Adoption​ – How quickly are employees adopting new technology, business processes and job roles?​
  • Ultimate Utilization​ – How many employees are using the ERP system and demonstrating buy-in?
  • Proficiency​ – How well are employees performing their jobs with the new ERP system?​

If one of these factors is negatively impacting your ERP project, you may want to conduct an ADKAR (Awareness, Desire, Knowledge, Ability, Reinforcement) Assessment. Evaluating how well you’re meeting employees’ needs will help you develop a change management plan, which is a key pre-implementation activity.

What Employees Need During a Change Initiative

  • Awareness of the need for change
  • Desire to make the change happen
  • Knowledge about how to change
  • Ability to implement new skills and behaviors
  • Reinforcement to retain the change once it has been made

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Desire is one of the key components of ADKAR that organizations overlook. They see change as a mandate that employees will follow whether or not they desire it. While this may be the case with some employees, software usage isn’t the ultimate goal. Employees must be proficient with new software for your organization to realize business benefits, but they are unlikely to become proficient without the desire to change.

Reluctant software users are almost as bad as employees who refuse adoption altogether. It’s important to begin change management activities before ERP selection, so you can proactively build desire among employees and give them more time to process the changes. While SAP and Oracle may be infinitely better than your old ERP system, employees may still be reluctant to adopt a new system if you don’t give them reasons to desire change.

Another aspect of ADKAR that many organizations forget to address is employees’ need for reinforcement. When employees revert to old processes, this may indicate the need for reinforcement. The best way to reinforce change is through recurrent training and frequent communication. Our experience as a software implementation expert witness has revealed that a lack of communication is a leading cause of ERP implementation failure.

It’s helpful to think of ADKAR as sequential. You cannot meet every need simultaneously, and each employee will go through the process at a different pace. Managers should be the first to complete the ADKAR process followed by the employees they supervise.

How to Be a Change Leader

  1. Prepare yourself for change​ – What changes will impact your team and how? Why are these changes being made? Answering these questions is the first step to becoming a change leader.
  2. Adapt to the change that is happening to you​ – Just because you’re a manager doesn’t mean you like all the proposed changes. You should share your concerns​ but ultimately commit to supporting change.
  3. Develop competencies to manage change​ – A manager should have the competencies to take on the roles of a communicator, liaison, advocate, resistance manager and coach.

If your organization is experiencing low productivity, high turnover and low morale as a result of organizational changes, the role of coach will be essential to your digital strategy. Managers who assume this role significantly impact how employees perceive change. By listening to employees’ concerns and using ADKAR, these managers are able to identify barriers to change and develop plans to address them. Executives can also play the role of coach. In fact, they can be some of the most effective coaches because of their level of influence.

6 Tips for Coaching Employees

  • Remove barriers – Barriers to change may relate to family, personal issues, physical limitations or money. Coaches should fully understand the individual situation of each employee to determine how to remove barriers.
  • Build desire by providing choices – Employees need to know in simple and clear terms what their choices are and what consequences they face for making a particular choice. This puts a level of control back into the hands of employees.
  • Create hope – Employees are more open to change when you frame it as an opportunity for a better future. Coaches can create desire for change among employees by expressing their own excitement and enthusiasm. While this tactic is effective, it can be misused if coaches create false hope and don’t believe in the change themselves.
  • Convert the strongest dissenters – By focusing their energy on the most vocal dissenters, coaches can reduce the spread of negativity. Another reason that converting vocal dissenters is worthwhile is because they may be some of the most vocal advocates when converted.
  • Highlight the tangible benefits – Case studies and testimonials can tangibly demonstrate the benefits of change. Conducting pilot programs and sharing the successful outcomes is also useful for generating buy-in.
  • Use money or power – This tactic works well with mid-level and senior managers that are critical about the success of the ERP project. Offering higher pay in exchange for project support can be worth the investment.

Aiming for a Higher ERP ROI

While many organizations aim for short-term cost savings, some organizations understand the importance of long-term ROI. They expect more from their ERP software because they know its true value lies at the intersection of people, processes and technology. They know that technology alone cannot deliver long-term ROI.

However, this is easier said than done. If you know the true value of ERP software but need a little guidance to achieve it, hiring an ERP consultant is great investment.

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5 Benefits of Business Process Management

5 Benefits of Business Process Management

Many organizations begin ERP selection without a solid foundation of business process management. When they look at the mass of ERP systems to choose from, they have no idea where to start because they don’t know what technology will enable their business processes or competitive advantage.

Clearly, business process management is important. At the most basic level, business process management helps you define business requirements that you can submit to your long-list or short-list ERP vendors. However, the value of business process management goes beyond business requirements:

Competitive Advantage

Misalignment between processes and strategy makes it difficult to deliver customer value. Business process management gives you the opportunity to design your processes to support your digital strategy and competitive advantage. Business design sessions bring together stakeholders from across the organization to promote strategic alignment and find opportunities to improve your competitive advantage.

You can protect your competitive advantage and minimize software customization by viewing processes through three lenses. Backoffice processes, like invoicing or procurement, can usually leverage out-of-the-box software functionality. Other processes are industry differentiators. These will guide your choice of ERP software since some ERP systems may not support niche functionality. Finally, there are processes that provide competitive advantage, such as product development or ecommerce. These may require software customization. While expensive, customization for the sake of competitive advantage is always worthwhile.

SAP vs. Oracle vs. Microsoft Dynamics vs. Infor

Clash of the Titans 2019 highlights the challenges implementing organizations experience when working with these top ERP vendors.

Employee Buy-in

Defining your business processes allows you to identify organizational changes and communicate them to employees. Imagine telling employees, “there will be change,” without being able to outline specific process changes. This would not elicit buy-in.

Business process management also helps you understand roles and responsibilities as well as changes to organizational structure. This understanding facilitates change management activities as it enables you to develop a targeted communication plan.

Another way to elicit buy-in from employees is to involve them in business design sessions. When employees are allowed input on the changes made to their own processes, they will naturally support these changes and encourage others to support them, as well.

Organizational Alignment

When we say that business process management can lead to organizational alignment, we are talking about a certain approach to business process management. One approach relies on functional thinking, which is a way of thinking about processes in terms of specialization. The other approach relies on end-to-end process thinking, which looks at the entire value chain, including the intended purpose of each process and hand-offs between functions. The latter approach leads to organizational alignment.

Another name for this approach is value chain mapping. What does it look like? It’s all about breaking down functional silos and gaining end-to-end process understanding, visibility and control. You bring together various stakeholders to look for ways to increase efficiency across functional areas and not just within functional areas. By integrating processes across silos, you ensure everyone is working toward the same goals.

While many ERP consultants take a functional approach to business process mapping, Panorama uses value chain mapping. Make sure your ERP consultant takes this integrated approach.

Fewer Workarounds

Ideally, business process management will remove 90% or more of the workarounds your employees use to complete tasks. Employees use workarounds when processes are poorly defined. Sometimes, the current technology cannot support efficient processes anyway.

When mapping your business processes, be sure to differentiate between workarounds and actual processes. You don’t want to include workarounds in the business requirements you submit to ERP vendors as each requirement may add additional implementation costs. You can remove workarounds by designing new processes that negate the need for extra steps.

Another cause of workarounds is a lack of effective employee training. Fortunately, an ERP implementation is a great opportunity to train employees. You can use process documentation to design customized training materials. Training should be recurrent enough to support long-term retention and customized enough to address each employee’s unique processes.

Continuous Improvement

Business process management provides a foundation for building a center of excellence, which allows you to continuously improve. During business design sessions, you can develop key performance indicators (KPIs) to regularly measure performance improvements and project cost savings, such as decreased turnover.

While most organizations only measure improvements immediately after go-live, many benefits are achieved overtime, so you should continue to measure improvements years after go-live. This is especially true if you have a center of excellence since you will always be improving processes.

While continuous improvement is essential, it can be mismanaged. It’s important to involve the IT department in process changes as your ERP system should continually be configured to support new processes. If your technology cannot support these processes, employees will use workarounds and create new inefficiencies.

What is Your Business Process Management Approach?

An end-to-end process mindset can help your organization realize the benefits of business process management. But how many organizations use value chain mapping? According to a recent study by the American Productivity & Quality Center, the biggest challenge organizations experience with end-to-end process thinking is convincing executives of its value.

How can you overcome this challenge? Understanding the benefits of value chain mapping and being able to clearly articulate them will help you obtain buy-in.

Schedule a Free 30-minute Consultation With a Digital Transformation Expert!

6 Tips for Assessing ERP Implementation Risks

6 Tips for Assessing ERP Implementation Risks

What would you do if your ERP implementation went over-budget? What if it caused an operational disruption? You would have to react quickly and deduce the reasons for failure. Once you get your project back on track, you’d have to make up for lost time.

This scenario is probably making your stomach churn. No one wants to waste time and money. That’s why many organizations take a proactive approach to risk mitigation. They develop a risk management plan before selecting ERP software. They also assess their project plan to ensure it has the right activities and right level of detail, and they perform continual assessments throughout their project.

Why Assess Your ERP Implementation?

  • You’ll have a comprehensive view of your project activities, performance and risks​.
  • You can detect errors early and proactively prevent errors.
  • You’ll minimize implementation risk and cost.

How to Assess Your ERP Implementation

Conduct Stage Gate Reviews

Stage gate reviews ensure the quality and completeness of your project plan. At the end of each implementation stage, the executive team and project team should determine if every deliverable for that stage is complete before moving on to the next stage.

This is also the time to assess the quality of work. Are you addressing business aspects, such as change management, or are you just focusing on technical aspects? What methodology and templates are you using? As you identify risks, you can include them to your risk management plan.

Stage gate reviews can reduce your likelihood of needing project recovery services, which is a last resort for many organizations. Even organizations pursuing digital transformation can inadvertently skip key project activities and find themselves in need of project recovery.

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

Assess Your Project Management and Governance

Effective project management can mitigate many project risks. A good project manager knows who’s in charge of managing the project budget and timeline and has a good understanding of the roles and responsibilities of project team members. If this doesn’t sound like your project, it’s not too late to develop strong project governance. Panorama’s ERP consultants provide project auditing services that help organizations stay on-budget and realize expected business benefits. 

Focus on Organizational Change Management

When assessing your project plan, you might notice it’s a little heavy on technical activities and little light on people-related activities. Do you have a plan for identifying and mitigating change resistance? Do you understand the impact of change on each department and individual employees?

Your project plan should include change management activities that promote two-way communication and drive awareness of project goals. Communication works best when it’s informed by employees’ needs and concerns. By investigating the reasons for change resistance and determining the skillsets employees lack, you can develop a change management plan that addresses the entire organization – at the department and individual level.

Focus on Business Process Reengineering

Your project plan may be lacking a focus on business processes. If so, business process reengineering may be a good addition to your project plan. Business process reengineering ensures a new ERP system has the functionality to support your organization’s goals. Involving subject matter experts helps you determine business requirements and identify opportunities for process improvement.

For every process you improve or redesign, change management becomes more essential, so be sure your project plan considers the interdependency between business process reengineering and organizational change management. For example, you’ll need to document the change impacts of each redesigned process.

Assess Your Data Migration Plan

Organizations that develop a data strategy prior to implementing ERP software are more successful with data migration. The process is still arduous, but it doesn’t cause operational disruption. These organizations spend time defining the scope of data conversion and assessing data cleanliness.

A best practice for data migration is setting milestones and conducting multiple conference room pilots. Aim to have 25% of your data converted and cleansed for the first conference room pilot, 50-75% for the second and 100% for the third.

Assess Your Level of Customization

Software customization is costly, so it’s important to plan for it early in the project to avoid going over budget. While assessing your project governance around customization, you may find a lack of project controls.

Good project governance for customization includes predefined customization limits and a formal approval process for change orders. Executives should have the final say when it comes to additional customization. They will decide if it’s worth the extra cost by investigating the reasons behind the change order – did it originate from employees’ resistance to process changes or is it aligned with the organization’s digital strategy and competitive advantage?

What if You Identify Major Risks?

While assessing your ERP implementation, you may find holes in your project plan. It’s not uncommon for organizations to skip organizational change and business process management in order to accelerate their implementation. Even organizations pursuing digital transformation tend to overlook certain change management activities.

Fortunately, revising a project plan isn’t difficult if the project is still in its early phases. Most executives will not object to more project controls around customization. Some may object to organizational change management, but developing a business case can help you show the value of change readiness.

Schedule a Free 30-minute Consultation With a Digital Transformation Expert!

4 Data Security Tips for Your ERP Implementation

4 Data Security Tips for Your ERP Implementation

New digital technologies, like AI an IoT, are augmenting the business intelligence provided by ERP software. While this business intelligence helps organizations improve the customer experience, it also presents new data security challenges. With great business intelligence comes great responsibility.

Better customer intelligence is generally beneficial to both the organization and the customer, but sometimes, it can be a burden. For example, a data breach can cost your organization millions in legal fees and lost business. You may also lose customers if they feel their privacy is threatened, not by a security breach, but by how you choose to use their personal data. Mitigating these risks requires an understanding of potential security threats and applicable compliance issues, such as HIPPA and GDPR.

How can you be proactive in identifying risks while still supporting revenue-generating initiatives across your organization? Here are four tips for enabling an innovative, but vigilant, ERP implementation team:

Evaluate your organization’s culture.

A customer-centric culture promotes data security because it encourages employees to listen to customers’ data privacy concerns and share them with executives. Let’s say you’ve implemented a new CRM system, and several customers are expressing privacy concerns. Your ERP implementation team should be the liaison between customer service reps and executives to establish a data management process and define security standards.

It’s important to develop a change management strategy that promotes a culture where data security is the responsibility of everyone in the organization. ERP software integrates data across the organization, so several departments likely have access to customer data. Improved data access is essential to digital transformation, so restricting data access isn’t the answer – better security is.

The Beginner’s Guide to Digital Transformation

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Understand the role of the chief information security officer (CISO).

Your CISO can enable your digital strategy by leading cultural changes, such as encouraging open communication and prioritizing education. In terms of education, CISOs should regularly host cyber security trainings and provide educational materials in a variety of formats multiple times per year. Cyber security training is also an essential pre-implementation activity.

Open communication is especially important between the CISO and other executives. By scheduling regular meetings with privacy and legal teams, CISOs can build strong relationships across the organization. A foundation of trust makes it easier for CISOs to prove the value of data security by presenting credible data and suggesting possible next steps. This proactive approach is enabled by predictive analytics – CISOs should use business intelligence to protect business intelligence.

Develop strong governance processes.

Your CISO needs complete visibility into the organization’s supply chain and ERP selection process, so they can evaluate new technology from a data security perspective. By developing a vendor management program, CISOs can keep tabs on various ERP vendors and their associated security risks. Predictive analytics is useful here as well. It enables CISOs to quickly detect when an implemented system violates the organization’s security profile. Even the top ERP systems in your industry may have vulnerabilities.

Strong governance processes also help ensure legal compliance, especially with the International Organization for Standardization’s (ISO’s) IT security management standards. A security solution, like HyTrust, can serve as a compliance litmus test.

Be especially wary of IoT security.

The internet of things (IoT) plays a major role in ERP implementations for many organizations. Industry analysts predict that IoT and ERP will become an increasingly popular combination. IoT improves data insights and operational efficiency, so it’s not hard to see why organizations are drawn to it. If you’re considering integrating IoT with your ERP system, there are several security concerns of which to be aware.

IoT devices are vulnerable to cyber attacks because they communicate with other internet-connected devices, making them prime targets for hackers who want access to multiple data sources. IoT devices aren’t only a convenient target, but they’re an easy target – most organizations aren’t prepared for an attack and don’t have adequate protections in place. They don’t realize that a device managed by a third party may not have the same level of security as technology hosted on-premise.

A lack of due diligence on the part of the IoT provider is another reason hackers target IoT. Hackers know that many IoT providers haven’t taken the time to enhance their security as they were too eager to get their devices to market before competitors.

How can a CISO protect customer data stored and/or collected by an IoT device? One option is implementing an IoT device management platform, such as Amazon Web Services. These platforms enable you to install crucial software updates on all your IoT devices. Your ERP project team can also protect data by designing optimized business processes that reduce errors.

Convincing Your Boss to Invest in ERP Data Security

It’s not easy to prove the ROI of cyber security. Justifying the investment, requires an understanding of the threat landscape, attack probability and potential losses. With this information, you or your CISO can convince executives that ongoing cyber security is necessary to support the organization’s goals.

The implementation of a new ERP system is a great opportunity to discuss cyber security with executives. New technology brings new security threats which need to be addressed if you want to realize value from business intelligence and customer data. Consider hiring an ERP consultant to help you develop a cyber security business case.

Schedule a Free 30-minute Consultation With a Digital Transformation Expert!

Top 6 Reasons for ERP Failure

Top 6 Reasons for ERP Failure

When recovering from a failed ERP implementation, the most common question organizations have is, “Who is at fault?” Organizations struggle to answer this question as the project involved many stakeholders, from the project team to the ERP consultant to the ERP vendor. A better question to ask is, “What were the root causes of failure in the overall project execution?”

We’ve learned several lessons from helping organizations with ERP project recovery and ERP litigation. Following are six common reasons for ERP failure:

Technical Focus Instead of Business Focus

The most successful organizations view their ERP implementations as business transformations rather than technology projects. They understand that a new ERP system has much more impact on the business than a Windows upgrade. ERP implementations have a significant impact on employees, business processes and the organization’s overall strategy. However, many ERP consultants are more focused on technology than people and processes. In contrast, our research shows that software functionality is actually one of the least important criteria for ERP success. So, stop thinking so much about SAP vs. Oracle, and start thinking about people and processes.

The Beginner’s Guide to Digital Transformation

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Unrealistic Expectations

Embarking on an ERP implementation with unrealistic expectations is often the beginning of ERP implementation failure. Some ERP vendors lowball implementation cost and duration, which forces organizations to cut corners or absorb unexpected costs. Project plans should be realistic and not overly-aggressive. How can you tell if your plan is realistic? Start by determining the critical success factors that will make or break your project. What has worked for other organizations of similar size and industry? What challenges do organizations usually encounter? Chances are you will find that change management and business process reengineering are critical success factors that ERP vendors overlook. The recent SAP failure at Lidl demonstrates the importance of realistic expectations. The retailer defined strategic goals at the beginning of the project but didn’t consider the success factors necessary to achieve these goals. Seven years and 500M Euro later, it became clear that the budget for a successful implementation was more than the company could afford.

Lack of Executive Buy-in

The executive team may have approved the project budget, but their job is far from over. They need to form an executive steering committee to clarify the overall digital strategy and make decisions about resource allocation, timeline, budget and benefits realization. Executive involvement ensures the ERP implementation doesn’t become a technology project but fits into the organization’s overall strategy. Organizations that use ERP software to enable a long-term digital strategy are more likely to realize benefits, such as improved customer service and sustainable competitive advantage.

Insufficient Business Process Reengineering

Some ERP vendors will say you don’t need to focus on business process management because their software is built with industry best practices and can be implemented out of the box. While best practices may be appropriate for some areas of your organization, they may erase your competitive advantage in other areas. Focusing on business process reengineering prior to selecting an ERP system helps you design future-state processes that will determine your functional requirements. Today’s ERP systems are far too flexible to provide clear direction on how to run your business. Organizations that fall into this trap end up automating their existing processes rather than optimizing them for efficiency and competitive advantage.

Lack of Change Management

If there’s one thing that’s sure to prevent ERP failure, it’s organizational change management. In each of the 30+ ERP lawsuits for which we’ve testified or written expert reports, change management issues contributed to project failure. These organizations didn’t build a change management team and viewed change management as simply an end-user training exercise. They could have invested in organizational assessments, employee communications and customized training, which would have ensured that their employees effectively used the new ERP software and followed new processes and procedures. You can’t force employees to embrace change; it’s their choice and they may choose to resist it. Usually, this is subtle and non-malicious, but it can still undermine your ERP implementation.

Too Much Software Customization

Most organizations begin ERP implementations expecting little to no software customization, but in our experience, most clients end up needing at least moderate customization. While some customization is always necessary, customization gets dangerous when you customize functionality that should be standardized. For example, many back-office processes are not competitive differentiators, so standard software functionality is usually sufficient. If employees are pressuring you to customize processes like this, it’s a sign of change resistance. Decrease the resistance instead of increasing the customization.

Hiring Inexperienced Resources

Your systems integrator and your ERP consultant should both have relevant ERP experience within your industry. This goes back to the point about realistic expectations. How will you know what’s required for success unless you review lessons learned from similar organizations? An ERP consultant with industry-specific experience understands the challenges your organization might face and can ensure you have access to the right expertise. National Grid recently experienced an SAP failure due to the inexperience of its systems integrator. The systems integrator did not have experience implementing SAP in the US utility industry, so their work caused technical defects within the system that led to significant operational disruption. Systems integrators can easily misrepresent their capabilities, so it’s important to ask for relevant references.

How to Prevent ERP Failure

You can prevent ERP failure by looking for warning signs. If any of the above issues sound familiar, it’s not too late to change course. If you haven’t yet begun ERP implementation, you can avoid these six mistakes by developing a strategic and realistic implementation plan.

Schedule a Free 30-minute Consultation with an ERP Project Management Expert!

How to Prepare Your Organization to Select ERP Software

How to Prepare Your Organization to Select ERP Software

When organizations decide to implement ERP software, they often jump right into ERP selection without taking the time to prepare. They assume they can select the right technology by simply evaluating software features and benefits.

However, there are many activities that should precede ERP selection. Before you start thinking about ERP vendors or perusing top ERP systems lists, consider focusing on these seven activities:

 

Ensuring Organizational Alignment

The key to a successful ERP selection is ensuring that stakeholders across the organization understand and agree with the organization’s strategy objectives. Then, you can consider how you might use technology to achieve objectives, such as improving the customer experience, creating new business models or generating new revenue. This isn’t the time to focus on specific technologies but to establish a foundation that ultimately will help you evaluate ERP vendors based on their ability to enable your strategy.

The Beginner’s Guide to Digital Transformation

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

Developing a Business Case

What business benefits do you expect to realize from new ERP software? What are the expected costs? Knowing the answers to these questions is critical to justifying an ERP investment when executives ask about ROI. To really win them over, you should outline exactly how new technology will enable your organization’s strategy objectives. Most ERP failures can be prevented by ensuring stakeholders understand technology’s role in digital transformation.

 

Mitigating Change Resistance

As soon as you’ve made the decision to implement new ERP software, you need to inform employees. You may not know what specific technologies will be involved, but it’s never too soon to start communicating about the overall goals of the future ERP implementation. By evaluating your organizational culture and employees’ openness to change, you can develop an organizational change management strategy that helps employees embrace change. Encouraging employee buy-in is not just about increasing system usage. Employee buy-in is critical long before implementation. For example, employees can provide useful input during the selection process. Building enthusiasm before selection can maximize their future engagement.

 

Defining Business Requirements

Many organizations do not have clearly-defined processes, but as they embark on their ERP project, they realize the necessity of business process mapping. Documenting current business processes helps you prioritize functional requirements and identify opportunities for improvement. While no ERP system will address every business requirement, process mapping gives you an idea of which requirements are most important. Process mapping also helps you understand who owns processes and data, so you know who to involve in the selection process. ​

 

Transforming Business Processes

While some processes may only need incremental improvements, processes related to your competitive advantage may need a complete overhaul. In other words, they need business process reengineering. This is an approach to business design that focuses on breaking down functional silos and providing end-to-end process understanding. It involves thinking about the purpose of each process and the hand-offs between functions. Ultimately, this approach builds process efficiencies that will guide your selection of ERP software. If a system can’t support your optimized processes, then it’s not right for your organization.

 

Understanding Deployment Options

Do you want to house ERP software within your IT department or host it externally? Complex organizations that need heavy IT control, gravitate toward on-premise deployment, while organizations that need less control generally outsource their IT functions. Here’s some of the terminology you might encounter as you’re evaluating deployment options:

Cloud​ ERP

Software hosted in an external environment that is either single tenant or multi-tenant

 

SaaS ERP

Software managed by a specific vendor in a multi-tenant cloud environment

 

On-premise ERP

Software hosted within your organization​

 

Hybrid​ Cloud

A combination of on-premise hosting and cloud hosting

 

Managed Services​

All platforms and technologies hosted by external provider

 

Developing an IT Strategy

In addition to deployment options, there are several other IT strategy decisions to make before ERP selection. For example, you’ll need to determine an integration strategy – do you want a single ERP system or several best-of-breed systems? While best-of-breed ERP systems can help you build competitive advantage, they also create technical complexities, integration challenges and data issues. Many organizations implement single ERP systems since they enable standardization, which can reduce change resistance. However, single ERP systems don’t allow you the flexibility to choose the best software for each of your functional areas. This means you might need more software customization, which is costly.

 

Selecting an ERP System

These seven activities will help you establish a foundation from which you can effectively evaluate ERP vendors. Now you have the necessary information to analyze the functional and technical fit of any digital technology on the market. You know what criteria are most important to your organization, so you can narrow down your potential options until you find the technology that supports your digital strategy and improves your competitive advantage.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

What is Your ERP Consultant’s ERP Negotiation Methodology?

What is Your ERP Consultant’s ERP Negotiation Methodology?

During the ERP software selection process, many organizations struggle to understand and compare vendors’ statements of work. Some of these organizations hire ERP consultants to help them navigate the cost variables and negotiate favorable terms.

However, choosing the right ERP consultant can be just as confusing as selecting an ERP system. Any ERP consultant can claim to deliver vendor negotiation services, but not all consultants have an effective methodology. When evaluating an ERP consultant’s vendor negotiation methodology, consider whether it includes these four activities and deliverables:

1. Strategy Development

An ERP consultant should collaborate with you to develop an ERP negotiation strategy. Ideally, they’ll ask you about your goals and priorities. For example, is it more important for you to reduce operational expenses or reduce capital expenditures?

They’ll also help you determine which contract terms are most important to you. These may include terms, such as:

  • Licensing payments should be spread over deliverables.
  • Organization will spend x amount per year.
  • Subscription costs will not be increased for x years.

2. In-depth Price Comparisons

The most valuable deliverable an ERP consultant can provide is a negotiation workbook showing apples-to-apples comparisons of your top contenders. You may have found that vendors’ quotes are not easy to compare. Vendors’ statements of work make various assumptions, such as:

  • You’ll use all software functionality right away
  • You’ll use x amount of out-of-the-box functionality
  • You’ll need x amount of customization
  • You’ll take x implementation approach
  • You’ll use mostly internal resources

A negotiation workbook helps you understand statements of work based on your unique requirements instead of vendors’ assumptions. Your ERP consultant should help you understand your requirements by facilitating activities, such as:

  • Determining an ideal level of software customization, and ensuring you’re only customizing when absolutely necessary (i.e., to improve your competitive advantage)
  • Understanding how many internal full-time resources you can reasonably dedicate to the project and how many vendor resources you’ll need
  • Understanding how long it takes to automate workflows in the system and how complicated it is, as well as who will be configuring workflows
  • Determining which activities should be included in each project phase

Below is a sample negotiation workbook. The spreadsheet allows “what if” scenarios (i.e., what if you get a 30% discount):

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

3. Total Cost of Ownership Analysis

A long-term view of cost is just as important as a short-term view. The ideal ERP consultant will provide a three-year total cost of ownership analysis – or use whatever timeframe makes sense for the length of your ERP implementation. This analysis should be included as part of the negotiation workbook. The analysis considers factors, such as:

Payback period

Panorama clients typically recoup the cost of their ERP implementation within three years.

Benefits realization timeframe

Panorama clients typically realize full business benefits from out-of-the-box functionality within 9-12 months.

Deployment model

Most ERP vendors encourage a cloud-hosting model and a SaaS licensing model. Organizations that deploy ERP software on premise typically host it in the cloud.

Licensing structure

The number of users and types of users will affect your cost if you choose a user-based pricing model. Many ERP vendors underestimate the number of users to make their system seem less expensive.

Implementation approach

Will you use a phased, big bang or hybrid approach? If phased, will you phase per function or per module? Make sure your ERP vendor doesn’t expect you to buy all licenses upfront.

Software costs vs. service costs

You should aim for a ratio of 2:3 for software costs to service costs.

Software configuration

How long will it take you to configure each of your business processes? Are there any process dependencies (processes that need to be set up before other processes)?

Resource rates

Panorama clients typically pay $175-225 per vendor resource. If you negotiate this too low, you may end up with rookies on your team.

4. ERP Negotiation Guidance and Coaching

Your team has made large purchases in the past, and you don’t want ERP consultants taking control. The ideal ERP consultant will take a collaborative approach and be flexible enough to respond to your unique needs: they can negotiate on your behalf, prepare you for negotiating with ERP vendors yourself or attend calls with you.

Whichever method you choose, you should aim for cost savings of 30-60%. Your savings will vary depending on your organization size and your chosen ERP vendor. Some vendors don’t go below a 20% discount. You can achieve additional cost savings overtime by ensuring maintenance costs are based on purchase price rather than list price.

Panorama clients typically go through three to four rounds of negotiation, which can last anywhere from three weeks to several months.

The Right ERP Consultant

It’s not easy finding an ERP consultant that focuses on all four of these activities. If you’re not convinced these activities will save you money, take a look at these case studies:

  • Panorama recently negotiated more than $15 million in savings on licensing costs alone for a large, multi-national client.
  • Panorama negotiated cost savings for a client that could not afford their top-choice vendor and was about to settle for their second choice.

Typically, Panorama clients achieve cost savings that are ten times the cost of the negotiation services. And Panorama’s performance warranty ensures every client gets a significant discount on their software purchase or they don’t pay us a dime for our time spent negotiating on their behalf.

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How to Manage Change During a Merger or Acquisition

How to Manage Change During a Merger or Acquisition

Any type of change is traumatic, but few things are scarier than a merger or acquisition. Whether you’re doing the acquiring or you’re being acquired, this process can be stressful for everyone involved.

Managing change related to a merger or acquisition is necessary for both the short- and long-term health of your organization. While mismanagement can lead to lost productivity in the short team, it can also weaken your company from within and make it vulnerable in the future.

To effectively manage change, you should focus on your most valuable resource: your employees. Here are five tips to help you prepare for the major change of a merger or acquisition:

1. Identify Skill Gaps and Overlaps

When you join forces with another organization, the first thing on employees’ minds is the status of their jobs. To avoid this panic, you should address employee concerns long before change occurs.

And long before you communicate with employees, you should spend time defining how your organization will look post-merger. This will provide visibility into skill gaps and overlaps. If you clarify the situation as quickly as possible, you’ll find it easier to manage change. Less concerned about their jobs or their future, employees will slowly turn back to the task at hand.

2. Focus on Organizational Culture

Bringing together two different organizations is going to combine two different types of organizational cultures. This could cause problems, but it doesn’t have to. In fact, culture can be one of your most effective tools in managing change – it can autocorrect for things you simply cannot control.

To avoid culture clashes, you should meet with teams throughout the organization to decide how processes will look post-merger. A strong business process reengineering methodology can help you establish a process framework prior to merging with another organization.

Focusing on culture before a merger or acquisition will make it easier for you to incorporate new employees into your organization and facilitate your transformation.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

3. Make Communication Easy

During times of change, rumors are your worst enemy. The last thing you want is employees gossiping about what they think is going to happen post-merger. This not only takes people away from work, but it hurts workplace morale, which can have a negative impact on the health of the company.

It’s important to establish clear and open lines of communication with employees throughout the acquisition process. Consider developing an organizational change management plan and holding weekly meetings to discuss the latest news related to the merger and to answer any questions people may have. This simple step ensures everyone is on the same page and gives you the chance to dispel rumors while keeping everyone calm and working towards a common goal.

4. Establish Purpose

Many organizations use mergers and acquisitions as a growth strategy. The idea is that if you can combine highly-profitable companies in similar but different markets, then you can increase efficiency and profitability. This can be a smart strategy, but only if stakeholders are aligned.

To ensure alignment, you should communicate your strategy and explain how it aligns with your organizational vision. If acquiring a certain company gives you access to a new market, then make your intentions clear.

5. Collaborate

Organizational change can often feel as though it’s being imposed from the top, and this can lead to change resistance. It’s important to make the transformation as collaborative as you can.

Recruiting integration teams is a great way to spread the workload of change management, and it makes people feel more involved in the process. Participating in integration teams gives employees another way to stay informed about organizational changes.

While preparing for change is important, unforeseen challenges always arise. You should develop a plan but remain flexible as you navigate change. Keep these tips in mind, as they will make your merger or acquisition more successful.

About the Author: Jock Purtle is the Founder and CEO of a digital business brokerage. Prior to starting DigitalExits, he was an eCommerce entrepreneur. In his current role, he works with business owners to help them strategize growth and plan an exit, which has given him considerable experience in fields such as organizational change and corporate culture.
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. If you are interested in guest blogging opportunities, click to read more about our submission guidelines.

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6 Benefits of Machine Learning and AI for Supply Chain Management

6 Benefits of Machine Learning and AI for Supply Chain Management

Artificial intelligence (AI) has the potential to become one of the most disruptive technologies of the 21st century. It’s driving innovation across sectors as disparate as healthcare and agriculture. Supply chain management is one area where AI has many applications and benefits.

Before moving forward, here are some quick definitions:

  • AI refers to a branch of computer science that involves simulating intelligent human-like behavior in machines.
  • Machine learning is a branch of AI concerned with using statistical techniques and algorithms to facilitate computer systems in improving their performance on specific tasks using data alone, without being explicitly programmed.

Benefits of Machine Learning and AI for Supply Chain Management

1. Predictive Analytics

Demand forecasting analyzes customer demand to optimize supply chain processes. Optimal inventory levels and reduced holding costs are key benefits of accurate demand forecasting.

Machine learning models are adept at predictive analytics for demand forecasting. These models can identify hidden patterns in historical demand data. For example, the models can correlate customer purchasing behavior with weather patterns.

We developed a manufacturing ERP systems list for organizations interested in this type of functionality:

2. Inventory Management

An important use case for AI is enhancing the computer vision capabilities of ERP systems and machines. Computer vision is a field of computer science that works on enabling computers to see, identify and process images.

Thanks to machine learning and deep learning, image classification is now becoming more feasible, meaning computer systems can now recognize and classify objects in images with a high degree of accuracy – in some cases, even outperforming humans.

In terms of supply chain management, computer vision can enable more accurate inventory management. Target, for example, trialed a system in which a robot equipped with a camera tracked inventory on store shelves. (For information on other trends and key issues in contemporary supply chain management, read this article by Bringg.)

3. Optimized Procurement Management

Chatbots have dramatically improved in recent years, and while they are often used in the context of customer service, they also have benefits in procurement management.

A good example is Chyme, which opens up conversational interfaces between human operators and sales/marketing automation solutions, such as Salesforce. A large beverage company implemented Chyme as they were experiencing inefficiencies when employees sought information on procurement queries. Employees were required to call a helpdesk and wait for operators to access several systems to give them the required information. By implementing the AI-powered procurement bot and integrating it with various ERP systems for access to real-time information, inefficiencies were markedly reduced.

Chatbots provide instant information on shipment status, stock availability, stock price and other procurement queries. This is a clear case of AI benefiting supply chain management while augmenting the roles of staff and allowing them to focus on value-added tasks instead of getting frustrated answering simple queries.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

4. Automated Quality Inspections

Manual quality inspections conducted at logistics hubs are often used to inspect packages or containers for any damage during transit. The possibility to automate quality inspections has emerged with the growth of AI.

IBM Watson is an artificial intelligence system that can be used for automated analysis of defects in industrial equipment. The system uses machine learning techniques to check for damage via image recognition.

The use of AI to power automated quality inspections reduces the chances of delivering faulty goods to customers.

5. Improved Compliance

Manufacturers in certain industries are required to comply with a range of industry-specific regulations governing product quality. In industries like aerospace and healthcare, supplier quality is paramount. A component part that fails to meet industry regulations in aerospace, for example, could lead to human fatalities.

Supplier quality management is costly and time-consuming because manufacturers in heavily-regulated industries need to track and monitor thousands, or even millions, of component parts from different suppliers to ensure they meet compliance standards. Machine learning models can streamline auditing and compliance monitoring of component parts.

6. Faster, Higher-output Shipping

The autonomous vehicles industry is still in its nascent stages. However, as it begins to mature, there is enormous potential for shortening shipping times. Human truck drivers can only be on the road for a limited amount of time within a certain time period. Autonomous vehicles, powered by AI and machine learning, do not have this limit on driving time.

Closing Thoughts

The benefits of AI and machine learning in supply chain management are clear. These technologies augment the roles of skilled workers, allowing them to provide more value to their organizations.

If you’re pursuing digital transformation, AI may be just what you need for increasing operational efficiencies and competitive advantage.

Written By: Limor Wainstein. Limor is a technical writer and editor at Agile SEO, a boutique digital marketing agency focused on technology and SaaS markets. She has over 10 years’ experience writing technical articles and documentation for various audiences, including technical on-site content, software documentation, and dev guides. She specializes in big data analytics, computer/network security, middleware, software development and APIs.
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. If you are interested in guest blogging opportunities, click to read more about our submission guidelines.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

6 Benefits of Cloud ERP

6 Benefits of Cloud ERP

Cloud ERP and on-premise ERP each have their benefits. The best choice for you will depend on your organization’s structure and business strategy.

While this post focuses on the benefits of cloud ERP, it is by no means superior to on-premise software or hybrid cloud environments. The benefits you realize from any technology will depend on your project execution before, during and after implementation.

Here is a technology-agnostic perspective on the reasons some organizations choose to implement cloud ERP:

1. Better Business Intelligence

Cloud technology allows organizations to access data remotely without complex technical configuration or robust IT staffing. Over the past two years, the number of organizations deploying business intelligence (BI) in the cloud has doubled. Cloud BI adoption is especially prevalent among sales and marketing departments as they rely on real-time data to understand and improve the customer journey.

When it comes to data access and data storage, cloud ERP has several advantages over on-premise ERP. Cloud technology is more scalable for storing large amounts of data and can provide access to data gathered by IoT technology.

While researching cloud ERP systems, you’ll likely run across many lists of “top ERP systems.” These lists are often based on the amount of research and development vendors are investing in their products. The most innovative ERP vendors are heavily investing in cloud BI.

2. Faster Implementation

Cloud ERP systems are faster to implement than on-premise ERP systems. The technical environment for cloud technology can be configured in as little as 24 hours.

This gives organizations more time to focus on the business side of transformation. Change management and business process management require the same time and resources whether you’re implementing cloud or on-premise ERP.

3. Ability to Focus on Your Core Competencies

Many organizations lack sufficient IT staffing or cannot afford the same resources and infrastructure as cloud providers. While an organization may be decently skilled at IT, it’s not necessarily its core competency.

Cloud technology allows organizations to outsource their IT function and focus on their core business. Retailers, for example, typically like to dedicate more focus to the customer experience than IT maintenance.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

4. Cost Savings

The initial cost of cloud technology is lower than on-premise technology. While subscription costs add up over time, many CFOs are more concerned about minimizing capital expenditures than reducing operating costs. These CFOs may opt for a multi-tenant cloud to minimize long-term costs.

For smaller organizations, the long-term cost of cloud ERP may actually be less expensive than on-premise ERP – the fixed infrastructure costs of on-premise ERP can’t be spread over enough volume to justify the cost.

5. End User Buy In

Cloud technology tends to be more modern and easier to use than on-premise software, so employees may be quicker to embrace it. This does not mean organizations won’t need end-user training and a communications plan. It just means they might experience less resistance. Some organizational cultures are more accepting of cloud ERP than others.

In any technology initiative you should communicate with employees about the benefits of new technology, emphasizing how their jobs will become easier. Are you implementing robotic process automation in conjunction with cloud technology? Focus on how these bots will streamline menial tasks and enable employees to work more efficiently.

6. Strong Data Security

To avoid security breaches, many organizations turn to cloud ERP as cloud vendors tend to have very secure hosting environments. Some CIOs still worry about the security of the cloud, but they don’t realize how vigilant cloud ERP vendors can be when it comes to security because the stakes are so high. Cloud vendors have a lot to lose – with multiple customers, they are popular targets for security breaches. This may sound like a disadvantage, but in many cases, it forces vendors to develop sophisticated security.

Cloud ERP Best Practices

While there are very compelling reasons to implement cloud ERP, all technology initiatives entail significant risk. Before jumping into a cloud implementation, you should first understand your business strategy and digital strategy. The deployment model you choose should align with these strategies.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

Why Localization Should be Part of Your Digital Transformation Strategy

Why Localization Should be Part of Your Digital Transformation Strategy

Whether you are a CEO of a company, an independent content creator or a marketing executive of a large enterprise, chances are you have given some thought to digital transformation. The digital marketplace we live in today requires brands and their respective businesses to innovate their marketing strategies in order to stay relevant.

Studies have shown that 55% of startups worldwide have already adopted digital transformation as their primary business strategy. One of the more predominant factors of becoming relevant to a wider customer base is site and content localization. What localization can accomplish is to make your brand relevant to markets outside of your local area or language region.

Localization of your internet presence can enable you to approach new markets and clients as well as to establish a firm presence as an important figure in your industry. Let’s take a look at why digital transformation should take center stage in your internationalization efforts through the lens of localization.

1. Brand authority & industry presence

It can be difficult for a company to establish its presence on the market, especially in a competitive niche. However, content localization coupled with digital transformation can help your brand achieve that goal. By going the extra mile and localizing your web content, you will make a statement that you are ready to grow as a brand.

Both customers and other companies in your niche will start to notice your online content, pages and the impact you make thanks to the search engine optimization (SEO) that comes with localization. In short, the more you move into localization of your content through digital transformation, the more prevalent your name will be online.

2. Greater variety of markets

Localization entails that you translate your content into languages other than your native one. This means that any customers and clients who speak Chinese, Russian, Greek or some other language will take notice of you. In that regard, you will effectively attract a more varied and lucrative clientele than ever before.

While traditional digital transformation efforts focus on internal restructuring, localization looks outwards towards the public. This is what makes localization a good choice for digital restructuring since it will place your brand’s pin on the markets across the world.

3. A flexible content structure

Content localization will give you ample opportunity to catalogue your website, blog posts and social media accounts. This is a good time to refresh and reevaluate your content marketing strategy now that you have localization in mind.

You will effectively create a more manageable and flexible content structure, which will allow you to create new types of interesting content for your international audience. Managing such a large operation is a huge feat, so you should consider outsourcing a part of your localization process to a trustworthy third party.

It is good practice to check out several translation reviews before settling for the writers and translators that suit your brand needs the most, especially in long term. Once you have a content creation and localization pipeline in place, managing the digital transformation chess pieces around your brand will be a quick and enjoyable task.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

4. Better SERP ranking

All the digital transformation efforts you put into your website, brand and content lead to one thing – better SEO. SEO remains a pivotal part of content optimization on the web and directly affects the visibility of your brand on popular search engines such as Google, Yahoo and Bing.

Search engine result page (SERP) extrapolates data from your SEO optimization and ranks that content higher or lower than the competition’s. Your rank will depend on the level of optimization you applied to your content.

Localization is considered a huge leap forward from anything you might do to technically optimize your content through Google Adwords or SEM Rush. In essence, localization through digital transformation of your online brand will ensure you show up on people’s browsers far more frequently than before.

5. High ROI

Every company has to take ROI into consideration when innovations are in question. After all, digital transformation isn’t the cheapest or fastest way to upgrade your business model. However, content localization is a very worthy investment for an online brand for one simple reason – organic traffic. Localization brings organic traffic to your website and subsequently allows for much higher conversion rates.

This is a much more affordable marketing strategy than any form of paid advertisement, live event or influencer campaign. The ROI of localization in your digital transformation far exceeds any previously mentioned marketing efforts and it makes sense for your brand in the long run.

6. External investments & partners

Once the buzz around your company starts spreading, you will see a lot more clients and customers knocking on your door. One of the more prominent knocks you should be present for is when interested partners and investment opportunities approach you.

Localization can do a lot for your brand and being interesting to potential investment partners is only one of them. Make sure to take every option into consideration when it comes to corporate partnerships and investment projects as a result of your newly-implemented digital transformation. There is a lot to be gained by working with other brands in your niche and creating joint products and services for international markets.

Now, Not Later

Large companies and small startups are both cautious about implementing anything new into their existing business models. However, technical transformation and digital upgrades to your brand are becoming a market necessity. If you decide to wait, you can find yourself in the position of becoming irrelevant to the market because other brands have embraced new digital transformation techniques in your place.

Localize a portion of your online presence into popular global languages and monitor the performance of your brand for a while. Before you know it, you will have expanded far beyond where you were when you started considering localization as part of your digital transformation strategy.

Written By: Kristin Savage. Kristin graduated from Columbia University where she was majoring in Germanic Languages. Besides English as her mother tongue, she also speaks German and Dutch fluently. Currently, Kristin is studying Spanish and planning to obtain her PhD in Applied Linguistics.
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. If you are interested in guest blogging opportunities, click to read more about our submission guidelines.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

A Brief Overview of Robotic Process Automation

A Brief Overview of Robotic Process Automation

Competition is fierce in the robotic process automation market. It’s a market that has more than tripled in revenue during the last two years, perhaps due to the buzz around artificial intelligence (AI). However, robotic process automation isn’t quite the same as AI.

What is Robotic Process Automation?

Robotic process automation (RPA) is the use of software robots to perform simple, repetitive tasks, such as data entry or certain employee onboarding tasks. Unlike AI, RPA cannot make judgments about future scenarios.

Organizations often deploy RPA bots in place of an ERP system or use them in conjunction with an existing ERP system. While ERP systems automate many business processes, they don’t automate all processes. This is where bots become useful. Usually, a bot does not have to be directly integrated into an ERP system to interface with it.

When RPA technology came on the market, it was primarily adopted by the financial services industry. Now, it is popular across all industries, and organizations have a variety of software vendors from which to choose.

Three software startups rule the RPA market: Blue Prism Group, UiPath and Automation Anywhere. These three companies were all founded in 2005 or earlier, but they didn’t become successful until they entered the RPA market.

Why is the RPA Market Growing so Quickly?

Using bots to complete repetitive tasks saves organizations time and money and reduces errors. Bots also allow employees to focus on higher-level work instead of mundane tasks. In other words, the return on investment is huge. Every organization wanting to compete in the digital era is considering RPA technology.

Strategic marketing has also contributed to the growth of the RPA market. Blue Prism Group popularized the use of the word “robotic” in conjunction with “process automation” as it invoked the concept of AI. Taking advantage of the popularity of AI, the RPA market skyrocketed.

Another reason for the market’s growth is the fact that RPA technology is relatively low cost, and the initial implementation typically doesn’t require extensive customization or deep systems integration.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

RPA Implementation Challenges

The RPA market continues to grow despite rampant implementation failures. The only reason organizations think RPA is quick and easy to implement is because they are rushing through implementation without proper planning or a long-term roadmap. Organizations soon find that RPA technology is difficult to maintain as their organization grows and business processes evolve.

If you know where your business is headed in the next five to ten years, you can configure your bots to fit your future business model. When evaluating RPA vendors, look for a flexible solution that aligns with your culture of continuous improvement.

The Future of RPA

RPA technology will likely become more sophisticated as software companies move beyond the automation of simple tasks and begin automating more advanced processes. Eventually, ERP vendors may acquire RPA (soon to be AI) companies to extend their own AI functionality.

In the meantime, organizations implementing RPA are getting creative. They’re integrating RPA with cognitive technologies, such as machine learning, speech recognition and natural language processing, so they can automate processes previously requiring human judgment. Most organizations are putting this type of automation, known as intelligent automation, on their strategic agendas for the next year.

While the future of RPA is bright, will the future it creates be just as idyllic? Automation technology has eliminated jobs in the past, so its reasonable to expect that more advanced automation will eliminate just as many, if not more, jobs. In response to this fear, organizations are developing reskilling plans, so they can maximize employee retention even as entire roles and job descriptions are eliminated.

Should You Consider RPA?

In this digital era, organizations want to redefine the way they work. While the need for new technology is urgent, you should first focus on aligning your people and processes with your digital strategy. Your RPA implementation should be part of a holistic digital transformation initiative.

If you build this strong foundation, your organization can realize numerous benefits from RPA technology, including cost savings, reduced cycle time and improved customer service.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

8 Secrets to Developing a Business Case For an ERP Implementation

8 Secrets to Developing a Business Case For an ERP Implementation

You want to begin an ERP implementation, but executives aren’t fully on board. How can you gain the support of your leadership team?

Ultimately, every project comes down to one thing: the potential ROI. Here are eight tips for developing a business case to convince executives to invest in new technology:

1. Relate the problem to the bottom line

Perhaps you’re hoping ERP software will help employees keep up with increasing workloads. Maybe you’re having a hard time accessing real-time data. Regardless of your reasoning, the best way to pitch your strategy is to relate it to your organization’s bottom line.

Are your employees spending too much time on mundane, repetitive processes? Present that information in terms of lost productivity and labor costs. Are you continually missing deadlines? Calculate the penalties you’ve had to pay as a result. Sound financial reasoning sets your recommendation off on the right foot.

2. Show multiple opportunities for improvement

One purchase, numerous benefits – what’s not to love? Most enterprise technologies touch multiple areas of an organization. This makes them a valuable investment. To strengthen your value proposition, emphasize each of the ways an ERP system could transform your organization.

3. Demonstrate long-term usability

Executives aren’t just worried about today’s results – they must think about tomorrow’s goals as well. In the long-term, outdated technologies can become hard to use and expensive to maintain. Modern ERP systems, on the other hand, are more user-friendly and seamlessly integrate with technologies you might adopt in the future. Look for ERP vendors that have a demonstrated history of support, system updates and long-term ROI.

4. Build credibility through case studies and reports

Corporate decision-makers need data to rationalize an investment. Most ERP systems – especially large systems like SAP and Oracle – can provide extensive resources to help you build your business case. For example, a success story from another company in your industry can be convincing to executives.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

5. Anticipate failure

Executives are held responsible when an ERP implementation fails. As a result, they often err on the side of caution when it comes to expensive technology investments. When you approach the executive team, don’t just present the reasons why you should adopt the new technology. Think through the potential reasons why you shouldn’t, and come prepared with answers to objections such as:

  • Our IT team doesn’t have the time to spend on implementation.
  • Our legacy systems are too old to work with a new ERP system.
  • Our processes are too complex for an out-of-the-box product.
  • Our data won’t be secure.

6. Set a realistic timeframe

Implementing an ERP system doesn’t happen overnight. While executives may want immediate results, it’s better to give them realistic expectations. You should account for production testing, user training and data migration. Map out each milestone and consider building in extra days for unexpected roadblocks.

7. Offer to monitor, report and analyze

Meet with executives to develop specific goals and key performance indicators (KPIs). Offer to provide regular status updates to make the results more visible. This demonstrates that you’re aligned with their priorities.

8. Liaise between executives and end-users

Once executives are on board, you should continue to communicate with them regarding end-user needs. Nobody will have more insight into what’s necessary in an ERP system than the people who currently own your business processes. You can communicate their pain points up the chain of command, ensuring the technology you select meets your business needs.

Final Thoughts

Don’t be afraid to advocate for the technology you need to remain productive and competitive.

“Organizations don’t prosper,” notes Harvard Business Review, “unless managers in the middle ranks . . . identify and promote the need for change.”

Executives don’t always see the day-to-day issues that impede productivity, but they do have the responsibility to listen to and solve their organization’s challenges. Presented with sound reasoning, a business case for an ERP implementation can convince executives to invest in technology that enables transformation.

Written By: Faith Kubicki, Content Marketing Manager for IntelliChief. 
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. If you are interested in guest blogging opportunities, click to read more about our submission guidelines.

Schedule a Free 30-minute Consultation With a Digital Transformation Expert!

10 Tips for Finding an Expert Witness for a Failed Software Implementation

10 Tips for Finding an Expert Witness for a Failed Software Implementation

ERP failure can include anything from operational disruption to cost and schedule overruns to a lack of benefits realization. Organizations experiencing ERP failure often file lawsuits and hire attorneys to defend their cases. These attorneys then seek the help of an expert witness.

An ERP expert witness provides litigation support to attorneys representing software developers, system integrators or end-user clients. The expert witness works closely with attorneys to determine where the failure points lie within failed ERP implementations.

If you’re an attorney, software developer, VAR or end-user seeking a software expert witness, here are ten tips for finding a good one:

1. Look for an expert witness who is unbiased

Does the expert witness have any connections to software vendors or system integrators? If so, this should disqualify him or her from being involved in a case. This bias is not always revealed upfront.

2. Find an expert witness who has worked with both vendors and end-user clients

An expert witness who does not have experience with both, should be disqualified, as this may indicate bias toward particular clients.

3. Assess their testimony experience

Do they have the technical expertise to analyze a case accurately? Do they have experience being deposed, and have they given expert testimony before a judge or arbitrator?

4. Determine if they use an individual or team-based approach

Will one expert do all the work themselves? This comes down to a cost issue. There may be thousands of documents to review to find the root causes of failure, and you don’t want to pay the rate of the expert for work that a qualified analyst can accomplish.

5. Determine if the expert has previously been disqualified

Has your expert ever been disqualified prior to testimony? This is one of the first questions opposing council will ask, and if the answer is “yes,” then the expert will likely be disqualified again.

Schedule a Free Consultation with a Software Implementation Expert Witness Today!

6. Consider the amount of expert witness experience

How many cases has your expert worked on? If the answer is one (or fewer), you should question the expert to see how he or she holds up under intense scrutiny.

7. Find an expert who has consistent historical documentation

Does your expert have a consistent history represented in his or her CV, resume, expert witness listings, social media and other sources? Inconsistencies will be researched by opposing council and brought to light in deposition or testimony, which may result in disqualification.

8. Look for an expert with a history of publication

Has your expert been interviewed by reputable media sources? Has he or she personally published articles or whitepapers? Some experts will take another person’s work and represent it as their own.

9. Look for schedule flexibility

Often, deposition and court dates are not fixed. Is your expert’s schedule flexible enough to adjust to movements in times and dates by opposing council or the court?

10. Find an expert who is detail-orientated

Is your expert a detailed person who will dedicate the required time and effort to provide an exhaustive examination of the facts? Or are they a person who will improvise when faced with tough questions? Your expert needs thorough knowledge of the issues impacting the case.

Following these guidelines when looking for an expert witness will save you time and money in the long-run. While it takes time to investigate expert witness qualifications, your efforts will pay off when your chosen expert delivers a testimony that wins the case.

An Expert Witness Case Study

A state government agency experienced a failed software implementation and considered suing its selection and implementation partner. The consulting firm was tasked with replacing the agency’s tax collection systems, but project deliverables were delayed, and the project suffered from a lack of staffing. The project had also run overbudget and had poor project management.

The government agency engaged an expert witness to determine the feasibility of a lawsuit. Had the consulting firm met the contract terms? Was legal action warranted or were the delays and staffing issues within reason?

The expert witness team audited several thousand case documents to develop an analysis and argument for the legal team. The expert witness team determined the project delays were unreasonable, and the consulting firm hadn’t provided promised resources. Documenting their findings in a 70-page analysis, the team gave the agency confidence in their proposed lawsuit.

The lawsuit helped the agency recover tens of millions of dollars in lost business benefits and consulting fees.

The government agency was successful because they hired an expert witness team as opposed to a single expert. The team had a breadth of experience working for both plaintiffs and defendants and had significant selection and implementation experience. This is the type of team you need when your ERP implementation fails.

Schedule a Free Consultation with an ERP Software Expert Witness Today!

How to Develop an IT Strategy to Guide Your ERP Selection

How to Develop an IT Strategy to Guide Your ERP Selection

The multitude of enterprise software options available in the market today overwhelms most organizations. They often realize they need to go back to the drawing board and define an IT strategy so they can narrow down their choices.

Not only do organizations need to decide between ERP vendors, but they need to weigh the costs and benefits of different deployment options, integration strategies and digital technologies, like IoT and artificial intelligence.

Do you already have an IT strategy? It doesn’t hurt to reevaluate it to determine if it’s really meeting your organization’s needs, both now and in the future. Here are five signs you need to redefine your IT strategy:

1. Your enterprise technology hasn’t been updated in the last decade

Most organizations replace their ERP systems every ten years – at minimum. If you’re not replacing your enterprise technology every decade or so, you’re falling behind your competition. While it’s wise to make the most out of your current IT investments, you should also be able to discern when systems become outdated.

2. Your IT strategy isn’t aligned with your overall business strategy

When CIOs decide to implement new ERP software, they have good intentions, but sometimes, those intentions aren’t aligned with the organization’s overall strategy. For example, an organization may want to reduce capital costs, but the CIO wants to implement a SaaS solution instead of an on-premise solution. Before selecting ERP software, you should first define your strategic objectives, and then define specific IT objectives that support those overarching business goals.
When CIOs decide to implement new ERP software, they have good intentions, but sometimes, those intentions aren’t aligned with the organization’s overall strategy. For example, an organization may want to reduce capital costs, but the CIO wants to implement a SaaS solution instead of an on-premise solution. Before selecting ERP software, you should first define your strategic objectives, and then define specific IT objectives that support those overarching business goals.

3. You haven’t considered all the strategic options

You may think an IT strategy entails a full-scale ERP implementation. However, ERP software is just one of many technology solutions that can improve your operations. Digital technology such as IoT, artificial intelligence and business intelligence are also viable options.

4. You don’t have an actionable plan for replacing your enterprise technology

You may have completed steps 1 through 3, but your IT strategy is useless without an actionable, strategic plan. This plan should include a multi-year roadmap for how you’ll achieve your organizational vision.

5. Your IT strategy doesn’t meet your organization’s ROI thresholds

Your IT strategy should fit the cost, benefit and risk tolerances defined by your organization. For example, let’s say you’re a risk-adverse organization in a mature industry with very low margins. Do you really want to implement a high-risk, high-cost solution?

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

How to Develop an IT Strategy

1. Define your company’s overall strategy

If you don’t currently have a well-defined company strategy, you should define and document a vision for where the organization is headed in terms of growth and transformation. This should influence how you move forward with your IT strategy.

2. Define IT’s role and purpose in your organization

 Does your organization view IT as a commodity or as a competitive differentiator that provides unique value to your customers? The answer to this question will lead to one of two decisions: outsourcing IT functions or building IT competencies in house. This will also determine the types of technology you consider – cloud, SaaS, on-premise, best-of-breed, etc.

3. Assess your IT department’s competencies

 If your IT department is sophisticated, your organization may be equipped to handle a best-of-breed, on-premise ERP system. A less sophisticated IT department may want to implement a SaaS ERP system instead. When assessing your competencies, be sure to consider your overall physical infrastructure.

4. Consider all your digital transformation options

The enterprise technology industry has evolved from just a few large ERP vendors to several vendors offering a variety of point solutions. Instead of implementing a single ERP system, you can now choose from industry-specific solutions and point solutions focused on certain functions. Aside from technology, you can transform your organization by reengineering your business processes or reimagining your business model.

5. Develop a long-term strategy

Some organizations rush into a short-term technology decision without considering the long-term impacts. For example, if you implement a CRM system without considering how it fits into your long-term strategy, you may find it doesn’t integrate well with certain ERP systems. This limits your options when you decide to implement other technologies. Be sure to have a long-term view even when embarking on short-term initiatives.

6. Consider the non-technical aspects of your digital strategy

Many organizations focus on the technical aspects of their IT strategies without considering the people and process aspects. Your IT strategy should address business process reengineering and organizational change management – both of which will help you realize the full benefits of digital transformation.

Every Organization Needs an IT Strategy

Defining an IT strategy before selecting an ERP system ensures your technology is aligned with your organizational vision. While this may sound like an expensive ordeal, you don’t have to be a large, billion-dollar organization to afford the luxury of an IT strategy – you just need to find the right consulting partner.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

7 Business Process Reengineering Tips For Competitive Advantage

7 Business Process Reengineering Tips For Competitive Advantage

While most organizations are racing to ERP go live, some are taking the time to reengineer their business processes. They are not concerned with implementing an ERP system as quickly as possible. Instead, they’re focused on beating the competition by designing differentiated, efficient business processes. They may lose the race to the go-live finish line, but they’ll win the race that actually matters – the race to grow their customer base and increase revenue.

Here are seven tips for improving your competitive advantage through business process reengineering:

1. Budget adequate time and resources

Business process reengineering takes time. In fact, it takes more time than the technical configuration, testing and implementation of ERP software. It probably took your organization years to adopt your current processes, so it will likely take some time to change those well-established processes. You should ensure sufficient time for defining, improving and implementing new business processes. Benchmarking against organizations of similar size and industry will help you set realistic expectations for your project.

2. Define business requirements before selecting ERP software

Organizations often find that modern ERP systems are too flexible to simply start using out of the box. Even the simplest business processes have multiple workflow options. This complexity will slow down your project if your business processes aren’t well defined before the design and build phases of your implementation. If you start your project with a clear vision of your business requirements, you will minimize the amount of time you spend with expensive technical consultants. You’ll also ensure your competitive advantage isn’t lost to standard software functionality.

3. Improve business processes before selecting ERP software

Just as you should define business requirements before software selection, you should also improve your processes as early as possible. This is also the time to consider whether your processes align with your long-term organizational strategy. Waiting until the last minute to improve processes may leave you with no choice but to keep all your existing processes, whether or not they are optimized. Operational efficiency can differentiate you from your competitors, so now’s your chance to surpass them through process improvement.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

4. Don’t treat all business processes equally

Many organizations are overwhelmed by the number of business processes they need to document, analyze and improve. They don’t realize they can start by focusing on just the processes that are competitive differentiators. These processes should drive your selection of ERP software and shouldn’t be constrained by software best practices, which may not be best practices for your unique operations. For example, your customer service may be a source of competitive advantage. If so, customer-facing processes should be a priority during business process reengineering and requirements gathering.

5. Integrate business process re-engineering with change management

Resistance to change is one of the main reasons business transformation takes longer than expected. Ensuring employees understand and accept new processes is challenging because people naturally dislike change. Before training employees, you should identify the gaps between your current and future state, so employees understand new processes in the context of their day-to-day jobs. A comprehensive change management plan includes more than training. You also need to strategically communicate with employees to ensure they accept new business processes before go live and adopt those processes for the long term.

6. Integrate analytics into business processes

Several ERP vendors offer innovative solutions that leverage business intelligence and predictive analytics. These systems use artificial intelligence (AI) to turn massive amounts of seemingly unusable data into actionable data. But what good is this data if you don’t have a plan for acting on it? When defining your future state business processes, you should include processes for analyzing and acting on data. Chances are, most of your competitors don’t have a strategy for leveraging AI nor have they implemented this innovative technology.

7. Measure results and make incremental improvements

Measuring post-implementation results helps you stay on track to realizing expected business benefits. If you’re not achieving a particular benefit, you should determine root causes and pain points. Continually measuring incremental benefits realization allows you to make corrections as needed. Misalignment between business requirements and software functionality can deter benefits realization. Lack of employee buy-in can also create a roadblock.

Why Re-engineer Your Processes?

Every organization deserves ERP software that supports their business processes. The only way to ensure you select such software is to reengineer your processes before selection.

Business process reengineering also ensures your chosen ERP software aligns with your long-term organizational goals. ERP systems are a big investment, so they should support your processes for at least the next five to ten years.

Most importantly, business process reengineering helps you beat the competition by ensuring your ERP system enables differentiated, efficient business processes.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

Manufacturing ERP Software: 12 Vendors That Rock

Manufacturing ERP Software: 12 Vendors That Rock

Manufacturing organizations today have more than 200 different manufacturing ERP software solutions to choose from. To help navigate this challenge, we developed a report highlighting what we believe to be the top ERP systems for the manufacturing industry based on our experience and research. The report includes Tier I, II and III ERP systems as well as niche applications. We discuss considerations such as user experience, cultural fit and functional strengths.

Before you download the report, here’s a quick overview of some of the highlights from the Tier I ERP vendors:

SAP

As one of the largest vendors in our report, SAP makes large investments in research and development. SAP has recently invested in its manufacturing execution system (MES) by leveraging artificial intelligence. When tracking defects, for example, the MES system provides near real-time information by relying on the Internet of Things (IoT).

Another strength of SAP is the ability to configure and centrally manage a hierarchy of resource reason codes across plants.

One thing to consider when evaluating SAP is the systems’ complexity. In our experience, implementation durations can range from nine months to more than 18 months, depending on complexity as well as the rollout methodology.

Infor

Infor is another large ERP vendor that is consistently developing innovative products. Infor’s products for process manufacturers are designed to increase operational efficiencies by allowing easy adjustments to formulas before and during production.

Earlier this year, Infor enhanced its supply chain management (SCM) functionality to leverage digital technologies, such as big data, machine learning and IoT. The SCM system can be purchased as part of a full suite of solutions.

While both Infor LN and Infor M3 provide deep out-of-the-box functionality, organizations may need to implement an additional Infor product to access more advanced functionality.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

Oracle

Oracle also invests heavily in manufacturing ERP software. Oracle’s warehouse management system (WMS), providing cloud-based inventory management and warehouse management, leverages innovative technology, such as IoT and mobility. The WMS system can easily integrate with other business applications.

Oracle’s manufacturing products use artificial intelligence and predictive analytics to rapidly identify issues, pinpoint the root causes and predict events before they occur.

While Oracle’s cloud applications consolidate best practices from their various business applications, Oracle’s cloud functionality is not yet as rich and deep in functionality as historical JD Edwards or EBS functionality.

Microsoft Dynamics

Microsoft Dynamics solutions have a familiar user interface and suit organizations of all sizes. Microsoft Dynamics D365 Enterprise enables data and resource integration across various departments and locations. The solution has been redeveloped as a pure SaaS model, but also can be deployed on-premise or hosted in the cloud. In terms of field service functionality, Microsoft Dynamics employs IoT technology to improve response times and operational efficiency.

This October, Dynamics 365 for Sales will be enabled with artificial intelligence, which will give manufacturers better visibility into their supply chain. Dynamics D365 continues its reliance on a partner ecosystem to develop niche functionality. Partners are currently in the process of understanding niche IP development for the new version of Microsoft Dynamics.

The Ideal Manufacturing ERP Software

The ideal manufacturing solution should address the entire supply chain, from product inception to customer delivery. It should have functionality to track suppliers, materials, production costs, maintenance and customer relationships. Ultimately, it should increase operational efficiency and provide full visibility into manufacturing processes and business data. Transforming your manufacturing organization requires technology that drives efficiency and enables full supply chain visibility.

While it’s helpful to compare the strengths of various ERP systems, the best solution for your business depends on your unique needs and situation. We hope this report helps you evaluate the solutions we’ve deemed the most viable manufacturing ERP vendors in the market.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

5 Ways to Prepare for Transformational Change

5 Ways to Prepare for Transformational Change

If you’re considering digital transformation, you probably know it entails significant operational changes. Whether you’re changing your entire business model or certain business processes, these transformational changes are challenging for organizations and their employees.

Many executives and project teams struggle to integrate organizational change management into their projects. Here are five ways you can prepare your organization for change:

5 Ways to Prepare for Change

1. Ensure executive alignment

Most organizations have at least one executive who is not on board with the goals of the project or is working against the project. Your executive team needs to be aligned – the success of all other change management activities depends on it. Executive involvement precedes executive buy-in. Asking executives questions, such as what they would like to achieve with new technology, can help establish buy-in.

2. Facilitate organizational readiness assessments

How can you implement transformational change without understanding your employees and your culture? Conducting an online survey and series of focus groups can give you an idea of the strengths and weaknesses of your organizational culture. This insight can identify the root causes of change resistance and help you determine strategies for implementing change.

3. Conduct organizational impact assessments

You can simply inform employees that their jobs will change, or you can explain exactly how they will change. An organizational impact assessment helps you understand the degree of change and nature of change so you can effectively communicate this to employees. Communication should be targeted, personalized and continuous.

4. Customize your training materials to fit your business processes

While most ERP vendors have training materials for their products, the training isn’t customized. When you train employees without considering the nuances unique to your organization and industry, employees may experience confusion, and training won’t be nearly as effective. Training materials should be tailored to your business processes. A training program should cover more than just how to use the ERP system. Employees also need to know what processes and decisions need to happen outside the system.

5. Develop a comprehensive organizational change management plan

Merely focusing on end-user training and basic employee communications will not lead to long-term transformational change. An independent consultant can help you define the change management activities that will enable digital transformation.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

How to Communicate With Employees

1. Look for signs of resistance

While employees may appear to embrace change, subtle forms of resistance may still exist. Be on the lookout for signs such as reduced productivity, absenteeism and conflict. When developing a communication plan, you should pay attention to change resistant employees.

2. Develop a communication plan

A clear understanding of stakeholder needs allows you to develop a targeted communication plan outlining key messages for each stakeholder group. The plan should also specify when and by whom information should be communicated.

3. Provide leadership

Executives should provide clear, consistent and repeated communication of project goals, and they should explain how these goals align with the organizational vision. Without this type of communication, employees won’t understand how new technology will help the organization grow, better serve customers and become more efficient. Instead they’ll assume the organization is using technology as a cost-cutting measure and a strategy for eliminating staff.

4. Facilitate two-way communication

When will training occur? When will changes roll out? How can I express my concerns? These are common questions employees have during digital transformation projects. Executives and the project team should hold meetings throughout the project so employees can ask questions and express concerns.

5. Establish a project brand

A brand is a value proposition that encourages loyalty. A brand for a digital transformation project should reinforce the importance of the project. A branding contest is a fun way to engage employees and help them feel a sense of ownership. When communicating with employees, don’t underestimate the power of branding.

6. Create a project portal website

This serves as a central location for employees to find timely project information. Available materials should include implementation plans, upcoming events and training schedules. Smaller organizations sometimes use a bulletin board to disseminate information in lieu of a website. A central location for information encourages collaboration and participation from all stakeholders.

7. Utilize change agents

These are people inside the organization responsible for communicating key messages to end-users. As trusted advisors and super-users of the new technology, they are likely to hear different thoughts, concerns and reactions than executives hear.

Is Organizational Change Management Really Necessary?

Many executives believe organizational change management is a luxury rather than a necessity – even if they’re undergoing a digital transformation that’s radically changing their operational model. Time and resource constraints prompt executives to cut organizational change management from their project budgets in an attempt to complete the project as quickly as possible.

Unfortunately, executives that forgo change management typically find their projects require more time and money in the long run as they scramble to increase system usage after the technology is already implemented.

Executives that do believe in organizational change management often struggle to develop an actionable plan. If this describes you, we hope this blog post is a good starting point in preparing your organization for transformational change.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

SAP vs. Oracle vs. Microsoft Dynamics: 6 ERP Evaluation Criteria

SAP vs. Oracle vs. Microsoft Dynamics: 6 ERP Evaluation Criteria

If you’re a large, complex organization evaluating ERP software, you’re likely considering Tier I vendors like SAP, Oracle and Microsoft Dynamics. How do you decide between these three viable options when internal bias and vendor enthusiasm threaten to sway you?

The best way to evaluate ERP systems is to weigh the strengths and weaknesses of each according to the following six criteria.

ERP Evaluation Criteria

1. Deployment Options

Many ERP vendors have a flagship product where they invest most of their R&D. It behooves you to know which product this is and how it can be deployed. For example, Oracle ERP Cloud can only be deployed in the cloud. SAP S/4HANA, on the other hand, has multiple deployment options.

Most Tier I ERP vendors are heavily investing in cloud technology, but functionality is still limited compared to many on-premise solutions. This doesn’t mean every organization should select an on-premise solution. In the future, your ERP vendor may stop developing or even supporting their on-premise products. At that point, you’ll have to transition to the cloud, which is more complex and time-consuming than vendors claim.

While vendors are heavily investing in their cloud offerings and providing more robust functionality, the novelty of the cloud is still intimidating to many organizations. No one wants to be among the first to take the leap. They want a long list of references from companies of similar size and industry. Whether you’re evaluating SAP, Oracle or Microsoft Dynamics, their cloud implementation resume may be smaller than you expect.

2. Scalability

Software scalability refers to a system’s ability to handle an increasing amount of work and increasing number of users. SAP, Oracle and Microsoft Dynamics are built for large organizations with complex operations, but do you know which products and deployment models can continuously scale to support your growing business?

For example, if your customer base increases, the software should be able to handle an increasing number of users and transactions. It should continue to provide real-time data despite an increase in data volume.

Scalability can be expensive for some on-premise solutions. You might need to purchase additional servers to support the increased workload. It’s important to ask vendors what their products can support out-of-the-box, and if they can be scaled.

3. Technical Fit

SAP, Oracle and Microsoft Dynamics each have different functional strengths that make them well-suited for certain industries. While industry focus is a strong indicator of technical fit, your business requirements should have the final say. If you take the time to map your processes and define your business requirements, you can ask vendors to demonstrate specific functionality. You’re not expecting too much by asking a vendor to demo their ERP system based on your business requirements rather than presenting a canned sales demo.

While no ERP system can address every possible business requirement, you should look for a system that addresses your highest priority requirements. In addition, you should determine which of your processes should be standardized based on ERP functionality, and which processes are competitive differentiators that could require software customization.

Sharing your business requirements with vendors and allowing access to subject matter experts ensures vendors fully understand your business.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

4. References

Vendors will make many claims about their system’s capabilities and ease of use. If you want to validate these claims, you should request references, so you can ask previous customers about their experience. What functionality did they implement, and did they achieve the desired results? Did the vendor offer ongoing support?

References should be from organizations similar to your own that have implemented similar functionality. If you’re considering cloud ERP, ask for references that have deployed their software in the cloud.

5. Return on Investment

While total cost of ownership is a common consideration during organizations’ ERP evaluations, return on investment is even more important. While Microsoft Dynamics may be less expensive then SAP or Oracle, that doesn’t necessarily mean it will save you money in the long run and deliver a high ROI. If you select an ERP system based on your organizational vision rather than total cost of ownership, you’ll realize more business benefits.

Developing a business case will help you quantify the benefits you expect. This will guide you in improving your processes and defining your business requirements. Your ERP system will be more likely to deliver a high ROI if it’s configured based on optimized processes.

If you’re comparing the ROI of several different ERP systems, you may find Panorama’s ROI Calculator useful.

6. Product Viability

Do you know the long-term outlook of the ERP solutions you’re evaluating? While SAP, Oracle and Microsoft Dynamics aren’t likely to go out of business any time soon, they may stop supporting certain products. It’s also worth knowing where a vendor plans to invest their R&D in the future, as it’s your responsibility to select a product that will support your organization in the long-term.

You should conduct industry research to determine if a software product is on par with its competition. If not, the vendor may be planning to discontinue the product. In the short-term, product stagnation hurts your business as you’ll spend a fortune on customization just to remain innovative.

Other Considerations

Before evaluating ERP software, you should define a digital strategy. What are the pain points of your current IT infrastructure, and what needs to change to support your organizational objectives?

While new technology can bring much needed change, the only way to enable long-term, large-scale change is through business process reengineering and organizational change management. Even if you select the best solution from among SAP, Oracle and Microsoft Dynamics, you won’t transform your organization unless you enable change by focusing on your people and processes.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

A CIO’s Guide to Digital Government

A CIO’s Guide to Digital Government

While private sector organizations are innovating their processes and technology to improve their customer service, government organizations must race to keep up with citizens’ increasingly higher expectations. In the midst of this race, government organizations are finding that digital government is much more challenging than it sounds.

Government CIOs are not giving up, though. They’re using digital transformation to provide better services to citizens, and they’re seeing benefits such as decreased operational costs and increased citizen engagement.

Top 5 Digital Government Challenges

1. Scalability

The societal benefits of digital government increase when delivered at scale, but government organizations are struggling to scale new technology and processes across all of their operations. They’re encountering silos and resistance to change that prevent their digital government initiatives from impacting citizens.

2. Accountability Without Authority

While government CIOs are increasingly accountable for the success of digital transformation projects, their level of authority remains limited. They struggle to obtain the authority to manage their own budgets and make hiring decisions. Sometimes, they’re even left out of crucial strategy meetings with fellow executives because their role is viewed as strictly technical.

3. Red Tape

Political agendas, existing legislation and procurement controls can create roadblocks to innovation. For example, CIOs considering IoT often encounter resistance from leadership due to security and privacy concerns. While these concerns are well-founded, there are new ways of mitigating risk that should be explored.

4. Myopic Focus

Some government organizations focus on the technical aspects of digital transformation as opposed to the people and process aspects because they don’t understand the project’s overall purpose. When organizations define project goals without considering the organization’s mission and vision, CIOs struggle to realize the full benefits of transformation. They have virtually no budget for organizational change management or business process reengineering.

5. Resource Constraints

Funding for the technical aspects of digital transformation is also scarce for many government organizations. CIOs who wish to implement the latest technology may find that their IT departments can’t provide the necessary back-end IT infrastructure. Without funding to hire additional resources, CIOs struggle to manage and scale digital government initiatives.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

Tips for CIOs Pursuing Digital Government

Develop a Business Case

Digital transformation is more than a transition from “green screens” to modern ERP software. It’s a strategic, organization-wide initiative that changes how citizens interact with their government. Developing a business case will help you outline expected benefits that align with organizational goals and objectives. A business case justifies an IT investment by demonstrating the potential ROI.

Prioritize Integration

Technical integration and process integration enable government organizations to efficiently address citizens’ most pressing needs. Integration requires organizational alignment, collaboration and strong project governance. Strive for integration as disparate systems create inefficiencies that impede citizen engagement.

Optimize Inefficient Processes

Before selecting new ERP software, you should map your processes, improve your processes and define your requirements. The most inefficient processes deserve the most attention as they can bring the most value when optimized and automated. These processes should translate to “must-have” requirements, which determine software functionality.

Reduce Resistance to Change

Ensure the project team doesn’t get lost in the technical “weeds.” New technology, new processes and new operational models lead to monumental change throughout an organization. Developing an organizational change management plan can help you prepare employees for digital transformation.

Enhance Security

While technologies like IoT have many applications in the public sector, adoption has been slowed by security concerns. You can address these concerns by adopting API management practices that enable safe data transfer. Consider implementing advanced detection systems and backup systems.

Emerging Technology Trends in the Public Sector

The adoption of cloud technology has been on the rise for government organizations that want cost savings and easier data sharing. Organizations are ensuring security by storing classified data on private clouds.

Blockchain technology

This technology hasn’t been widely adopted by the public sector, but once cost-effective solutions are developed for the government, adoption is expected to increase. Government organizations that have experimented with block-chain have realized benefits such as increased security and efficiency.

Hyperconverged infrastructure

This infrastructure combines all of an organization’s technology into a single platform. Many government organizations like this option for it’s scalability and cost-saving possibilities.

The Internet of Things (IoT)

This technology holds great opportunity for government organizations. While the Department of Defense accounts for the majority of IoT spending, civilian agencies stand to benefit as well. For example, organizations could use IoT to improve their visibility into public transportation systems.

Conclusion and Essence

These are just a few of the technology trends you can incorporate into your digital government strategy. As a government CIO, you’re probably facing many roadblocks to adopting this technology, but you’re determined to improve operational efficiency and citizen engagement. If you develop a digital government strategy that prioritizes integration, security and organizational alignment, you can overcome some of the common roadblocks to government innovation.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

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