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.
Top 10 Change Management Coaching Tips for Digital Transformation
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.
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.
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.
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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.
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:
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.
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.
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.
Schedule a Free 30-minute Consultation With a Digital Transformation Expert!
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.
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.
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.
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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.
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.
Pre-implementation Readiness: How to Prepare for ERP Selection
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.
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 a Digital Transformation Expert!
What is your manufacturing model? Is it mass production or digital manufacturing? Most manufacturers will say they’re trying to move to digital manufacturing, but are they prepared to realize the full benefits of their digital strategies?
Digitizing every phase of your supply chain is only half the battle. Digital manufacturing also entails integration of disparate systems, processes and machines. Integration enables real-time decision making based on real-time data. Digital manufacturing isn’t just about automating processes; it’s about using intelligence from multiple technologies to optimize processes and improve product design.
How to Realize the Benefits of Digital Manufacturing
Even if you already have all of the manufacturing technology you think you need, it never hurts to reevaluate your current state:
Define a Digital Strategy – Your digital strategy should be aligned with your organizational vision. What technology do you currently have, and what technology should you implement to achieve your goals? More importantly, how will you integrate this technology?
Develop a Business Case – You should set ambitious but realistic KPIs and continually monitor your progress.
Obtain Executive Buy-in – We’ve included this in several blogs. It will probably be in every blog. That’s how important it is. Not only do you need executive support, but you need a core team with stakeholders from each functional area.
Streamline Your Processes – You should begin business process management before selecting technology. Inefficient processes cannot be fixed with technology alone.
Prove Value – Use proof of concepts to demonstrate the value of digital manufacturing. Early wins show employees how they can benefit from upcoming changes.
Communicate – Even with a proof of value, employees may still worry about being replaced by a robot. You should remind them that digital manufacturing will free them to focus on more important tasks.
Develop Essential Skillsets – You will need digital skills, such as big data analytics, automation, cybersecurity and mechatronics.
Define a Business Intelligence Strategy – Who will be responsible for analyzing and acting on business intelligence from the factory floor? What processes will you need to implement to streamline decision making?
Finding an ERP System to Support Digital Manufacturing
While ERP software isn’t the only technology you need for modernizing your manufacturing processes, it often is the backbone of the full suite of technologies that gather, store and analyze your data.
Many ERP software vendors have been quick to respond to the evolving needs of manufacturers. They’ve committed to building capabilities such as IoT, machine learning, artificial intelligence, big data and blockchain directly into their cloud offerings. Other vendors use API to connect to external applications.
IoT is an essential component to integrate into your ERP system as it gathers sensor data from the supply chain and provides actionable analytics on design issues, lead time, maintenance needs, inventory levels, energy consumption and even the customer experience. Housed in the ERP system, these analytics can be reviewed by supervisors and communicated to decision makers on the shop floor.
When evaluating ERP systems, you should assess their ability to aggregate data from key areas of your supply chain.
Is Digital Manufacturing Improving Your Operations?
So, you’ve selected an ERP system and integrated it with advanced manufacturing technologies. What benefits should you expect? Here’s a partial list:
Here’s a bit more detail on a few of these benefits:
Easier Consumer Product Customization – Whether you’re selling directly to consumers or to other businesses, you need to be flexible and responsive. Customer needs constantly change, and they expect quick response times. Five years ago, it wasn’t economically viable to produce smaller quantities of customized products. Now, this is faster and cheaper thanks to 3D printing and digital collaboration with contract manufacturers. Mass customization is also more feasible with today’s technologies.
Better Decision Making – The masses of data contained in ERP systems become manageable when integrated with digital manufacturing technology. IoT brings actionable data to the forefront and alerts managers in real time. Smart machines can also alert managers of impending maintenance needs.
Continuous Innovation – The same data that improves real-time decision making can be used to drive continuous innovation. Customer experience data helps product managers design better products. Product managers can also rely on artificial intelligence to determine what factors improve production quality.
Who’s Adopting Manufacturing Technologies?
Few manufacturers have implemented all of the technologies mentioned in this article, and even fewer have done so successfully. While fully digitizing and integrating your supply chain seems like an ambitious endeavor, manufacturers who move first will realize benefits unachievable for slower moving competitors.
Schedule a Free 30-minute Digital Strategy Consultation With a Digital Transformation Expert!
Whether you’re lost and asking for directions or distraught and seeking a listening ear, asking for help is never easy. This is true in both our personal lives and our professional lives. While asking a coworker for help can be embarrassing, it’s not as mortifying as seeking outside help beyond the walls of your organization. Many executives dread the prospect of seeking professional guidance, such as a business consultant or ERP consultant, to address an organizational issue they don’t want to address internally due to time or resource constraints.
According to Gartner, CEO’s top priorities for 2018 are growth and IT-related. It will be interesting to see how many of these CEOs seek outside help and how many use only in-house resources to transform their organization.
Asking for help seems like a sign of weakness. You might feel like you’re admitting incompetence, but you’re actually admitting you have limits. No organization has unlimited time and resources. Acknowledging this fact is a strength. It shows you’re informed about your processes, your people and your pain points. It shows you’re willing to change and do what’s right for your employees and your organization as a whole. If you hide organizational problems, they become much harder to fix.
Your competitors don’t seem to be struggling. There’s nothing worse than feeling like you’re falling behind your competitors. But, are you really? Underneath all of their flashy marketing and innovative products, likely lie the same underlying operational pains your organization is experiencing. Again, your feelings of incompetence are unfounded. You’re all in the same boat. The person who calls an ERP consultant first, will quickly outpace the others and achieve operational efficiency, customer satisfaction and revenue growth.
You’ll surrender control of your project. While it’s difficult to trust people you don’t know with something dear to you, no one said you won’t have any say in the process. In fact, you’ll be in charge of all final decisions, and you’ll have the opportunity to set the tone for all project communications. Digital transformations are more likely to succeed with executive sponsorship and buy-in. The more involved you are, the more business benefits your organization will realize. ERP consultants make recommendations – you decide whether or not to follow them.
You’ll choose the wrong ERP consultant. Maybe you’ve had experiences in the past where your ERP consultant put entry-level college grads on your project and allowed you minimal facetime with senior leaders. Maybe you were given a biased recommendation for an ERP system based on the consultant’s financial ties. Maybe you are scarred from this experience. While you don’t want to risk making the same mistake again, your project will benefit from third-party guidance, so you should keep your options open. If you need additional skillsets and resources, the right ERP consultant can provide this while bringing seasoned, industry expertise and unbiased software recommendations.
Why it’s OK to Ask for Help
While there are many reasons to approach a digital transformation without third-party guidance, there are just as many reasons to ask for help:
Validation of project deliverables – Oftentimes, you’re too close to the project to see the big picture or you’re focused on organizational politics. A third-party can provide a fresh perspective and review your project plan to ensure it’s realistic and includes all necessary components.
Lessons learned from other digital transformations – If you hire the right ERP consultants, you will have access to experts with a wide breadth of digital transformation experience. They’ve encountered similar problems to yours and know how to navigate challenges such as vendor negotiations and organizational change management.
Specialized skills – Speaking of organizational change management, you may not have this expertise in-house. If you hire the right experts, they’ll have both technical and business skillsets to address the full lifecycle of your digital transformation.
Reduced strain on employees – You don’t have to significantly disrupt your employees’ day-to-day jobs to transform your organization. While you do need a dedicated project team, consultants can help you strategically build your team so you select the right subject matter experts with a strong understanding of their particular functional areas.
Leverage for persuading “the powers that be” – Sometimes, you have a great idea that will save your organization time and money, but you have no decision-making power. ERP consultants can help you build a business case that will convince your boss to invest in digital transformation.
Cross-functional problem solving – Successful digital transformation requires a focus on business process management throughout the project lifecycle. ERP consultants can collaborate with process owners across departments to understand pain points and facilitate the definition of future state business processes. Sometimes, these meetings are one-on-one. Sometimes, they are cross-functional. In both cases, consultants place a high value on stakeholder input from all functional areas – this includes customers!
The Value of ERP Consultants
Whether you’re hiring a business consultant or ERP consultant, you’ll likely feel a little unnerved about being so humble. However, organizations that are willing to admit their limitations can experience the benefits of third-party guidance, such as objectivity and specialized expertise.
Transforming your processes, people and technology isn’t easy. ERP consultants can reduce the risks inherent to large projects by helping you anticipate common pitfalls. If you wait to hire a consultant until you’ve begun experiencing problems, the damage is much harder to fix.
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1. Blockchain allows for streamlining secure transactions between logistics suppliers, manufacturers and third-party partners.
Blockchain is a ledger of records structured into blocks of data, which are connected using secure cryptographic validation to form a continuous chain. Each block references and detects its predecessor. What makes this so important in terms of supply chain management is the fact that the ledger isn’t stored in a master location. Instead, the data lives on multiple computers simultaneously, giving all vested entities visibility and access to the records. Old transactions are preserved forever, while new transactions are instantly and permanently added. This ensures that the history being viewed is exactly the same for everyone, from the manufacturers and suppliers to the third-party partners. This will eliminate the need to reconcile internal data and prevent any group from cheating the system by misrepresenting goods, shipments, etc.
2. Blockchain makes everything traceable and enhances accountability.
As mentioned above, every single aspect of a transaction is visible to every party in the supply chain. This means every single item can be traced from the very beginning to the very end, essentially eliminating fraud, waste and delays. This also ensures that no single company has complete control over access to the information. As an added bonus, once a transaction has been added to the chain of information blocks and confirmed, it cannot be removed or altered, making it a very trustworthy record (a transaction must be confirmed six times to be deemed valid.) Then, it is permanently added to the record on the public ledger. There is absolutely no way to manipulate or erase any confirmed block data.
3. Overall, blockchain makes most things easier.
When it comes to the supply chain market, the use of blockchain simplifies almost everything. It virtually eliminates fraud and reduces errors. Additionally, it becomes much easier to manage inventory, improve partner and consumer trust and identify and fix any potential problems. Courier and payment costs are reduced, and the need for paperwork is eliminated. Finally, the long process of reconciling and auditing separate ledgers from different entities in the supply chain is eliminated.
The unique features of blockchain have the ability to positively affect all industries on a global scale.
In other news, ERP Boot Camp is quickly approaching. Have you registered yet?
In the past few years, IoT (Internet of Things) technology has exploded, resulting in plenty of positive changes for ERP systems. From enhancing customer service to making it easier for companies to monitor and evaluate data, IoT has significantly improved ERP functionality and how companies do business as a whole.
What is IoT?
IoT is the collective term used for the billions of physical devices all over the world that are connected to the internet, both collecting and sharing data. Think of all the tools in your life that connect and share data. This includes everything from smartphones and heart monitors to refrigerators, washing machines, coffee makers, cars and more.
How Has IoT Enhanced the ERP System?
In simple terms, IoT increases the usefulness and power of an ERP system, whether on-premise or in the cloud. It is easy to see why companies in all industries are looking at creative ways to utilize IoT. For example, in the manufacturing industry, equipment-mounted diagnostic tools and computerized maintenance management systems make sure information is available to everyone from the technicians working on the floor to the senior executives upstairs.
In both the manufacturing and customer service sector, handheld scanners have tremendously enhanced an ERP system’s functions. It makes keeping up with inventory much more manageable, while also providing the data needed for better forecasting and production. This ensures products are adequately stocked so when customers are ready to make a purchase, so are you. As a bonus for companies, the use of handheld scanners can cut down on administrative costs .
There is no doubt that smartphones have also had a substantial impact on ERP systems, improving the quality of service for both customers and employees. Access to critical information is now at their fingertips, creating better response times by delivering real-time information on the spot. Customers no longer have to wait to find out if something they are interested in is in stock. Instead, this information is immediately available. From the employee side, productivity is increased, and downtime is reduced.
There are plenty of other ways IoT has improved customer service. For example, mobile apps allow you to check-in at hotels, restaurants, and store pickups. When it comes to healthcare, patient care is greatly enhanced when physicians can use their smartphone or tablet to view a patient’s test results, previous doctor’s notes and medication records using IoT enabled technology.
How Will IoT Continue to Enhance ERP Systems?
IoT also allows for greater flexibility, considerably enhances data and makes life easier for everyone. By 2020, a whopping 95% of products are expected to be IoT enabled. Any business that has yet to embrace this technology is at a considerable disadvantage to users of IoT technology. In the very near future, they will have no choice but to adopt this technology or continue to be left behind . It is impossible to predict precisely how IoT will enhance ERP systems in the future, but you can be confident their role will only increase.
Panorama will be conducting an ERP Boot Camp in Chicago on May 21 & 22. We pride ourselves on intentionally making this a small group learning event, so seats are limited. Whether you’re considering a change to your ERP system(s), in the middle of implementation, or trying to measure the effectiveness of your new software, this is a great opportunity to gain independent knowledge.
The strategy is the backbone
While we’ll talk about many relevant subjects like the pros and cons of cloud vs. on-premise, Boot Camp provides much-needed parameters and discussion around the enterprise strategy that must be in place for each successful ERP implementation. There is a methodology and a cadence that should guide each successful implementation. All too often the focus is on software selection, and while relevant, it pales in importance to having an effective plan. In our experience as consultants, picking the wrong software is rarely the cause of implementation failure.
We mention this because it is far more common for Boot Camp attendees to have experience or opinions about software selection. Discussing the importance of an enterprise vision (and how to build one) sometimes gets lost in the excitement of choosing modern ERP software.
Software selection and its role
At Boot Camp, you won’t hear from ERP software vendors, who typically tend to heavily promote the perceived benefits of purchasing “their” software. We will discuss vendor-specific software and what to watch for and what to watch out for. Boot Camp is all about what you need to hear vs. entities telling you what you want to hear.
Whether you’ve chosen your software or want to get a better idea of how to do so, there’s something to learn for everyone. Do you understand how software vendors’ price their products and how much room there is for negotiation? Will the software do more than automate some of your current processes? We’ll talk about related subjects like Digital Transformation and the Internet of Things.
What happens at Boot Camp?
We will be discussing/dissecting real-life situations and solutions. While Panorama will spearhead the conversation, the dialogue and learning are interactive and collaborative. Lock yourself in a room for two days with people responsible for projects (that their jobs may depend on), and you’d be amazed at how effective, creative and unfiltered the conversation becomes. Boot Camp will rekindle what you know, what you’ll relearn and what you’ll become proficient at with practice.
Failing is an option we don’t recommend
Maybe it starts with making sure that your steering committee is on the same page as your project team; you can’t over-communicate to gain ongoing support for your project. Boot Camp provides an arsenal of tools and methods of how to do this. Effective communication will build allies and you’ll want to hear what we have to say about funding an effective organizational change management initiative. These are only a couple of important topics we’ll explore.
While there is never a good time to disrupt our busy work schedules, participating in Boot Camp might be a welcome reboot of learning and ideas. It will equip you while informing you. We hope you’ll consider the investment of time. Register now.
We work with many clients who implement new ERP software simply because they “have to.” In my experience, this isn’t a good enough reason to move forward – not if you want your initiative to succeed and deliver a competitive and transformative advantage to your organization.
Broad goals are important for your ERP software or digital transformation initiative
On one hand, it makes sense that you may need to do something with the outdated legacy system you’ve outgrown. Perhaps the system is no longer being supported by the software vendor. Or, it could be you’ve customized the solution so much that it’s not realistic to keep using it. Or, you’ve simply outgrown the current system and can’t scale to meet your future growth objectives.
ERP software typically can do much more than simply replace your old technology. Most current software has grown leaps and bounds in overall functionality, such as in advanced planning, business intelligence, analytics, artificial intelligence and a host of other areas that can enhance your competitive advantage. However, this functionality is likely to get watered down – or worse yet, not leveraged at all if your primary goal is to simply replace your current system.
ERP implementations are difficult and often tricky to begin with. The degree of difficulty grows exponentially when you don’t have clear direction and goals for the project. Consider two projects: one with the goal of replacing an outdated legacy system and another with a mission of improving the customer experience to better compete with competitors. Which one do think is more likely to deliver a greater return on investment and fuel growth?
Focus on the bigger picture
With that in mind, it’s important to step back and define a clear vision for your ERP or digitaltransformation project. What exactly are you trying to accomplish? What business improvements do you expect? How will modern technology help you realize those improvements? How will your project governance align with those goals during implementation? These are just a few of the plethora of questions you’ll need to ask yourself (and your team) to succeed.
You’ll also want to clearly define the expected business benefits and improved efficiencies in great detail. Your business case should be more than just a means to justify the project; it should also provide a way to track and manage benefits going forward. Think of it as a living, breathing benefits realization plan that has significance and doesn’t sit on the shelf collecting dust after the project begins. This is one of the best ways to ensure you realize the full benefit potential and ROI of your investment.
The benefit to your ERP implementation or digital transformation
Besides longer-term benefits, a focus on bigger picture goals also ensures that your ERPimplementation or digital transformation goes well. All too often, companies with a “replace the old system” mentality get lost during implementation. They don’t have clarity when making critical decisions, such as how to streamline business processes, how to define scope, whether to customize and a host of other issues. Without a clear vision of what you are trying to accomplish, you’re shooting in the dark when making these decisions.
How can you ensure that you’re focusing on gaining lasting competitive advantage as opposed to replacing an old system? The easiest way is to start during your implementation planning process. Ensure these questions are answered and integrated into your implementation strategy, project charter and overall project approach. The balance of benefits like improved workflow and integrated processes must equal better customer satisfaction. This is something that independent ERP consultants such as Panorama can help with.
As the top software company in the world, it only makes sense that Microsoft would offer its own version of ERP software . Microsoft Dynamics was first released in 1993 . Since then, it has undergone significant changes and upgrades, primarily to stay ahead of the many other ERP software vendors that have entered the market. So, how does Microsoft Dynamics stack up against the competition? Here’s a look at how Microsoft Dynamics compares to other ERP software.
1. Options for a variety of business sizes and operations
Microsoft Dynamics offers four ERP solutions: AX, NAV, GP, and SL plus CRM software (Microsoft Dynamics CRM) and software for retail businesses (Microsoft Dynamics RMS). Although any of the four ERP solutions can work for any size business, GP, NAV, and SL are better suited for small to medium-sized businesses. AX is the preferred option for large companies that operate in multiple sites and/or countries.
Each ERP has unique features to suit different business sectors. NAV offers the functional support that is often needed in manufacturing and distribution industries. GP has significant HR and financial management abilities. SL is a great fit for project-based businesses, such as construction companies. This array of choices makes it easier for businesses to select the specific ERP solution that will work best for their needs.
2. Implementation and integration
Dynamics can be challenging to implement. One reason is because it is an expensive and complex ERP program. If the initial parameters are not correct, the long term results could be costly. Those mistakes won’t be apparent until it’s much too late. It is unwise to attempt implementation without the guidance of an expert. While Microsoft has several Value Added Resellers (VARS), finding who is competent with Dynamics and your industry can be difficult.
Dynamics easily integrates with other Microsoft products that you are likely already using, including QuickBooks, Outlook, Excel and Word. This streamlines processes and increases business efficiency. Also, this allows your employees to access and use Microsoft programs without going outside the ERP software. Integrating other ERP systems with Microsoft products is often a difficult and time-consuming process.
3. Customer support
It is important to identify the level of service your vendor is going to provide. As stated above, Dynamics is a complex, intricate program. Your employees are going to need guidance and support well beyond the initial implementation.
Larger companies using AX will find there are several competent, customer-focused VARs in the marketplace. They will provide on-site training and support. However, smaller businesses often have to rely on Microsoft’s rapid deployment program. Training usually doesn’t extend beyond self-service training videos. This can leave your employees with more questions than answers.
4. Microsoft Dynamics intuition
Dynamics makes good use of artificial intelligence, including Azure Machine Learning and Power BI. This greatly enhances the system’s intuitiveness. Your team will gain insight into customer communications, transactions, and other pertinent data. The result is accurate predictions and inferences allowing you to anticipate client needs. Businesses benefit from streamlined operations and reduced costs.
5. Dynamics is compatible with legacy systems.
Compatibility with your legacy system is critical when transitioning to an ERP system. Unfortunately, not all ERP systems are compatible with legacy systems. Dynamics has shown the ability to be compatible with some legacy systems. This can help the transition by reducing time, money and effort. Again, it’s imperative to have an expert guide you through this process.
6. Microsoft Dynamics useful features
Dynamics gives businesses a wide selection of tools for productivity that can enhance every facet of a company. The functions available through Dynamics are numerous. Businesses can accomplish useful tasks, such as control general ledger, sales and finances. Manufacturing has the ability to manage their supply chain, schedule and plan production. It can even assist HR by tracking employee training, development and performance.
Overall Microsoft Dynamics is a powerful ERP. But due to its complexity, it requires expert guidance. Is Dynamics right for your business? Panorama Consulting can help you decide.
Lets say you work at a large-scale manufacturing company…..
In most manufacturing companies, the top three expenses are: salaries / employee pay, facility cost and material cost.An ERP system can help alleviate at least two of those major costs.By lessening a major overhead cost, ERP software is a great investment which will continue to help save money both in the long-term and short-term.
The average investment for a newly implemented ERP system for 10 users can be around $30,000 to $40,000.The cost can fluctuate, depending on amount of users, customization, ERP brand and overall need.
Aside from cost of the software, there should also be time accounted for time employees to learn the new system as well as the initial time for the implementation to occur.
The ERP system which you and your company decide to implement should be known beforehand so that you can map out an appropriate strategy.If you’re not completely sure what you need, this can best be determined by working with your ERP consultant.He or she can help you determine an overall digital transformation strategy, goals of implementation and common pain points which ERP can help to address. Most ERP Consultants at Panorama have a background in both business and technology plus have many years in a multitude of industries.
For skilled labor, the hourly cost can vary but the national average for a variety of skilled labor positions can be between $17 to $25 per hour according to the Bureau of Labor Statistics.In manufacturing, having skilled labor is key.
Assuming that all workers in your facility earn hourly pay that is somewhere within this range, these costs can add, especially if many of them regularly work overtime.Not to mention if your manufacturing company is large and you have 1,000, 10,000 or 100,000 laborers.Regular overtime can put strain on company budgets not to mention it indicates that there is some inefficiency somewhere.
With ERP implementation, your employees can more easily track jobs, material and track efficiency which can cut down on overtime while improving efficiency.
In some cases, ERP implementation can help companies save up to 20% in labor costs while making employee efficiency go up as well.
Saves Admin Costs
With ERP software, many functions are combined all on one platform which means that employees can spend less time researching questions for clients, less time switching between individual systems and less time tracking down invoices and payments.These sorts of admin costs can eat up a lot of time which is usually superfluously spent time anyway.
In some cases, admin costs can be reduced by 10% and again make for more efficient operations as well as lessening employee stress by allowing them to constructively use their time.
Saves Material Cost
Along with staff and salary-based cost savings, ERP also helps employees track material costs as well as helps with material planning.It is not uncommon for a manufacturing operation to order too much or too little material to fulfill an order.If too much material is ordered then it may just sit in a corner unused.If too little material is ordered, the cost of ordering more on quick demand can get expensive.
ERP software can help with material planning and inventory tracking and save, on average, 10 to 15%.
Clearly, the savings that ERP can provide outweighs the initial investment required to start its implementation.Shaving these percentages from your facility helps save both money and time not to mention will make for happier employees who no longer need to spend their time inefficiently.
If you have looked into ERP software, then you have almost certainly heard of Infor Cloud. For over 16 years, Infor has been providing ERP solutions for small and medium-sized businesses. Currently, a Tier I ERP vendor, Infor Cloud is one of the four most leveraged ERP systems. This is primarily due to the variety of functions and capabilities it offers, as well as its scalability .
1. Although once targeted at the manufacturing industry, Infor Cloud now offers a variety of products designed for other industries.
Unlike some other ERP vendors, Infor Cloud has worked diligently to create continuously enhanced software for every industry. Their ERP software is not considered “one type fits all” and no one industry is considered more important than the other. They have specialized software available for every industry, including fashion, equipment rental, healthcare, hospitality, food and beverage, public sector, automotive, aerospace and defense. All software features the latest innovations and modules specifically designed for that individual niche including social applications and mobile access. This may help eliminate the need for specialized (and expensive) customizations.
2. After making numerous acquisitions, Infor Cloud has made integration with other services easy.
When some ERP vendors acquire others, they put little, if any, effort into integration. At Infor Cloud, this is not the case. Instead, they have released middleware that allows for high integration with other services. For example, systems used to do everything from track workflow to monitor processes and manage events can be integrated into Infor Cloud software.
3. Infor Cloud offers fast installation.
Infor ERP software has been designed to facilitate rapid deployment, allowing users to get up and running as quickly as possible. This is the case, whether it is on-premise or in the cloud. This may be an advantage over some other ERP systems that require lengthy installations or a great deal of customization.
4. Infor Cloud is a leader in mobile functionality.
Infor Cloud understands that in today’s world, traditional offices, where everyone comes in and works in the same building from 8-5 p.m. are a thing of the past. Instead, more and more companies allow remote offices and employees to work from home. Infor Cloud’s mobile functionality is touted to be more robust than its competition.
5. Infor Cloud is always looking for ways to modernize, simplify and save.
Infor Cloud dedicates a significant amount of time and effort to creating software that is continuously innovative, offers greater choices and increased value. Additionally, they have a strong support network that ensures upgrades go as efficiently as possible. In just the last year alone, Infor Cloud has introduced over 6,400 new integrations, 6,200 new features, and 176 new products, an impressive accomplishment . Few, if any, other ERP vendors can match this. It is easy to see why their customer list includes some of the world’s top corporations, including Ferrari, Heineken, Bausch & Lomb, Best Western International and Wyndham Hotels.
Simply put, many other ERP vendors cannot compare to Infor Cloud.Not sure if Infor Cloud is right for your company?Don’t fret, leave it to the best!Contact Panorama Consulting Solutions to help determine the right ERP software roadmap.
As you consider the potential shift to an ERP system, it’s important to identify which style of digital transformation is most aligned with your business strategies and goals. One of the most important questions you should consider in your planning is whether or not you are looking for standardization or flexibility in your operations. There are certainly pros and cons to both approaches.
1. Pros and Cons of Standardization
Standardization is a great option if you are looking to create a system that delivers quality goods or services with a solid degree of predictability. Standardization allows for consolidation of business practices and adds a great deal of stability to your operations. Standardization also allows you to implement foundational processes with consistency and dependability.
You may find a few issues with standardization as well. Sometimes, standardization makes it difficult to keep up with changing trends. While your standardization allows your business a great amount of stability in the here and now, it may not leave room for future forecasting. As your business grows, your standardized processes could hold you back if you’re not careful.
In terms of implementation, standardization will require a greater amount of management up front in both the business process and in implementing organizational change You’ll also need to plan for a large scale employee training program.
2. Pros and Cons of Flexibility
Flexibility in your digital transformation will allow you to better meet the unique and often customizable demands of your clients. Flexibility can be great for rapidly growing companies that need to be able to adjust operations processes quickly. Smaller companies also benefit from flexibility, as they often face unique challenges because of their size. A flexible system might also provide compatibility for upgrading software in the future.
On the downside of flexibility, your system can become too loose. This might make it more difficult to enact standard business processes across the board. It also might not push employees who are resisting your digital transformation to make necessary operational changes. Too much customization in your software can also be a negative, as this affects usability.
A flexible ERP system will require a large amount of project governance. There also needs to be aggressive controls in place throughout the implementation and customization process.
3. How to Decide
As you can see there are valid reasons to consider a standardized or flexible approach to your ERP system. Often, you can choose a software program and implementation plan for your business that lends itself more to one side of the spectrum or the other. Consider what aspects of your digital transformation are most important to your company brand and growth strategy.
The best thing is to decide what the goals of your ERP system implementation are and look at how more standardization or flexibility will support you in achieving theses goals.
Most ERP implementations take longer than planned, cost more than expected and don’t effectively mitigate risks. It’s perplexing why this happens so frequently. What can be done to avoid falling into the same trap of so many implementation teams?
According to Panorama’s 2018 ERP Report outlining the results of hundreds of recent ERP software initiatives, 64% of organizations spent more money than they budgeted and 79% took more time than expected. Perhaps even more surprisingly, over half of respondents indicated they experienced some sort of material operational disruption after go-live – for example, unable to ship product or close the books at period end.
The good news is, although ERP implementations are difficult, some organizations crack the code on how to overcome the challenges. We’ve practiced and studied implementations for over a decade and success isn’t due to luck. Project success is initiated at the onset, correlating to a deliberate and strategic approach, which effectively navigates the many pitfalls and risks. Based on this year’s research and Panorama’s experience, here are the top five drivers pointing to successful implementations:
1. Clear alignment with overall business strategy
Misalignment between a project and an organization’s overall strategy is one of the most common – and most difficult to overcome – challenges of an implementation. For example, we recently worked with a company that was driving an overarching business transformation focused on leveraging technology to surpass its competitors. Their main goal was to improve the customer experience. However, their ERP implementation was more focused on using technology to automate and streamline back office functions, rather than customer-centric improvements. This misalignment resulted in confusion, higher project costs and diluted results failing to live up to executive and customer expectations.
Recommendation: utilize independent ERP software experts to help translate your corporate strategy into an aligned implementation strategy and plan.
2. Realistic expectations during implementation planning
We’ve found many ERP implementations are (unfortunately) doomed from the start. Often, it’s because their project teams had unrealistic expectations from day one. When expectations aren’t aligned with reality, bad decisions with rippling effects can result. For example, if you commit to your management team to complete your project with an unrealistic timeframe and/or budget, you are more likely to cut critical project activities such as organizational change management and business process improvement. This will ironically accelerate your risk of time and cost overruns, among other challenges.
Recommendation: rather than taking your ERP vendor’s proposal at face value, be sure to rely on independent third parties to validate and supplement your implementation strategy and plan.
3. Laser focus on people, organizational change management and workforce transition
According to our 2018 ERP Report, organizational and people issues are the number one reason most ERP implementations take more time and money than expected. The key is to not become overwhelmed by this issue but find ways to overcome the people issues and build stakeholders. While doing so you’ll also need to deliver more business benefits, ROI and value than expected. These best-in-class implementations and project teams understand that erring on the side of investing heavily in organizational change management will result in a lower cost and risk implementation.
Recommendation: invest as heavily in your organizational change management activities as you would in your software and technical project activities. It will cost you less time, money and risk in the long term.
4. Effective business process management and process improvement
One of the biggest (and most common) mistakes is to defer to your chosen ERP software to determine how your business processes will look in the future. Today’s ERP systems are far too robust and flexible, meaning you need to define your business processes before your implementation. The last thing you want, is your expensive functional and technical consultants, billing their time while your team decides how it wants its business processes to look going forward.
Recommendation: define your future state business processes and improvements before you begin your technical software implementation.
5. Strong project management, governance and controls
Poor project management and controls can wreak havoc on any implementation:
Make sure your project charter clearly defines your governance controls and structure
Clear roles and responsibilities must be in place for your project manager, executive steering committee and other key internal and third-party project roles
Governance must align with the unique needs and dynamics of your organization
The framework of your governance must be comprehensive yet dynamic, as well as specific and repeatable
Since ERP implementations can be complex business transformations (rather than just technology initiatives) it’s important to have the right people, controls and governance in place prior to beginning your implementation.
Recommendation: clearly define your project team, governance and controls as part of your project charter. Consider hiring independent, third-party experts that manage these sorts of implementations for a living.
While this blog is intended to alert you to (or reinforce) key drivers of successful implementations, I’ve only scratched the surface of this topic. I didn’t write much about risk management, issue identification, communication or transparent reporting to name a few others. Effective project governance provides direction and hopefully decision-making protocols. It does not replace the need for effective leaders who can hone in on managing accountability, management resolution and validating metrics.
While ERP and CRM software have some overlapping features and characteristics, their core functions are vastly different. It’s important to understand these key differences to know what might be best for your company.
What is ERP?
ERP is an acronym for enterprise resource planning. ERP software is all about the back office. The goal of ERP software is to make business processes more efficient and decrease money spent on managing those processes. ERP software is designed to manage key components of your business, from accounting, to human resources to inventory and supply chain. ERP software is also highly data-driven. Because it provides an integrated approach to company systems, ERP software can provide updated information like reports and track issues and trends. This allows you to head off potential problems and focus on business management and planning.
What is CRM?
CRM software is all about the front office. It stands for customer relationship management. While ERP software focuses on the business, CRM software focuses on the customer. CRM software tracks customer information across departments. It also houses information on potential new customers as well and can be a valuable tool in tracking leads or creating marketing campaigns. CRM also allows for the synchronization of sales, marketing and customer service data. The best CRM software tracks multiple customer interactions between departments. This can foster better customer relationships via easy access to pertinent client information.
Which should I choose for my business?
The answer for most companies is that both. CRM and ERP are often both needed to maximize efficiencies and automate manual processes.
Both systems are about increasing efficiency and hopefully profitability for your company. They just approach this from different angles. There are several factors to consider when choosing the software that is best for your company. It’s important to have both an ERP system for business management and a CRM system for customer data management. However, you can achieve this a few different ways.
Many ERP systems have a CRM component. This option allows you to have one system that handles everything. Keep in mind that the CRM component may not be as advanced as a standalone CRM system, so it is important to assess what is needed for your business. In many cases it may prove sufficient for your needs. The most popular stand-alone CRM systems typically come at a high price. You may not need the Cadillac of systems when the Chevy will perform just fine.
If you choose to pursue a standalone CRM system alongside your ERP system, integration is key. Without proper integration, your company may find communication between departments lost in translation. This is never a good option. The good news is that integration between the two has become easier because standalone CRM systems are often built/designed to be integrated.
4. Both CRM and ERP Have Value
ERP and CRM software are both valuable assets that allow you to make better decisions, generate reports and manage business success in today’s competitive market. While there is certainly overlap between ERP and CRM systems, understanding the differences is key to making good business decisions. Soliciting the help of an independent ERP consultant can help you make smart strategic decisions since they are well-versed in both types of software. For more information, be sure to download our Clash of the Titans Report, which breaks down some of the biggest names in ERP.
We help companies select and implement ERP software and each has unique needs and requirements. Some are looking for more of a strategic and complete digital transformation, while others are looking for a shorter-term effective fix. Some are looking for ways to standardize operations and drive business improvements, while others are simply trying to replace their outdated legacy systems.
Private equity (PE) owners and funds are some of our most frequent repeat clients. They are more predictable customers who hire us to manage ERP implementations at companies they directly own or invest in. Their needs and drivers are laser focused because they are driven to accelerate growth and profitability even more so than most executives. PE firms are formed by investors often using a combination of private and borrowed money. This makes their needs and motivations particularly interesting and time sensitive.
Below are some key things we commonly see PE firms looking for in their ERP implementations:
1. Low tolerance for implementation time and cost overruns
No executive likes to see an implementation take too much time, money or resources and this is especially true with private equity organizations. They tend to have a very low tolerance for software customization, overly complicated software functionality, poor project management and other things impacting implementation time, cost and risk. Almost to a fault, they want to make sure their ERP investments are maximized and not distracted by what they perceive to be superfluous project activities or costs.
2. Higher likelihood of opting out of “big” ERP systems
Because of the lower tolerances for cost, time and risk overruns, PE firms are more likely to push for alternatives to “big” ERP systems such as SAP S/4HANA or Oracle Cloud. While plenty of large, Fortune 1000 companies use these products, PE firms are more likely explore ways to get more bang for their buck at a lower cost point.
One common school of thought is the new system may be a shorter-term (but credible) enhancement until they sell the company to an acquirer, so they don’t want to spend too much time or money on a larger or more complex system. This often leads them to a Tier II or industry-focused solution rather than one of the more common “big” names.
3. Scalability of business processes and credible reporting
A primary focus is often to ensure their investment in new ERP systems can help scale for aggressive growth. This means they are more likely to stomp out inefficient processes, automate as much as they can and build a business process and technology framework that aligns. Delays or inefficiencies can directly impact profitability and momentum. This is where shared services models, common business practice, optimized business processes and other drivers of scale and precision are particularly appreciated.
Operating and reporting enhancements are another driver, such as credibly being able to report, capture and manage key performance indicators. This is an important tool for PE firms to measure value, progress and predict cash flows.
The most sophisticated private equity firms also recognize that managing organizational change management (OCM) will be a key enabler and driver of scalability and growth. A trend is to use the functionality the software provides, so the people must adapt to the new system and not vice versa. This reduces costly customizations and recognizes the impact on the people side (think business culture change). Experienced ERP consultants like Panorama offer detailed roadmap OCM Solutions that should be incorporated with any ERP implementation.
4. What does this mean to companies that aren’t private equity firms?
While most readers don’t work for or are owned by private PE firms, there are still plenty of lessons to learn from these practitioners. They are fueled by strategic growth even more than most, so if your organization shares a similar focus you may learn from their priorities and approach.
Many public and private companies acquiring other companies with the intention of integrating them profitably, can learn from this discussion. Also, the ability to achieve higher returns or accelerate growth could benefit all types of businesses. Bottom line, underlying most successful enterprises is an effective, modern ERP system that can support the goal of the organization while maximizing resources. PE companies have opportunistically realized they can usually sell a company for a greater premium or valuation when equipped with an effective ERP system.
PE firms have a compelling reputation of a successful buy-to-sell focus that must yield superior financial results. This tends to focus them solely on running their businesses and portfolios, while strategically using outside experienced independent ERP help to do the heavy lifting when it comes to changing or enhancing systems. This begs the question; why do some companies without a core competency in ERP excellence try to do this themselves?
Deciding to implement a global ERP system is not one that should be made lightly. The truth is this can be a very challenging transition to. Are you ready to take on the challenge of global ERP implementation? It can be daunting, like when you are at the top of a ski slope thinking you are ready to push off. To make this process easier, first determine if this is even the best strategy for your company. Here are six things you should consider before embarking on a global ERP implementation:
1. Consider the size and reach of your business.
Just like skiing, if you have not been growing your skill level you might not be ready for this big of a mountain. The primary reasons to even consider making the switch to a global ERP system are size, scale and locations. If you have multiple sites and operate on a worldwide level, a global system may be necessary or desirable. It will allow for standardized business practices, streamlined processes and faster financial reporting. If your company does not have this type of footprint, there may not be a need to go global. If it does, consider adding the services of an independent ERP consultant to help navigate. Global ERP implementations are difficult and fraught with unknowns.
2. Evaluate possible language and cultural barriers.
Trying to get everyone in your company on the same page can be hard, mainly when there are issues with communication. This can lead to a significant breakdown of the ERP planning and implementation process. In fact, underestimating the impact of culture is one of the primary reasons of global ERP implementation failure. This is why it is imperative that you partner with someone who has experience and expertise in the language and culture of the country you are working in. This will help avoid language barriers, prevent you from committing cultural taboos and help you gain the trust of your company’s local team.
3. Have a clear understanding of the country requirements.
Every country has different (and sometimes intricate) requirements when it comes to taxes, currencies and regulatory reporting. Without even realizing it, you could fall out of compliance and be subject to penalties. Global ERP systems necessitate understanding each country’s requirements and nuances. Countries can operate very differently. While may use a flat tax rate regardless of profit, some countries (Italy and Germany, for example) have alternate tax models that correlate the effective tax rate with increasing profits. Matching and testing them within your ERP system can be complex at best.
4. Find an ERP system that provides a balance between localized and global processes.
Global ERP systems give you the opportunity to standardize as much as possible. When determining how to do this you should be sure to identify methods that will work best for everyone. Be willing to bridge differences that will make it easier for everyone to accomplish crucial tasks and build a healthy relationship between the various locations. This is also the time to determine whether your support will be global, localized or customized.
5. Think about your rollout style
Are you planning to go-live with all features and geographies simultaneously or will you roll out in phases, based on geography and/or features? This will largely depend on the experience of your implementation team and other resources, as well as any legacy system constraints. Keep in mind that a well-defined phased implementation offers significant advantages including decreased ERP failure risk.
6. Develop a clear plan for cleaning and migrating all data
Determine how data and growth will be managed now and in the future. How much data will be transferred to the new system? Another way of thinking about this is your ERP initiative should be geared for the future state business challenges and opportunities. For example, can local offices control their local accounts or will any changes require centralized governance?
Making a decision between implementing an ERP system or Best of Breed system is never an easy decision to make. There are several factors to consider when trying to decide what is best for your company.
First off, in case you don’t know, Best of Breed software is simply the best product in its class.Often comprised of the best modules from various vendors, Best of Breed incorporate many different functions and features.
To position you and your team for success, here are the top five things you should do prior to starting your implementation:
1. Cost – Integrated ERP software often comes with a hefty upfront price tag. There is often the need for customization and this can really add to the bottom line. Best of Breed systems can be less expensive, however costs can add up quickly when talking about additional features and functionality which your organization many not even need. Highly touted Best of Breed systems may pose a potential for overlap in functionality. In other words, don’t overpay for systems which you won’t be utilizing just because it’s highly touted. An experienced ERP consultant can help you make those determinations.
2. Implementation – The ERP software selection and implementation process should be a factor in determining which direction is best for your organization. You can implement Best of Breed to address specific business processes that might be in immediate need of help. Best of Breed ERP systems encompass a variety of specialized functions from a variety of specialized vendors, all of which need to be integrated.Implementing any new ERP system is a major endeavor which requires time and cost.
3. Versatility – Are you looking for a cloud-based solution?There’s a Best of Breed option for you.Are you looking to expand into new territories fairly quickly?Then Best of Breed may be for you.Of course ERP software offers versatility as well, the functionality isn’t quite like Best of Breed so you should truly understand your long-term and short-term needs before deciding between the two.
4. Ease of Use – Ease of system use is something else to consider. Best of Breed systems focus on specific areas of business, which can be extremely helpful, however, specialization can also require further staff training or learning many nuances of the solution.Day to day, Best of Breed can also make it easier for your organization to manage work orders, satisfy customer needs, improve internal processes and increase efficiency overall. ERP software comes in a fully integrated approach, which can also be a solution for your organization’s need for a digital transformation.
5. The Best Fit – It’s important to consider which model will fit best with your company and both its long-term and short-term needs. Be sure not to get too caught up in trends or thinking about what worked well in another organization like yours.Your organization will have its own individual needs, budget and dedicated staff hours that all need to be considered.Should you find that Best of Breed is a good fit for your organization then it’s important to go through all of its features and benefits with your independent ERP Consultant before starting implementation.
Finding the right ERP consultant for your business can be a time consuming process! There are so many different factors to consider in your search that it can feel a bit overwhelming. But choosing the right ERP consultant is essential to the successful implantation of your ERP project. Here are several things to consider when selecting your ERP consultant.
1. ERP Firm Experience
It’s important to do your research on the specific ERP consulting firm you’re considering. Different firms may have different experiences with ERP selection and implementation and you want to make sure the firm you choose is the best fit for your project goals. Is the information on the company’s website accurate? Is the firm involved in any lawsuits? Be sure to check facts and ask for references early on in the process.
2. ERP Consultant Experience
If the ERP firm checks out, you’ll also want to consider the individual consultant you might be working with as well. Understand your potential ERP consultant’s background and experience with the firm. Also, take into consideration whether or not your potential consultant is a contracted employee and if this matters to you. Has the consultant worked on projects similar to yours? Be sure to assess the particular skills that a potential consultant brings to the table to ensure they are a good fit.
3. ERP Consultant Knowledge
It’s also important to get a feel for your ERP consultant’s general knowledge. Don’t be afraid to as a lot of questions. What is their education and professional qualifications? Does the consultant have real world experience that will enable them to understand potential problems that arise in implementing a new ERP system? What kind of industries has your ERP consultant worked in? All of these questions will help you determine whether or not your ERP consultant has the knowledge required to help you implement your project.
4. Customer Stats and Feedback
Make sure to understand the types of customers your ERP firm and consultant has worked with in the past. ERP software can be highly specialized and it might be important to consider an ERP consultant whose previous clients are in a similar industry to your own. Also, consider the size of previous companies an ERP consultant has worked with. Do they have experience in with a company your size? Be sure to request references from the ERP firm and contact companies for feedback.
5. Project Plan and Methodology
Make sure your ERP consultant has a plan for taking your project on. Ask for a project plan and make sure it outlines in detail the steps they will take for implementation, as well as their methodology. Also, be sure to consider the proposed methodology. Does it fit with your company’s business philosophy? This is an important partnership and you want to make sure that your goals align.
There are many things to consider when choosing an ERP consultant. It may seem like a lengthy process, but doing your research to pick the right consultant will only save you time, money, and stress in the end.Be sure to check out our list of qualified, independent ERP consultants here.