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.
The Big Picture: Introduction to Digital Transformation
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 In the long-term, outdated technologies can become hard to use and expensive to maintain.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.
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.
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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.
Many organizations begin technology transformations with the goal of selecting ERP software that will bring a high ROI and measurable business benefits. They soon realize the transformation is much more complex than they expected, and the benefits are much more elusive.
So, how do you set realistic expectations for the selection and implementation process? The first step is understanding the scope of change and the role technology will play in your transformation. At one end of the change spectrum, technology is used to support existing processes. At the other, technology enables process redesign and supports changes to an organization’s business model.
In the latter case, technology is not the focus of the project. Instead, the project team focuses on transitioning people and processes. Before selecting technology, the organization defines a corporate strategy and technology strategy and designs new business processes to support their vision. Reengineered business processes mean new roles and responsibilities for employees. Both business process reengineering and organizational change management account for significant time, budget and resources. If you’re at the other end of the change spectrum, your expectations will look very different.
Still not sure what level of change your project entails? Ask yourself why you’re implementing new technology in the first place. Maybe you’re changing your business model, experiencing rapid growth or expanding into new markets. If so, your technology transformation could be more aptly called a business transformation, as you will experience significant changes to not only your technology but also your people and processes.
Pre-implementation Readiness: How to Prepare for ERP Selection
Once you’ve determined the scope of change, you can begin developing a business case. Some organizations use business cases to justify their investments. Others use business cases to estimate their return on investment. In both cases, you will need realistic expectations.
By benchmarking against technology transformations at similar organizations, you can ensure you’re setting achievable goals. Executives, the project team and other stakeholders should have a clear understanding of the expected timeline, budget, resource allocation and benefits realization. If issues arise, they should be informed so they can readjust their expectations. It’s normal for slight adjustments to occur throughout the project.
What to Expect
The total cost of ownership of an ERP system can be difficult to determine. Don’t assume that smaller vendors will be substantially cheaper than large vendors. The cost depends on several factors, such as level of customization. Also, don’t assume that cloud solutions will be less expensive than on-premise solutions. The cloud may be cheaper upfront, but more expensive over time.
The project timeline can also be difficult to estimate. Sometimes, years can go by before you realize all expected business benefits. The project itself can take years, so add a few years on to this, and you have your benefits realization timeline. The selection phase can take up to six months.
To make matters more difficult, the budget and timeline are both subject to change. During the span of a technology transformation, you will undergo normal organizational changes unrelated to the project, such as staff turnover. You should take this into account when developing a project plan.
Some changes to budget and timeline are avoidable, however. Accounting for all project activities upfront will help you avoid surprises. Here’s a partial list of overlooked activities to include in your project plan:
Quantifying specific benefits you hope to achieve, such as visibility into real-time data, visibility across functional areas, reduced inventory and decreased days to close
Developing a master data management strategy and data migration strategy
Conducting an organizational readiness assessment
Developing and executing an organizational change management plan
Assessing staffing needs for each phase of the project, and possibly augmenting your staff with outside resources
Working with functional leads to map current and future state business processes and identify pain points
Working with functional leads to define requirements, validate requirements and schedule software demos
Recruiting stakeholders from different departments, business units and locations to help define requirements
Distributing workshop guides to prepare employees for requirements gathering workshops
Prioritizing functional requirements into three categories (mandatory, value-add, nice to have)
Balancing the need for software customization with the cost of training
Reskilling employees whose jobs will become automated
Meeting with the vendor for an organizational design session
Why Set Expectations
When your organization needs new ERP software, it’s tempting to just focus on technology. In many cases, CIOs are expected to do so. However, if you want to set realistic expectations, you must account for the people and process aspects of technology transformation. These account for significant time, money and resources.
You should also develop a business case to give executives an idea of the ROI and business benefits they should expect – and articulate the benefits realization timeframe. Most importantly, you should understand why you’re implementing new ERP software, so you can determine the scope of change.
Schedule a Free 30-minute Consultation With a Digital Transformation Expert!
ERP Boot Camp was the best value for the money seminar I have ever attended. Every manager hoping to build or validate their project strategy should attend.
~ Boot Camp Attendee
Panorama’s next ERP Boot Camp is just around the corner on May 22nd-23rd in Chicago, Illinois. Boot Camp is two days of intensive, interactive ERP education in an informal setting. The subject material covers everything from software selection to implementation to organizational change management. We ensure guests walk away with a robust understanding of what constitutes ERP project success. Still not convinced that ERP Boot Camp is necessary for you and your team? Read on for other reasons to attend:
Because the fundamentals of ERP project management should not be a secret or surprise. Too many teams go into an ERP implementation with little or no ERP project management background. An ERP implementation can be a defining point in your career — don’t you want to be armed with all the information you need to make it a success?
We will give you expert guidance and advice you will not hear elsewhere. Panorama instructors are ERP consultants with boots-on-the-ground experience. They will discuss the variables that can mean the difference between success and failure. Their goal is to provide best practices on everything from negotiation to licensing to customization . . . and more.
You will learn in a relaxed, collaborative environment. Forget giant auditoriums. Panorama’s ERP Boot Camp is an intimate, collegial experience with plenty of time for interaction, networking and relationship-building. Presenters are accessible, and presentations are interactive. We limit attendance to ensure a small group format. If you are looking for personalized training, you have found the right place.
We will cut through all the jargon and hype to give you the truth. One of the most challenging tasks for a project manager is to cut through all the hype to discover what their ERP software truly can provide. Because our instructors are independent consultants, they are not afraid to give you the real story on software selection and implementation. Our collective opinion is based on hundreds of ERP implementations.
We teach you about ERP failures to prepare you for success! Panorama’s expertise in salvaging failed ERP implementations and our expert witness work in ERP lawsuits gives us an unparalleled breadth of knowledge to help you avoid pitfalls and build a framework for ERP success. If you are still on the fence, consider this: Is an ERP implementation really something you can do without proper training? You become licensed before flying an airplane and certified before diving in the ocean. Why assume an ERP implementation would be any less risky?
Equifax, Yahoo, Uber. 2017 was the year where no data seemed safe. How secure is your ERP?
There have been improvements in cyber security in recent years, but ERP systems are still highly vulnerable to attacks. In fact, 89% of experts in the field of cybersecurity anticipate increased attacks against ERP systems in the future [1]. Of that number, 33% expect to see a significant increase in attacks. It is easy to see why it is so important for businesses of every size to invest in cybersecurity as part of their ERP.
Why Are ERPs Vulnerable?
Attackers are intent on taking the quickest and easiest route to the most valuable data. They are well aware that ERP systems are likely to have this data and can have multiple weak points of entry. It is not unusual to find companies that have no plan in place to safeguard their confidential data.
There are additional reasons why ERPs are a favorite target of attackers. One is businesses are not aware of their risk because they tend to put off regular cyber security audits. The result is potential problem areas aren’t identified. Thus no security measures are taken to fix the problem and prevent an incident. This is particularly true for cloud-based ERPs that are often accessed by multiple users over different platforms. You should be especially aware if you are using an outdated or legacy ERP. They often simply can’t stand up to new-age security threats.
Don’t Assume Your Small Business is Safe
It is a common misconception that hackers are only interested in attacking ERP systems of large corporations. The truth is that over 70% of cyber attacks are made against businesses that employ less than 100 people [2]. One reason for this is because small businesses often rely solely on the ERP vendor to provide cybersecurity.
Tips for Investing in Cyber Security as Part of Your ERP
Keep your software is up-to-date.
Software updates are usually done to fix any weak spots or bugs the developer has identified. If you are not automatically updating your ERP software, you are increasing your system’s vulnerability.
Promptly apply vendor security patches.
Routinely updating your anti-malware and antivirus software equally important. This will ensure security patches are implemented as soon as they are provided. When patches are not applied, vulnerable areas serve as an entry point for hackers.
Require encryption when telecommuting.
If you have employees that telecommute, encryption can help protect your data.
Opt for a private cloud
Private clouds are a bit more expensive, but they tend to have more stringent safety measures and fewer points of entry for hackers. Plus, private clouds are usually easier to monitor, making it easier to identify and deflect possible attacks.
Finally be certain that your employees know the importance of cybersecurity. If you have not already educated employees on what they can do to mitigate risk, do so immediately. The top two causes of cybersecurity breaches are negligent employees and inadequate passwords [3].
Require they create strong passwords that are long and use multiple characters. Encourage employees to change their passwords regularly. Employees should never use the same password for multiple accounts.
ERP vendors can provide ongoing maintenance and support but your organization’s best bet for fighting cybercrime is hiring an independent ERP consultant who recognizes the importance of contingency planning and developing a solid IT strategy.
Enterprise resource planning, or ERP, can be a daunting phrase and an even more daunting process especially for the novice user. When trying anything new, it can be confusing and maybe even a little scary. However, it is important to push past the fear because the benefits of ERP can be overwhelming! The process of implementing ERP Software can be difficult, even for experienced users so keep in mind the following things when implementing ERP:
What is ERP?
ERP software integrates many functions and departments all into one system platform for easier tracking and organization. Obviously, there is much more to it, but at a basic level it is the system or systems that keep a company running. Originally created to help manufacturing companies keep track of massive amounts of inventory and invoicing, ERP is now used across multiple industries for multiple jobs. The uses are endless, as well as the options. Larger companies could not run or scale successfully without effective ERP systems.
Looking at ERP for the first time
Now knowing what ERP is used for, at least at a basic level, a novice user should be starting to think about what ERP can do for them. An ERP consultant, someone with a background in both business and technology, can help guide a novice user through the process of ERP implementation, including the initial choosing of the software. For example, whether the novice user is at a large company or a small company and how robust the functionality needs to be, can be great questions to answer during the initial phases of developing a business specific ERP strategy.
Implementing ERP for the first time
Once the software choices have been determined and chosen, ERP implementation can begin. The process can be long and tedious, and this is where an ERP consultant will come in handy. ERP implementations can take from months to years, depending on the size and complexity of the company. For example, a company with multiple locations or currencies is commonly a longer and more difficult implementation. In no way does a novice user have to go through implementation alone. Aside from a consultant, a novice user can also rely on resources such as Panorama’s educational ERP Boot Camp, webinars, white paper studies and more. Implementation needs a clear plan and competent knowledgeable players to work well and stay on track. Many first time ERP implementations go over budget and take longer than expected for a myriad of reasons.
Tips for ERP Novice User
As ERP is such a wide topic, novice users are encouraged to do as much research as they can to get up to speed. Again, there are a variety of resources from which to choose. An ERP Consultant is often the best bet to help with mapping and planning as well as making sure the project stays on track. Also, when looking at ERP costs, remember that it is an investment meant to save a company money and time in the long term, so don’t be so concerned with sticker shock. Your ERP “investment” should make your company more efficient and able to compete in your marketplace.
Benefits of ERP for the novice user
Investing in ERP software can make a huge difference in the profit and functionality of a company when executed well. ERP Software was built with the idea of saving money for companies via efficiencies and automation. Duplication of tasks are often eliminated. Increased customer satisfaction should be a by-product. This should lead to increased ROI and profits and the ability for companies to grow without adding bodies. As mentioned above, an independent ERP consultant can be of significant help. They do this every day for a living.
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.
What next?
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.
In a world that is constantly changing, ERP software has also had to evolve to meet customers’ needs and stay competitive. There have been significant changes over the last five years with some being more of an improvement than others. Here’s a quick look at some top improvements to ERP software since 2013.
1. Giving companies the opportunity to move to the cloud
Without a doubt, one of the biggest improvements to ERP software involves a company’s ability to switch to the cloud. There are several reasons companies have had such a positive response to the cloud. For example, it offers greater security by frequently testing for vulnerabilities and making certain data is securely backed up with a disaster recovery plan in place. The cloud also offers anywhere access to information by partners, staff, and customers and eliminates the need to purchase additional storage/server hardware. As a bonus, the up-front costs tend to be less expensive[1]. In fact, in Panorama’s most recent 2018 ERP Report shows cloud deployments increased to 85%. This was a surprising increase from the previous year which shows more and more companies are taking advantage of this type of ERP software system for their business.
2. Increasing ERP software options for smaller businesses
Over the last five years, more and more small businesses have adopted ERP systems. The reason for this is simple. There have never been more ERP software options. From niche and industry-specific software to software geared specifically to small businesses. Whether on-premise or cloud solutions, small businesses have tons of options to choose from. They even have the ability to customize their solution. This has led to more small and medium-sized businesses to consider implementing ERP software.
3. Shorter integration periods
Vendors have made every effort to shorten integration periods. For example, interfaces are cleaner, faster and more accurate. At the same time, the introduction of simpler applications has not only reduced integration times, but also decreased setup costs and improved effectiveness. Check out the video “How to Develop the Right ERP Strategy for Your Organization” to help with this process.
4. Enhanced security
Security is an increasing concern for both individuals and companies, especially since data breaches have become increasingly sophisticated. This is why ERP vendors have put so much time and effort into offering top-notch data protection with highly advanced permission protocols, encryption and high-quality firewalls.
5. Improving interconnectedness
As SaaS (software as a service) applications and cloud solutions have merged into existing ERP systems, they have given businesses the ability to run operations using a single, end-to-end platform. This has eradicated the need for different systems and greatly enhanced interconnectedness between various departments. This has resulted in instantaneous department communication, quicker response times and operations that are quicker overall. For many companies, this has led to a substantial boost in both production and revenue.
6. Maximizing big data information
In recent years, there has been a huge push to incorporate big data into ERP software. The reason for this is simple. Big data has the potential to be a game changer by improving information density, providing greater predictive analytics to potentially uncover hidden patterns and shortening decision making processes. Plus, it allows companies to effectively track incredibly detailed production data, which has resulted in enhanced processes, productivity and overall quality.
As you begin your journey to select and implement ERP software for your company, there are several factors to consider. As you get started, it’s important to have selection criteria to help you choose the ERP option that is the best fit for your business. Below are five things you don’t want to overlook in your ERP software selection:
Company Details
The biggest reason you might be considering a new ERP system is to help you achieve your business goals in terms of growth and efficiency. This should be the central focus of your selection process, as well as increasing customer satisfaction.
However, there are other important aspects to consider when making your selection as well. Considerations like company size, number of locations and annual revenue are important factors when considering various ERP software. Look for software that has worked for other businesses with a similar profile to yours for maximum success.
Technology
You’re probably already considering the functionality of potential ERP software in your decision-making process. But don’t forget to consider the underlying technology as well. Technology changes so rapidly that an ERP software using newer technologies may benefit you in the long run.
It’s also important to consider how the technology of your potential ERP system will mesh with the technology strategies and preferences already in place with your IT department. This will make an ERP implementation a much smoother process.
Cost
Cost is always a major concern when considering your ERP selection, and it should be. There are ERP software options at a variety of price points, so it’s important to consider your budget when assessing options.
Make sure you factor vendor fees into your bottom line. Get the scoop on annual support fees and implementation costs, and make sure that’s a part of the conversation when considering the overall cost and value of an ERP system.
Function
When assessing how a potential ERP system might work with your business, make sure you look at best practices in your specific industry. ERP systems all provide support for business areas that are utilized across the board, like accounting and marketing. But not every option is going to offer you the best fit for all the daily functions your business uses. Be sure to consider all the unique and specific needs of your business when trying to find the best ERP system for you.
The Human Element
The people involved in your ERP software selection process will be key to a successful implementation. You want to make sure that you are going to be well supported by a potential vendor.
When trying to determine whether you’ll receive maximum support, consider all the support systems a vendor has to offer. This means everything from consulting and implementation, to user groups and phone support. Having the right kind of support will maximize the success of your implementation.
There are so many factors to consider during the ERP selection process that it’s easy to overlook some of these important things. Make sure to add these areas of focus to your list if you want to choose the best ERP system for your business.
My last blog covered 10 things that contribute to ERP failure or success. After reading this list, you may wonder what you can be doing differently to ensure your ERP implementation is successful.
Most poor decisions made during a project don’t become evident until later – often after it’s too late – so it’s important to recognize some of the risks and common pitfalls that less experienced practitioners often fall prey to. With a solid understanding of these risks, you’ll be able make more effective decisions that are more likely to lead to success and are less likely to undermine your ERP initiative.
Below are five decisions that may be jeopardizing your ERP implementation without you even knowing it:
1. Lack of focus on organizational change management
Sometimes no decision can result in a poor decision, as is often the case with organizational change management. Executives and project teams don’t always recognize the need or importance for change management. Worse yet, some decide not to invest the time and resources required to ensure that this critical success factor is properly addressed. If you’re not actively focusing your team and resources on organizational change and its impacts, then your decision is actively undermining your chances for success.
2. Deferring to ERP software to develop your future state business processes
While detailed transactional workflows will largely be dependent on the software being implemented, it is a mistake not to define your desired business processes and workflows to some degree. If you think about your business processes in the context of how they should operate regardless of technology, it will give you a clear direction on how your new software should be configured and implemented. Most modern ERP systems are far too flexible to assume they will provide a “silver bullet” in defining your future state processes.
3. Relying too much or too little on outside ERP consultants
Some executives and IT heads assume they can handle these sorts of ERP and digital transformations themselves. Others assume they can completely outsource the initiative to outside ERP consultants. Either extreme is ill-advised, so it’s important to find the right balance. You need to leverage outside help along the way, but you also need to ensure that your team owns the project and its results. This is the only way to ensure a sustainable solution that doesn’t require consultants for the long term.
4. Failing to implement formalized project governance and controls
ERP project governance and controls are at least as important as the project manager you put in place – if not more so. These controls ensure that the project team stays focused. There will be requests that increase scope (think customization requests) so the management of time and cost must be deliberate ensuring the project stays on track for the long haul. This should be included as part of your charter during the early stages of your transformation.
5. Sticking to hard and fast budgetary and project timeline expectations
To use a common saying, “executives are often guilty of stepping over dollars to pick up pennies.” In other words, they focus too much on containing short-term implementation costs, even if the end result is higher long-term costs after implementation. This risk is further complicated by the fact most budget and time estimates are unrealistic or arbitrary to begin with, so adhering to them can be extremely risky.
Making good decisions also requires a strong diverse project team with skill sets that complement each other. Forming a winning team takes thought and commitment. I once worked alongside a project team that recruited team members by specifying that they only wanted internal members that would be “desperately missed” by their departments. Their goal was to form an “A” team. This initiative had project team charter and had planned for backfilling. You have often heard me say that ERP initiatives should not belong only to the IT department.
In this blog we’ve talked about some of the decisions and details that will be crucial to the result of your project. While executive oversight is imperative, adding the outside perspective of an independent consultant is a best practice to help alleviate risk while adding knowledge.
As one of the oldest and top enterprise software companies, Oracle has developed an extensive portfolio of business software applications. Therefore, it should be no surprise that it is one of the most widely used and researched ERPs. Whether you are familiar with Oracle ERP Software or just beginning to consider what they have to offer, this will help you see how they compare with other ERP providers.
1. Oracle has opted to take a different approach to growth.
Most ERP providers work to add features via in-house software development. Oracle has chosen primarily to acquire top software companies and incorporate their products into existing Oracle software. Over the past few years, Oracle has made multiple billion-dollar transactions. For example, in 2016 they purchased NetSuite for $9.3 billion. In 2017 they purchased Aconex, one of the world’s top construction management platforms, for $1.2 billion [1]. Thanks to these strategic acquisitions, Oracle has managed to appeal to a wide variety of niches, giving them the opportunity to gain new customers.
2. Oracle was late to the cloud, making this an area where they are looking to catch up.
While other ERPs started transitioning to the cloud early on, Oracle lagged way behind. Oracle’s focus on pushing a traditional on-premise ERP system has cost them significantly. In 2017, Oracle’s cloud revenue was listed at $5.6 billion, while Amazon’s cloud revenue was $17.5 billion and IBM’s was $17.0 billion. Oracle continues to try to make up for their late entry [2].
3. Oracle has a slightly longer implementation period.
According to data made available through Clash of the Titans 2017, Oracle’s implementation period averages 24.5 months. This is about one month longer than Microsoft Dynamics at 23.6 months [3]. SAP is 23.1 months, while Infor’s implementation period is a much shorter 15.3 months. There are several possible reasons, including an initial project scope expansion, resource constraints or technical issues. Another reason might be training issues. Oracle’s software has the reputation of being less user-friendly than other ERPs.
4. Oracle is designed to fit almost any organization.
Partially due to their history of making huge acquisitions of software developers in every possible niche, Oracle has managed to develop ERP applications for almost every industry. Regardless of company size or existing business challenges, Oracle can usually provide a solution. Oracle is used by professional service providers, healthcare companies, local and state governments, nonprofit agencies, and public and private schools. Other ERPs are designed only for specific niches or companies of a certain size.
5. Oracle is known for top-of-the-line security.
Oracle has developed a reputation for being serious about security. However, they are not resting on their laurels. Currently, Oracle is in process of acquiring Zenedge in an effort to give their firewall security an even greater boost [4]. Zenedge’s Distributed Denial of Services (DDoS) mitigation and Web Application Firewall (WAF) are used by thousands of companies all over the world to ensure their system is protected from a potentially malicious attack. This protection will now extend to all Oracle Apps.
Implementing an ERP system for your business can be a daunting and time-consuming task. However, choosing the right ERP consultant can make the process go a lot smoother and provide you with much needed ongoing support. Here are some of the ways the right “independent” ERP consultant can improve your ERP project.
Experience and Expertise
The experience and expertise in implementing an ERP system is perhaps the biggest way an ERP consultant can help you. Your ERP consultant will know the best practices for implementing your program. They do it every day! They’ll also help you stay on time and on budget. They will also view your project from an outside perspective which can be valuable. It’s important to ensure that the consultant you choose fits your culture and is independent. Truly independent consultants are not software resellers and they do not receive compensation from software companies.
To make the most of your ERP consultant’s expertise, be sure to choose a consultant who has experience implementing ERP software in your specific industry or with other similar businesses. A good consultant will also suggest best practices from outside of your industry that could be of help to your business if incorporated.
Day-to-Day
Every project has unique needs and once the initial plan and strategy is done, the day-to-day details start. Some people need a lot of guidance while some need assistance when problems or questions pop up. An experienced consultant will have shepherded multiple ERP projects while most companies have not. Whatever your specific situation is, let your ERP consultant know your level of experience so he or she knows how to meet your needs. Also let your ERP consultant know how you like to communicate and share the communication plan that’s been drafted for the project.
Project Management
You probably have project managers in your company, but they also have other responsibilities. ERP consultants can manage all facets of the ERP implementation process to ensure a timely and cost-effective result. The ERP consultant will also help your company set/validate realistic goals, budgets and deadlines.
A consultant will understand industry standards and best practices and will help you negotiate your ERP software costs with vendors. Consultants often have established relationships with vendors and can help expedite the process. Consultants also have your best interests in mind. Typically, a consultant can negotiate a lower overall software package price on your behalf.
You may task your consultant with help validating a software that you have chosen or hire them to lead a more comprehensive software selection process. Ultimately, they will help you ask the right questions to ensure you are getting the best product fit for your business.
The Big Picture
Your ERP consultant can also provide you with unbiased opinions about what’s working or not working regarding your business processes. This expert outsider’s perspective can be invaluable throughout your implementation project. Most companies and employees have personal biases, based on their job roles and how things have been done in the past. Business process improvement should also be tackled before the implementation begins.
Your ERP consultant will help you meet your objectives and keep your team on track. It can be easy to lose focus with all the excitement of a new system. But your ERP consultant will keep your decisions in line with the big picture and company goals for the new system.
Your consultant will also help you address any insufficiencies in your business operations (think redundancies) and help ensure that your overall process for doing business is optimized.
Change Management
Implementing an ERP system can mean big changes for your business. These changes can be overwhelming for your team and the rest of your workforce. An ERP consultant can help usher in these changes. Employees are often worried about job loss or having to learn new duties or routines.
An ERP consultant can help with training and provide resources to make sure your workforce is ready and able to make changes to their daily routines. Your consultant can also act as a mediator when differences of opinion will undoubtedly arise. Having someone to help manage the human element of your ERP implementation is important. A common cause of ERP implementation failures is not dedicating enough time, money and resources to ensure that employees understand and are supportive of upcoming system changes.
As you can see, choosing the right ERP consultant can improve many facets of your ERP software selection and implementation process. Finding a truly independent consultant like Panorama Consulting Solutions may be one of your biggest challenges.
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.
Initial Investment
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.
SavesLabor costs
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.
Today we published our brand new 2018 ERP Software Report, which summarizes the results from nearly 300 recent ERP implementations across the globe. While the data tells a similar story to years past, it also contains a few surprises.
First, it’s important to understand where we gathered the data. The average company in our sample generates $439 million USD in annual revenue, with a majority of organizations based in North America. Organizations in the study were in industries of all types, ranging from manufacturers, retail and distribution companies, construction firms, and a range of other industry verticals.
We summarized and analyzed this broad data set to arrive at some conclusions regarding trends in the industry, challenges companies face when implementing new ERP software, and lessons learned. This is the twelfth consecutive year that we have conducted the annual study.
Some results aren’t surprising to those of us that have been in the industry for a while. Others were a big surprise to the Panorama team and I.
Here are five surprising takeaways from this year’s ERP Software Report:
1. Cloud ERP software adoption may have finally reached a tipping point.
We saw a very large increase in cloud ERP software adoption this year compared to past years, with this year’s mix of SaaS and cloud deployments increasing to 85%, compared to 15% on-premise deployments. While this number may not be striking on the surface, it is a big difference from last year’s data, which showed less than 50% of organizations were deploying cloud and SaaS solutions.
The fact that the leading ERP vendors are pushing SAP S4/HANA,Oracle Cloud, and Microsoft Dynamics 365 cloud solutions so aggressively may finally be paying off for them. So, which is more surprising: the fact that cloud and SaaS adoption has reached 85%, or the fact that last year’s number was so low?
2. The grand illusion of lower ERP implementation costs.
Past years have shown that the average total ERP implementation costs anywhere from 4% to 5% of a company’s annual revenue. This number includes a project’s all-in costs, including software licenses, implementation costs, hardware upgrades, organizational change management, training, backfilling internal resources, and any other costs associated with the transformation.
This year, that number decreased to 3.6% of annual revenue. While this may sound positive on the surface, it actually reveals a flaw in our data: since most deployments are cloud solutions (see point #1 above), initial costs are naturally going to be lower. However, our implementation cost data only captures the initial implementation costs – not the ongoing costs. In most cases, cloud deployment costs less money up front, but can increase longer-term outlays due to higher annual subscription costs. It is important to take this data with a grain of salt.
3. ERP implementations are taking longer and resulting in more operational disruption.
Despite lower up-front costs, ERP implementation durations are increasing. While the total average duration increased a relatively innocuous 16.9 to 17.4 months, those that took longer than expected increased from 59% to 79%. Again, this can be largely attributed to the increase in cloud deployments, which creates a false sense of implementation speed and ease and results in unrealistic expectations along the way.
Operational disruptions saw a similar increase. Those that experienced a material disruption following go-live – such as being unable to ship product or close the books – increased from 56% to 66% last year. This isn’t comforting to most executives and points to some of the lingering deficiencies in the abilities of most ERP consultants’ and vendors’ ability to manage implementations well.
4. Despite relatively high satisfaction with ERP software vendors, overall ERP implementation satisfaction levels plummeted to 42%.
Customer satisfaction with their chosen and implemented ERP software increased to 68% this year. However, satisfaction with their overall implementations plummeted from 81% to 42%, which suggests that more companies are either struggling with their deployments and/or managing to unrealistic expectations surrounding those initiatives. Thought leadership such as Ten Tips to a Successful ERP Implementation, provide guidance on how to manage your digital transformation to success.
5. Organizational change management still reigns as the biggest challenge to a successful ERP implementation.
For the second straight year, organizational change management was atop the list of top reasons why projects took longer or cost more money than expected. Ironically, many organizations think they will actually save time and money by cutting this important corner, but our research tells a different story. You are more likely to find that you have underinvested in managing organizational change, and those that do find that they implement faster, less expensively, and with a higher ROI than those that don’t.
These five “surprises” may or may not be surprises to you. They also just barely scratch the surface of the many lessons and takeaways outlined in this 40-page report, so I encourage you to download the complete 2018 ERP Report to learn more, click on the button below.
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].
So, how does Infor Cloud compare to other ERP software like SAP or Oracle? Here’s a quick look at how Infor Cloud stacks up against other top ERP vendors:
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 [2]. 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.
When you are considering ERP software to integrate and streamline your business’s finances, HR, and other processes, SAP is an option that you will frequently come across. For well over a decade, SAP has been the ERP system of choice for all types of industries. This trend is expected to continue in the coming years [1].
This raises two important questions. What sets SAP apart from other ERP systems currently available? Why is it one of the most widely used ERP systems in the world [2]? To answer these questions, here’s a brief look at how SAP compares to other ERP software.
1. SAP can fit any size business, from the smallest company to a Fortune 500 company
Unlike some other ERP systems that are geared for use by companies of a specific size, this is not the case with SAP. Instead, they offer a diverse line of ERP platforms that are known for being incredibly consistent. They offer an all-in-one solution with a straightforward implementation process. Additionally, transitions are easy as a company grows and expands.
SAP also offers multiple cloud solutions and it integrates straight out-of-the-box with complementary services, such as Google and PayPal. This is uncommon in the world of ERP systems. All of these are things, as well as the fact that SAP offers plenty of flexibility for growth, are things that small businesses can greatly benefit from. At the same, SAP offers the functions and capabilities needed by the world’s largest companies. In fact, almost 80% of Fortune 500 companies use SAP, including Johnson & Johnson, Pfizer, and Phillip Morris [3].
2. It is also ideal for any business
As mentioned above, SAP works with all types of industries, which isn’t always the case with ERP systems. Businesses that are implementing a new ERP may not know exactly which functions and modules they need. SAP has a wide selection for a custom fit without having to pay for customization. Businesses also benefit from SAP’s integration. When changes are made to one module, other modules are immediately updated.
3. It does not offer unnecessary functionality
All ERP systems require training and time for your staff to learn how to use it. The simpler the system, the shorter the learning curve will be. Some ERP systems, such as Oracle, to offer too many functions for most businesses. Many of them are unnecessary which makes training more difficult and complicated. While SAP offers all the functions a business needs, it keeps them streamlined so the users does not become confused.
4. When compared to other ERP systems, SAP offers the quickest financial payback and shorter implementation time
SAP is the second most expensive ERP system to implement (Oracle is first). However, it does provide the quickest financial payback (around nine months) when compared to other ERP systems [4]. For businesses using SAP, this results in faster financial benefits. At the same time, SAP has established a significantly shorter implementation period than its counterparts, which also facilitates quicker success.
5. SAP usually requires less customization than other ERP systems
When compared to its competition, SAP has a reputation for its impressive out-of-the-box functionality. This results in minimal, if any, need for customization, which can slow down the implementation period. However, it is worth noting that SAP does provide plenty of customizable solutions that will suit all types of business if needed.
Currently, SAP rates very high when compared to other ERP systems. Of course, other vendors, including Oracle and Infor, are continually looking to make upgrades and changes. SAP will have have to work hard to stay ahead of the competition, or they could be surpassed in the future.
One of the keys to a smooth ERP implementation are the people you involve to make it happen. Your business may have chosen a great software, but if the people involved in the process aren’t ready to change, your ERP implementation will not be successful. To ensure your ERP implementation succeeds, some of the “key players” you’ll want to involve are listed below:
1. Executive Engagement
Let’s start at the top. Every successful implementation project needs an engaged executive team. They must be ready and willing to take on the responsibility of ushering in wide-scale changes within the company. They not only need to kickoff the project, they must also remain active participants.
To get more granular, it’s important to have an executive sponsor for your ERP implementation. This team member will be the point person at the executive level and is typically a member of the executive team as well.
This person will serve as an active leader, heavily involved in the implementation process, giving guidance when difficult decision points arise. This person not only lends their voice to the project, they also actively support everyone involved in the implementation process. The executive sponsor will lead your company by displaying unwavering commitment to the success of implementing your ERP system.
2. IT Team
To help ensure the success of your ERP implementation, your IT team needs to be empowered to take charge and help as necessary. Your IT team will be essential, not just in implementation, also in maintaining your ERP system.
As project coordinators, it is important to make sure your IT team is in the loop throughout the process. Communication and coordination are key. Beyond this, the ERP implementation process should be a collaborative endeavor, where your IT team is heavily involved.
If your IT team is lacking in the skills or knowledge necessary to handle this responsibility, consider training opportunities to bring them up to speed.
3. Company Change Agents
Change is hard. When implementing a new ERP system, your business can expect to see a lot of change. This is why having “change agents,” or team members across the business, who buy into your ERP implementation strategies and goals is also vital to your success.
Change agents can be any part of the project management team. The most important change agent is the project manager leading the ERP implementation process. This point person should be an experienced project manager, capable of leading the project management team and able to be accountable and transparent.
Change agents are also the team members responsible for communicating goals and ERP project status results to the larger organization. These change agents are energetic about sharing the goals of your new ERP system within the company. They also realize how the business will benefit from this new system. Change agents create hype and excitement. They can also help diffuse rumors or negative perceptions since they are commonly accessible and willing to answer questions.
4. Training
Other change agents are the team members responsible for training. They often take on the role of the “super user.” For your ERP implementation to be successful, employees must not only buy into the change, they must also know how to make the most of the new system. In this regard, training opportunities are paramount. Super users might host workshops or provide personalized instruction and assistance to make sure employees are ready and able to operate the new system. While super users don’t replace formal training, they make it comfortable for coworkers to ask questions in an unthreatening way.
5. ERP Consultant
An independent ERP Consultant can often be a smart addition to your team. They probably do implementation assistance for a living and their experience is valuable. They can be another go-to resource to help you every step of the way. A consultant will often see trends or risks before other members of the team, since they are not caught up in day-to-day activities.
Often, teams with previous experience implementing an ERP project, may have a false sense of security. The world of ERP software is dynamic and ever changing. An ERP consultant can help navigate both software and people issues. Panorama’s consultants have a background in both business and tech and have the extensive training needed to make your digital transformation a success.
Remember, people are the key to a successful ERP implementation!
ERP failures may be more common than you think, but they don’t simply happen without warning. They also don’t happen overnight. Instead, failures and other ERP implementation project challenges tend to build over time. Seemingly small risks become bigger, while a subset of risks may mutate into exponentially more complex challenges over time. If not properly identified, managed, reduced or eliminated these risks will reach a tipping point – wreaking havoc on the project, or worse, causing a full-blown failure.
To the trained eye, many risks are recognizable from the start. The key is to know what to look for and how to navigate the challenges. I like to call this iterative process, “actionable strategies for risk mitigation.” Risks come in many forms, if you’re too close to your project (immersed in detail) or don’t have a deep specialization in digital transformations the road ahead may be bumpy.
Below are five key takeaways about assessing risk on your ERP implementation project:
1. Seek out unbiased, independent third-party resources, to conduct a formalized risk assessment throughout your implementation
A crucial mindset is to accept risk exists and put forth a concerted effort and plan to control it. An objective, third-party assessment of your implementation is a best practice. It’s key to involve someone who isn’t clouded by, or too close to the day-to-day details to recognize risks and warning signs. One way to do to this is to bring on a resource that isn’t part of the project team. Someone whose area of expertise includes risk assessment experience with several similar projects throughout their career.
These assessments should be done regularly throughout your implementation to identify probability of occurrence, consequence severity and impact. Unlike most of your team members, an external partner can also dedicate time and methodology to this important effort (think identify, manage, eliminate or proactively avoid or reduced risks). You can learn more about Panorama’s independent oversight service offerings here.
2. Look at potential ERP implementation risks from all possible angles
Project risks come in different shapes, sizes and variations so it’s important to assess your project using many different “lenses.” Risk factors can span a spectrum relating to people, process and technology. Identifying and recognizing risk earlier on is preferable to reacting to risk factors as they pop up. For example, Panorama uses a project assessment framework, evaluating from 12 key areas including data, organizational change management, business processes, project management and a host of other areas. Whatever evaluation framework you decide to use, it’s important it provides a comprehensive and structured analysis of your project in a time sensitive manner.
3. Assess project risk using the most common root causes of ERP failure
Those of us who have been involved with enough ERP implementations recognize there are commonalties across projects (pitfalls, cost impacts, failure points) in these initiatives. Rather than recreating the wheel or shooting from the hip, it’s useful to start by evaluating project risks relative to what other similar projects experience. This helps ensure you have a “checklist” of sorts to help identify and focus on specific project risks and threats. With this said, you’re also working in a constantly changing environment. The ability to monitor and adjust is key, as well as understanding how the project’s risk profile may change.
4. Prioritize risks and identify risk mitigation plans
When done correctly, most project assessments identify more risks than can reasonably be addressed with limited resources and team members. Additionally, not all risks require a mitigation strategy. Therefore, prioritization is important since it enables your team to focus on addressing the things posing the most immediate and/or greatest risk to your project. An objective view of your project and plenty of experience will ensure the most pressing issues are being addressed first. For these highest priority risks, you will want to create and execute a risk mitigation plan backed by a contingency plan.
5. Recognize early warning signs of ERP implementation risk
It’s important not to underestimate the complexity of an ERP implementation. It’s also not an exaggeration to say there’s a direct correlation between successful implementations and early risk identification. Experience and research shows most ERP failures marinate over time. A string of small, seemingly insignificant mistakes can morph into sometimes unstoppable failure points when unattended. Like the “canary in the coal mine,” it’s important to recognize the value of early warning signs. Read this blog to learn some of the common warning signs of ERP implementation risk.
The takeaways mentioned above highlight the importance of dedicated independent risk oversight, which can sometimes get buried in the excitement and momentum of an implementation project. It’s a complex subject and I’ve only touched on it. Realistically assessing risks, recognizing recurring risks and understanding the opportunities made possible by risk are other important considerations. Don’t tackle these challenges alone.
Margins are critical in every business. For a distributor, healthy margins are the difference between success and failure. Vendor costs, inventory control, sales pricing and delivery expense all directly affect your margins. Properly managing all these areas while delivering outstanding customer support is the key to driving business growth.
Therefore finding the best ERP software is crucial to ensuring that every aspect of the distribution process goes as smoothly and as efficiently as possible. Here’s a quick look at a few of the most crucial aspects of distribution and how the ERP software Microsoft Dynamics GP approaches it.
1. Purchasing Inventory
Having the correct inventory levels is vital. Balancing just in time inventory maximizes cash flow and avoids wasting capital. Microsoft Dynamics GP’s inventory module allows you to identify which vendor has the things you need across multiple locations. It also allows you to cross-reference a vendor’s SKU number with yours. This makes coordinating purchases much more simple, decreases the likelihood of miscommunication and makes certain you get the right products.
Dynamics GP can also analyze purchasing trends. You can be prepared for when sales spike and avoid being out of stock. This data will also help you to scale back inventory during slow periods preventing you from having capital tied up in unused inventory.
2. Purchase Orders
Microsoft Dynamics GP includes a field that not only tells you how long a specific vendor takes to supply goods but also converts this data into a chart that is easy-to-read. Having this lead time information at your fingertips makes it much easier to select a vendor with the ability to supply what you need at the time you need it. GP’s inventory module also looks at what you have on hand and recommends purchase orders. As a bonus, it will check your database of primary vendors to ensure they have what you need. This streamlines the entire purchase order process.
3. Warehouse Assembly
Some assembly work may be needed for special promotions, such as Kitting and Bill of Materials (BOM) assembly. Microsoft Dynamics GP’s inventory module allows your warehouse to identify assembly of products at the time the order is received. For example, you may sell party plates, cups, and forks separately, but offer a special price when all three are purchased together. When this order is placed at the special price, GP’s kitting process will ensure your warehouse sees a list of all three items, making the assembly process easier and reducing the chances of errors. Dynamics GP also supports handheld scanners to ensure quality control.
4. Fulfillment Process
In some cases, fulfillment includes more than order entry and shipment. For example, it may require crating, special packaging, or gift wrapping. Microsoft Dynamics GP includes an advanced distribution option so that you have complete insight into each step. This allows managers to identify and fix potential issues, as well as make crucial business decisions that could affect workflow.
5. Invoicing
Ordering and shipping a lot of products is great but only if you get paid. Dynamics GP not only helps with invoicing but it also assists in making sure those invoices are collected. It can automatically generate an invoice when the order is placed or shipped. Customers with recurring invoices or shipments are easily managed. If a customer exceeds their credit terms or extends beyond their payment limit, Dynamics GP will automatically halt shipments and deliveries. This protects you from customers who are credit risks.
6. Returns
Returns are a fact of life. Microsoft Dynamics GP’s Returns Management Process simplifies this process by creating accounts that show the types of returns coming in, whether it’s a repair and return, advanced exchange, full credit or etc. The system is also responsible for all the paperwork, meaning it automatically adds it back to the inventory and automatically credits the customers. In other words, returns have never been easier.
7. Pricing
If you are involved in the business to business transactions, you may offer customer specific pricing options. For example, you may want to discount prices or have contracts that are renegotiated yearly. GP’s extended pricing function makes it easier to manage this date sensitive reporting.
Of course, customer service remains a crucial part of your business. Integrating your sales department in with your inventory control is an excellent idea. This makes it easier for your sales team to quickly answer questions, avoid backorders, and know which vendor has a product on hand. This results in a seamless experience that is sure to please every customer.
5. Organizational change management still reigns as the biggest challenge to a successful ERP implementation.
