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How to Become a Digital Government: 7 ERP Selection Tips

How to Become a Digital Government: 7 ERP Selection Tips

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

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

Top 10 Public Sector ERP Systems

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

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

7 ERP Selection Tips

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

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

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

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 She believes that teachers are spending too much time entering attendance records because their outdated system is difficult to use.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

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

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

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

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

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

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

3. Don’t Only Think of Your Immediate Needs

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

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

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

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

4. Do Give Small Vendors a Chance

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

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

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

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

5. Do Document and Map Your Business Processes

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

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

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

5. Do Enlist the Help of a Third Party

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

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

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

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

5. Do Consider Return on Citizenship

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

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

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

Modernizing Your Organization

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

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

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

How to Determine ERP Customization and Configuration Needs

How to Determine ERP Customization and Configuration Needs

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

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

2019 ERP Report

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

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

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

ERP Customization vs. Configuration

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

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

Making the Decision

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

How to Use the Decision Tree

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

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

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

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

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

Does a standard configuration meet the business requirement?

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

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

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

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

Do you have the budget for customization?

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

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

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

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

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

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

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

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

Can you reengineer some of your processes?

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

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

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

Revisit the requirement and ensure its validity

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

Select the Right System to Minimize Customization

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

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

How to Achieve ERP Business Benefits

How to Achieve ERP Business Benefits

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

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

2019 ERP Report

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

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

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


8 Strategies for Realizing Business Benefits

1. Understand Your Current State

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

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

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

2. Outline Expected Benefits and ROI

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

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

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

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

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

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

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

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

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

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

3. Ensure Organizational Alignment

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

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

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

4. Develop a Realistic Project Plan

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

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

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

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

5. Focus on Change Management

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

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

6. Think Twice About Changing Your Goals

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

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

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

7. Continually Measure Benefits Realization

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

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

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

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

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

8. Continually Improve

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

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

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

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


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

How ERP Software Improves Process Integration

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

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

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

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

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

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

1. Standardize Your Processes

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

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

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

2. Integrate Your Processes

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

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

3. Ensure Employee Buy-in

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

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

How ERP Software Improves Your Competitive Advantage

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

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

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

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

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

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

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

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

How ERP Software Improves the Customer Experience

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

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

1. Customer Management

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

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

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

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

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

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

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

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

2. Order Management and Fulfillment

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

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

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

3. Credit Management

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

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

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

4. Invoicing and Accounts Receivable

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

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

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

5. Payment and Cash Application

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

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


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

1. Understand How Data is Shared Across the Company

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

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

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

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

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

3. Track and Communicate Metrics That Differentiate Your Company

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

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

How ERP Software Improves Operational Efficiency

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

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

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

1. Data Entry

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

2. Inventory Cycle Times

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

3. Customer Relationship Management

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


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

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

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

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

How ERP Software Improves Regulatory Compliance

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

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

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

1. Consider Compliance When Mapping Your Processes

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

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

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

2. Focus on Change Management

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

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

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

3. Involve Your Auditors Throughout the Project

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

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

How ERP Software Improves Business Intelligence

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

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

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

1. Develop a Data Migration Strategy

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

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

2. Understand What Insights Different Stakeholders Need

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

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

3. Focus on Business Process Reengineering

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

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

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

4. Focus on Change Management (Again)

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

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

5. Carefully Evaluate ERP Vendors

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

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

What Benefits are You Expecting From New ERP Software?

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

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

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

8 ERP Software Selection Process Best Practices

8 ERP Software Selection Process Best Practices

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

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

2019 ERP Report

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

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


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

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

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

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

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

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

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

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


2. Don’t Forget About Your Incumbent ERP Vendor

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

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

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

Upgrading your ERP software can provide immediate business improvements.

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

Several software vendors have acquired other enterprise or point solutions.

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

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

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

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

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

3. Focus on Business Process Management

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

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

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

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

What is a business requirement? Here are some examples:

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

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

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

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

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


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

4. Consider Multiple Criteria

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

Organizational Alignment

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

Technical Fit

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

IT Strategy

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


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

Vendor Viability vs. Level of Service

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


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

5. Set Realistic Expectations​

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

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

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

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

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

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

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

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

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

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

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

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

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

6. Don’t Forget About Your Millennial Employees

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

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

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

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

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

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

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

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

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

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

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

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

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

7. Carefully Manage ERP Vendors

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

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

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

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

Ensure Vendors Understand Your Business

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

Allow Vendors Access to Your Company’s Key Employees

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

Evaluate Vendor Responsiveness

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

Remember That You Are the Customer, Not Them​

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

Coach Executives to Deal With Vendors

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

Let a Vendor Walk if Necessary

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

Negotiate Aggressively

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

Clearly Define Scope

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

Find the Best Implementer

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

8. Hire an Independent ERP Consultant

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

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

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

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

ERP vs. CRM: What’s the Difference?

ERP vs. CRM: What’s the Difference?

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

The Beginner’s Guide to Digital Transformation

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


ERP vs. CRM: A Real-world Analogy

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

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

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

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

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

CRM Systems: What You Need to Know

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

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

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


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

ERP Systems: What You Need to Know

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

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

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

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

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

Overlapping Features Between ERP and CRM

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

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

Should You Select ERP or CRM?

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

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

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

To help you decide, ask yourself the following questions:

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

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

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

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

2. Do you need a new financial system?

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

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

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

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

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

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

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

6. Is your project a digital transformation?

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

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

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

CRM Implementation Tips

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

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

1.  Focus on Organizational Change Management

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

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

2.  Consider Your IT Strategy

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

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

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

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

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

4.  Understand the Integration Capabilities of Your CRM System

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

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

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

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

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

Selecting the Right Technology

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

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

How to Develop an ERP Project Plan

How to Develop an ERP Project Plan

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

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

2019 ERP Report

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

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


The Importance of Realistic Expectations

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

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

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

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

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

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

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

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

Why do Companies Have Unrealistic Expectations?

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

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

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

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

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

“This is going to change our whole business.”

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

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

Realistic ERP Selection Expectations

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

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

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

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

1. Ensuring Organizational Alignment

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

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

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

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

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

2. Developing a Business Case

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

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

3. Building a Selection Team

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

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

4. Mitigating Change Resistance

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

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

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

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

5. Mapping Your Current State

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

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

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

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

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

6. Improving Business Processes

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

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

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

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

7. Understanding Deployment Options

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

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

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

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

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

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

8. Developing an IT Strategy

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

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

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

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

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

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

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

9. Developing a Data Migration Strategy

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

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

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

Realistic ERP Implementation Expectations

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

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

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

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

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

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

1. Develop a Business Case

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

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

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

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

2. Communicate With Executives

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

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

3. Don’t Believe Sales Hype

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

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

4. Consider Internal Staffing Needs

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

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

5. Ensure Strong Project Governance

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

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

6. Account for all Essential Activities

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

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

Other activities you might overlook include:


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

7. Regularly Adjust Expectations

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

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

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

8. Don’t Forget About Post Go Live

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

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

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

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

Before you begin ERP selection, you should take the time to set realistic expectations and begin developing a project plan. Panorama’s ERP consultants can help you account for all the essential activities required for a successful project.
An Overview of Software Requirements Gathering

An Overview of Software Requirements Gathering

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

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

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


8 Benefits of Software Requirements Gathering

1. Risk Mitigation

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

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

Click to Enlarge

2. Process Improvement

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

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

3. Documentation and Clarity

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

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

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

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

4. Employee buy in

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

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

5. Competitive Advantage

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

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

6. Successful ERP Selection

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

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

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

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

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


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

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

7. Faster Implementation

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

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

8. Understanding of ERP Success

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

9 Tips for Requirements Gathering

1. Understand Your Business Goals

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

2. Involve the Right People

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

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

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

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

3. Develop Workshop Guides

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

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

4. Start With Process Mapping

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

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

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

5. Don’t Forget About Process Improvement

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

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

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

6. Prioritize Requirements

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

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


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

7. Allocate Adequate Time and Don’t Waste it

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

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

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

8. Ensure the Right Level of Detail

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

Sample Questions to Ask About an Order Entry Process

  1. How do we receive orders (EDI, fax, hard copy, phone)? What percentages does each account for?
  2. How many orders do we receive every day?
  3. Who receives the orders?
  4. Are the orders edited?
  5. How many active customers do we have?
  6. How many orders do we receive from new customers?
  7. How many orders fail in EDI?
  8. How many orders cannot be entered without further research?
  9. How long does it take to enter an order?
  10. How many orders fail credit checks, and how long are they on credit hold?
  11. What is our processing time from receipt to shipment?
  12. How many orders have multiple lines?
  13. How many orders can be filled complete on the first pass?
  14. Can we promise ship dates at order entry time?
  15. Can we verify pricing at order entry time and match to the price the customer sent?

Essentially, you want to document the end-to-end processes, including all the handoffs and touchpoints. We recommend organizing processes into swim lanes according to the responsible employee or department.

9. Follow-up

A follow-up session need not be a lengthy session, but it should go through every technical and functional requirement to verify that each was understood correctly. All the same stakeholders should be included, so they can validate that what you put on paper is what they meant.

Business Requirements = Business Benefits

Companies that take the time to define their business requirements before ERP selection are more likely to realize measurable business benefits from their ERP projects.

However, requirements gathering is complex and time-consuming, so many companies forgo it to accelerate their selection. Still, some companies take the time to gather requirements and often hire ERP consultants to ensure a more seamless requirements gathering experience.

Panorama’s ERP consultants take the time to understand your company’s competitive advantages and business goals. We assist in mapping your current state and future state, and we make recommendations from not only your industry’s best practices but also other industries’ best practices.

Most importantly, we ensure ERP vendors understand your list of requirements and ensure they deliver ERP demos that help you select the best solution.

How to Handle ERP Negotiations and Find a Negotiation Expert

How to Handle ERP Negotiations and Find a Negotiation Expert

ERP software can be a multi-million-dollar investment, but companies often don’t invest the same time, expertise and resources into negotiating these deals as they do negotiating other major capital outlays.

This is not to say that companies aren’t concerned about the cost of ERP software or of implementing ERP software, but they do tend to overlook certain cost variables. Companies, often, are most concerned about the obvious variables: software costs, maintenance costs, hourly rates and scope of services.

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While these are all important, they typically are not the things with the most impact on total cost of ownership. Instead, it’s the things lurking beneath the surface that make a difference.


9 Tips for ERP Negotiation

Below are nine tips for identifying hidden costs and negotiating with ERP vendors:

1. Understand Roles and Responsibilities

Some of our clients go into vendor negotiations ready to beat up their vendor on cost. However, negotiating a contract with your software vendor isn’t just about minimizing cost. It’s also about managing risk and clarifying roles and responsibilities.

A low-cost deal isn’t going to do you much good if the vendor has shifted all the risk to you to help get to the desired number. Fortunately, most vendors are willing to negotiate roles and responsibilities.

Here are some questions to ask yourself as you’re reviewing the vendor contract and statement of work:


  • Who is responsible for training end users?
  • Who is responsible for data cleansing and migration? How much historical data will be converted?
  • Who will handle overall project management of internal and external resources?
  • What are the assumptions surrounding changes to the configuration of the software? This is especially pertinent if you have been sold an “industry pre-configured” solution.
  • How many internal resources does the vendor assume you will dedicate to the project?
  • Who is responsible for system testing, business process testing and integration?
  • Who will create system and security profiles in the system?
  • Who will handle Sarbanes-Oxley, FDA, system validation and other regulatory compliance requirements?

2. Understand the Scope of Modules and Functionality

Constant updates to software versions, multiple variations of available modules and disconnects between the demo and proposal cycle can create ambiguities.

For example, not all ERP vendors group functionality within the same modules. While a customer relationship management (CRM) module for one system may include a robust way to convert a lead into a customer with a corresponding order, other systems may require use of an order entry module.

Companies also may experience confusion when sales teams demo one version of a product, while the proposal team assumes a different version of the software without explaining the difference.

3. Consider Annual Maintenance Costs

This is where vendors make their real profit. As such, vendors will usually hold the line on this annual fee, especially if you’ve negotiated an aggressive deal on software licenses.

At the very least, you should remember to include a maximum amount that vendors can raise their annual maintenance fee. Asking if the vendor can hold the price steady for at least three years is a good way to control costs.

4. Don’t Assume the First Offer is the Best Offer

As with any negotiation, vendors typically start by offering software at their list price and reducing from there.

Don’t be afraid to ask your vendor to reduce their software pricing, particularly as it relates to license costs. Vendors typically are flexible in their software pricing because they have several other ways to make money, whether it be through ongoing maintenance, professional services or training.

5. Review the Contract Terms and Conditions

Some common things to look for include payment terms (you don’t want to pay for everything up front), and what happens if you don’t like the vendor’s technical implementation resources.

In general, you want to look for other conditions that can be more advantageous to the vendor than to your company.

6. Don’t Buy More Software Than You Need

One common pitfall is purchasing more software than you need, whether it be in terms of unnecessary modules or too many users. For example, we recently worked with a mid-size manufacturing company that estimated it had purchased $600,000 of licenses that were not going to be used by the company anytime in the near future.

It’s always easier to add to your purchase over time, but nearly impossible to scale back on licenses you’ve already committed to. Even if your ERP vendor is offering you a “once-in-a-lifetime” deal on software licenses, you likely are going to overcompensate for the cost savings by purchasing software you don’t need.

Don’t let these “time-sensitive” discounts create a sense of urgency. Most sales reps will continue to honor discounted pricing after the discount period.

We recommend purchasing what you need when you need it and pre-negotiating the price on future purchases to avoid license cost increases. When we negotiate deals for clients, they’re able to purchase additional licenses, modules or users at pre-defined costs for three years or more.

7. Distinguish Between FUD (Fear, Uncertainty, Doubt) and Reality

One of the most common sales tactics in any industry is to create fear, uncertainty and doubt in the minds of potential buyers. Buyers of ERP solutions face similar tactics, whether it’s being told that only the vendor’s direct professional services group is able to handle the implementation, or that the maintenance contract will be void if a non-certified consultant installs and configures the software.

The key is to understand which messages are real versus FUD. This is a skill that comes with extensive knowledge and experience in the industry.

8. Benchmark Against Other Deals

Here are some questions you can ask yourself to help identify points of negotiating leverage:

  • What is the vendor offering companies that are similar to yours?
  • What are competing vendors offering?
  • Does your incumbent vendor provide some additional leverage via upgrade or migration credits that may put cost pressure on other vendors?

We see too many companies zero in on one vendor without receiving proposals from and conducting an evaluation of other vendors. If you have competing offers, you can ask your preferred vendor to meet the pricing offered by a lower-cost vendor. You also can make concessions based on any functionality gaps or concerns.

9. Consider People and Processes

It’s amazing how often vendors’ project plans do not assign critical project activities to either the vendor or customer but completely omit them.

For example, most change management activities are not included in the project plan, aside from basic end-user training. In addition, business process management is oversimplified to entail the adoption of the software workflows out of the box with no modifications.

We recommend improving and documenting your processes before issuing a request for proposal (RFP). This ensures the vendor understands your unique processes and doesn’t assume you’ll implement everything out of the box.

While this tip may seem unrelated to traditional contract negotiations designed to pinch project costs, the long-term cost savings of realistic expectations can be just as significant as the direct cost savings you negotiate.

You don’t want to come out of negotiations thinking you’ve scored a great deal only to find you’ve merely shifted your costs to other budget categories, incurred greater costs in the future or elevated your implementation risk.

With that said, companies should not enter into fixed-cost contracts without completely understanding them . . .

The Unintended Consequences of Fixed-cost Contracts

On paper, it’s a brilliant idea: 100-percent cost predictability and shifting the risk from your own company to your ERP vendor. However, fixed-bid contracts have some potentially disastrous consequences that are even more destructive than the problems they were intended to address.

In our experience serving as software expert witnesses for many failed ERP projects, we have found that fixed-bid contracts are often the root cause of ERP failure. It’s never a good idea to enter into a fixed-cost contract without fully understanding the costs and risks.

Here are three consequences of entering into a fixed-bid contract with your ERP vendor or systems integrator:

1. Incentives are Misaligned

In fixed-bid arrangements, you know exactly what you’re going to pay, but you’re not always getting what you need to make the project successful. In fact, the vendor is financially incentivized to provide a bare-bones scope and provide cheaper, less experienced resources.

2. Your Company Takes no Responsibility for the Project’s Success

Executives typically don’t understand the complexity and magnitude of a successful ERP project, so they lean on their ERP vendor to guide them. However, only internal executives and management team members can provide the direction, resources, operational decisions and oversight required to make an ERP project successful.

In fact, the way the non-technical aspects are managed will ultimately determine the success of your project. These non-technical aspects include activities such as business process reengineering and organizational change management. No vendor is going to magically improve your processes and gain employee buy in without involvement from your executive team.

3. The Fixed-bid Buffer can be More Costly Than Managing Time and Materials

When we advise clients in their ERP software selection initiatives and contract negotiations, it is rare to see vendors fix-bid a proposal without including a buffer – often ranging from 30- to 40-percent. In other words, they will take their estimated time and hourly rates and add a buffer to insulate them from the risk of overruns.

In addition, as noted in point #1, they will at the same time reduce their scope, leaving more the more costly and time-consuming activities for the client to manage.

At the end of the day, this doesn’t reduce cost, it simply shifts costs from the vendor to the implementing company. To add insult to injury, most companies don’t fully understand the magnitude of the costs being shifted from one party to the other, so they end up having extremely unrealistic expectations.

Are Fixed-bid Contracts Always Bad?

You can definitely leverage the potential benefits of fixed-cost contracts without running into the challenges outlined above. Here are some tips for making the most of fixed-bid contracts:

1. Ensure You Have a Solid Contract Review and Negotiation Process

The fine print and details around scope and responsibilities of each party in the contract can be the silent killers of an ERP project, so make sure you have an experienced team helping you. Investing in this due diligence early on ensures you have realistic expectations of what it takes to get your ERP project done right, rather than cheaply and quickly.

2. Invest in Project Auditing

Independent ERP consultants, like Panorama, can ensure you are tightly managing scope, milestones, budget and vendor activities. Our project auditing services will help you maintain an on-time and on-budget project.

3. Don’t Forget About the Non-technical Aspects of Your Project

This is true of any ERP project, but it is especially true for fixed-bid engagements. Make sure you’ve designated enough time and resources for business process management and organizational change management. Odds are your vendor will not include these in their scope.

Qualities to Look for in a Software Sales Rep

The overwhelming majority of ERP vendor sales reps are good people. In fact, it’s in their best interest to give you a good rate because the idea behind making a sale is to turn you into a long-term customer. Vendors want long-term revenue streams that are predictable.

How do you tell if your sales rep is one of the good ones? Look for the following signs:


  • Sells you the modules you absolutely need and never encourages you to purchase everything at once
  • Includes hardware costs, project resources, integration, customization and other hidden costs in the total cost of ownership
  • Includes all critical project activities in proposal and contract
  • Estimates a deployment time based on the scope of all critical project activities
  • Knows how to differentiate between processes that add value and competitive edge to your company and those that don’t

What is Your ERP Consultant’s ERP Contract Negotiation Methodology?

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

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

1. Strategy Development

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

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



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

2. In-depth Price Comparisons

You may have found that vendors’ quotes are not easy to compare. As such, the most valuable deliverable an ERP consultant can provide is a negotiation workbook showing apples-to-apples comparisons of your top contenders.

This is valuable because there is no universal standard for how ERP software solutions should be priced. For example, some vendors price their software with named users, while others price with concurrent users.

Apples-to-apples comparisons are also helpful due to the fact that vendors’ statements of work make various assumptions, such as:

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

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

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

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

3. Total Cost of Ownership Analysis

A long-term view of cost is just as important as a short-term view. The ideal ERP consultant will provide a three-year total cost of ownership analysis – or use whatever timeframe makes sense for the length of your ERP implementation.

This analysis should be included as part of the negotiation workbook. The analysis considers factors, such as:


  • Payback Period – Panorama clients typically recoup the cost of their ERP project within three years.
  • Benefits Realization Timeframe – Panorama clients typically realize full ERP business benefits from out-of-the-box functionality within 9-12 months of go-live.
  • Deployment Model – Most ERP vendors encourage a cloud-hosting model and a SaaS licensing model. If you’re considering SaaS licensing, you may incur escalating annual charges for additional functionality, data or transactions.
  • Licensing Structure – The number of users and types of users will affect your cost if you choose a user-based pricing model. Many ERP vendors underestimate the number of users to make their system seem less expensive.
  • Implementation Approach – Will you use a phased, big bang or hybrid approach? If phased, will you phase per function or per module? Make sure your ERP vendor doesn’t expect you to buy all licenses upfront.
  • Software Costs vs. Service Costs – You should aim for a ratio of 2:3 for software costs to service costs.
  • Software Configuration – How long will it take you to configure each of your business processes? Are there any process dependencies (processes that need to be set up before other processes)?
  • Resource Rates – Panorama clients typically pay $175-225 per vendor resource. If you negotiate this too low, you may end up with rookies on your ERP project team.

4. ERP Negotiation Guidance and Coaching

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

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

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


It’s not easy finding an ERP consultant that focuses on all four of these activities. Panorama is one of the few that does.

If you’re not convinced these activities will save you money, take a look at these case studies:

  • Panorama recently negotiated more than $15 million in savings on licensing costs alone for a large, multi-national client.
  • Panorama negotiated cost savings for a client that could not afford their top-choice vendor and was about to settle for their second choice.
  • Panorama saved a city government more than $500,000 in negotiations. The vendor was able to provide a lower price due to well-defined ERP requirements and expectations.

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

Engaging Panorama to assist with vendor negotiations will help you lower your total cost of ownership and mitigate risk.

Ensuring ERP Demos Address Your Company’s Unique Processes

Ensuring ERP Demos Address Your Company’s Unique Processes

At a glance, organizing ERP demos can seem like a simple task – find a system that seems to fit your needs, call the vendor and have a representative conduct a demo. By following this method, you are guaranteed to see several impressive software solutions, but you are not likely to find one that truly fits your needs.

While ERP vendors may genuinely believe they have the best ERP solution for your company, it is the responsibility of the ERP project team to read between the lines. In addition, your employees should provide input as to which ERP systems best fit your company’s processes and digital strategy.

The best way for employees to provide this input is by attending software demos and providing quantitative and qualitative feedback. Your company should schedule a demo for each of the enterprise resource planning systems on your vendor shortlist and invite employees from every affected department.

SAP vs. Oracle Case Study

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

With the right methodology and independent guidance, you can organize ERP demos that help your company narrow down its vendor shortlist. Based on our client experience, we have provided several tips for preparing for and conducting effective software demos:

How to Prepare for an ERP Demo

Like most things in life, the more prepared you are for something, the better the outcome. That same principle applies to conducting a successful ERP software demo.

1. Prepare Your Processes

Reengineer Your Processes

Conducting business process reengineering prior to scheduling software demos will help you maximize ERP business benefits. You don’t want to simply pave the cow paths of what has worked in the past.

For example, if your company needs access to real time data to improve the customer experience, you’ll want to design processes to support this. These new processes then translate into business requirements, which help you evaluate the business intelligence functionality of various ERP systems.

Prioritize Your Business Requirements

Determine which processes give your company competitive advantage. These processes determine your highest priority ERP requirements and should not be standardized. While standardization in areas such as financials is usually advisable, areas like customer service should be protected from standardization.

High-priority requirements should meet two criteria: 1) They provide competitive advantage, and 2) They represent functionality that differentiates between different ERP systems.

While most organizations have a decent sense of what requirements meet the first criterion, they don’t have the internal knowledge base to address the second criterion. This is where independent ERP consultants are useful, as consultants like Panorama have extensive experience with a variety of ERP systems.

For example, many of our clients want to understand the difference between different systems’ inventory management and supply chain management functionality. We help them understand some of the differentiating factors, such as artificial intelligence and IoT.

2. Prepare the ERP Vendor

Explain Your Company’s Business Requirements

ERP demos are the finale of the requirements gathering process. You spent countless hours gathering business requirements, so make sure the ERP vendor understands them. This is important because an ERP vendor can’t demo what they don’t understand.

A vendor shouldn’t have to ask clarifying questions during the demo, so be sure they have access to subject matter experts long before the demo.

You should also create detailed business scenarios and ask vendors to run through the same processes in the same amount of time. This allows for apples-to-apples comparisons.

Provide a Demo Script

We’ve all attended software demos that are more generic sales pitches than personalized and relevant presentations. Some sales reps are especially skilled at selling their software’s “best practices” as one-size-fits-all functionality.

The key to finding the functionality best suited for your unique processes is creating a demo script based on your business requirements. If a vendor refuses to follow the script, consider it a red flag.

Your script should include a section that allows employees to see data move from the beginning to the end of a process. For example, if your demo is specific to showing the creation of a quality order, employees may want to see how the order is executed, how the variables are set up and how goods are quarantined when they don’t pass quality criteria. While these peripheral processes might not be the main objective of the demo, employees need to understand the full context. 

You’ll also want to ensure your script specifies that reporting work streams should be demoed alongside functional work streams. This gives employees a holistic view and gets them thinking about reporting requirements for implementation.

While a script is useful, you can’t predict everything employees will want to see. Employees may be eager to see a particular feature even it isn’t scheduled to be demoed. This impromptu demo request can be met if the right configurations are in place and the relevant data exists. 

Provide Data

Speaking of data, you’ll want to provide demo data to vendors, so they can demonstrate specific processes requested by employees. For example, the vendor’s existing demo data may be suitable to demonstrate typical manufacturing industry processes, but if your company is a car manufacturer it may not strike a chord if they are shown the quality management process for a batch of soda.

When a vendor createa data on the fly, this can derail a demo. Employees could become distracted, for instance, with the creation of a production order when the demo is about the quality management process.

Set Expectations

You should provide vendors with specific meeting times and a detailed agenda. Don’t let a vendor control the pace of your evaluation process by requesting to demo last or at a later date.

In our engagements with clients, we typically have the vendors spend the first hour of the day with subject matter experts addressing cross-functional requirements. This ensures vendors don’t waste time on these dashboards and workflows during the functional sessions.

Ensure an Adequate Number of Demo Staff

Having an extra demo resource who can illustrate actions taken by different roles can help employees visualize how the ERP system can pass data between different roles to accomplish a process. An extra demo resource can also be useful if the vendor needs to create impromptu demo data.

3. Prepare Employees

Be Informative

Provide information, such as the demo script and agenda, ahead of time, so participants have adequate time to plan for their absence within their departments.

Provide Guidelines

Oftentimes, ERP vendors steer away from the demo agenda to showcase special features, so participants must be trained to recognize this. Additional features that are not relevant to your requirements, should not be factored into participants’ final scores.

Another scoring guideline you’ll want to address is the importance of basing scoring on business requirements. Participants should evaluate ERP software based on requirements as opposed to vendor performance. When all is said and done, your daily life will revolve around the software, not the best performing vendor.

In addition, attendees should be instructed to be on time and attend the same sessions for each vendor. If participants aren’t consistent with attendance, they can’t provide reliable scoring. Our clients typically provide participants with scoring sheets based on demo scripts, so they can write comments as they go. This helps jog their memory when inputting their scores digitally.

5 Tips for Organizing Software Demos

1. Focus on the Goal

If you set expectations upfront, you are now in position to table questions that are not aligned with the goals of the demo. While you should be prepared to show certain features that are peripheral to your main objectives, you should also remind your audience of the expectations. After all, ERP software is too vast to demo every single feature.

2. Designate a Timekeeper

Once a demo starts to venture off track, it becomes difficult to make up for lost time. A demo that runs over schedule allows little time for questions and answers. While Q&A can always be conducted remotely, it’s most effective in person, so be sure your timekeeper alerts the room when it’s time for questions.

3. Develop a Method to Analyze Results

Feedback from participants must be recorded in a way that the project team is able to analyze afterwards. Make sure that everyone understands what each score represents and that you have a solid analysis process established to analyze the data.

4. Schedule Multiple Demos

It is important to schedule at least two to three ERP demos to give participants a chance to compare systems. Only demoing one software and making a decision by default does not ensure a best fit.

5. Leverage Several Data Points

While demos are a good starting point to help you evaluate long-list vendors, keep in mind that this information is provided by biased sources that have a vested interest in nudging you toward selecting their software.

In order to neutralize or validate any biases, it is important to leverage other data points from independent sources. For example, Panorama provides a number of free and unbiased data sources to aid your ERP selection process, including our 2019 ERP Report and 2019 Clash of the Titans Report.


A lot of prep work goes into guaranteeing successful demo sessions and a successful ERP selection. Panorama’s ERP consultants can assist your team in gathering requirements, preparing demo scripts, analyzing demo scores and assisting in all of the other activities outlined above.

How Artificial Intelligence Improves ERP Software

How Artificial Intelligence Improves ERP Software

While artificial intelligence (AI) is a relatively new technology, it has already demonstrated its disruptive potential and created a buzz in the software market. In fact, according to Gartner, as much as 80% of emerging technologies will have artificial intelligence as a key component by 2021.

Artificial Intelligence Within ERP Systems

AI allows ERP vendors to improve ERP systems using machine learning and natural-language interfaces. The AI in ERP systems provides actionable data insights enabling companies to improve their operational efficiency.

A good example of an AI-driven ERP solution is SAP Leonardo, which includes a number of microservices integrated with a cloud platform. Oracle also has introduced a number of AI-based tools for its ERP solutions, including digital assistants, advanced access and financial controls, and smart supply management.

SAP vs. Oracle Case Study

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

Another example of an AI ERP solution is Coleman AI from Infor. You can ask this bot to suggest the next offer for a certain customer, create a requisition for a particular item and help you with many other tasks.

9 Ways AI Improves ERP Software

1. Advanced Analytics

AI’s ability to work with massive amounts of data enables real-time, accurate data insights. For example, AI can analyze the buying behavior of different categories of customers, enabling you to tailor your products or services to the needs of a certain audience.

2. Warehouse Management

Artificial intelligence can test countless demand forecasting models with precision, adjusting to different types of variables, including changes in demand, supply chain disruptions and new product introductions.

For instance, BMW uses learning algorithms to track an item from the manufacturing stage until the moment it’s sold, monitoring 31 assembly lines in different countries.

3. Forecasting

AI-driven solutions can process historical data and make predictions for the future. These tools identify seasonal patterns in your business, offering suggestions on whether you should decrease or increase production.

Not only does AI reduce the costs of forecasting, but it also makes forecasting much more accurate. You can significantly reduce the risk of underproduction or overproduction, when you manufacture the right amount of inventory.

4. Financial Management

AI can automate quarterly and monthly processes and closing operations by verifying reports for accuracy and comparing account balances between independent systems.

For example, AI can categorize invoice data into different accounts and discern the difference between a phone purchase and a monthly phone bill.

5. Interdepartmental Processes

Connecting sales, inventory and accounting is not an easy task. However, AI is not afraid of massive amounts and various types of data, making it the perfect solution for creating a centralized platform.

6. Customer Service

If your company does field service, AI can use information about performance evaluations and employee qualifications to schedule service calls and assist with planning.

7. Production Processes

When integrated with an ERP system, AI can detect inefficient processes and suggest a solution that will cut costs.

AI also can identify processes that use too much energy. It enables predictive diagnostics, minimizing the waste of resources.

8. Human Resources

Another advantage of AI-enabled ERP software is that it can be proactive. For example, it can detect what employees need a raise. In addition, it can analyze data on the skills and experience of applicants, expediating the recruiting process.

9. Sales Automation

Chatbots powered by AI not only help customers but also conduct the whole sales triangle. Now, bots can cope with segmentation and provide responses in real time.

Should You Select an ERP System With AI Capabilities?

While ERP systems have always been able to integrate various functions within an organization, AI takes this integration to the next level. It does this by analyzing large amounts of data, making predictions and suggesting next steps.

Panorama’s ERP consultants can help your company select an AI-enabled ERP system that increases your operational efficiency and improves your customer experience.

About the Author
Ester Brierley is a competent QA Engineer in a software outsourcing company. Also, she is a virtual assistant and a seasoned content creator for College-Writers, and knows the secret for balancing freelancing and her full-time job.

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.

ERP Data Migration and Cleansing Tips

ERP Data Migration and Cleansing Tips

What’s one of the most important questions to ask before beginning ERP implementation?

Is our data clean?

If your answer is no, you’re not alone. Most companies have data spread across multiple platforms and formatted in various ways. Our advice to these companies is to cleanse and import data before implementation to ensure their ERP software delivers accurate, real-time data. Proactive data migration also ensures minimal downtime at go-live and reduces the duration of operational disruption.

2019 ERP Report

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

However, ERP data migration is easier said than done. Most ERP vendors do not take responsibility for data migration or cleansing because it’s extremely costly. Therefore, your ERP project team must take on this responsibility.


5 Ways Data Issues can Cause ERP Failure

The perfect analogy to describe what an ERP system’s function is for a business is the heart to a human body. If the ERP system is the heart, then data is the blood moving from one part of the business to another – all flowing from and returning to the ERP system.

When data issues exist in your system, there are several ways this can cause ERP failure. Like the importance of blood in the human body, data cleanliness and integrity are essential for a successful ERP project.

Unfortunately, many ERP vendors exclude data migration from their deliverables. As such, it’s not surprising that 41% of respondents in our 2019 ERP Report reported that data issues caused their ERP project to run over-schedule. We also have seen data issues contribute to budget overruns.

So, how do data issues slow down an ERP implementation and propagate unexpected costs?

1. Your Integrations can Fail

If your business operations rely on partner data, such as shipping information, gift card balances or currency exchange rates, you probably have a few integrations to your enterprise resource planning system. When the data being passed back and forth between your ERP solution and a third party is unclean, it can cause your integrations to fail.

For example, let’s say your shipping methods are “Next Day” and “Standard Ground.” However, your shipping carrier has methods called “Next Day Air” and “Next Day Air Freight.” If your ERP system’s data is too specific (or in this example, not specific enough), the carrier might send back data that your system cannot accept. This will cause any records attempting to be created to error out. Your integration might attempt once more to create the failed records, and the cycle repeats itself. This can cause system performance to decrease and can slow down your ERP implementation process making it run over-schedule. Even though you’ve already gone live, the project recovery process still counts toward your total implementation duration.

We help companies avoid integration issues by preparing them for data conversion before implementation. This preparation involves developing a data strategy, defining the scope of data conversion and determining a data conversion approach.

2. ERP System Performance can Slow

Whether it’s from integrations attempting to repeatedly create records or from batch jobs running and erroring out, bad data can take a toll on your ERP system’s resources. This system lag can be amplified if your transaction volume is large, like during peak times in your business operations.

For example, data issues can cause a batch job to error out. Let’s say that your business runs both its master planning operations and point-of-sales operations through the enterprise system. Master planning is a system-intensive process as it accounts for many different variables like current sales, future orders and current stocking levels. For your point-of-sales operations, your registers and the ERP system need to communicate via a series of batch jobs to push the data back and forth.

If some of your future orders don’t have dates on them, the master planning job can error out. Your ERP system will continue to run the job, allocating more resources to it to balance the load. If your point-of-sales batch jobs start running at the same time, there will be minimal resources allotted to those jobs. As a result, cashiers may experience slower response times or no response at all.

Returning to the analogy of ERP software as the heart of business operations and data as the blood, when a person has a blood clot or blockage, the heart must pump even harder and expend more energy to deliver blood to the body. Sometimes, this can be fatal to a human body (or to a business).

3. Your Customer Satisfaction can Take a Hit

When your system has data issues, your customers notice. This is a data issue that has several prime examples. Consider a returning customer shopping online on your e-commerce site. She wants to buy running shoes to break in for a 5k she is running at the end of the month. She can’t remember what size in your brand fits her, so she looks up her order history to see what size she ordered in the past. Using her name and email she attempts to recall her profile, but the ERP system has duplicate records for her.

Let’s say the customer remembers her size and is ready to order. She checks the inventory levels that your site displays because a quick delivery is a key factor in her buying decision. The product seems to be in stock, so she makes the purchase.

However, it turns out the inventory levels displayed on your site were incorrect because of bad data in your system – your customer will not get her order for another two weeks. If you put yourself in her shoes, would you be a repeat customer?

Once a customer loses trust in your system’s data integrity, it’s nearly impossible to get it back. Consumers today rely on social media and review sites to determine where to spend their money. Disgruntled customers are more than happy to share their unpleasant encounters with the world, preventing you from gaining new customers without even interacting with them.

Improving the customer experience is an important business benefit for many companies. However, some companies do not cleanse their customer-facing data before migration. We recommend discussing data with all departments, so you can understand the various data sources and entry procedures.

If your business hopes to improve the customer experience, you should outline this goal before ERP selection so you can align every component of the project around this goal, especially the data component. Our ERP implementation methodology focuses on organizational alignment as this ensures the ERP software (and its data) support the organization’s goals.

4. Your System can Become Corrupted

Invalid data can cause your ERP system to become corrupted. Whether the data is invalid from a user error or from an automated system update, bad data can wreak havoc on your ERP system and cause functionality to behave unexpectedly.

For example, let’s say your business captures physical dimensions for products in various units of measure. You sell milk in liters and cheese in kilograms. Your ERP system has two item groups – one for liquids and another for solids. If your products are mistakenly assigned to the wrong item group, your cheese could be sold in liters, costing you money by charging much less than the quantity provided is worth.

This single mistake of assigning the wrong item group can cause a chain of downstream issues. When goods are shipped, the system may prompt the user to capture the weight in liters. As a result, all customer- and vendor-facing documentation may display orders for cheese in liters, making it confusing and even a little embarrassing to correct your ERP system’s data mistake.

5. Business Users can Make Bad Decisions

Arguably, the biggest failure that data issues can cause is allowing users to make key business decisions based on bad data. When users believe the system is correct, they don’t hesitate to order ten dozen more corrugated boxes because the warehouse inventory says they have zero on hand.

With bad data being the foundation of user decisions, inventory can be depleted or inflated. The same check to a vendor could be cut twice or not at all, causing your account standing to be damaged. Customers on an “opted out” list could be accidentally emailed by your marketing department and your company could be the target of a lawsuit. While some of these examples sound dramatic, they can be a reality if your ERP system is receiving or pumping out bad data.

Along these lines, once your business users distrust the data in the system, they will forever second guess your ERP system’s accuracy. For example, if a human resources manager denies a pay increase request for an employee because the data in the system says there is no budget, the employee might leave the company. If the human resource manager finds out later that the budget was incorrect, he or she might lose trust in the system’s data integrity.

In some companies, users distrust the data so much that they do their own data validation before making a decision, like exporting data into Excel and doing their own data massaging. This extra step of data validation outside of the system can cause inefficiencies in business processes and lead to low benefits realization.

Our ERP consulting services focus on change management during the data migration process. Designating process owners and data owners not only increases system buy-in, but it improves data integrity as these “owners” are accountable for ensuring data cleanliness and reliability.

11 Data Migration Tips

1. Assign Responsibility for Data Cleansing

There is a general misconception that the IT team can handle all the data cleaning. While there is data cleansing software, these packages can only help identify potential areas to be cleansed.

Someone still needs to know, for example, out of two different address records for a company, which one is correct. Also, someone knowledgeable needs to verify that a closing balance is in fact correct.

In most cases, the person who should cleanse these records is not in the IT department but is within the specific department that owns these records. These are called data owners, and they are critical for establishing standards and guidelines to maintain quality data.

IT staff should assist data owners by identifying the data flow, integration points where the data is being updated and what data sources exist.

Examples of Data Needing Cleansing

  • Duplicate customer or supplier accounts
  • Master data that isn’t classified with a common taxonomy
  • Blank description fields for products
  • Old product codes no longer in use
  • Data for a customer that has gone out of business
  • Critical data in Excel that is not in your system of record

2. Remove Duplicate Data

Duplicate items can be identified in two main ways: 1) Direct duplicates include two or more items possessing the same manufacturer name, part number and description. 2) Fit-form-function duplicates include two or more items that possess different manufacturer names and part numbers but have the same fit, form and function.

3. Don’t Migrate All Your Data

Companies continue to persist in the idea that they can migrate all the data from the legacy system over to new ERP software, and the software will somehow magically scrub and standardize it. That’s just not the case.

If you’re moving to a new house, would you put trash and clutter in the moving truck? Probably not, so when you’re moving to a new ERP system, you don’t need to bring over every single piece of data. Some of this data is unclean, unnecessary or pure junk.

The more useless data you bring over, the harder time you will have finding the data you really need, which can delay go-live.

Companies tend to hoard data, believing that someone, somewhere down the line just might need that one nugget of information. An ERP project is a great opportunity to clean house.

4. Determine What Data to Migrate

This can depend on what industry you’re in and your forecasting needs. Determining what data is important should be a collaborate effort that involves all departments.

5. Determine Resource Requirements

You will need developers to convert data and data owners to review and cleanse data. In addition, you may need executives to review certain types of data. Most likely, this will include data elements that relate to the core of the organization’s culture. These may be items your organization has avoided because they seem too hard to address.

Other resources you may need include resources for change management and business process management as you likely will need to train employees on how to input, manage and analyze data once the new system is implemented.

6. Consider Industry Regulations

Different industries have different regulatory requirements. For example, some regulations restrict the ability to change and/or export certain kinds of data records, such as HIPAA with electronic medical records.

You should carefully consider your method of data cleansing (e.g., in-system vs. Excel) if your company has industry-specific regulatory requirements.

7. Consider the Data Complexities of Global Projects

In global ERP projects, you’ll encounter different systems speaking a variety of ERP languages layered on top of cultural and language differences. It is vital to identify these complexities early and communicate to your project team where you see the need for executive decisions. This will eliminate slow periods in the data conversion, allowing developers to stay engaged.

If your project is global, you also will need a signed document from the executive steering committee stating who is responsible for data at the global, regional and country level for both master and transactional data.

8. Define Taxonomies and Attributes

Most ERP systems use some sort of taxonomy to classify items. Master records must be classified correctly, completely and to a level of detail that makes the record easy to identify for search and reporting functions.

While it is not necessary to choose one particular taxonomy, it is necessary to have a taxonomy that supports your company’s business initiatives. Therefore, you should ensure your ERP consultant has experience with taxonomy selection and deployment.

Item record attributes play a similar important role. Attributes define the item and are important for successful parametric searches. Incomplete or incorrect attributes prevent items from being found, resulting in proliferation of parts and bloated inventories.

To ensure a successful ERP data migration project, we recommend extracting, normalizing and completing item attributes beforehand. Because of the sheer volume of attributes to be extracted and enriched, an automated approach is the only practical way to execute this.

9. Develop New Processes

Once the initial data cleansing is complete, you will have more data to cleanse – unless you ensure employees adopt new processes that enable data accuracy. Even though these processes may be designed for legacy systems that will soon be retired, these processes are still worth developing. Consider the fact that most ERP projects last years. Can you endure two more years of dirty data?

We recommend that companies redesign their business processes and train employees both for the future state and this interim state. Both business process reengineering and organizational change management play a critical role in maintaining data cleanliness.

10. Test Before Migrating

Discover if you’re on the right track with your data by moving data to test environments. This will be time consuming and typically requires the development of unique code. Don’t make the mistake of leaving it until the last minute.

11. Use Your Data to Make Business Decisions

With your data migrated, your new processes established and your employees on board, you can almost breathe a sigh of relief – but not quite yet. Now, you must figure out what to do with your data insights.

Companies that have their eye on realizing business benefits from their ERP systems tend to address this issue early with change management and business process management. Knowing that an ERP software solution will enable increased data visibility, forward-thinking companies take advantage of this benefit by establishing data analysis processes. These companies also spend time training employees on these new processes.


Data migration is not usually a priority at the beginning of an ERP project. Instead, the focus is often on planning and design, while data migration is a muddled topic that people tend to avoid.

When companies avoid or delay data migration, their new system will provide unreliable data leading to technical challenges, customer dissatisfaction, low system usage and low benefits realization.

While data migration and cleansing may add cost to an already expensive ERP project, the effort will pay for itself almost immediately through the identification of excess inventory, reduced equipment downtime and improved data insights.

Panorama’s ERP consultants can help your organization develop a data migration strategy that ensures your ERP software provides reliable data to all stakeholders from the minute it goes-live until it’s retired.

5 Tips for Prioritizing ERP Requirements

5 Tips for Prioritizing ERP Requirements

When your organization decides to implement a new ERP system, it can be an exciting time for employees. There is hope on the horizon that the tedious workarounds or functional gaps within the current system will be replaced with a better and more advanced system.

It’s likely that your employees started making wish lists as soon as you announced the ERP project. These wish lists will continue to grow until someone (likely project management) reminds the team of the project constraints.

Anyone experienced in organizational change management will tell you that excitement around a new ERP implementation is a key success factor in user adoption. While turning away employees’ wish lists due to budget or time limitations may dampen the excitement, you also must control project scope.

2019 ERP Report

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

So, how do you implement a new ERP solution while ensuring both project feasibility and employee engagement? The answer is prioritization of ERP requirements before ERP selection.

Prioritizing ERP software requirements may sound like a simple task, but when all parts of the business believe their functional requirements are the most important, you may find yourself in a stalemate. Luckily, there are several strategies you can use to help your team reach a consensus and ensure a successful ERP project:

1. Clarify the Project Goals and Scope

You may be familiar with the “project management triangle” or “triple constraint” where scope, time and cost are depicted on each corner of a triangle with quality in the center. Usually, before an ERP project has begun, all three of these constraints are already decided. While time and cost are easy to quantify as the project progresses, scope can run amok – especially when it comes to meeting business requirements.

It’s because of this scope ambiguity that project kick-offs are important. With all team members (business users, analysts, ERP consultants, stakeholders, etc.) present, you should clearly define the business objective of the project and identify items that are definitely out of scope.

The goal of your project could be as simple as moving off your legacy system due to end of support or as complex as overhauling your e-commerce experience to modernize your customer service. Whatever your goal, make certain that all team members understand it, as this will minimize the amount of non-critical business requirements that arise during ERP requirements gathering.

2. Define Baseline Business Processes

Identifying the business processes that will be impacted by the ERP project helps you define project scope. In addition to identifying these processes, your team should document them as they exist in the current system. This will help establish a list of minimum requirements needed to keep the business operating.

When documenting business processes, the ERP project team should focus on business needs and not confuse current system limitations with what is truly needed. This is not the time to define future state processes but just to listen to employees’ needs.

3. Improve Your Processes

If you need to increase efficiency, break down silos or achieve another important business benefit, then business process reengineering is your new best friend. We recommend conducting business process reengineering before considering standard ERP functionality. Why before? It’s because functional areas that bring competitive advantage – such as customer service or supply chain management – should not be standardized.

Once you’ve improved the processes that differentiate your company from competitors, you can begin looking at ERP functionality. This will help you determine how to improve processes that may need to be standardized. These might be processes related to finance or human resources.

While differentiated processes should not be standardized, this is not to say that standardized processes can’t bring competitive advantage. In fact, ERP vendors spend countless dollars and hours refining system capabilities to meet the most frequently asked for features to appeal to the widest customer base. Taking advantage of a process recommended for your industry can help you to stay competitive.

4. Perform a Fit Gap Analysis

Now that you’re looking at ERP functionality, you can perform a fit gap analysis. This helps you identify where a new system fits your company’s requirements and where it doesn’t. Basically, for each requirement gathered, you should determine if each ERP system on your long list can meet the requirement natively (fit) or requires a modification (gap).

Requirements that are considered “fits” and can easily be configured are usually no-brainers when it comes to priority. Fit requirements that involve some additional effort, like a data conversion for example, can also be prioritized as these are usually easy wins for the project team.

Gap requirements, however, should be put lower on the priority list. Having a long list of gaps makes prioritization challenging, so you may want to weed through the erp requirements list to determine if the system can support these requirements in a different way than anticipated.

If there are any remaining gaps, you can justify these gaps by conducting a cost analysis. Here are some questions to keep in mind when justifying gaps:

  • What is the business impact if this requirement is not met?
    • Additional labor requirements?
    • Dollars lost?
    • Customer satisfaction impact?
    • Compliance issues?
  • Will this impact the project timeline?
    • How many hours are required?
    • Does the project have the appropriate resources to complete the work?

Based on this analysis, a cost can be associated with each gap requirement to determine if it can remain as a lower priority.

5. Classify Business Requirements

Now that all valid requirements are on the table and the gaps have been justified, the project team can classify each requirement into one of three categories: must have, value added and nice to have.


Any requirement that falls into this bucket is mission critical. Classifying a requirement as a must-have, signifies that the business cannot operate without it.

The dollar amount determined during the cost analysis of this requirement should be subtracted from the project budget since it is assumed this requirement will be met. Continue to subtract from the overall budget as requirements fall into this category as seeing the dollar amount decrease will help the team keep perspective as to which requirements are really a priority.


Value-added requirements are not mission critical. However, requirements that fall into this category could greatly enhance the business.

For example, let’s say your project mission is to simply replace the legacy system with new ERP software. As such, you are not designing new business processes that don’t already exist in the current system. If the current system does not have the ability to send customers an email when their online order has shipped, then this requirement is not technically within the project scope and is not a must-have requirement.

Considering that email confirmations are pretty standard in the e-commerce industry, meeting this requirement could add a lot of value to your company if you operate within this industry. That’s why this is an example of a value-added requirement.


Requirements that are classified as nice-to-have are often addressed in a later phase of the project. These types of requirements are those that are neither mission critical nor add a great amount of value to the business.

For example, a business user might want the ability to request a report that identifies the amount of late deliveries per vendor. While this data is readily available in the system, the user wants a report that provides a summary view. This would be considered a nice-to-have requirement.

When classifying requirements, we recommend keeping the project budget, timeline and scope top of mind. Also, it’s important to ensure collaboration among all departments and stakeholders, so you have a well-rounded perspective on what the business should prioritize.

What ERP System Fits Your Company Best?

The only way to answer this question is to prioritize your business requirements. This calls for organizational alignment around project goals, a clearly defined scope and, more often than not, process improvement.

Panorama’s ERP consultants are experts in business process reengineering and software selection. We can help your company find an ERP software solution that meets your highest priority requirements as well as several value-added and nice-to-have requirements.  

How Much Does it Cost to Implement an ERP System?

How Much Does it Cost to Implement an ERP System?

If your company is beginning ERP selection, you’re probably thinking a lot about cost. How much does system A cost compared to others? Does this fit within our budget? As important as these questions are, they miss the bigger picture – the total cost of ownership. In other words, how much will the implementation cost in addition to the cost of the technology itself?

A company’s unrealistic expectations regarding total cost of ownership is often the first domino to fall in an ERP failure. This leads to failure because companies end up cutting corners on activities that are critical success factors.

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Inaccurately estimating ERP project costs is more common than you might think. In fact, ERP vendors typically outline a one-dimensional estimate of implementation costs. These estimates often fail to include hidden expenses, like internal resources, external consultants and hardware upgrades.

Further, a software vendor will usually estimate implementation costs to be a 1:1 ratio between software licenses and technical implementation costs. This technical implementation cost is woefully low for most companies.

So, why do vendors make such low estimates? Sometimes, sales reps are trying to lowball their estimates to get the deal closed. Other times, sales reps do not truly know the costs required to make an implementation successful.


Common ERP Project Costs

Below are some common project costs, beyond the cost of the software itself. We recommend carefully quantifying these costs before investing in ERP software, so you can accurately weigh ERP business benefits vs. costs.

While these are not all the costs associated with an ERP project, they are the ones that are most likely to be overlooked during the budgeting and planning process.

1. Change Management

Many companies assume that the ERP vendor or systems integrator will handle this, but many don’t. Those that do, still require involvement from your internal employees.

Training, for example, is one component of organization change management that requires internal resources. Vendors and systems integrators will typically train the internal core team on how to use the “vanilla” software, but rarely customize the training to reflect the company’s unique software configurations and customizations.

As a result, your internal ERP project team must take charge of training activities. Not only should they customize training materials for software configurations, but they also should customize them for employees’ unique business processes.

In addition, there are a host of other change management activities that the internal ERP project team should be responsible for, including communication planning, business readiness assessments and focus groups, to name a few.

2. Business Process Management

Enterprise resource planning software presents an opportunity to standardize your operations across multiple locations and redesign processes that need improvement. This requires internal time and resources.

Don’t assume that the software will provide all the answers on how to run your business. Instead, recruit an internal team to help design your future state.

3. Resources for Backfilling

This might include contract or other employees you hire to manage the day-to-day activities of project team members who are no longer able to commit to their usual jobs.

4. Hardware and Infrastructure Upgrades

It is rare that an organization can implement a modern ERP system without a modern IT infrastructure to support it. Servers, databases, bandwidth, PCs and other components of an organization’s IT infrastructure often need to be upgraded to support the new enterprise system.

In addition, IT staff often need to be augmented with additional resources, training or outside consulting to support the new environment.

These costs are significant. Many companies implement cloud based solutions to save money on resources and infrastructure.

5. Longer Than Planned Implementation Duration

Given the amount of resources, time and money dedicated to an ERP project, even the slightest delays will affect the budget. To avoid delays, be sure your project plan includes overlooked activities, like requirements gathering, system design, testing, ERP data migration and interface development.

How to Scope Your ERP Project

Your project scope directly influences your project budget. While many organizations scope their project based on number of modules or number of users, we recommend considering other factors, such as the scope of change required to achieve business goals and your employees’ level of change readiness.

Here are three tips to keep in mind when scoping your ERP project:

1. Account for the complexities of your business.

Is your business relatively simple, or is your business a complex set of business processes supporting a diverse line of products? Be sure to get an independent view of your organization’s complexity when planning your ERP implementation. In other words, seek input from someone besides the person selling you the software.

Many complex businesses need a full ERP software solution that addresses all of their functional areas (human resources, supply chain management, etc.). Less complex companies may be looking for a point solution to address one specific area, like customer relationship management.

2. Focus on people and processes.

Technical activities are rarely the cause of project scoping issues. Instead, the primary causes are related to business process reengineering and change management activities. For example, failing to improve your business processes before selection can lead to unexpected costs during implementation.

3. Benchmark against other organizations.

We have all heard the anecdotal stories about what to expect from ERP projects. However, these isolated examples are rarely indicative of what the average project looks like. We recommend looking at broad sampling of organizations similar to yours to gain an understanding of what your project costs may be.

For example, our 2019 ERP Report reveals that SMBs use an average of seven full-time internal resources, and large enterprises use an average of 24 full-time internal resources. This does not necessarily mean that these people were committed 100% to the project. While some organizations may have had seven people spending half their time on the project, other organizations may have had 14 people spending a quarter of their time on the project.  

How to Control Costs

There is a fine line between cutting costs to save money and undermining the success of an EPR project. Cuts to ERP budgets that look good on paper can have disastrous consequences in the long-term.

Here are a few tips to help you control project costs without cutting essential activities:

1. Set realistic expectations.

More often than not, ERP vendors and their system integrators mismanage expectations on what total costs will look like. This makes it difficult for your company to set realistic expectations. As a result, you may end up presenting an inaccurate business case to executives.

When you realize your mistake, you may find that executives aren’t willing to increase the budget. While you may still encounter executive resistance if you have realistic expectations upfront, this is much less painful than losing your job because you set unrealistic expectations that resulted in a botched implementation.

Our ERP selection methodology helps clients develop a realistic business case. A business case should be used for more than just convincing executives to approve the project. It should also be used to prevent budget overruns.

2. Detail each of the cost components.

Setting realistic expectations requires an understanding of all essential project costs. This includes the obvious costs as well as the hidden costs: hardware upgrades, maintenance, internal resources, external consulting support, customization and a host of other budgetary items that companies often overlook or underestimate.

If you’re not sure what costs to include, we recommend developing a project plan. When we help clients develop project plans, they typically avoid incurring unexpected costs.

Once you have identified all the major cost components, you can then benchmark these line items to actual costs for companies similar to yours. Our 2019 ERP Report can be a good starting point for setting realistic benchmarks.

3. Respect the “untouchables” of your ERP budget.

There are certain, critical elements of an ERP project that should never be considered for the chopping block. One example is organizational change management. On paper, it may appear that you could save millions of dollars by removing all change management activities from your project plan. However, this doesn’t reflect the financial impact of employee resistance, project delays and other common risks of neglecting change management.

On the flip side, you will want to identify the areas that you can remove from your budget if necessary. For example, customization is one area that many companies decide not to spend too much money on, and this usually has few, if any, consequences.

As a general rule, if you want your project to be successful, then your budget should reflect a heavier focus on the business aspects of the project rather than the technical aspects.

4. Take your time during ERP selection.

Too many companies rush into ERP as if the world is going to end without it, and they don’t take the time to clearly lay out their business requirements. We recommend involving employees in ERP requirements gathering sessions to ensure your potential ERP solution can support the most important processes from each functional area.

One of our recent clients saw significant cost savings during implementation by investing in a thorough selection process. The CFO of the organization commented that the investment in selection did not increase the total project budget because money that would have been spent later in the project was simply spent earlier.

5. Negotiate with ERP vendors.

Did you know vendors may give you a discount if you negotiate with them? It’s true!

However, this is easier said than done, so most companies that want to negotiate their ERP software contract, hire an expert. When we help clients negotiate with vendors, we provide a total cost of ownership analysis that helps clients compare software contracts. In addition, we typically conduct three to four rounds of negotiation to reduce licensing fees and implementation costs.

How Much Does ERP Implementation Cost?

If you want an accurate estimate for your project, be sure to accurately scope your project and account for some of the most overlooked costs. Panorama’s ERP consultants can help you set realistic expectations that won’t scare executives nor get you fired for causing budget overruns.

How to Assess ERP Software Scalability

How to Assess ERP Software Scalability

ERP projects can be lengthy. Depending on the scope of the project, implementation can last anywhere from six months to three years. After implementation, ERP software should support an organization for at least five to ten years. As you can imagine, choosing an ERP solution to scale with your business is an important consideration when selecting an ERP system.

Software scalability refers to a system’s ability to keep pace with your businesses’ trajectory. This means that an ERP solution should be able to take on new markets and handle exponential increases in transactional volume, workload and amount of data.

SAP vs. Oracle Case Study

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

When looking for a scalable ERP solution, we recommend asking ERP vendors about factors, such as global functionality, infrastructure options and integration capabilities. Most importantly, ask them how they address the latest technology trends, and how they can adapt to your future business needs.

In addition to asking questions of vendors, you should also investigate several questions on your own:

4 Scalability Questions 

1. Does the ERP System Have Global Capabilities?

One way that many businesses expand is through globalization. If your company currently is in the US market but plans to expand to the rest of North America and eventually to Europe and Asia, you may want to consider an ERP system that offers a global solution out-of-the-box. Here are some considerations:

There are some countries for which many ERP systems have difficulty complying with their tax rules and government regulations.

For example, Brazil has one of the most complex tax systems in the world, and oftentimes ERP consultants will need to specialize in – or at a minimum – have experience with Brazilian implementations to be successful. Knowing this challenge, some ERP vendors have come up with “localizations” specific to countries to help companies doing business in other countries stay compliant.

Another example is the data localization laws in Russia. The laws require that data relating to Russian customers must reside on servers within the country. This poses a challenge for companies beginning a new ERP implementation or expanding an existing ERP system.

Other countries, like China, are adopting similar data localization laws, forcing many ERP vendors to build localizations for their customers.


If your business wants to compete in the global marketplace, it must advertise and transact in a multitude of different languages.

For example, vendor-facing documents, like requests for proposal (RFPs) or purchase orders, must be in the local language. Customizing reports for different languages can be costly and time consuming.

The same thing can be said for customer-facing documents, like sales orders and invoices. If your business maintains an e-commerce presence, this adds another layer of complexity regarding languages and translations.

Many ERP vendors today provide out-of-the-box language translations to support global customers. When assessing if an ERP system is the right fit for your business, make sure to ask about language options to prevent an unwelcome surprise when you scale your company in the future.

2. Does the ERP System Have a Scalable Infrastructure?

As your business grows, you want your ERP system infrastructure to be able to grow with you. This may look different depending on your IT infrastructure:

Cloud Scalability

It’s easy to change the specs of your underlying cloud infrastructure by talking with your cloud service provider (CSP). Some CSPs, like Microsoft or Amazon Web Services, offer different subscription plans based on your business needs. They can also see your transactional volume and tune your virtual machines accordingly to give you high performance.

The ability to scale has become even easier today with SaaS ERP systems. The CSP assesses your unique situation to determine how many database servers you need with what specs. This is just one of many advantages of SaaS ERP systems.

On-premise Scalability

If your organization must keep its technology on-premise, there are still some scalable ERP solutions available. Consider ERP systems that tune performance based on the number of servers dedicated to it. This allows your business to procure additional servers to accommodate larger transactions sets.

Scaling on-premise infrastructures is doable but more costly compared to scaling cloud solutions. Data storage, for example, is more costly in an on-premise system, especially when you’re dealing with a large amount of data.

3. Does the ERP Vendor Have a Futuristic Outlook?

The ability for employees to perform tasks from mobile devices is becoming the norm, and if your company doesn’t already allow this, there’s a high chance it will need to in the future. ERP systems that offer mobile solutions and integrate with IoT and machine learning are considered on the visionary end of Gartner’s scale.

Even if an ERP solution does not have these capabilities built in, an ERP vendor should at least have these ideas on their roadmap. If an ERP vendor can’t speak to their future vision in relation to these technology trends, it is a red flag that their software might not be scalable for your business.

Many companies we work with have a futuristic outlook, so they are looking for an ERP vendor that does, as well. We recommend conducting business process reengineering before ERP selection, so you know what the future state of your business looks like and can find an ERP vendor that meets your needs.

4. Does the ERP System Have Adaptability?

During ERP selection, adaptability is a key factor to keep in mind. Even though your organization may not take advantage of all the features offered by the software immediately due to budget constraints, there may come a time in the future that you will.

ERP software that has feature sets across a wide variety of industries can be helpful in the future, as you may be able to use some components to meet new ERP requirements – as opposed to purchasing a third-party software for a specific need.

If you plan to expand your company’s business model and offer different products or new services, here are some ERP selection considerations:

Business Model Expansion

Perhaps your current business model is only for the manufacturing and sales of a certain product, but in the future, you want to expand to offer installation services, as well. Your current ERP system may not have a services module or feature set that will allow you to take advantage of this without disrupting your current manufacturing processes. You could purchase another software package to handle selling and providing the installation services, but eventually your disparate systems will need to exchange data. This requires a custom (and expensive) interface and an internal or external IT team dedicated to database management.

The ability to add new features or modules without affecting current business processes is a key indicator of whether an ERP solution will scale with your business.

Easy Integrations

Another feature to keep in mind when selecting an ERP system is the ease of integration. Luckily, ERP vendors today often partner with third parties to build “plug and play” connectors that provide holistic solutions to customers, especially for certain industries.

For example, several ERP systems that cater to the retail industry have pre-built credit card payment connectors that allow businesses to accept credit card payments. If your business doesn’t accept credit card payments now, but you have plans to in the future, then asking about potential connectors is a wise choice.

Realistically, every ERP system will not have pre-built connectors for every interface requirement. Asking about the ease of building custom integrations is important, as it’s very likely you’ll need to build one in the future. You might bring a new vendor into your business environment, or your reporting requirements may change from sending PDFs to a form of electronic exchange. Whatever the need is, finding an ERP solution that will allow you to easily integrate with outside systems will help you to scale in the long term.

Workforce Expansion

If your company plans to make any acquisitions or push for a big hiring campaign, you’ll need to determine if the ERP system can handle a large increase in users.

Every ERP vendor markets their software based on the size of the business supported. For example, Workday caters to giant enterprises, while SAP Business One targets small- to medium-sized business.

When vetting your ERP choices, it’s good to be realistic in your predictions of the future. You don’t want to pay for hundreds of extra licenses if you will never use them.

4 Tips for Scaling Your Company for Growth

While finding a scalable ERP system will help your company grow and transform, an exclusive focus on technology limits your ability to do so. Following are four tips for preparing your company for aggressive growth:

1. Standardize Your Processes

Eliminating non-value-added activities and increasing operational efficiency is just part of the equation when it comes to scaling for growth. You also should standardize business processes across business units and office locations. This enables you to decrease costs and provide a repeatable operational and system template.

2. Enable Flexibility

While it may appear to conflict with the standardization mentioned above, businesses in growth mode also need flexibility. After all, business processes in the Asia-Pacific region likely will look much different than those you design for North America. As such, we recommend localizing your processes by region, customer and product line when applicable.

3. Integrate Your Operations

Lack of integration of information and processes is one of the more common pain points we hear from clients. For example, when a manufacturing group becomes aware of production bottlenecks that will likely delay key work orders, that information isn’t always accessible to sales teams.

While ERP systems enable this integration, you also should equip your people and processes. In other words, design end-to-end processes and train your employees to perform them.

4. Ensure Access to Real-time Data

Just as different departments should have access to integrated information, your executive team should have visibility into the entire organization. For example, COOs want to know what demand the sales team is forecasting so they can plan their production accordingly.

This type of decision-making information is one of the most effective ways to scale for growth. If you want to ensure access to this type of information, then paying close attention to data migration during selection and implementation is essential.

What Can Change in Ten Years? A lot!

An ERP system should last your organization at least ten years. During this time, your company likely will go through some major changes. It’s important to determine if an ERP system can support these changes, before you select and implement it.

Panorama’s ERP consultants can help your company assess the scalability of various ERP solutions, and help you select a system that can deliver long-term ERP business benefits.

The Truth About ERP Project Teams

The Truth About ERP Project Teams

If you’re considering an ERP implementation, you’re probably not enjoying the process of obtaining budget approval. Executives have a litany of questions, some of which you aren’t prepared to answer.

While you can’t anticipate all of their questions, we will help you answer one of executives’ most common questions: “Who needs to be on the ERP project team, and how much time will they need to dedicate to the project?”

Providing a detailed answer will require an understanding of what it takes to build a winning core team.


Who Should be on Your ERP Project Team?

Depending on the size of the organization and the scope of your project plan, your team might range anywhere from 15 members to just a few. At minimum, you need representation from each of your organization’s functional areas. Look for people who understand multiple parts of the business, not just their own little world.

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If you’re using ERP consulting services, the consultants likely will recommend that you secure a certain level of commitment from certain internal groups in order to augment external resources. Leveraged appropriately, the following groups can facilitate a more effective ERP selection, implementation and/or business transformation:

1. Executives

Every successful ERP project needs an engaged executive team. Executives must be ready and willing to kick-off the project and remain active participants.

It’s important to have an executive sponsor for your ERP project. This person will be heavily involved in the selection and implementation process, giving guidance when difficult decisions arise. Executive sponsors will encourage employee buy-in by displaying unwavering commitment to the ERP project.

2. IT Team

An ERP project should be a collaborative endeavor, where your IT team is heavily involved. Your IT team will be essential, not just in implementation, but also in maintaining your ERP system.

However, as the demand for skilled IT professionals continues to rise, many companies are finding it difficult to procure IT resources for their ERP projects. If your team is lacking IT skills, consider providing training opportunities or look for outsourcing opportunities.

3. HR Team

You might not know it, but the human resources professionals that you employ might be some key contributors to your ERP project. HR professionals can help you obtain external resources for the ERP project. Many companies need external resources for backfilling.

In addition, HR has their ear to the ground and will often know about the roadblocks employees encounter. This is helpful for identifying pain points as well as processes that are redundant or inefficient. Your HR department also can be of great assistance with organizational change management.

4. Employees who can Help With ERP Selection

ERP selection involves requirements gathering. Your project team can prepare employees for requirements gathering sessions by developing workshop guides, which get employees thinking about their processes. The project team also is responsible for conducting requirements gathering sessions and ensuring all essential requirements from all departments are documented and prioritized.

ERP selection also involves business process reengineering and ERP vendor demonstrations. Your project team can ensure the right people are involved in these activities. While these people may not be project team members, they should be heavily involved in the selection process. Involvement facilitates project buy-in and organizational alignment.

5. Employees who can be Change Agents

Change agents are team members across the organization who support your ERP implementation strategies and goals. The most important change agent is the project manager. This point person should be capable of leading the project team and demonstrating accountability and transparency.

Change agents are responsible for communicating goals and status updates to employees. Change agents create excitement and help diffuse rumors by being accessible and willing to answer questions.

6. Employees who can Manage Training

Other change agents are the team members responsible for training. They often take on the role of the “super user,” – people who not only buy into the change, but who also know how to make the most of the new system.

Super users might host workshops or provide personalized instruction and assistance to ensure employees are ready and able to operate the new ERP solution. While super users don’t replace formal training, they make it comfortable for employees to ask questions.

Project Team Personality Traits

Organizations must identify skill sets and personality traits that contribute to business transformation success. Professors Kenneth Benne and Paul Sheats published a study, Functional Roles of Group Members, in which they identified key personality traits that contribute to strong teams. Here are five of those personality traits:

1. The Cheerleader

This team member should encourage other project team members to participate and recognize them for their contributions. This role is useful for encouraging engagement on both the project team and throughout the organization.

2. The Peacemaker

This member helps project team members reach a consensus when compromise is necessary. Peacemakers focus on the success of the organization as a whole. This role is useful when defining and prioritizing business processes.

3. The Sergeant-at-Arms

This member ensures the project team meets deadlines and expectations while adhering to the organization’s core values. This role can help develop strong project controls and governance and gently remind team members of these guidelines.

4. The Good-Humor Man

This member helps relieve the tension and anxiety of business transformation. The right amount of jest can lighten the mood and reenergize team members.

5. The Contrarian

This member is a critical thinker and innovator who is not afraid to share their opinion. This role can challenge project team members to think about the project from a people and process perspective instead of a technical perspective. The contrarian can also ensure that the project team preserves the organization’s competitive advantage during business process management. They are long-term thinkers who can help align the ERP project with the organizational vision.

How to Build an ERP Project Team

It is important to start building your ERP implementation team before ERP selection to avoid falling into the trap of poorly resourced teams, lack of representation from key business areas or low accountability. Below are a few things to consider when assembling your project team:

1. Seek Executive Sponsorship

Executives can have a strong influence on who is selected to serve on a project team so it’s critical that executives are on board with the goals of the project. The project manager is responsible for ensuring that executives are well-aware of project scope, project budget and project resource requirements – and aligned in terms of overall goals and project priority – so that executives can make informed decisions when helping project managers choose team members.

2. Look for Strong Communicators

Some organizations build their project team based on who they believe to be the smartest or most technically skilled. While technical expertise and operational knowledge are important, communication skills are also valuable, especially when the project team must execute a change management plan.

Communication is also essential during requirements gathering. Team members will need to be vocal during this phase to ensure the business requirements from their department are represented. Ensuring all business requirements are met in the new ERP system is essential for ERP selection.

3. Make the ERP Implementation the Team’s Top Priority

At key points throughout the project, your project team may need to devote their entire focus to the ERP project rather than their day jobs. In a perfect world, the project team would be fully dedicated to the project during these times, but that’s not feasible for most organizations.

Project managers and executives must help the project team prioritize work, so the project is a top priority. Some organizations staff their project teams with a certain amount of external resources to ensure project team members can more fully focus on the ERP project.

If your organization’s communication about the project have been sparse, your project team probably doesn’t understand the importance of the project’s success. Overcome this hurdle by taking the time to talk to address concerns on an individual basis before assigning responsibilities. If some of your staff are already up to their ears in another major project, respect the preexisting situation and try to limit their involvement in the ERP project until the time is right.

4. Clearly Define Roles, Responsibilities and Accountability Measures

Project team members should be assigned responsibilities in accordance with their strengths, experience level and bandwidth. Begin defining roles and responsibilities at the beginning of the project to ensure accountability and representation from key business functions. Responsibilities can include anything from process definition to end-user training.

You can use a project charter to assign responsibilities for each phase of the project. The project charter defines exactly who is responsible for what as well as how decisions should be made and how issues should be resolved.

In addition to defining what team members are responsible for, you also should define what they’re not responsible for. For example, final sign-off on future state business processes and decisions about the organization’s operational model should not be driven by the project team but the executive steering committee. In several of our expert witness engagements, we have seen steering committees delegate everything to the project team.

5. Avoid Bad Hires

Not only can a bad hire derail an ERP project by not performing their duties, but they can impact the attitude of other employees. These employees may already be on edge because of organizational changes when a bad hire comes along and gives them another reason to resist change.

Many companies don’t know how to hire for an ERP project. They don’t know what questions to ask, how to evaluate technical skills or how to assess cultural fit. Panorama’s IT Staffing services help organizations overcome this hurdle. We offer a flexible array of contract, contract-to-hire and permanent placement services.

How to Find a Good ERP Project Manager

If a company has a weak project manager, no one knows who is responsible for what or whether progress is being made. Here is a list of five qualities a project manager must possess for your ERP project to succeed:

1. Organized

People waste time when they are hunting for lost emails or switching between devices to find what they need. Being organization not only increases efficiency but helps make and reinforce good impressions.

Every workplace has at least one desk that is heaped with files. If keeping a desk tidy is difficult for your project manager, how are they going to handle more complex tasks?

2. Punctual

Punctuality sets the tone for organizational conduct. If a project manager is late to meetings or misses deadlines, this sets the tone for all employees. The best project managers are always early. “I didn’t have time,” is never an unacceptable answer unless there was an extenuating circumstance.

3. Transparent

When project managers are upfront with employees about the status of the ERP project, it helps build trust between management and employees. Additionally, making information available to all employees empowers them to make better decisions and produces a product of higher quality.

Closely related to transparency is receptivity toward the thoughts and opinions of employees. The best project managers listen to the people who are in the weeds, performing the details of a much bigger picture.

4. Experienced in Your Industry

Given the choice between a fledgling project manager with deep industry knowledge or an experienced project manager with shallow industry knowledge, choose the former.

A project manager must have industry experience in order to ask detailed questions about business processes and methodologies. Project managers with no industry experience may have a high-level understanding of how things operate but almost everyone in the company should possess that knowledge anyway. When a project manager understands the inner-workings of an industry, fewer blind spots exist.

5. Communicative

When people do not know what is expected of them, this indicates the project manager is not doing their job. For a successful ERP project, every employee needs to understand their role and should be held accountable.

The best project managers hold status meetings to keep tabs on the progress of various tasks. If a team member needs help completing a task, they can ask during these meetings. Status meetings are also helpful in keeping everyone motivated because employees can see how the project is progressing towards its goals.

What Other Internal Resources Will You Need?

1. Executive Steering Committee

This group includes executives and members of the board of directors. The steering committee communicates the importance of the project and explains how it supports the organization’s mission and vision. The committee also participates in milestone meetings regarding software recommendations, organizational alignment and organizational change management.

In addition, the committee helps select project team members in accordance with the project scope, budget and resource requirements. The steering committee has a good understanding of project goals and organizational vision, so their input is valuable when choosing project team members.

While some department managers may be resistant to lending resources, your steering committee can work with them to ensure the right resources focus on the ERP project when necessary.

2. Subject Matter Experts

Much like the project team, this group includes representatives from each functional area. Subject matter experts participate in requirements gathering, requirements validation and vendor demonstrations. These are your “super users,” “change agents” and advocates for your project.

3. Change Management Team

Without the contributions and encouragement of a change management team, the ERP project team would most likely be overwhelmed by project fatigue and conflicting priorities. The change management team is responsible for working with third-party implementation partners to develop strategies that address communication, training and benefits realization.

5 Roles of a Change Management Team

1. Leading by Example

The change management team should not only communicate that the ERP project is a priority, they also should demonstrate this in their actions and decisions.

There’s no doubt that the team will have to make tough decisions, such as postponing or suspending another initiative outside of the ERP project. In order to make such decisions, the team needs to understand the pressures of competing priorities and be able to communicate their concern to the project team.

2. Recognizing Achievements

When the project team loses sight of priorities, reinforcing these priorities through recognition of effort goes a long way. The change management team should regularly acknowledge and celebrate the work being done and sacrifices being made by the project team, SMEs and end-users.

3. Promoting Accountability

Speaking to project team members about their responsibilities will reinforce their accountability to each other and to the organization as a whole. The change management team should encourage team members to hold each other accountable and to voice disagreements constructively.

Regular meetings are a great way to lay everything on the table for discussion and to encourage the project team to come to a consensus. Once a consensus is reached, the change management team should ensure everyone understands the shared responsibilities and reinforce overall expectations.

4. Including Change Agents

Change agents may be a part of the change management team, or they may just serve as liaisons between the project team and end-users. Either way, change agents can redirect employees’ attention to what really matters – the goals and objectives of the organization as a whole and their individual role in the success of the project.

5. Communicating Effectively

Organizations should staff their change management teams with strong verbal and written communicators. Team members should be empathetic but persistent.

What About Outsourcing?

Project managers walk a fine line between the use of internal resources and external resources. A lack of external resources can mean limited expertise. On the other hand, a lack of internal resources can mean poor project ownership and a lack of organizational alignment. Only internal stakeholders can make the ultimate decisions on how your business will run going forward. 

It’s no secret that ERP projects require a dizzying array of skills and competencies. Organizations embarking on business transformations are hard-pressed to assemble project teams that have a vision for how the business can evolve, have business process reengineering and change management competencies, and have a host of other skill sets that are difficult for most organizations to develop internally.

Because of the challenges associated with assembling such a rare and broad set of collective skills, many organizations turn to outside resources to augment their internal skills. Here are a few considerations to help you determine when it may be most appropriate to outsource your ERP project:

1. Focus on People and Processes

It can be easy to take a myopic view of ERP projects, focusing almost exclusively on finding external pinch-hitters with software-specific functional and technical expertise. While these skills are important, they are also somewhat of a dime a dozen. Let’s face it: compared to the people and process aspects of an implementation, configuring and implementing ERP systems are fairly cut and dry propositions.

The business components of implementations – such as change management, project management and business process reengineering – are much more difficult. These skill sets are harder to find. When looking for outside help, it is critical to find a partner that has a comprehensive skill set and a strong ERP implementation methodology.

We’ve found through our implementation and expert witness experiences that ERP success and ERP failure typically has very little to do with how well technical aspects were handled during the project.

Instead, success or failure is more commonly determined by how the business components of a project are handled. While the technical skills may seem more specialized and therefore more important – especially if you’re a CIO or IT manager – it’s actually the more intangible areas that will determine your project’s success or failure.

2. Don’t Outsource Everything

Some companies take more of a hands-off outsourcing approach. While you certainly want to rely on outside assistance wherever it makes sense, you won’t be successful if you don’t step up to the plate to provide a minimum level of internal support and skill sets.

For example, outside consultants – no matter how talented they may be – can’t make decisions about how to run your business for you. In addition, they can’t tell you if the designed and delivered enterprise resource planning system does exactly what you want it to. Only people within your organization can provide these inputs.

Therefore, it is important to identify and recognize those skills and responsibilities that your internal team should provide versus those that can be outsourced to outside parties.

3. Look for the Biggest Gaps

It can be helpful to conduct a gap analysis of the required skills versus the skills you currently possess in-house. The biggest gaps are going to be the ones that you’ll want to outsource to ERP consultants and other external resources.

An independent ERP consultant can be a smart addition to your team. 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 system, may have a false sense of security. The world of ERP software is dynamic and ever changing.

What’s Your Project Scope?

Your project team structure mostly depends on the scope of your project. Is it simply an ERP implementation or is it a broader business transformation?

Panorama’s ERP consultants can help you determine the scope of your project and the degree of organizational change entailed. This insight will guide the structure and size of your project team.

Cloud vs. On-premise ERP Security: The Advantages and Disadvantages

Cloud vs. On-premise ERP Security: The Advantages and Disadvantages

In a matter of a few years, IT departments across most industries have fully embraced cloud computing and its benefits. While cloud computing is popular, is it secure?

It is often a huge headline in the news when an organization’s ERP software is comprised due to a cloud security breach. This negative press was once the motivating factor for organizations to stay on-premise, but with the overwhelming advantages of moving to the cloud, businesses are making the move in order to stay competitive.

While moving from an on-premise infrastructure to a cloud-based one shifts some of the responsibility from the organization’s IT department to the cloud service provider (CSP), security remains a focal point for which both parties should bear responsibility.

Understanding who is responsible for which security measures is crucial to keeping your organization’s data safe in the cloud. According to Gartner, “In nearly all cases, it is the user – not the cloud provider – who fails to manage the controls used to protect an organization’s data.”1

This is similar to what we’ve found in our ERP implementation experience – people, not technology, determine the success of an ERP project. We’ve seen all different aspects of ERP implementations – including security – fail based on a lack of organizational alignment between people, processes and technology.

In fact, our 2019 ERP Report shows that more than a third of organizations experienced budget overruns due to organizational issues, and more than half of organizations experienced timeline overruns due to organizational and/or training issues.

2019 ERP Report

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

Whether you are currently using cloud computing, are planning to a move to the cloud or are staying on-premise, it’s important to know the difference in security design. Below we’ve outlined the key differences between on-premise and cloud security, as well as some of the advantages and disadvantages to both.

Differences Between On-premise and Cloud Computing

1. Ownership of Responsibilities

The biggest difference between on-premise and cloud security design is the amount of responsibility that rests on the organization itself. With an on-premise infrastructure, a business is responsible for ERP system security from end to end. They procure the servers where the data will be housed, build and manage the firewalls used to control access to the network and control the ability to query and extract data from the system.

In a cloud world, these security responsibilities are shared between the organization and the cloud service provider (e.g. Amazon Web Services or Microsoft Azure). This is often referred to as the “shared responsibility model.” Depending on what type of service a cloud customer is subscribed to, the security responsibilities of the customer differs:

Infrastructure as a Service

In the case of infrastructure as a service (IaaS), cloud customers are not responsible for physical elements, such as the actual hardware that applications are hosted on or data centers. Instead, they need only to manage the provisioning of virtual machines, secure the virtual network and monitor all applications and interfaces within the network.

Platform as a Service

When it comes to platform as a service (PaaS), the cloud service provider inherits additional security responsibilities. Since the customer is now paying for an entire platform, as opposed to only the cloud infrastructure, the CSP now manages the duties listed for IaaS as well as the provisioning of virtual machines and securing the virtual network. The cloud customer is still responsible for their data, monitoring their interfaces and securing their applications.

Software as a Service

For software as a service (SaaS), the CSP is responsible for all the previously mentioned duties for IaaS and PaaS, plus they are responsible for the application itself. This makes sense as now the cloud customer is paying to use the CSP’s application hosted on their platform and cloud infrastructure. In this case, the cloud customer is responsible for the security of their data and all interfaces.

In all cases, it is the sole responsibility of the customer to ensure that their specific security requirements are being met. If your organization is planning a move to the cloud, it’s helpful to list all your security requirements. When meeting with potential CSPs, give them the list of your requirements, and let them vet how their service can meet your requirements.

It’s extremely important to note – even though in a cloud-based environment many of the responsibilities now lay with the CSP, the cloud customer must follow the appropriate processes and procedures and hire knowledgeable personnel in order to maintain the integrity of a secure cloud. Designing and documenting processes around ERP security can help the organization prepare its IT staff for new roles and responsibilities. A strong business process management methodology is essential when defining new business processes.

2. Points of Access

Another key difference between on-premise security and cloud security considerations is the means in which the network is accessed. On-premise ERP systems only exist on the devices they are installed on. When business users need to access their company data in an on-premise environment, they need to be physically in the office (on the company’s network).

For example, an employee could have SAP installed on their work laptop, allowing them to view company data from that device (on the company network, of course). The same employee could also have a personal laptop that does not have SAP installed. This makes controlling access to applications and data simple, as there is only a single access point.

While this may pose challenges for employees working remotely, they can always use a virtual private network (VPN) to log into their in-office device. VPNs are secure because they require a security key or other means of identity management

In a cloud-based environment, employees can access company applications via a web browser. This means that any device with internet access becomes an entry point to business critical data.

Cloud-based environments also allow the use of application program interfaces (APIs). While APIs can be used with applications running on-premise, their use didn’t become normalized until cloud service (and software) providers began pre-building them into their platforms. Now, interfacing with third party software applications is as easy as exposing the appropriate API and allowing third party access to your environment.

This ease of interfacing has its benefits but adds an additional layer of complexity when it comes to security design. In an on-premise environment, interfacing with outside systems is usually driven by the IT department, and the communication channel must be built in collaboration with the third party. With this approach, security considerations can be designed into the communication channel up front.

When utilizing an API to create, read, update or delete data in another system it is crucial that proper planning takes place. Not all permissions are typically needed by an API to perform its designated function. Identifying proper permissions and their repercussions is just as important. We always advise against taking the easy road and just giving full permissions to an API.

When creating the API, you should investigate the security of the system you are interfacing with. One question to ask when interfacing is this: “If this system security is breached how can it affect our data?” Developing your connector or API with this in mind can save you headaches and potential lawsuits down the road.

The Advantages and Disadvantages of On-premise and Cloud Computing

Whether you have an on-premise infrastructure or are already in the cloud, there are some strong advantages to both in terms of security:

Advantages of Cloud Security

A huge advantage when it comes to security in the cloud is the accessibility of security tools built by the cloud service provider or ERP vendor. Usually, for an additional fee, CSPs like Amazon, Microsoft and Google offer built-in security tools that help your IT department identify and remediate network vulnerabilities and provide suggestions on how to improve your security design.

Cloud service providers have a lot riding on the security of your data – namely, their reputation. Even if a data breach is the fault of a cloud customer, the reputation of the CSP also takes a hit. Because of this, CSPs have heavily invested in machine learning to help identify weak spots in your system and notify you immediately in case of an attack.

Another benefit of security in the cloud is the level of automation that can be achieved leveraging APIs. These APIs make it simple to orchestrate incoming and outgoing messages between your company’s network and third parties, ensuring that the proper authentication methods are in place each step of the way.

Disadvantages of Cloud Security

While the use of APIs can be considered an advantage in terms of automation, it can also be seen as a disadvantage when looking at the amount of access points to manage. If you have several third parties automatically accessing your environment, it can be difficult to monitor all the inbound and outbound traffic. In the case of a breach, it is even more problematic to find out where your security issues lie.

Advantages of On-premise Security

An obvious advantage of an on-premise security design is the clarity of responsibilities and ownership around security requirements. With a physical data center, it’s easy to see that access to the facility must be protected by the customer. The ownership of security requirements falls 100-percent on the organization.

As long as the organization prepares its people and processes, its data security will be strong. An organization must not only prepare its IT department but its end users, as well. While end users have a very different set of security responsibilities, their role is no less important. Some organizations develop an organizational change management plan to prepare employees for the security considerations of a new ERP system.

Disadvantages of On-premise Security

With the ownership of the data center resting solely on the business, the amount of security responsibilities given to your IT department is more than double that of cloud-based security.

Additionally, in an on-premise environment, there is usually little to no automation in terms of communicating with third parties. This means your IT department must securely build and manage a channel of communication each time a new vendor is added to your ecosystem.

Lastly, as if your IT department doesn’t have enough on its plate, the majority of security tools made for on-premise environments are outdated. With new ways for cybercriminals to access sensitive company data, security tools must constantly evolve to keep up with new threats. When the defense is no match for the threat, IT professionals must be even more diligent in monitoring your network’s security.

The most common form of attack on company networks is not so much a virus or brute force hacking. It is social engineering and elevated permissions granted to individuals or groups not requiring full access.  This is the result of not having a solidified IT plan and documentation.

You can address social engineering by having official training for all staff on the attackers’ methods and tactics. Non-essential security permissions can be audited and refined by your in-house IT security professional or an external IT auditing firm.

Where Should You Host Your ERP System?

During ERP selection, cyber security is a concern for many organizations. Ultimately, security depends less on technology and more on your people and processes.

For example, cloud hosting may be more secure than on-premise hosting if your internal IT department is not large enough, skilled enough or prepared enough to manage the full security of an on-premise ERP system. However, a cloud environment still requires internal security responsibilities, so a strong internal team and clearly defined processes are still essential.

Panorama’s ERP consultants take the time to understand your organization’s unique situation. We can help you prepare your people and processes for the challenges of either cloud or on-premise security.

  1. Gartner, Is the Cloud Secure?,, March 2018
Dynamics AX vs. Dynamics 365: Comparing Microsoft’s ERP Versions

Dynamics AX vs. Dynamics 365: Comparing Microsoft’s ERP Versions

Many organizations that are using Microsoft Dynamics AX are considering an upgrade to Microsoft Dynamics 365 for Finance and Operations (D365). If your organization is considering this upgrade, you may be interested in learning more about the differences between these two systems before you commit to an ERP project.

Before delving into these differences, we’d like to share one caveat:

Before beginning an ERP project or digital transformation, we always recommend that organizations take a step back and evaluate their business goals. According to our 2019 ERP Report, less than half of organizations find the technology aspects of their ERP projects to be difficult. In contrast, more than half of organizations find the business aspects of their project to be difficult. These findings show the importance of focusing on organizational alignment before technology.

2019 ERP Report

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

We recommend that businesses align their organization and conduct a comprehensive ERP selection to determine if an upgrade is preferable to moving to a completely new ERP vendor. Evaluating multiple ERP vendors allows organizations to see which systems align with their business goals.

Nevertheless, we recognize that an upgrade to a D365 is a popular choice for many Dynamics AX customers, so in this post, we’ll focus on these two systems. First, we’ll provide a brief history of how AX has evolved over time, and then we’ll review the key differences between AX and D365.

A Brief History of Dynamics

Originally developed in 1998, IBM Axapta was created through a collaboration between IBM and Damgaard Data to fulfill the need for a computer-based accounting program geared towards enterprise-level businesses.

A few years later, Damgaard Data merged with Navision Software A/S to create the company Navision A/S, which Microsoft later acquired. During this time, the ERP system was known as Axapta.

Over time, Microsoft further developed Axapta to cater to businesses across a variety of industries, including financial services, manufacturing and retail. Axapta then became known as Dynamics AX.

Several versions of Dynamics AX were released by Microsoft, each continuing to establish the business software as a contender in the market – from AX 4.0 to AX 2009 and finally AX 2012. The ERP system was widely adopted, and many customers are still using a version of Dynamics AX as their means of operating their businesses.

Fast forward to 2019, and Microsoft is proudly marketing and implementing D365 as the greatest version of their ERP software to date. The transition started with moving AX into the cloud, allowing users to access the application via a browser. Briefly, the name of this version was AX7. Later on, when Microsoft was rebranding their product line, they changed the name to Dynamics 365 for Finance and Operations.

Dynamics AX vs. Dynamics 365: 5 Differences

Although they are essentially two different versions of the same business solution, there are a few key differences between the two ERP solutions. For the sake of this post, we will compare Dynamics AX 2012 to Dynamics 365 for Finance and Operations.

1. Infrastructure

The biggest difference between Dynamics AX and Dynamics 365 is the infrastructure the systems are built on. When Microsoft committed to putting cloud technology first when CEO Satya Nadella took over in 2014, they moved the Dynamics products into the cloud, as well. This meant that Microsoft’s cloud service, Azure, would host D365 and any other applications from the Dynamics 365 suite of products. In contrast, Dynamics AX 2012 can still be run on-premise, meaning that customers can host the application on their own servers that are physically onsite.

Initially, there was some resistance to the cloud-driven model. Organizations were used to storing their production data locally and having the ability to access it at any time. For example, with an on-premise ecosystem, a system administrator could write a SQL query to view data in real-time.

Customers who had a production environment of AX did not want a cloud based application, as they would have to request copies of their production database from Microsoft to pull from the cloud.

The process for code deployment to production was also changed in the cloud. System administrators could no longer promote code to production on-demand, and instead, had to schedule a deployment, which Microsoft would do on the customer’s behalf.

Despite the initial resistance, cloud based infrastructure has become an accepted and, oftentimes, preferred method of managing an ERP system. Creating and maintaining an on-premise ecosystem is an administrative project on its own – you must acquire the necessary hardware, build the network in a way that allows employees around the globe to access it and plan for disaster recovery. All of this can be extremely costly and a headache to maintain.

With Microsoft Azure hosting your software system, these steps are done by Microsoft in collaboration with the customer, making environment management convenient and simple.

2. Custom Development

Another key difference between Dynamics AX and D365 is the method in which custom code is written and implemented.

With any ERP implementation, there is bound to be some software configuration or customization needed to meet specific business requirements. With Dynamics AX, custom development can be applied using the over-layering method. Over-layering is a concept that allows the core product, customer code and any value-added reseller (VAR) code to be separated from each other in different layers. The different sets of code are then layered on top of each other within the ERP system. Sometimes, when the code is merged, compatibility issues arise, and developers must adjust their code before it can be deployed.

D365 requires the use of the extensibility model as opposed to over-layering. This means the core code of the ERP system is locked down, not allowing any customizations. Developers must customize the software through built-in extension points.

Only objects that have extension points can be customized, but if a customer has a need for a new extension, they can request it from Microsoft. Microsoft often provides extensions directly to customers or includes them in future releases. When it comes to upgrading, the extensibility model is highly preferred as it causes significantly fewer compatibility issues than the over-laying method.

While Dynamics products are easier to customize than many other vendors’ products, it should be noted that extensive customization is a key failure point we see in many of our software expert witness engagements. We recommend that organizations carefully manage customizations by developing project governance and controls to ensure customizations are made only when absolutely necessary.

3. Upgrade Model

Upgrading to a newer version of Dynamics AX – like AX 2009 to AX 2012 – often requires a new implementation. Many AX customers considering an upgrade find that they first need to evaluate the business impact of the upgrade and improve their business processes. This requires a new implementation because new processes often require new configurations and/or customizations.

Other AX customers see the need for a new implementation when they realize that their custom code conflicts with the code delivered by Microsoft in the new software version. In these cases, developers must change and sometimes entirely rewrite their customizations.

Upgrades from AX 2012 to D365 can typically be done without a new implementation, depending on the amount of custom code involved. However, upgrades from AX 2009 to D365, require a new implementation since there is no direct upgrade path from one to the other.

With the move to the cloud came the opportunity for Microsoft to adopt a new upgrade model, similar to the upgrade model of modern applications consumers are familiar with today.

This model, used in D365, does not require a new software implementation. Instead, monthly updates are pushed out to customers on the ERP application. Large feature changes are delivered as parameters or configuration keys, allowing customers to decide if they want to turn on the new functionality. For customers with custom code, the chances of conflicts with the upgrade are drastically reduced.

4. User Interface

A very apparent difference between Dynamics AX and D365 is the user interface. With Dynamics AX, a user can launch the application from a desktop and perform their work within the program. Dynamics AX has the aesthetic of most ERP systems, which is, to be honest, a little out of touch with today’s typical ERP user.

With D365, a user can launch a web browser and enter a URL. Within the browser, the user can perform his or her work and open additional tabs if necessary. D365 can be launched from desktops and mobile devices alike – anywhere with an internet connection. The look and feel of D365 is more aligned with Microsoft’s branding and matches the style of other Microsoft products, like the Office 365 suite.

In Dynamics AX, the homepage defaults to an area called Role Centers. Here, users can create custom queues and links that make performing their daily functions easier.

In D365, the homepage defaults to an area called Workspaces. While similar to Role Centers, Workspaces are prebuilt queues, links, lists and graphics that are related to specific modules and security roles.

An unfriendly user interface can exacerbate the user adoption challenges inherent with ERP implementations. When organizations experience user adoption issues – user interface-related or otherwise – they often seek guidance from ERP consultants. If user adoption issues are severe enough, this can be considered an ERP failure. ERP consultants, like Panorama, have extensive experience recovering ERP implementation failures caused by variety of factors.

5. Navigation

Navigational differences, though minor, are worth noting.

A common theme across ERP systems is that certain screens can be launched from several different places in the system. In Dynamics AX, a user must know the menu path to a specific screen. For example, to create a new sales order, a user can navigate to Sales and marketing > Sales orders > All sales orders. However, this is not the only place to launch the sales order screen, which makes it difficult and time consuming for users to memorize any particular path.

In D365, a new search capability was added to allow users to type in the name of the screen they are looking for and click from the results to launch the page.

Should You Upgrade Your AX System?

Now that you know the basic differences between AX and D365, you may be more confident that you need to upgrade to D365. This is a wise decision for organizations seeking a more manageable production environment, easier customizations and upgrades, or an improved user experience.

However, an upgrade from AX to D365 is no easy task. Our ERP consultants can help you understand the business impact of an ERP upgrade. We will guide you through organizational change management activities and other essential project activities that make upgrades smoother and more beneficial to your bottom line.

4 Reasons to Replace Your ERP System

4 Reasons to Replace Your ERP System

Whether your business operates on a collection of homegrown applications, a select suite of products designed for specific business needs or a full ERP system that does it all, there are several reasons why your organization might benefit from new ERP software. Some reasons hit close to home, like losing out on new customers who prefer a modern shopping experience. Other reasons are out of sheer necessity to keep your business going.

Determining your organization’s motivations is not a small task. Your motivations could be based on a mixture of different factors. To help you determine if your organization might need a new ERP system, we’ve defined some of the major reasons organizations implement or switch to new ERP software, along with some tips, best practices and disclaimers for each:

1. Replacing Your Legacy System

The most obvious reason for an ERP implementation is simply to replace your legacy system. There comes a time in the trajectory of every organization when the CIO or other executives recognize that their current software isn’t cutting it anymore. There are several reasons behind this:

Your Current Software is Outdated

If the business processes that your current system supports have changed, users may be relying on workarounds to perform their daily functions. Workarounds are exactly what their name implies – extra steps performed in a system to work around missing functionality required to complete a task. Workarounds cause inefficiencies, and in turn, can increase costs and create unhappy employees.

Along the lines of employee happiness, a younger workforce may find it difficult to learn the existing application and find newer software more attractive and even familiar. Newer technologies follow similar design patterns to consumer applications of which younger generations are already experts. Retention of the best talent is important to stay competitive in any industry, and keeping your workforce engaged has a direct correlation to employee retention.

Most importantly, the modern consumer is looking for convenience. When a customer transacts with your organization, he or she wants a simple and efficient experience. With older ERP software, sometimes the entry point for customers is extremely dated. For example, a system that accepts sales orders via fax, but not online can turn potential customers away and towards a more accessible competitor.

Your Organization is Going Through Digital Transformation

The phrase “digital transformation” can be heard often when CEOs address stakeholders or VPs give a keynote at internal conferences. But what does it mean? According to the website, a digital transformation is the “application of digital capabilities to processes, products, and assets to improve efficiency, enhance customer value, manage risk, and uncover new monetization opportunities.”

The Beginner’s Guide to Digital Transformation

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

One of the biggest shifts in the IT paradigm related to digital transformation is accepting that business applications can live in the cloud and don’t need to be on-premise to be serviced. When an organization decides to transform its IT infrastructure from in-house to a cloud-based setup, most applications require a major upgrade or need to be retired and replaced.

Another shift related to digital transformation is organizations acquiring new, modern applications to perform ancillary functions. For example, suppose an organization implements a new expense tool. Both employees and management alike are loving the new tool as it allows an easy way to submit, view and approve expenses from any kind of device. This scenario may not seem like it has anything to do with needing new ERP software, but what if the organization has several of these examples and none of the applications integrate with the current ERP solution without heavy customization? A new system would most likely be more efficient and beneficial than creating all those custom interfaces.

Your Legacy System has Issues

The most dire of reasons for replacing your legacy software is the need to address issues with the current platform. Workarounds alone may not be enough to solve a business problem created by your system. If your legacy system simply cannot handle real-time inventory updates and your sales depend on this, it’s time for new ERP software.

The worst crime any business application can commit is to provide bad data to its users and customers. If your legacy system is providing inaccurate data to customers (for example, current pricing on items) or faulty data is being used in demand forecasting, it’s time to part ways with it. In an era where consumers have a wide-reaching platform to share their mishaps with the world (a.k.a. social media and review sites), it’s critical to have a system you can trust to provide accurate and relevant information to your customers.

2. Scaling Your Business

When business is good, it grows – and with growth comes a need for a more robust enterprise backbone. There are some ERP systems that are built for small to medium sized businesses and others that are built for large enterprises. If your organization has substantially expanded since you implemented ERP, you may be outgrowing your system. Here are some telltale signs that your business could benefit from new ERP software to scale your business:

Performance is Slow in the Current System

Due to increased transactional volume, the performance of some ERP solutions may slow depending on their architecture. This will become apparent when users submit tickets for reports taking longer to run than normal or when batch jobs are not completing in the time they are allotted.

Users Experience Intermittent Issues and Outages

If your ticketing system is constantly filled with users reporting outages and issues, your ERP system likely is not keeping up with the business demand. A key indicator is time-out related issues. Once you start seeing an influx of these, you’ll know it’s time to make a change.

If a new ERP solution is implemented for this reason, it’s a smart idea to pay particular attention to performance requirements and load testing throughout the implementation.

3. Cutting Costs

Commonly, one of the first places an organization looks to reduce costs is to the IT department. After some analysis, a CIO or business leader could find that moving to a new ERP system would save the company a significant amount. Cost savings could come in the form of lower cost licensing and savings on custom support fees:

Lower Licensing Costs

Different vendors have varying licensing models – some can be considered a premium while others are in the affordable range. Comparing your licensing cost for your current ERP solution to others in the market requires reaching out to the sales teams of different ERP vendors. It may seem too early when you’re simply trying to analyze the costs, but bringing in different vendors can actually save costs in the long run as the sales teams are fighting for your business.

If this seems a little intimidating, Panorama offers ERP selection and contract negotiation services to help you through the RFP process and to be your advocate in meetings with vendors. Our experienced team can help you make the right decision for your organization when selecting a new ERP solution.

No Custom Support Fees

If your organization is currently paying vendor fees to support custom applications, this may be another place to save. Implementing new ERP software provides the opportunity to realign your business processes with industry standards, allowing you to drop custom support and utilize out-of-the-box capabilities of the system.

4. Upgrading Your Existing ERP

Another reason for implementing a new ERP system is the need for a software upgrade. There are a few key reasons for performing an upgrade, each with slightly different implications:

The Current Software Version is Sunsetting

Software vendors can’t support all versions of a product indefinitely, and with that constraint comes the need for customers to upgrade. Typically, when a vendor has a major version of their software approaching the end of its life in terms of technical support, they will proactively reach out to customers to help them through a transition plan. During this communication with the vendor is the right time to make your ERP selection to the appropriate version, or new product, for your unique needs.

Bug Fixes are Included in the new Release

As mentioned previously, oftentimes users will be resourceful and find workarounds to system shortcomings to complete vital tasks. If an upgraded version has fixes to these workarounds, the justification for upgrading is satisfied immediately.

Contrary to the previously mentioned scenarios, upgrading your existing ERP solution can be handled differently than a brand-new implementation. Users are already familiar with the software and communication can be adjusted to excite users about coming improvements. Your organizational change management strategy will look different for an ERP upgrade, as users are more open to improvements than large-scale changes.

ERP Selection Help

No matter your reason for implementing (or upgrading to) a new ERP system, having an experienced team in your corner will make any project less stressful and more productive. Our ERP consultants are experts in ERP selection and can ensure you invest enough in the selection process to save time and money during implementation.

Oracle’s Shift in Focus: From Oracle JDE to Oracle Cloud Applications

Oracle’s Shift in Focus: From Oracle JDE to Oracle Cloud Applications

Most organizations would agree that evaluating ERP software is as enjoyable as being stranded in a blizzard. There are so many ERP vendors in the market today that it’s hard to see the details while there’s a flurry of snow blowing around you.

If you’re about to begin ERP selection, a good place to start digging into the details is with some of the more well-known ERP vendors. While these vendors are a good fit for many organizations, they may not be right for yours. Then again, one of these vendors’ products might be just what your organization needs to reach its strategic goals.

Why not find out for sure by looking at some of the product details that most organizations aren’t privy to until the later stages of selection? Our ERP consultants have in-depth knowledge on hundreds of ERP vendors, but today, let’s look at some insider information on Oracle JDE and the Oracle Cloud Applications.

Oracle Overview

Founded in 1977, Oracle is a $39 billion-dollar company that develops enterprise software and other technology for mid- to large-sized organizations. Oracle’s primary strength is developing and acquiring robust product lines, such NetSuite, that provide flexible functionality to a variety of industry niches. We have evaluated and/or implemented Oracle products for organizations across various industries and verticals and found Oracle’s products to be very versatile.

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Insider Information on Certain Oracle Products

Oracle JD Edwards (JDE)

Oracle JD Edwards EnterpriseOne has always been a good fit for manufacturing companies and professional services companies. However, in our experience, JD Edwards software is not as good of a fit for consumer-packaged goods companies that have extensive distribution, supply chain management and transportation needs. Typically, Oracle’s JD Edwards works best for larger organizations with complex manufacturing and service management processes.    

While JD Edwards products are robust, they aren’t receiving the same R&D funding they once did. Oracle has significantly reduced the amount of development and minimized the research component of JDE funding. Our recent experience with Oracle at client engagements has confirmed the fact that little to no new development of JDE will be performed. This was stated by numerous Oracle representatives at multiple levels.

This trend is mostly due to the fact that Oracle has decided to focus on its Cloud Applications. This shift in focus means that it will only be a matter of time before a vast majority of JDE system integrators and resellers will no longer focus on JDE.

Typically, in these times of transition, an ERP vendor shifts internal resources to its new product. We have found this to be the case with Oracle, as they are decreasing JD Edwards resources for technical support in order to focus on training and certifications for its Cloud Applications suite.

So what is Oracle’s long-term plan for JDE? Oracle will continue to release updates, but they likely will only include functionality that has already been developed by the channel or include minor bug fixes. Many vendors follow a similar process when starting to sunset a product line.

The sunsetting of JDE doesn’t just affect organizations in the long-term, but in the immediate term as well. Organizations using JDE may find the user interface difficult to navigate. This is because Oracle has not made any significant improvements to the JDE user experience in many years, and they don’t intend to make any improvements in the future. It’s not surprising that JDE has historically had a low rate of user adoption. This is not a challenge that cannot be overcome, however, as we have used organizational change management activities to increase user acceptance of new enterprise resource planning software.

All technology that Oracle is currently developing is designed for the cloud model. Development kits, integration toolsets and other integration technologies are being built on a common cloud platform. Fortunately, JDE can be embedded onto this platform, and we hope that it will eventually be integrated so customers don’t have to be responsible for their own system maintenance.                   

Despite the lack of research and development, JDE is still a very functional product. Based on RFP summaries from our recent client engagements, we have found that JDE can meet most clients’ financial, manufacturing and professional services requirements. If you’re considering an ERP implementation in one of these industries, JDE may be a good fit.

Oracle Cloud Applications

The Oracle Cloud Applications are designed for organizations across industries with at least $750 million in annual revenue. Smaller organizations can run the application set but are often resource-constrained, which leads to less functionality being adopted or implemented.   

Oracle started developing its Cloud Applications seven to eight years ago. While rebranding Oracle Fusion into the Cloud Apps and broadening the scope of functional areas has benefited Oracle’s cloud ERP offering, it still lacks some functionality. This is slowing down their new sale and cloud conversion rates.

The intent of the product is to bring best practices from their other products (CRM, Manufacturing, Financials – Seibel, JDE and EBS). However, not all complex processes and functionality have been built into the new application, and Oracle is relying on system integrators for heavy configuration or product extensions to supply basic functionality. Many organizations, including Panorama clients, see the Cloud Apps as too risky and too expensive.

However, the Cloud Apps do have an intuitive user interface. Historically, separate applications, like Transportation Management or Demand Forecasting, had different user interfaces and were difficult to navigate. With the Cloud Apps, Oracle has done a nice job of combining functionality of these separate applications while updating and harmonizing the user interface.

Despite the intuitive user interface, we have found that user adoption rates for the Cloud Apps are behind the curve when compared to other leading vendors regarding innovation, deployment methods and overall maturity. For example, Oracle has been developing their artificial intelligence platform for many years, but it has lagged in functionality for production and distribution environments.

Another challenge for the Cloud Apps has been Oracle’s recent change in leadership. Last year, Thomas Kurian, Oracle’s President of Product Development in charge of the Cloud Apps, left the company, leaving the focus of the future development of the Cloud Apps unclear. Kurian wanted Oracle to be more public-platform-agnostic, inclusive of Amazon Web Services (AWS) and Microsoft Azure. This conflicted with Oracle co-founder, Larry Ellison’s desire to continue to operate solely on the Oracle platform.

What does this mean for Cloud App customers and potential customers? For the time being, the Cloud Apps will only operate on the Oracle platform and not the Azure or AWS platforms. This may pose challenges for some organizations as full dedication to the Oracle platform, including toolsets and services, is often too much to ask for mid-sized organizations. Platforms like Azure and AWS make it easier for customers to source experienced resources to support their ERP systems.  

Oracle’s dedication to the Oracle platform has also affected customers’ ability to automate certain business processes as some functionality is still in development. While Oracle continues to develop functionality, it is hesitant to tie future releases to specific dates. As a result, many system integrators are developing their own extensions as a bridge until Oracle releases the necessary functionality.

During ERP implementation, organizations often become frustrated with products that lack certain functionality as this can mean a longer time to full benefits realization and return on investment. However, this does not need to lead to ERP failure, as long as the organization sets realistic expectations and has a plan for continuous improvement.

Despite slow product development, the Cloud Applications is headed in the right direction, with new functionality emerging every day. Based on RFP summaries from our recent client engagements, we have found that the Cloud Apps can meet most clients’ financial, manufacturing, consumer-packaged goods and supply chain management needs.

Should You Implement an Oracle Product?

Your ERP selection considerations will depend on your organization’s unique needs and goals. Therefore, your decision about Oracle shouldn’t be based solely on this blog post. Oracle has many other viable products that may be a good fit for your organization’s business requirements and digital strategy.

Panorama’s ERP consultants can help you prepare for ERP selection by understanding your unique organizational goals and recommending suitable products from several different vendors. We are experienced in facilitating vendor demonstrations and evaluating products against organizations’ business requirements.

7 Tips for Developing an ERP Business Case

7 Tips for Developing an ERP Business Case

More organizations are realizing the benefits of ERP software. Not only are Fortune 500 companies implementing and upgrading ERP systems, but small businesses are taking advantage of niche ERP solutions tailored for their industry. If your organization is looking to realize increased business benefits from ERP software, our experience has shown it is critical to develop a detailed and comprehensive business case.

By developing a business case for new ERP software, you can shed light on operational issues, determine how to solve them and estimate the resulting business benefits. This is easier said than done, as organizations tend to have different ideas regarding what constitutes an effective business case. With that in mind, we want to share seven tips for developing an effective ERP business case:

Understand the Importance of a Business Case

Don’t develop a business case until you understand its importance. You’ll develop a much more thorough business case when you know what’s at stake. So, what’s at stake? Business benefits. A business case ensures your organization realizes measurable business benefits from its ERP software. It ensures the project achieves business goals, not just IT goals.

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Identify Pain Points

A good business case begins by identifying problems and determining what solutions are needed to solve them. Not everyone will agree that problems exist or that they require an ERP solution. A business case can help you achieve organizational alignment regarding the need for an ERP system.

Acknowledge Challenges and Risks

There are, obviously, challenges in every ERP implementation. A business case allows an organization to take an honest look at obstacles that must be overcome, whether it’s a lack of resources, lack of expertise and/or lack of employee and executive buy-in. We have seen many high-profile cases where ERP implementations failed because those responsible for developing the business case and implementing the system were not forthcoming about potential risks.

Determine Your Organizational Goals

Chances are, your reason for implementing ERP software isn’t just to replace an old system. Often, we find organizations have many goals they want to achieve through implementation:

Improving Customer Service

Every business case should consider the customer service benefits of new ERP software. Does your organization want to enable customers to order online 30% faster once an ERP solution is implemented? If so, include this in your business case.

Improving Business Processes

If your operational pain points are related to broken or inefficient business processes, then outline these processes in your business case. Potential process improvements should be specific and measurable.

Improving Employee Morale

An ERP system can improve employee morale by making employees’ jobs easier. Employee morale is measurable since it can be gauged by distributing surveys, conducting focus groups and/or tracking turnover rates.

Increasing Revenue

If processes are streamlined, customer satisfaction increases and employee morale improves, this will most likely result in a positive financial outcome as well. We have found that identifying potential cost savings within a business case increases the likelihood of achieving executive buy-in. The business case also should outline the total cost of ownership of new ERP software, including implementation costs. When you focus on both the costs and the benefits, you can show how the latter outweighs the former. After all, ROI is the language of executives.

Consider Alternatives to Implementing ERP

Instead of implementing new ERP software, some organizations upgrade their existing software, improve their business processes without new technology, or simply decide to do nothing for the time being. It is important to examine the costs of each of these options against the cost of an ERP implementation. For example, it may become evident that the cost of doing nothing and remaining inefficient is greater than the cost of an ERP project.

Develop an ERP Project Plan

Your business case should include a detailed section outlining the components of your ERP project plan. While the business case helps get the project off the ground, the project plan ensures a project maintains momentum and sticks to the expected timeline and budget. Accounting for all essential project activities, including change management and business process reengineering, sets realistic expectations regarding implementation timeline and budget.

Measure the Results

Once you’ve built a business case and begun your project, it’s time to start measuring results. It’s important to measure results throughout the project so you can track your progress, promote accountability and monitor your budget. Measuring results can also help sustain project buy-in when and if it wanes.

A Business Case Supports ERP Success

A thorough business case will, more often than not, result in a successful ERP selection and implementation. If your organization is considering an ERP implementation, Panorama’s ERP consultants can guide you in developing a business case that allows you continuously prove the value of new ERP software.