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ERP Software done correctly can be a great tool for improving a business. Done badly, it can demoralize employees and drive down business results.
Case-in-point:
ERP Software should enable business processes, not torture the employees.
“My experience with SAP was of an all-purpose integrated business solution. At the beginning of the day, I clocked in using an SAP applet. Next, I would go through a set of SAP generated planned-production orders, direct work orders, or reported directly to my supervisor. After looking through the routing information (generated through SAP), I would complete the specified task. When the task was complete, I would “clock-off” on the job, which entailed bringing the PPO to a computer, scanning it into an SAP applet, and entering my badge number (employee ID). Another thing I found interesting was the request to clock off on all activities. Even if I had only swept or scraped tape off the floors (it was a slow summer), I was asked to clock off on something called “lean labor.” I found this curious, though I suppose from an efficiency standpoint it was very important. To refer back to these “value-chains,” it is important to know exactly what every employee, piece of inventory, and work order are doing at any given time. Whether it is benig worked on, working on something, or finished, this real-time updating system allows everyone company-wide to see which projects are in progress, which are complete, and which have not been touched. Also from a managerial standpoint, it is important to see how much work each individual employee is doing and how well they are performing, not to mention that employee’s ID will always be attached to that job if future concerns arise.
Now from a business standpoint this is all well and good. But what about the employee? A lot of days, clocking and clocking out I felt as though it did not matter whether or not I was even there. There were simply no jobs to be done for entire weeks at a time, but that did not change that I had to “clock out” for certain jobs. Of course, a business wants to make sure that all of its employees are being as productive as possible, but clocking out on cleaning out the same area 3 times during a week seemed redundant and absurd. Not to mention clocking out on an activity such as “material handling” or “lean labor” is fairly arbitrary. This of course necessitated a manager to scold me when my productivity levels fell (ie playing Frisbee with a cardboard box in the back). It is important to note that I was simply summer-hired as well. Working full time at a job as a number would eventually get fairly tedious. As one of my co-workers noted to me, they had simply clocked in and clocked out for a couple of weeks and clocked off on none of the jobs they were doing. No one said anything to him. So who’s checking these jobs?” - Andrew Mellino
Implementing technology to collect data is one thing, but ERP should not be just about the numbers. ERP ideally should be “process improvement enabled by technology.” It should not be a tool to harass the employees. This is a key concept to understand when implementing and going through the design phase. Which processes are broken and which processes are working fine. Once you have defined that, then see where the ERP software can enable best business practices. It is essential that the employees have a buy in and provide feedback to this step.
If you get the employees to buy into the implementation and how it will change their jobs, you will gain the benefits of higher utilization of the system and overall better adoption. If you fail this step, you will have a failed ERP implementation. There is a saying that you should “drive data collection to the source.” This means that you should have the person who is directly responsible for the source of that data be the one who is entering it. When the ERP system is not implemented with the employees in mind, the employees will be unmotivated to use the system, ensure that the data is accurate, or even bother to put in correct information.
With the help of your line employees, design in best practices and work with them to build a system that they will use and will benefit not only them by making their jobs easier, but also benefit the whole company by driving positive results.
How not to implement and use ERP software is a post from: ERP and More!
Defining your ERP Evaluation Criteria is essential for paring down the vendors and getting to the final choice. There are two focus areas for determining your selection criteria:
Determining your ERP Evaluation Criteria
1. ERP Evaluation Criteria – Process
The Process analysis for determining your ERP Evaluation Criteria is the method you would use to determine the flow of data through the system and how it would follow along your established or to-be business processes. For example, following a process flow of quoting an order, receiving the order, manufacturing or purchasing the product, shipping, and finally invoicing the order is known as the order-to-cash process flow.
There are other anther ERP Evaluation Criteria processes such as procure-to-pay, which maps the inventory requirement through the accounts payable billings. Another example could be the HR process of recruiting though retirement.
Using Process Flow documentation to determine your ERP Evaluation Criteria
By mapping out these processes in a tool such as Microsoft Visio Standard 2010
2. ERP Evaluation Criteria – Functional
ERP Evaluation Criteria for the system is the detailed list of all of the things you need the system to do, from processing purchase orders, processing a sales order, to invoicing a client and producing financial reports. These are the nitty gritty things that your system should do. A good place to start is to evaluate your current system. What are the functions that the current system does well? Include these in your list. What are the things that your system does poorly, include the desired functionality in your list.
Your list should not be 10,000 lines, but rather it should look at those items that make your business unique. For example, most every business has to cut A/P checks. So most systems can do that. So do not list as a requirement that the software should be able to cut A/P checks, rather make your requirement specific to your company, such as “System should be able to cut 3 copy laser checks, with reprint capability.” That very specific requirement will help you distinguish the vendors from one another.
A good place to start is with an ERP Evaluation Criteria Template. ERPandMore has many different templates to assist you in evaluating various ERP software venders and have best practices built in. In using these as a starting point, you will save yourself countless hours in both preparing these criteria templates as well as in differentiating the vendors your are looking at. We hope this has helped to answer How to determine your ERP Evaluation Criteria
How to determine your ERP Evaluation Criteria is a post from: ERP and More!
20
Social ERP?
0 Comments | Posted by Chris in Contributors, salesforce.com, social networking
Social Networking has become the mainstay of the internet now. Facebook, Twitter, and the like are all drawing people in and essentially training the next generation of computer users. These social media sites are like magnets that people have to go to each and every day to keep up with their friends and share their updates. People are accessing these media sources from all types of devices. It is all absorbing.
One of the biggest problems in most business applications is user adoption. Getting the users to use the system is a key challenge in many applications. So how does the business applications market combine the social media attraction to a financial or manufacturing system? Combining a social media approach to a business management system would seem to be a logical conclusion. But there are obstacles. You have two different elements playing here. The cold hard facts of transactional data and the emotional connectedness of the social media. How can these gel together?
Salesforce.com has begun a trend in combining social media with a business application through their Chatter application. Essentially, Chatter is a Twitter for Salesforce.com. It is an embedded part of Salesforce.com. Users can post status updates and see all of the updates from their chosen connections (friends). But the power of this application is that you can follow business objects within Salesforce.com such as Accounts, Opportunities, Contracts, etc. So anytime an update occurs on these objects, you get a status update, not from a friend, but rather from an application.
So how would this likely work in an ERP solution? First you could enhance any alerts to post to a status page. Next you could potentially use it to notify you on any changes to any master record, such as customer, supplier, inventory, or BOMs. The next thing you might consider is to have criteria based alerts be in the form of status updates. Post an update when a customer exceeds their credit limit, or post an alert when a critical inventory part is below its optimal stocking level.
The next logical extension of this would be to extend the ERP to the social web. Imagine getting private posts on Facebook when your major customer falls past due or when your shipment that absolutely must go out notifies you that it shipped on time.
The problem with this whole concept is the ability for traditional client server based ERP solutions to move in this direction. Some of the new systems (or recently re-written) solutions may be able to implement this type of functionality quickly, but some of the older technology solutions may have difficulty bringing a social media function quickly to bear.
As this is a topic with no clear solution yet, what do you our readers think? Where is this going? When will we see it? Please post your comments and thoughts. Thank you.
Social ERP? is a post from: ERP and More!
One of the most critical plans you can make is to prepare for the worst, especially when it comes to your enterprise software system and the database of all of the company’s critical information. A proper disaster recovery plan is essential, if you are running an ERP system, as it touches all aspects of the company. The plan can be as simple as a backup and recovery strategy, or as extensive as a global hot site fail-over plan. In either case, you need to prepare and test your plan.
Testing the plan is often where people fail. You often plan for the eventuality of a hard drive crash (and thus you use a RAID array), or you plan for the possibility of natural disaster, but what if you have a hidden hardware problem that is corrupting the database a little at a time?
That happened with one company we worked with. A failing motherboard caused problems with the email virus scanner, which in turn corrupted the email store a little at a time, so that it was unrecoverable. What do you do then? Well, in that case it was restore to the point in time that the email store database was usable. So the net impact was a few weeks of data loss. That is one illustration, but what happens if something like that occurs in your ERP database? Again the key is backups.
If backups are so critical, then why do people choose not to bother with testing and restoring them? Many people happily back up night after night, but never try to restore a data file or much less a database. Is it too expensive to have a test server? The real question is it too expensive to not have your ERP data after a disaster? What is the company worth? Millions? A few thousand dollars for a test environment seems like a reasonable investment.
Here are some of the things you need to think through:
1. Backups and Recovery procedures
2. Off-site storage of backup media
3. Security of backup media
4. Remote site backups (In a disaster, can you get the business up if the server site is destroyed?)
5. Personnel (In a disaster, can the right people be there to recover?)
6. Priority levels and potential downtime acceptability
7. Costs
There are some excellent disaster recovery resources on the web on this topic. One article that we liked was on making proper backups for your ERP system. We would suggest that you invest the time to learn more about this topic before it bites you. Remember that disaster always strikes at the most inconvenient time, so make the time now.
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ERP Disaster Recovery |
ERP Disaster Recovery is a post from: ERP and More!
12
Infor Launches Infor24 Cloud Initiative and Selects Microsoft Windows Azure as Preferred Cloud Platform
0 Comments | Posted by Chris in Contributors
Infor, one of the major players in ERP software, announced today that it has teamed with Micosoft to utilize their Azure platform for SAAS based computing and is offering several cloud based solutions on the Azure Platform. This is a significant move on their part and shows how larger ERP Vendors are moving to cloud computing.
Leading their ERP charge is Syteline, a powerful ERP solution for manufacturers. Taking this to a cloud solution will allow companies without the base infrastructure to utilize this software without the headaches of maintaining application and database servers.
Cloud based ERP should also shorten the implementation timelines of implementations. Using a cloud platform, you have taken the infrastructure questions out of the equation and are now strictly focused on processes and configuration.
You can read the press release here: Infor Launches Infor24 Cloud Initiative and Selects Microsoft Windows Azure as Preferred Cloud Platform.
What do you think of larger ERP solutions moving to the cloud?
Infor Launches Infor24 Cloud Initiative and Selects Microsoft Windows Azure as Preferred Cloud Platform is a post from: ERP and More!
If you have ever been through the ERP Evaluation process, you understand the stress and pressure that is involved with selecting ERP Software. Selecting ERP software is like getting married. It can have a lot of unknowns. If you are just beginning the process, hopefully this article will provide you useful tools to streamline your efforts. An ERP Evaluation process takes time and the level of effort for properly selecting a provider and implementer can be tremendous. Here are some key things that you need to keep in mind.
The nuts and bolts of an ERP Evaluation
A company only goes through an ERP Evaluation, on average, only once every seven to ten years. As such, they usually do not have resident experts in selecting software. Companies do everything from the extremely methodical analysis taking years, to the rash signing of the contract at a software convention with no investigation at all. How long should a proper search take from start to finish? If done in a thoughtful and yet expedient manner, it should take anywhere from three to six months. This really depends upon the number of candidate software vendors you are looking at and the degree upon which you investigate the implementers.
One of the best ways to keep the selection time down is to hire a coach. This coach can be a consultant, a seasoned colleague from a trade association such as APICS, or a Software Selection Service. In either case, they will be able to steer you clear of some of the obstacles that you are likely to run into. You want to choose someone that has a clear understanding of the ERP Software landscape. They must have been through several ERP Evaluations previously.
Once you choose your guide, you then need to look at your internal processes. Ideally, you can document your business and answer the following questions:
- What is the general industry of the business are you in? (ie. Manufacturing, Distribution, Professional Services, Retail, Property Management, or Construction, etc.)
- What are the things that distinguish your company from others in your industry? (ie. We have a retail store, we only sell through distributors, we manufacturer locally [or offshore], we have a strong customer support staff.) Don’t stop at one item, list out as many as possible.
- What is your budget? Are you looking at $50,000 or a $1,000,000 system? (Including implementation services and maintenance contracts)
- What does your current system do today that you want to keep as functionality and what does it do horribly that you want to improve upon?
- What are the key requirements for each of your various departments or functional areas? Both #4 and #5 should be documented in a spreadsheet with columns to indicate if they are “Must-haves” or “Nice-to-Haves.”
- What are the key business process that the system must enable? This is usually a flow from Order to Cash receipts (ie. Order, Inventory management, manufacturing, shipment, Invoicing, and finally payment) or on the other side, Procure to Pay (Inventory Shortage, Requirements Planning, Purchase Requisition, Purchase Order, Delivery, Stocking, Invoice Receipt, Accounts Payable) and ultimately financial reporting and analysis. Today, Customer Relationship Management (CRM) plays a large part in a business processes. This includes marketing to lead to account management to sales opportunity processes and product support with customer service processes. These processes should be mapped or at least documented to both a current state and a wishful future state.
With these evaluation factors, you now have the basis for an objective ERP Evaluation. You can use the list of requirements for your analysis of the vendors. Often the requirements are sent out as a Request for Proposal (RFP) and the vendors are scored based on their requirements. The top two or three vendors are then invited in to demonstrate their product. Usually that begins with a walk through of the company and an extensive question and answer session so that the vendors can get a sense of who you are as a company and learn more about your requirements in preparation for the demonstration.
Using your process documentation, a script should be provided to the vendors that will be evaluated. You can then use the script as an evaluation factor to compare the process flow of the various software candidates. The vendors should be held closely to the scripts processes. Many times, they will want to deviate to the latest release module that has nothing to do with your business, but looks “really cool.” Keep them on track.
Once all the demonstrations are completed, there is usually a sense of which vendor showed their software in a way the more clearly demonstrated that they could fulfill your requirements. You may have eliminated the last place contender, But this is not the decision point yet! Along with the demos, the vendors also need to provide a price proposal. These proposals should include the following:
- Software License cost
- Annual Support Agreement cost
- Implementation costs
- Estimate of hardware infrastructure costs
- Any other miscellaneous costs
You can also get references that you can either call or visit. In our experience though, these are only good to find out about the user’s experience with the software as they will tell you nothing but good things about the vendor, since they were selected because they are favorable references. But it might be good to hear about their implementation and their user’s reaction to the software.
Once you have all of these facts, you are ready to begin the next phase, which is the negotiation. Your evaluation still needs to look at the financial and contractual obligation you will be signing up for. At this point, you usually are down to the final two. One strategy is to play the vendors against one another, but this is sometimes not a good strategy. They are wise to this and will often dig in their heels. The best thing to do is to give them financial and contractual targets that will convince you that they are the right vendor for them. Don’t be afraid to ask for a lot more than you think they will give. They might just give it to you. Another key strategy is to negotiate at the end of the month. Ideally, the end of the month at the end of their fiscal quarter or year is ideal. The vendors are hungry to show the sale on their books and will often give deeper discounts.
Now with all the facts, you can make your choice. Once chosen, both you and the software provider will need to learn to compromise and respect the other’s view as you proceed to implement. Software can only be configured so far, before you need to change your processes. However, if you ran the evaluation process correctly, you will have selected the best fit for your business, so if there is any change to your processes, it will be by adopting the software system’s best practices. Thus, with your well-run ERP Evaluation, you have laid the groundwork for an even happier marriage!
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ERP Evaluation is a post from: ERP and More!
8
Consider The Sharp FO 3800M Printer For Your Fast-Paced Business
0 Comments | Posted by Chris in Contributors
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