| WHAT IS ERP?ERP is a term that is widely
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| | each requirement times the vendor
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| used yet probably not well understood. It
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| | response, and then summing the results,
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| stands for Enterprise Resource Planning
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| | you get a score that will give you an
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| and although it was initially targeted to
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| | indication of closeness of fit for each
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| manufacturing companies, today it
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| | vendor.Attend demonstrationsThe vendors
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| encompasses any product that can be used
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| | should now know your Critical Success
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| across an enterprise. When implemented
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| | Factors and key requirements, and should
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| effectively, ERP enables companies to
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| | be given an agenda so that time is
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| break down traditional organizational
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| | allocated properly. You should attend no
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| silos, replacing them with a tightly
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| | more than 4 demonstrations, and limit the
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| integrated horizontal structure in which
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| | time to 2-3 hours. Ask each attendee to
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| strategy, organizational structure,
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| | identify major strengths and weaknesses,
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| process and technology are closely
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| | as well as score (-10 to +10) how well
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| aligned. Applications can include
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| | they did for each topic on the agenda as
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| financial, distribution, manufacturing,
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| | well as indicate its importance (1 to
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| human resources, payroll, and project
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| | 10).Call referencesYou will be amazed at
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| costing.There is a lot of confusion
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| | how much you learn and how little some of
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| between an accounting system and ERP. In
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| | the vendors know their customers. Have a
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| the past, an accounting system was
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| | checklist of questions to ask such as our
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| limited to just financials, but that has
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| | checklist that can be obtained by
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| changed over the last few years and it's
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| | clicking here. Tell the reference a
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| now hard to distinguish between an
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| | little about yourself before asking any
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| accounting system and an ERP system. The
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| | questions so that they have a level of
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| difference between them is a matter of
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| | comfort with you.Prove that the system
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| degree as can be seen in the following
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| | will work for youPrepare a script that
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| chart.CriteriaAccounting
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| | contains sample transactions that should
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| System ERPEnterprise-wide Maybe YesScalab
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| | be processed through the entire system.
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| le Partially YesFees Low to
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| | The script is a day in the life at your
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| Medium HighRatio of Implementation Fees :
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| | company will contain the most important
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| License < 1 > 1Customization
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| | business processes with sample documents
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| capabilities Depends ExtensiveFunctionali
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| | and reports. You could ask 1-2 vendors to
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| ty Depends ExtensiveTechnology
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| | prepare a proof of concept. This is a
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| Platform Single MultipleAnalysisStart
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| | time consuming task for the vendors as
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| with an understanding of Critical Success
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| | well as for you in attending the
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| Factors (CSFs)
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| | demonstration. But you are only focusing
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| CSFs are defined as those things that
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| | on the vendors most likely able to win
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| you must do well in order to be
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| | your business.Negotiate the price and the
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| successful. You can use CSFs as a way to
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| | contractIt's a buyer's market. You will
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| determine whether a requirement is really
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| | get a minimum of 10% off the first quote.
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| critical. If a requirement can't be
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| | Many of the vendors offer competitive
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| mapped directly to a CSF, then it's not
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| | pricing when they know they could lose to
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| critical.Define measurements of
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| | a competitor who could offer a reasonable
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| successBefore starting any project, you
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| | solution at lower a price.Know the Total
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| should know how to measure success in
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| | Cost of Ownership (TCO)You need to
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| terms of saving money by streamlining
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| | understand all the costs including
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| operations, increasing revenues,
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| | license fees, implementation, support,
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| increasing market share... Measurements
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| | hardware, networks and communications
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| of success act as a motivator for staff
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| | before making a decision. There should be
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| during the implementation, help keep the
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| | no surprises later. Click here for more
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| project on track and focus effort on
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| | about TCO.Do a Boardroom PilotYou need to
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| attaining important business
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| | work with the system to understand the
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| objectives.Understand existing business
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| | many options. You may think that a
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| process and seek opportunities for
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| | customization is required until you
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| business process improvementUntil you
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| | better understand the various
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| have understood the existing business
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| | workarounds. The vendor has an idea of
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| process, you are not ready. Employees may
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| | the customizations, but has probably not
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| not know that what they are doing is
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| | created a specification or given you a
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| atypical. Roll up your sleeves and talk
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| | firm quote. Use the boardroom pilot as a
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| to the people who do the work. Remember
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| | way for the vendor to understand your
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| the devil is in the details. Along the
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| | requirements and for you to better
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| way, your value add may be in identifying
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| | understand the system before signing a
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| ways to improve business process.Don't be
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| | contract and purchasing the software. You
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| ambiguous in the definition of
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| | will need to pay the vendors for their
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| requirementsThe more ambiguous the
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| | time. You should get a fixed price as one
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| requirement, the more interpretation in
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| | of the deliverables of the boardroom
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| whether a particular vendor meets the
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| | pilot.ImplementationBusiness Case
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| requirement. You need to be precise so
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| | FoundationDon't forget what you should
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| that you can compare apples to
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| | have known during the selection process.
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| apples.Don't waste time on basic
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| | You should have already understood
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| functionalitySystems have matured to the
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| | Critical Success Factors (CSFs). CSFs are
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| point where the basics are done well.
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| | defined as those things that you must do
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| Focus only on the requirements that are
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| | well in order to be successful. As well,
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| unique or could vary by vendor.Manage
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| | you should have defined measurements of
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| scope, budget and timingProject
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| | success. Before starting any project, you
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| management is the key factor in
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| | should know how to measure success.
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| predicting success of any project.
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| | Measurements of success act as a
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| Project management includes management of
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| | motivator for staff during the
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| scope, budget and timing. Rather than
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| | implementation, and help keep the project
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| using the school of hard knocks, you
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| | on track and focused on CSF's. Even if
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| should consider working with a structured
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| | you have not done it for system
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| methodology such as published by the
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| | selection, it's not too late.Business
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| Project Management Institute (PMI).Get
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| | Process ImprovementDon't assume that your
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| employee involvementRecognize the
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| | existing business process is the best way
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| significant amount of employee knowledge
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| | to get the job done. Even worse, don't
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| and the potential contribution of the
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| | insist on modifying the new system to do
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| employees. Unfortunately, the knowledge
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| | exactly what was done before. First,
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| is typically in the heads of the
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| | ensure there is an understanding of
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| employees and care must be taken to
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| | existing business process. Roll up your
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| include their input. At the same time,
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| | sleeves and talk to the people who do the
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| you are effectively including them in the
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| | work. Ask them to tell you how much time
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| process and securing their buy-in for the
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| | is spent on activities. It may not seem
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| process.Assign an internal championAn
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| | serious if 1 person wastes 15 minutes per
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| internal champion should be allocated to
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| | day - but what does it cost if there are
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| the project. Even the most difficult
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| | 10 people doing the same thing throughout
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| projects can become successful when you
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| | the year? Assuming a rate of $25/hour and
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| have an internal champion who is ready to
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| | 1,800 hours or work per year, that little
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| do whatever it takes to get the job done.
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| | problem has cost the company $112,500 for
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| It is best to assign the internal
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| | the year.Project ManagementProject
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| champion at the beginning of the system
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| | management is a key factor in predicting
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| selection project to ensure their
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| | success of any project. Project
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| commitment and agreement with the system
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| | management includes management of scope,
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| selected.Manage the risksSeek out
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| | budget and timing. Rather than using the
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| potential risks, their impact, and their
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| | school of hard knocks, you should
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| likelihood of occurring. Encourage all
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| | consider working with a structured
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| interested parties to develop strategies
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| | methodology such as published by the
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| to mitigate the risks. Every organization
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| | Project Management Institute (PMI). A
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| has at least 1 naysayer, who can cause a
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| | good project manager has support of upper
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| lot of problems, but who is also very
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| | management, and can be tough. If the
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| knowledgeable. The naysayers must be
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| | project manager wants to please everyone,
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| included in the risk management process.
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| | he/she is not the right person.Internal
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| By getting their input early, you can
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| | ChampionAn internal champion must be
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| avoid problems and you effectively limit
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| | allocated to the project. Even the most
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| their negativity.Ensure management
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| | difficult projects can become successful
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| buy-inCommunicate scope of project and
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| | when you have an internal champion who is
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| get sign off at critical steps along the
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| | ready to do whatever it takes to get the
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| way. Management should develop or ratify
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| | job done.Employee InvolvementYou need
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| the measurements of success.Vendor
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| | their involvement for many reasons.
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| SelectionIdentify potential vendors
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| | Without it, you could risk missing
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| You would be amazed at how many vendors
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| | critical business process that only they
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| want your business. Start with a buyer's
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| | know about. And just as important is the
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| guide such as the one published on the
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| | psychological component. People are often
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| CAmagazine web site which you can access
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| | threatened by change. By getting them
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| from the menu on the left. You will
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| | involved, they are more likely to be
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| notice in the buyer's guide that the
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| | supportive.Best PeopleYou want your best
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| vendors are split into Tiers. The largest
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| | people involved in the implementation.
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| companies are usually best served by Tier
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| | They have the confidence of their
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| One and Tier Two vendors. Smaller
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| | colleagues, know the business well, and
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| companies are generally served better by
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| | usually have the right attitude. The
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| the other vendors partly because of
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| | implementation is going to take time. You
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| smaller investment, but also because of
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| | must reduce their normal workload.Risk
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| less complexity. Tier One products
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| | ManagementSeek out potential risks, their
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| generally have a lot of flexibility but
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| | impact, and their likelihood of
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| it takes more time to set-up, train and
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| | occurring. Encourage all interested
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| operate.
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| | parties to develop strategies to mitigate
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| There is typically more risk associated
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| | the risks. Every organization has at
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| with vertical and custom vendors.
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| | least 1 naysayer, who can cause a lot of
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| However, the benefits could outweigh the
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| | problems, but who is also very
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| potential risks. To obtain lists of
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| | knowledgeable. The naysayers must be
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| potential vendors:- use internet
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| | included in the risk management process.
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| searches- contact your
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| | By getting their input early, you can
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| accountant- contact colleagues- contact
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| | avoid problems and you effectively limit
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| consultants- contact industry
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| | their negativity.CommunicateDon't keep
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| associations- look at trade journals for
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| | people in the dark. Communicate formally,
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| articles and advertisements- attend trade
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| | informally and frequently.Train the
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| showsFind a good resellerThe reseller or
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| | TrainerThis is a good way to cut training
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| Value Added Reseller (VAR)/implementer
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| | costs, and force employees to know the
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| can make a big difference. Often,
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| | system. The best way to learn a subject
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| companies selecting new systems spend a
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| | is to teach it.Extensive PrototypingThere
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| lot of time analyzing the product and the
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| | are many options in the setup of a new
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| vendor but not enough time analyzing the
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| | system including setup options,
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| capabilities of the VAR. The VAR could
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| | conversion, integration, and
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| have been assigned by the vendor, and the
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| | customization. An iterative process is
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| VAR may not be the best choice. The
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| | required until the prototype is
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| vendors have a methodology for assigning
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| | completed. It may take a few times before
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| leads to their partners/VARs that is not
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| | you get it right. Take a small,
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| well-understood. You could be getting the
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| | representative sample of transactions
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| next VAR on a list. Once a VAR is
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| | through the system including reports and
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| assigned, the vendors are reluctant to
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| | controls. Don't go live before everyone
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| introduce another VAR, as it can lead to
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| | is ready.Beware of
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| VARs competing with each other for the
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| | CustomizationsCustomizations can bite.
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| same prospect. So do some pre-screening
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| | The first bite is that it slows down the
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| of the VAR. Better yet, get the VAR's
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| | implementation and the costs soar. The
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| name from someone you know.Issue a
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| | second bite occurs when you want to
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| Request for Proposal (RFP)An RFP is a
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| | upgrade to the newest release. This is
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| good tool to communicate your needs
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| | not to say that some customizations are
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| uniformly to vendors and to create a
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| | warranted and have a compelling business
|
| short list of vendors. Ask vendors to
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| | case.Phased in approachThere is also what
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| answer questions related to cost,
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| | is called the big bang theory, when you
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| technology, customer base, developer and
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| | do it all at once. I think it got its
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| implementer qualifications, and similar
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| | name because everyone shot each other.
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| customers. Have the vendors respond to
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| | Small and mid sized businesses especially
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| each requirement with a number such as
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| | don't have the manpower to do it all at
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| "7" in current release and quoted in
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| | once.Post Implementation ReviewLearn from
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| estimate, "6" in current release, "5"
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| | your mistakes and there's always room for
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| available in 6 months, "4" minor
| |
| | improvement.This article was prepared for
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| modification or workaround, "3" third
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| | these business consultants
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| party, "2" available in a year, "1" major
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| | , please visit them for more
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| modification or workaround, "0" not
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| | information.
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| available. By extending the priority of
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