Tag Archive: business processes

ERP Selection: Why It Has Become a Strategic Priority

April 18th, 2019

In today’s Amazonian environment, customers expect rapid delivery, over and beyond from cradle to grave, collaborative service, 24/7 accessibility and last-minute changes. Executives are realizing they must upgrade their technology infrastructure to meet and exceed these customer expectations while driving bottom line improvement.

Your ERP decision will be one of the most significant investments your company will undertake, and these projects are wrought with risk. 80% fail to achieve the expected results yet waiting “too long” can put you out of business.

Selecting an ERP System is a Strategic Priority
Because of the significant customer and bottom-line benefit and steep, unintended consequences associated with these projects, the most successful clients realize they must be a strategic priority. By no means should the decision by relegated to a technical expert or project manager. Involve your best and brightest on the team and ensure your executive team is on top of preparation, progress and the inevitable pitfalls – beginning with preparation:

  • Understand business processes: Start by understanding what occurs on a day-to-day basis. One of the top failure points is to assume that people can make the leap from current processes to what every ERP provider claims to be “best practices” on day 1 with no roadmap.
  • Gain strategic and cross-functional input – Since all systems will perform the basics well, success will boil down to what drives your strategy and supports your cross-functional and cross-organization collaboration.
  • Identify critical requirements – Countless hours wasted on typical business requirements (which all systems generally cover); instead, focus 80% of your attention on the requirements unique to your business, industry, and company. Think customer differentiation & profit drivers.
  • Prepare data and be realistic evaluating your process disciplines – No matter how well you prepare, your system will only be as good as your data and process disciplines.
  •  Dedicate appropriate resources – Be an exception. Supplement your resources, bring on appropriate expertise early on and be willing to invest in what will ensure success and mitigate your risk.

5 Critical Factors in Selecting ERP Software

As complicated as most companies seem to make it, the critical factors in software selection boil down to a select few:

  1. Your business objectives – Don’t worry about everything required in every module to run your business. Instead, take a step back and focus on what you need to meet your grow and profit plans.
  2. Cloud or not?  It depends. Dig into the details. Develop your own spreadsheets with paybacks. Consider your technical resources, adeptness with topics like cyber security and the latest technology, and your ability to navigate disruption and risk.
  3. Understand your culture – What are your cultural norms when it comes to change? Do your employees have an entrepreneurial spirit or do they require strict procedures? These answers will be integral to aligning culture and technology.
  4. Think about design upfront – Not thinking through down-the-line implications will derail the best of projects. Incorporate design and a holistic systems-view upfront.
  5. Ballpark estimates and ranges – Get a ballpark upfront, and never accept the first estimate. It’s typically too low! Worse yet, two suppliers that should be within 10% of one another can be 100% different. Ensure you are comparing apples to apples, and remember implementation, not software, is the 80-pound gorilla of ERP success.

ERP is a tough topic! Clients worry they are “too small” or it will be “too expensive”, and in the interim, the competition passes them by since having the technology that supports a superior customer experience without breaking the bank is a “must”, no matter your size or industry. With that said, we have seen clients ready to “throw out” a perfectly suitable ERP system as they think it is the system, not the process or people that is the issue when it isn’t.

If you’d like an expert to assess your situation to partner with you to achieve these types of results, contact us. 

      

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The IT – Business Partnership

January 21st, 2014
Successful companies forge partnerships with their IT departments to create an ERP system that provides data to make good decisions and provide their customers with an exceptional experience.

Successful companies forge partnerships with their IT departments to create an ERP system that provides data to make good decisions and provide their customers with an exceptional experience.

Is IT viewed as a partner to your supply chain or manufacturing business? Or a necessary evil? Or something in-between? Successful companies go down the path of partner. After all, critical business processes (which drive profitable growth) are connected with systems – you cannot succeed with one and fail with the other. Thus, you must think about strengthening the link.

Larger companies have folks termed business analysts who understand business and help translate business needs into technical specs and systems analysts who come from the technical side and think through how to translate technology into business results. However, the vast majority of companies are considered small to mid-size businesses and might not have these positions. There’s no reason to despair…. I often times find people who are capable of performing this role for your critical business requirements. The key is to look for them. I’ve worked with a few of the BEST, and I guarantee that although often undervalued, these folks had a direct correlation to tangible business results.

Even if you have these folks identified, it might not matter if you don’t view IT as a strategic partner. You better! Your ERP system can make or break your ability to succeed (as witnessed by the resounding failures of some new system implementations we’ve all heard about in the news or from our network… and the dramatic negative customer consequences to follow).

No company can run without financials – at least not for long. Financial reporting is tied to your ERP system. I’ve seen really impressive manual systems; however, even in the best case I’ve ever seen (which also happens to be the only case I couldn’t recommend low-hanging fruit because their manual network was so extensive), the reason I was talking with this client is because they had to upgrade and better leverage the system to support growth plans and service requirements. It is no longer acceptable to not know order status at all times!

Do you consider your IT or ERP experts as strategic partners?

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ERP Implementation: Keys to Success

October 17th, 2013
 ERP implementation

Achieve expected returns from your ERP implementation by following three keys to success.

I’ve found that noticing and acting on trends can be a key to success from both a professional and personal perspective.

Lately there have been plenty of trends to notice; however, a noteworthy one is that I’ve received several requests and/or inquiries about ERP implementation, post go-live support, and how to leverage ERP systems to drive business results. One of my recent speeches, “Leveraging ERP for Bottom Line Results” has become a popular topic, and as companies are beginning to think about investing in ERP again, it is all the more important to ensure success with your ERP projects in order to achieve the expected returns.

In my experience in working with multiple companies in a variety of industries and globally on implementing and leveraging the use of ERP systems to drive business results, I’ve seen the good, bad and ugly and have derived a set of best practices for achieving success.

A few of the keys to success include the following: 1) Build core metrics into the process upfront. 2) Focus on exception processes. 3) Look for ways to simplify

1.   Build Core Metrics into the Process Upfront – Building core metrics into the process upfront is undoubtedly the #1 key to success. For example, in one Oracle implementation, the company went over and beyond to ensure success by hiring not only Oracle consulting experts but also process experts to ensure a seamless transition; however, there was a significant gap with the day-to-day business. As is typical in implementations, often your best internal experts become involved with the implementation (and not focused on prior responsibilities), transition to new functions in the business or are dealing with entirely new business processes tied to the new system; thus no one is minding the store.

In my example, although there were people tasked with metrics and it appeared that the teams were well-organized, no one realized they were shipping significantly less immediately following the go-live. Soon, it built on itself, and they were suddenly behind and scrambling in shipping, production, planning and purchasing as well. Customers suffered! And costs increased. Instead, I’ve found that if you determine your core metrics upfront (or as soon as you realize your gap) and develop a simple tracking process; you’ll avoid unnecessary chaos and upheaval to your business.

 2.  Focus on Exception Processes – I’ve found that although there is typically a concentrated focus on testing all of the core areas of the business, implementations fall short with exception processes. I’ve yet to see an implementation that wasn’t struggling to maintain deadlines; thus, you are often fortunate to get through the testing and pilot process with your main functions let alone exceptions. Unfortunately, how many typical days are without exceptions (no mistakes, no entry errors, no changes in customer orders, and no delays in purchase orders)? Not many!

As exceptions begin to occur, the processes fall apart. It builds upon itself as well-intentioned employees find workarounds to resolve the exception which creates down-the-line issues. Instead, it is vital to ensure exceptions are incorporated into the training process. If that ship has already sailed, make sure to focus a team of people on bringing the organization up-to-speed on how to handle exceptions.

 3.  Look for Ways to Simplify – Last but not least, look for ways to simplify – your processes, systems and implementation. It is easy to get side-tracked in complexity when implementing a new system, as you want the system to do everything you previously couldn’t do as well as you wanted in order to achieve your business goals.

However, I’ve found it is at least 10 times better to simplify:

1) Boil down your desires to your core business drivers – what are your profit drivers? What aligns with your strategy?

2) Align your systems with your core business drivers through your critical success factors – typically, there are a handful of functionality areas to focus on in order to ensure the system will support your business and guarantee a smooth transition with key customers.

3) Ensure that the team focuses on these areas, even if it’s at the detriment to the rest of the areas. I’ve found this is easier said than done; however, the rewards are substantial. Implementing and leveraging systems can help drive business results; however, they often cost FAR more than intended with poor results due to implementation chaos.

Take a look at implementing a few best practices and turn a potential mess into results!

Why not start on the right foot by syncing lean with the business strategy, integrating it into the culture and putting in the effort to implement solid operating principles? Not only will you deliver bottom line results but you’ll also develop a culture of continuous improvement?



The Critical Importance of Design

September 23rd, 2013
Never underestimate the importance of design when upgrading or implementing supply chain systems.

Never underestimate the importance of design when upgrading or implementing supply chain systems.

I find that supply chain design is often undervalued. We seem to blindly follow systems and business processes handed down from our information technology departments and resources, but do we take the time to think through design? Purchasing, logistics, and ERP systems are considered big-ticket items for most companies.

Why would we leave design to chance and not fully leverage our investment?

If you are upgrading or implementing a new software system, start thinking about design prior to implementing, you cannot start too soon. My best clients ask for their processes to be reviewed, documented, and improved upfront. This way, the clients are familiar with the processes, and can better sync up their system and process design to deliver results. Even more importantly, those clients typically have a much smoother implementation, less customer disruption, less cost, less confusion.

If you are not upgrading or implementing, do not despair! Anytime you make a commitment to design, you’ll gain a benefit. Start by asking your employees about what is working and not working. Listen to their feedback. Review configuration options of the software. Get familiar with the functionality and business needs. Join user communities. Ask for ideas. Develop plans for design improvement. Significant results can be achieved without significant investment.

For example, one of my clients wanted to bring inventory levels down to free up cash without affecting service levels. We reviewed the people, process, and systems. There were opportunities to re-design aspects of each – within 6 months, the re-configured and re-allocated people, process, and system was able to deliver a 30% reduction in inventory.

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