Tag Archive: business systems

How To Know If Your Old Business System Is Just Fine

September 8th, 2017
Time for an upgrade?

Is it time to upgrade your business systems?

We cannot tell you how many clients call thinking they need a new system to support their business when they simply don’t! Certainly, there is a time to upgrade to a new business system, when you’ve outgrown your old one (for example: QuickBooks with add-ons like Fishbowl), or your old system is highly customized and unsustainable, or when you are in the midst of a merger or acquisition. However, before jumping to the conclusion that your system must be upgraded, think twice.

Any ERP transformation project will be expensive (more than you think!) and resource intensive. With that said, it is an absolute must to support business growth and success in some situations. Just make sure yours is one of them!

To upgrade or not to upgrade? That is the question.

It is also quite possible to extend the life of some systems. Is there a way to extend the life of your current system? We often find during analysis that there are options worth considering. It is smart to think about the timing of your upgrade and whether you can impact it. When can you dedicate the resources to ensure success? Of course, from one perspective, sometimes there is never a good time. And, on the other hand, we have seen clients wait “too long”. You don’t want to be in that club either.

Instead, complete a simple strategic analysis of your business situation and ERP needs and balance them against your current capabilities. An answer will emerge and just might “save you” either way. Perhaps you’ll be able to extend the life of your old system and maintain focus on your business OR you’ll find out that if you wait any longer, your competition will pass you by. Either way, it is better to be in front of it.

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Should You Upgrade Your ERP System?

Leverage as a Multiplier

December 5th, 2013
Excellent leverage opportunities are easy to overlook, and a powerful advantage for those who look for them.

Excellent leverage opportunities are easy to overlook, and a powerful advantage for those who look for them.

If you had the opportunity to make $1,000,000 with 100 hours of work or 10,000 hours of work, which would you choose?  It sounds like a no-brainer; however, if that’s true, why do so many supply chain businesses ignore the vast power of leverage?

Utilizing leverage can achieve substantial results.  Leverage is the advantage or power gained by using a lever. A classic example is the story of David and Goliath, where David was able to defeat Goliath because David used the power of leverage (by using a slingshot to defeat a giant). In my experience consulting with clients across multiple industries, geographies and company sizes, I’ve found that those companies that valued leverage achieved greater business results than those who didn’t.  A few keys to using leverage for success include:  1) Think leverage options, 2) People leverage, 3) Automation.

1.  Think leverage options:  There are many forms of leverage – money, resources (people), machines/equipment, systems, etc. The key is to take a step back from your situation or issue and think about leverage options. Although it will take additional time vs. beginning the task, it could save significant cost and/or produce significantly quicker, more sustainable and significant results. I’ve found this to be the critical step that is often overlooked. It is a common problem to have many more tasks requiring completion than is possible to achieve within the specified timeframe, and so employees are often overwhelmed and don’t have time to “put their feet up and think.” One of the most powerful forms of leverage is the power of your mind. Sounds too simple to be true? Be radical and experiment with this concept on one project….the results will likely be staggering.

2.   People leverage:  People leverage is powerful.  In one example in working with a company to improve profitability, the finance leaders suggested labor cost reduction as the key to success – a common “helpful suggestion” regardless of industry. However, in this case, labor costs were miniscule in comparison with other cost elements such as materials and freight.  Of course, it was possible to reduce labor costs and improve profitability; however, the effort spent on this significant effort would achieve only minor benefits. On the other hand, if we increased labor cost in strategic areas (such as investing in people who could impact material costs), we would achieve vast benefit with minimal effort.

 3.   Automation:  One of the key purposes of equipment and systems is to automate processes (hand packing boxes vs. utilizing an automatic packing machine). Therefore, utilizing equipment typically speeds up the process, reduces the likelihood of human errors, and reduces the cost of production (increases your return). In this case, you’ve used leverage (equipment) to automate and achieve significant benefits.  There are countless types and uses for automation.  Think about what will work for your business.  Do not automate for automation’s sake; however, strategic automation can be pivotal.

Leverage doesn’t have to require significant capital investment or complexity. Will you take a fresh look at your organization for leverage opportunities?

What is a Systems Pragmatist?

August 27th, 2013
A Systems Pragmatist thinks about and incorporates design every step of the way, and stays several steps ahead of the process.

Systems Pragmatists incorporate design every step of the way, and stay several steps ahead of the process.

Would you select curtains to spice up a house with a rickety foundation? I certainly hope not! Instead, you would resolve your foundation issues before even thinking about nice-to-have’s. So why do we spend countless hours picking out curtains and discussing color choices in businesses when our foundation isn’t stable?

Based on my 20+ years of experience as both a former operations executive and as a global business consultant, I find that more than 50% of my clients prioritize curtains over the rickety foundation – at least for a while. The excitement of implementing the latest lean program or ERP system outweighs blocking and tackling in terms of excitement, career interest etc.; however, it fails miserably. On the other hand, those companies who thrive ensure they design and implement solid processes and systems before even discussing programs that will build upon the base.

Since business processes and systems can become quite complex and cost millions of dollars, it is critical to simplify the design to what’s essential to your organization and focus on the core processes and related functionality that will support your business strategy and deliver bottom line results. This is where the Systems Pragmatist skill set comes into play – in essence, it cuts through the complexity to rapidly define, design and deliver the critical processes and system functionality required to elevate business performance.

Although we could discuss countless tips and techniques for designing and improving business processes and systems, there are a few core essential tenets: 1) Understand your objective. 2) Think design. 3) Execute & integrate with the culture.

1. Understand your objective: One of the worst mistakes my clients make is when they jump to solutions (process improvements, implementing the latest programs and selecting new technologies) before they understand the objective. As cool as the latest e-commerce functionality or S&OP results, it will become a complete waste of time and money if not aligned with the company’s direction and objection.

I have found a differentiation in my clients who leverage processes and systems to a competitive advantage vs. the rest – they think about design in every element of the process. Are you thinking 4 steps ahead in the process? How will it affect your ERP system results? Have you built in flexibility? Agility? Speed? Certainly, in the new normal business environment, those who have access to critical data for rapid decision-making, who accelerate products to market and who deliver faster than the competition will win the business. Have you thought about how to design these capabilities into your processes and systems upfront?

3. Execute and integrate with culture: Last but not least, the best design in the world is useless if it’s un-implementable! Software firms use the terminology of “build” and “run” to mean design a model or process trial and then roll out and utilize effectively. These can be good reminders to make sure you’ve dotted your i’s and crossed your t’s and that your process and system functionality work as expected.

An essential element of this phase is to integrate the business process improvements and system enhancements with the culture. Is it an after-thought or do folks think about it similarly to shipping orders (meaning it is part of their routine)? Embed the processes into the daily, weekly, and monthly routines. Consider potential roadblocks and bottlenecks upfront. Ask employees and supply chain partners for input and feedback. Test them out. Think through changes to related areas such as performance management systems.

I’d be surprised if you haven’t heard a horror story associated with a system implementation. There are countless reasons for them: Not enough training. The system didn’t do what we needed it to do. It wasn’t set up to work for the way we do business. We didn’t have enough time. It wasn’t tested thoroughly. And the list goes on. For example, I’m often times brought in by clients to help resolve system snafus that typically result in horrendous customer service issues and down-the-line negative profit impacts. 80% of time, the client feels as though the lack of training is the issue. Although it is always part of the issue, I find that it is 20% of the issue; whereas, design and integration with the daily routine is the 80/20.

Designing and implementing business process improvements and leveraging system functionality to drive business results can require an investment of time and resources. However, you’ll be left in the dust in your broken down Yugo if you don’t prioritize this critical priority. Why not get ahead of the competition by not only creating a solid foundation but also designing it as a strategic advantage to deliver a significant return on investment?

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