ERP Service Contracts – Do’s and Dont’s

The Situation

Over the last couple of years, companies hit with down revenues and have a ERP or CRM system version that is old enough that it’s not longer supported, have made the decision to cancel maintenance and support until they are ready to upgrade.

I mean if your software is no longer being supported and your not going to upgrade anytime soon WHY IN THE WORLD  would you be paying thousands of dollars a year. If that’s your situation – CANCEL IT now…

The ONLY caveat I will make is that some ERP and CRM companies will threaten you.. “OK Mr or Mrs Customer, if you cancel, WHEN you renew your maintenance and support, we are going to not only hit you with a penalty, but will charge you ALL support fees that were unpaid!!!

I only have one thing to say about this… Bull S__t!.

Don’t take it…

I didn’t.  I negotiated a deal where I would cancel for one year and then renew without any penalties or back charges.

Then, dig this… I am just re upping tomorrow and it’s been 20 months (it took me a while to get the OK) AND they are more than happy to give me the SAME DEAL.

You know why?

I think you do… A lot of people have canceled and M and S revenues are WAY down!

Any here’s a little tip on when you do re up. They might tell you that they are going to give you a GREAT deal and not charge you in arrears BUT you are going to have to agree to stay on contract for 3 years and pay the first year UP FRONT.

DON’T AGREE to this. I didn’t. I negotiated and am paying quarterly. There’s a 2% surcharge, but that’s well worth it.

So in summary, don’t pay when there is not value, start paying when there is and negotiate from the beginning to the end…

Until next time ….

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ERP Upgrade – Getting the Green Light

Hi There…

So you have brainstormed with the team and agreed on your areas of weakness, where the threats are and as a result have strong agreement that to move forward with an upgrade would be a REALLY good idea…

However, the guy that signs the check is not in the room…

The next step for me was to write a detailed – Problem – Solution and Financial Impact document.

This document will provide you with a couple of things…

  • First – It really provides you with clarity and an assurance that you are doing the right thing…
  • Second – It documents in detail those critical business and systems issues for future reference.

One problem – the document was for me and other geeks… What executive would read 10 pages of techno goop – other than me and maybe you?… therein lies the problem… sometimes the boss wants the gory detail but usually he / she wants the “Executive Overview”.

Consequently you have to be prepared to provide BOTH.

So you have the gory details – Now write an Executive Overview – same format as the detail doc EXCEPT  that it’s on ONE PAGE. Also – Include a rough cut timeline – phase plan – Top level, but gives readers an idea of what comes first, second and third and a general idea of how long the project is going to take. BE conservative here. we know how these projects go, right?

If you think it will take you 2 months – it will probably take 4….

Oh, and on the financial impact part, be sure to state monthly costs (leases / financed equipment), length of commitment and total cost.


  • State your problem(s)
  • Your solution(s)
  • A statement of financial impact
  • And a time line

Next, I would plan to discuss the Implementation Plan Executive Overview at a regularly scheduled managers meeting, board meeting, whatever, HOWEVER,  send it out a day early, give people time to digest it. If you have “planted seeds” early, and team members have a chance to review, there might not be a lot to discuss.

That’s how it usually works for me…

As a matter of fact, I sent out the Executive Overview the night before our meeting, and on the way out of the office I stopped by the Bosses office to say goodnight. The first thing he said to me was, “Well it looks like we have put off the ERP upgrade long enough, go ahead and buy the hardware” – first phase of my plan!

Wow – that was almost effortless… Except that it had taken months of discussion with VARs and teammates, drafting and redrafting the plan, feedback and just thinking it through.

Anyway – it has worked for me on many occasions – hope it provides you with some ideas.

Please be advised that I just updated this site and I will continue to work on it. I MIGHT have lost you as a feed reader subscriber, so if you feel so inclined

Let me know what you think – drop a comment below…

Please re subscribe – spread the word about ERP Roadmap.

Happy Trails – Until next time.


How to Get “Buy In” On Upgrading Your ERP System

In my last post I discussed upgrading your system and specifically where to start..

Establishing a simple scope objective must be done very early. Understand the limits of your project…

BUT – there is really an earlier step than that. While you THINK you know what the scope of the project is. You really (if you are IT) know it more from the System side. But the flip side to that coin is the BUSINESS side.

I have discussed the concept of Justification Drivers in the past, but it’s worth revisiting… Business and System issues both drive a business system investiment and when push comes to shove, the geeks talk about the system and everybody else talks about business issues. So guess what?

If you are IT, you HAD BETTER get the Business Drivers from all other affected areas of the organization into the conversation, AND it’s going to take more time that you think. Try to push the initiative too hard and others will push back! NOT GOOD.

Here’s the approach that I use having been through this many times. While my systems guy and I worked the systems side of the upgrade and knew that it had to happen; key hardware compnents were starting to fail at an accelerated rate, I decided that I would pull the management team into a meeting for a brainstorming session.

I wrote “IS Issues ” in the middle of a big white board and then started going around the table until we ran out of problems and issues …kind of like spokes on a wheel… idea, linked to ideas where appropriate. NO BAD IDEAS and it looked like this when we got done…

IS Issues Rough 02.jpg

We then identified and agreed on the top 5 most critical issues. I went back to my desk and created a more presentable version of the mindmap using Mind Manager (Great brainstorming software) and it came out looking like this…

IS Issues MindMap 2010.jpeg

By going through this exercise I not only had buy in from key players, I also had firm agreement on the System and Business Drivers that mattered most to the team.

In my next post I am going to cover how I sold it to the boss.

Until next time – Rick

Upgrading or Implementing a New ERP System – Where do you Begin?

This post will be the first in a series on the subject of upgrade / or implementing a new system.

With recent changes in technology, aging systems, and the economy, there are conflicting forces that are pulling and pushing us to upgrade or to hold off….

It’s a crazy time to be in business and in IT with these factors in play.

One issue that comes to mind first and foremost is “scope”. What I mean by that is Project Scope.

I have devoted past posts and for that matter an entire book to the subject – Purpose Driven ERP that addresses system justification, requirements and specifications, however, Project Scope is a topic that I now feel deserves more conversation.

• How big is your project?
• How broad and how deep?
• What defines the beginning and what determines the end?

If you don’t have answers to these questions – FORGET trying to get buy off and for that matter, trying to nail down the general requirements and the detailed specifications of your implementation.

You need to carefully, but simply define your project scope; this does not have to be a rocket science project – Just articulate the beginning and the end to the upgrade or the implementation.

What does the completed project look like?

While this seems simple, as it in essence is, it can be a very powerful guide in mapping your course; making decisions; where to turn when two courses of action present themselves, etc.

The depth of the project is another dimension and aspect to the scope that requires thought as well. Once you know what the beginning and the end look like, what “layers” are there to the project? Hardware, software, the cloud, virtualization… you get the idea….

We will talk about virtualization and the cloud in later posts…

Again, a scope document can be as simple as a couple of paragraphs, but very foundational when moving into discussions with other stakeholders in discussing an upgrade or new system.

Do you have a scope document? If not – Write One Now!

Hope I provided you with some food for thought… until next time…


The Seven Steps to Implementing ERP – Step 5 Process Integration

So if are implementing ERP – or any other large scale sofware system for that matter… Process integration In my opinion, is where your implementation either lives or dies…

Don’t short change yourself by skimping on the step! Or for that matter any step prior to integration…

If you are at the point where you are ready to integrate business processes with your new system, then you have completed the prerequisites…

Without these previous steps fully completed – Process integration will be impossible – so make sure that you have laid a good foundation… OK, I think I made my point…

Next lets look at the definition of ERP – A system designed to integrate business processes to eliminate waste, increase efficiency and effectiveness.

While I wrote this definition on the fly and crafted it to make a point – While there are other aspects to ERP, process integration is huge.

So huge in fact that I devoted 3 podcast episodes to it – them out at Implement ERP Fast.

I have developed a 7 step system to integrate business process into your new ERP System.
The steps are as follows:

1. Selecting Process Integration Team Members.
2. Selecting Business Processes to be Integrated.
3. Reviewing and Revising Business Policies Related to the Business Processes to be Integrated.
4. Listing Business Process Scenarios or the “flavors” of the processes to be integrated.
5. Detailing each Busienss Process flavoer to be integrated – Step by Step.
6. Testing Processes that have been Integrated.
7. Document Processes that have been Integrated.

If you follow these 7 steps, you will eliminate a lot of voodoo from an otherwise complicated phase of your project.

Take for instance Step 1 – At first, you might wonder if this really needs to be a step… Well let me tell you… Some people are not cut out to integrate business processes. You have to have what I refer to as a “systems mind”. You need to be able to “zoom in” and “zoom out” at appropriate times – focus on process in a disciplined way. If you pick the wrong guy or gal, you are going to go sideways FAST!

Next, Step 2 – What processes are you going to integrate in roll out? Most teams bite off more than they can chew and usually end up backing off as a result – give it SERIOUS THOUGHT.

Step 3 – Be real clear on what policies are going to drive process. Huh? Yeah policy – You know those guardrails that companies create to keep staff from driving off a veritable cliff in doing their jobs… For example, if you were integrating the Order Entry process, you would need to know what policies exist for “method of payment”. You take credit cards, or COD, BUT NOT open billing, So with a clear picture on this policy you won’t be developing process and setting up the system to accept 30 day terms. The beauty of this is that you can eliminate a lot of work and decrease frustration dramatically.

So that’s the first 3 steps – think through the last 4 and see what you come up with – Drop me a comment and let me know what you think.

By the way…

The Software Implementation Tracker – a 400+ page guide is just about ready to launch. If you sign up on my list (above) you will qualify for a “List Only” introductory price – I will email you a special offer. Spend MORE time focusing on nuts and bolts of your implementation and LESS time “managing” your project.

Next post will will deal with Step 6 of an ERP implementation – End User Training.

Until next time – Rick – Signing off…

The Seven Steps to Implementing ERP – Step 3 – Purchasing

OK, so far we have covered…

Step 1 – You have Justified and Specified your ERP system – people are going to "have your back" if something goes wrong (and it will!).

Step 2 – You have Sourced, Qualified and Selected an ERP software package that is going to work for your business.

Now for Step 3 – Negotiating and Purchasing your ERP system…

I can say without reservation that negotiating and purchasing an ERP system is just about as complicated as a purchasing transaction can get. While you might have extensive experience buying capital equipment, few other purchases will have as many angles as an ERP system.

First, you have the software, OK, not a big surprise, then the hardware to run it … again not a shocker, then the network backbone upgrades, then come the consultants from perhaps 1, but more likely 2 or 3 different firms, then the maintenance and support, the internal personnel that you have to keep working on the project….

So there is a list of the major aspects to the purchase. Now negotiate the best price and terms for each one of them! This is not a cookie cutter deal. The sales people that you are working with, while they are probably ethical, are going to answer your questions, and you should be asking lots of them, are not going to volunteer everything that they know about the deal…

What do I mean by that, well let me give you an example… Let’s say that you are buying the Quality module that is offered by the ERP supplier, and you know that the Quality module" consists of 15 key applications. However, the quoted package only includes "Quality module essentials", which means that you are only getting 5 out of the 15 apps. Don’t laugh, this has happened to me and yes I did catch it before I bought a package… but this kind of stuff can happen all over the place.

So bottom line – Caveat Emptor (Buyer Beware). I think you get the idea. Next … Step 4, Installation and Configuration…

Until next time… Rick

The Seven Steps to Implementing ERP – Step 1- Justification

Hi Folks … Rick here and sorry about the loooong delay in updating the blog…

Too many projects, not enough time – time flies….

So what are the 7 phases to implementing an ERP system?

Step 1 is Justifying the System and thoroughly Defining Requirements.

  • Without buy off from top management, don’t even think about moving forward with an implementation . With support you will be able to make it through the "rough spots".
  • Then take the time to define system requirements. By this I mean clearly outlining every need and want that you have in a new system. Take a look at all of your existing processes and those processes that you have yet to implement. Which ones would you "integrate" in to your new system.

And don’t think that this step only applies to a new system… it also is important when you are considering an upgrade.

While the emphasis on this site is ERP – this also applies to pretty much any major technology initiative – CRM, Supply Chain Management – even a new VoIP Phone System. So think about this long and hard – you will be glad that you did.

If you want to check out more of my thoughts and ruminations – go to and listen to my podcast on the subject of ERP implementation. I have multiple episodes that address Step 1 – Justifying and Defining Requirements on an ERP system…


ERP Implementation Success Strategy #1 – Leadership…

The ERP Roadmap blog is changing direction for a post or two…

We are going to be exploring the Success Strategies associated with a successful ERP implementation. A success strategy in is an approach and and intentional frame of mind that when followed will product a more desirable outcome …

Some of the areas that I intend to cover are…

  • Leadership
  • Communication
  • Time Management… just to name a few.

These “soft skills”  are so important to the successful implementation of an ERP system that they really should be discussed and revisited throughout the life of your ERP project… It really does take constant review and reinforcement of the right way to approach leadership, communication, time management and other aspects of the success mindset to develop habits and ultimately instinct that will keep you and your team heading in a positive direction.

Let’s take Leadership for example and specifically your approach in directing people and events on a large scale project to achieve desired results. You really want to provide an environment where your team as a unit can accomplish more that if all those involved attempted the their individual tasks on their own. While I tried to avoid using the word “Synergy”, I just could not help myself!

One approach that I have found very successful, is giving people specific desired end products – or deliverables, and then giving them reign to exercise their skills and capabilities – then stay out of the way! This is easier said than done, but when you do it, you WILL KNOW IT.

So – Give them direction, give them goals and dates and then GET OUTTA THE WAY and see what they can do.

I recently released an Implement ERP Fast podcast episode on this subject – you might want to check it out…

Until next time… Rick

ERP System Delay / Interruption Root Cause 2 – System Performance


Does your current system perform as well as a state of the art ERP system?

Does your software, hardware or system in general perform to levels that you would consider less than state of the art?

Let me give you a couple of comparisons between a legacy system and a new ERP system that I implemented a while ago:

• After moving to a new ERP system, where running my production planning module, MRP used to take 6 hours, the new system now takes between 30 to 45 minutes.
• Where a cost implosion (or roll up) used to take 2 hours, it now takes 30 minutes.

You can become complacent in performing our tasks and duties and at times might not realize that your systems performance is substandard.

I have learned over time that if I think that a particular system or module is not running as well as it should, it is either time for a tune up OR my systems performance might just be behind the curve.

Your system is “wound out” at 8,000 RPM’s on all 8 cylinders and other systems are just passin’ you by…

A little benchmarking might be in order. If you find that in fact your system is lagging in performance regardless of what you do, it might be that Performance is yet another “”driver” that will contribute to the justification of a new system…

ERP System Delay / Interruption Root Cause 1


Is your existing ERP system, the user interface, the database platform and other aspects of your system built on industry best practices?

In this day and age you might ask – isn’t everyone?…Not really…

You can see it at the systems level where an ERP provider produced a system built with a proprietary API – if you don’t think they are out there THINK AGAIN.

The user interface (UI) is another area where non standard design in common.

And as time moves on it is really inevitable that your system will become less and less standard:

• The older your system, the less likely that your hardware and software will be compatible with current technology.
• Standards change and as they do, manufacturers and publishers have no choice but to follow them.

Non standard or outdated software design can be a huge problem where the software still performs the needed task, but does so in an inefficient or unusual way. Put another way, the need for change is not strong, but bad habits are being built every day!

An example of this would be a non standard menuing or icon system where the menu items and icon graphics are not easily recognized … minor example in comparison to some…

I have seen current ERP systems that do exactly that. While I am all for creativity, this type of design is more for the programmers and graphic designers benefit and not the end user.

Proprietary design – what else could they do… in late 1970’s and the 80’s during what I call the Wild West of Manufacturing Systems prior to Local Area Network technology (LAN) and the Client / Server model. At that time, existing technology was such that companies had to build their systems on the old mainframe, distributed data or the dumb terminal model.

Looking for a new system? Look for systems that are built on standard hardware and with industry best practice software tools. In the long run you will be better off.

If your existing system is not up to standard, use your existing hardware and software situation to drive your justification for a new system.

What Does the New 3g iPhone have in Common with ERP Software?

With the release of the new Apple 3G iPhone on Friday 7/11/.08, came an iPhone meltdown across the globe where not only new subscribers but existing first generation iPhone subscribers where not able to activate or use their accounts… Bummer…

While I am sympathetic to people that have to go through this type of frustration, I really feel that they have no one to blame but themselves…

Which lead’s to Rick Nielsen’s Number One Technology Axiom – Never Buy Bleeding Edge Technology – Software or Hardware – unless of course you have absolutely no choice.

The reason is obvious – I am not a genius (I am sure that you have figured that out by now!), but let OTHERS beta test the new stuff!

Give it a month or two to clean up the stupid things that no one ever thought about.

An iPhone is probably more complicated than any of us might think. It is really a well designed device, but it’s not THAT complicated… and look what happened!

Now think about a state of the art ERP system – ORDERS of magnitude more complicated than an iPhone. IF there was ever a reason to wait until the first service pack, the second release, buying a new ERP system would be it.

I completely understand that you dig software and really want the latest greatest version and features that maybe you have been waiting for, for a long time, but be patient…

Again – let someone else Beta Test the software – I mean really – you are spending hundreds of thousands, if not millions on a new Enterprise system.

You really don’t need the frustration – In the short term AND in the long run you will spend less time and money on your implementation…


Time Management and Implementing ERP

As most of you know, successfully implementing an ERP system is a long difficult process. Time management is a huge part of it and you have to make every minute of the day count.

I am always looking for someone better suited than myself to perform a particular task. And all ego aside, there are many times that someone else is better, smarter or faster at getting certain types of tasks done.

If you can find someone else to do something that you were going to do, and you are not best suited to do it anyway, it frees you to do something that you REALLY should be doing.

So where am I going with this?

ONLY do things that PLAY TO YOUR STRENGTHS. As the well know Internet marketer, Alex Mandossian puts it – Strengthen Your Strengths and Outsource Your Weaknesses.

Think about this for a minute – if you focus on doing things that you are GOOD at, a couple of things happen…

  •  You are doing the things that you like to do.
  • You are probably going to do a very good job and …
  • If you are giving tasks to others that they are good at, they are going to take more pride in their work.
  • And finally they are probably going to do a better job at those tasks than you would.

Bottom line, more stuff is going to get done and everyone is going to be enjoy their jobs just a bit more.

Keeping ERP Project Management Simple

How do you keep track of what’s going on with your ERP software project on both a day to day and long term basis?

Traditional project management tools and techniques can allow you to keep track of complicated timelines, involving multiple departments at various stages of completion.

If however, you use project management software daily, a situation can exist where key people are spending more time updating the project software and feeding the system, than they are actively working on the project itself.

Further, in most companies the majority of the personnel working on an implementation project have “day jobs”; what they actually get paid to do.

At the same time, for long range planning purposes, project phase management and interdependent project activities, a well thought out project timeline is mandatory. A project plan is the only way for management to project the needed resources in people, time and money in the intermediate and long term.

So, use the fancy software up front and monthly or quarterly to update the big picture plan; to determine if your project is still on track to Go Live. The project plan is not then just a “chart on the wall”, not some stale dated piece of paper. It is a periodic review and reference of project status.

OK, so you have the big picture of the project created and routinely updated, but how do you handle day to day, week to week task management activities?

Talk to people!

Have a Weekly Team Status Meeting

Like most everyone else, I hate meetings. However, the best way that I have found to manage “next actions” or current tasks is a well run ERP status meeting.

I recommend that the meeting:
• Happens every week without fail.
• Be started on time.
• Occurs early in the week – preferably on Monday morning.
• Be documented in Word or Excel and made easily available to everyone concerned.
• Take no more than one hour – shoot for 30 minutes.

You must demand that everyone come to the meeting prepared to discuss the following:

• Last weeks completed tasks.
• Tasks being worked on this week.
• Challenges AND proposed solutions – don’t let this one get away from you – i.e. NO rabbit trails.

Minutes can be organized in any of the following ways but BE CONSISTENT.
• Person
• Process
• Or any other way that makes sense to you.

• New Business / Old Business – this can DRAG the meeting down so be careful!

This meeting can hold the team together, allow for efficient communication and keep things moving forward.

Coupled with a periodic project plan update, you can invest a minimal amount of time in project and task management and be confident that you know what’s going on with the project.