ERP in the Cloud… Is It a Viable Solution? Part 1…

Hi There – It’s been a while…  hope all is going well…

This is the first in a series of posts where we will discuss the viability of a cloud ERP / enterprise system solutions from a number of different angles?

• Performance

• Storage

• Maintenance

• Fault tolerance and Redundancy

• Access

• Security

• Cost

• Virtualization

• Specific module issues

• AND anything Y0U wish to add…

Obviously a number of these topics have been the talk of tech of late, but the implications of the cloud ERP – enterprise resource planning platform are far reaching.

Performance – While increasing bandwidth is available to small and large business, the variability in performance can be a real issue when you are talking about critical path business processes.

Storage – The cost of per gigabyte storage has come down dramatically and for that reason, storage cost reduction is not really going to be justification for putting your business systems in the cloud. However there are other issues associated with storage that could be important factors…

Maintenance – Hardware and software updates can certainly factor into the equation when considering a cloud enterprise business system. You really need to look no further than the SalesForce.com homepage graphic “No Software” to see the value proposition.

Fault Tolerance and Redundancy – Having your data stored on more than one disk system is a good idea. The question is… is it primary storage, secondary, tertiary, you get the idea…

Access – This factor to the overall discussion can take on a number of different facets. First of all, who has access to your system and data and second of all how reliable is your access…then there are security concerns…

Security – You know that if your hardware, software and your database are housed in your server room, that shutting down the web would mitigate intrusion at least from the outside. Next you also know that you have direct control over the condition of your hardware.

Cost – it is tantalizing to think that you could eliminate the overhead cost associated with your hardware and maintenance but at the same time what is the true cost of a cloud based business system? Accountability etc…?

Virtualization – Boy, talk about the buzz word of 2011! The potential benefits of virtualization can be tremendous from a labor, performance and a cost standpoint. But there are different things to consider and approaches when looking at a cloud virtualization solution.

Specific Module Issues – Now let’s discuss a few specific modules to your business system that might be of concern:

First Planning and Scheduling. If you have been involved in manufacturing systems for more than 5 minutes, then you know the CPU intensive nature of regenerating data.

Next, your financial / HR information; I don’t care what kind of encryption you have; passing mission critical information around the web is a concern. There are others, but you get the idea and we will discuss these in further detail in future posts.

In Conclusion

These issues and others will be the topics of discussion in upcoming posts. I am eager to hear your thoughts and experience with ERP in the Cloud.

Until next time, this is Rick, signing off…

If you are considering the purchase of, are upgrading or are in the middle of an ERP or CRM implementation, check out the Business Software Implementation Tracker, my 500+ page step by step guide that can aid you in:

Pinpointing your current location in the implementation process and…

Help you determine your next step in the project…

Walking all the way to Go Live…

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 ….

Rick
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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.

So

  • 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.

Rick

WSJ – Companies Are Spending On Software (ERP)

Hi there

This article in the WSJ today highlights that companies are starting to spend on equipment and software – Firms Spend More –  Carefully…
Sorry it’s just a summary (Subscription to read the whole thing)

This is good news for those of us that need to upgrade our aging systems. It appears that organizations are realizing that their equipment and systems are aging and now is the time to make some changes.

This is BAD news for those that get the go ahead due to the fact that vendors are not as motivated to give you the deal of the decade… that was two years ago… It told you so…

At any rate, if you can get the “green light”, do it while you can and ASK FOR THE MOON… If you don’t ask for more for less – you definitely WILL NOT get it. My #### 1 rule in negotiation…

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…

Rick

ERP Software Implementation – Structure and Flow – Part 6

Hi Folks – Sorry for the delay –

Big project in the works – heavy deadlines – but I’m gonna make it!!!

This post concludes the detail description of the 15 ERP Implementation Elements… Remember to review the last five episodes, as they have mucho additional information related to the Implementation Elements – so for the full story, be sure to check them out.

OK – Let’s get to it… The Quality Elements are those that deal with training, testing and documentation. These elements are there to ensure that all of your work was not DONE IN VAIN!

Element M – System Admin / App Training / End User Training
Quality Element

• Training must occur throughout the implementation of the system in various parts of the organization. In the beginning, a core team must be trained on the basics of the specification, sourcing and qualification of a system.
• Later on, training occurs during the system installation and configuration stages in the form of the administration of the system.
• Next, process integration and then application training take center stage.
Elements_1.jpg

• End User Training is that point in the implementation where many focus their attention, where personnel are trained to perform those tasks / processes that make the company money.
• This element allows the project team to manage the training aspect of the implementation in a progressive manner that culminates in personnel that are ready to go – at Go Live.

Element N – System Testing / Verification
Quality Element

• Testing your new system is an obvious aspect to a system implementation, and while testing has greater focus later in the implementation, it must be given proper attention throughout the project.
• This element drives you to properly identify, test, review and revise your system and to document your testing in all phases of your implementation.

Element O – Documentation
Quality Element

• Documentation is crucial to all aspects of your implementation. Things are changing on a daily basis and with the velocity of this change is the constant need to be reminded of
– where you have been,
– where you are and
– where you are going.
• Documentation must also be firmly in place to address regulatory concerns relative to the implementation.
• Documentation serves a key role in the development and delivery of training at all levels of the organization.
• This element provides reference, support and justification at all phases of the implementation process as well as at points long after your system has been implemented.

Well, that’s about it for this post, and please note that these posts are just a tiny sample of the contents of the Business Software Implementation Tracker...the guide and tracking system that will be your companion throughout your implementation – ERP, CRM, SCM – it does not really matter, the "Tracker" will be there for you … Check it out…

Later

Rick

ERP Software Implementation – Structure and Flow – Part 5

Happy Sunday…

In this post we are going to cover the last two Project Implementation Elements, System Security and System Reporting or Business Intelligence (BI).

Standard Reminder – the 15 implementation elements lie across your entire implementation – horizontally – and traverse all phases of your ERP / Business System implementation.

Being the 5th post in this series, if you have not read the previous ones, you are going to miss some of the foundation. The following info can stand on its own, but check out the previous posts when you have a chance.

Element K – System Security
Project Element

  • Digital security seems to be a topic of discussion in most technology circles these days and I don’t think that it is going to go away anytime soon. As software systems continue to become more sophisticated and integrated throughout the organization, the supply chain and across the Internet, the need for buttoned down security is essential.
  • During the implementation of your software system, this element must be given attention in all aspects of the project.
elements projects 031.jpg

  • In justification and specification, security must be looked at from the current state and future state perspectives.
  • In sourcing, qualification and purchasing, security must be looked at from the standpoint of a supplier that can appropriately meet your needs and continue to meet them in the future.
  • During the installation, process integration and training phases of the project, security must be a subject that turns a theoretical solution in to a reality.
  • Throughout process integration and training, security continues to take on a key role in building security methods, processes and systems and in training end users to assist in mitigating threats.
  • The security implementation element is crucial to the overall success of the organization in guaranteeing stability in a way that assures that the company can progress and evolve with the confidence that data is secure and is only accessed by those authorized to access it.

 Element L – System Reporting / Business Intelligence
Project Element

  • Extracting data from your system in the format required when and where you need it is a capability that to many is an afterthought.
  • Reporting and BI (Business Intelligence) must be given ample attention early enough in the implementation process for the organization to be prepared to make needed decisions at Go Live and thereafter.
  • Reporting is a critical implementation element given the fact that a software system is only a valuable and necessary as it provides you with the decision making information and intelligence that you require.


This concludes the Project Implementation Elements – In the next post, we will cover the three Quality Implementation Elements… Stay tuned…

If you are considering the implementation or upgrade of your system, The Business Software Implementation Tracker – will walk you through the structure and approach I am laying out here. This 500+ guide and template to an ERP or other large scale software implementation is designed to be your “consultant in a box”…

Until next time… this is Rick signing off…

Oh, I almost forgot… if all goes well Episode 25 of the Implement ERP Fast Podcast will be released this week…

ERP Software Implementation – Structure and Flow – Part 4

In this post we are going to move on to the second set of Project Implementation Elements.

Remember, 15 implementation elements lie across your entire implementation – horizontally – and traverse all phases of your ERP / Business System implementation.

Be sure to review the last couple of posts if you are just jumping in and be sure to subscribe to add these posts to your blog feed…

Part 1 – Implementation Phases and Steps
Part 2 – Implementation Elements – Reference Issues
Part 3 – Implementation Elements – Project Issues 1

In the second set of Project Elements we are going to cover two Elements; System Management and Configuration and System Customization.

System Management and Configuration is all about tailoring your system to meet your requirements and specifications. This is an ongoing activity and as you move through your implementation, depending on where you are in the evolution of your system, different focus must be given to configuring your system.
elements Projects 02.jpg

Next, System Customization; No matter what type of large scale system you are implementing, there will be aspects of the project that must be customized. BEWARE of this thread of the implementation. Keep VERY tight control over this activity; make sure that you needs are CLEARLY specified to avoid “feature creep”…

With that … let’s on to the meat of this post…

Element I – System Management /Configuration

Project Element

  • System management is an obvious aspect of keeping any modern system up and running. However focus on the system itself throughout the life of your implementation will morph and attention to configuration is crucial to your success.
  • In the beginning, the assessment of your legacy system to identify weak points will be the primary focus.
  • Then to specifying a new system to best meet your future needs.
  • As the implementation progresses, competent installation, configuration, migration and testing are all integral to your implementation.
  • During integration and training, the system is further refined in User Interface (UI) and configuration.
  • This element focus’ your attention on your core system architecture, it’s structure and functionality and the care and development of that system not only throughout the implementation but post Go Live as well.


Element J – System Customization
Project Element

  • While I do not look favorably on system customization, it is usually required at one point or another in a new system (in some cases – many points).
  • This element exists to develop, monitor / control and test customization efforts as they are usually expensive and are prone to grow and morph on their own – feature creep.
  • This implementation element provides you with a focus on system customization to ensure that your changes are appropriate, are reasonably priced (generally speaking), properly testing and documented.

Well that’s about it for today… short – but food for thought.

If you are considering the implementation or upgrade of you system, my guide, The Business Software Implementation Tracker – will walk you through the structure and approach that I am laying out. This 500+ guide and template to an ERP or other large scale software implementation is designed to be your “consultant in a box”…

Until next time… this is Rick signing off…

ERP Software Implementation – Structure and Flow – Part 3

Good day folks – in this post we are going to continue the discussion of the Implementation Elements.

To briefly review, the 15 implementation elements lie across your entire implementation – horizontally – and traverse all phases of your ERP / Business System implementation.

While the overarching Phases and Steps are sequential and vertically oriented, each with a discrete beginning and end, the Elements stay with you throughout your entire journey.

The Implementation Element is the “runway” level of your project and where actions and tasks are defined and carried out. At this lowest of levels, you maximize your focus and zero in on exactly where you are in your project and implementation.

I strongly recommend that you read the last two posts if you have not already done so, as they cover the Phase and Step levels of your project as well as an introduction to the Implementation Elements and take you to the point where this post begins…

Today we are entering into the “Project Elements”, where you are really starting to deal with the elements of project management, how policy affects an implementation and finally, the critical role of process management.

Element F – Project Management
Project Element

• Project management in the implementation of a software based system can vary in complexity depending on the scope of the system being implemented.

• This element guides you through the recommended project management techniques and the level of detail required at various Phases and Steps in your project.

Element G – Policy Management

Project Element

• Policy management is a critical aspect of any software implementation because of the broad guidelines that policy provides. As a system implementation progresses, policy must be referred to and revised as the system envisioned in the beginning is seldom the system that you end up with at Go Live.

• Without the direction and guidelines that business and process policies provide, project direction, process integration and team buy in are in serious jeopardy.

• This element directs you to view policy at different Phases and Steps of the project from different angles. This Element acts as a reminder that policy is a vitally important aspect of the project and that it will evolve along with other aspects of your organization.

Element H – Process Management
Project Element

• The Process element lies at the heart of a system implementation in that no recurring activity within an organization should occur without a clearly defined process.

• Business process definition and refinement will, even more so than policy, refine and change not only throughout the life of the implementation but also on a broader basis throughout the life of the business or organization itself.

• Business process definition provides clear direction in process integration between your existing and your new or upgraded system.

• The process management element must be given constant attention in every module, Phase and Step of the implementation and in doing so will provide you with the assurance that your new system will be as efficient, effective and as intelligent as possible.

Well that’s about it for today…

If you are considering the implementation or upgrade of you system, you should check out the Business Software Implementation Tracker – that fully describes the structure and approach that I am laying out. This 500+ guide and template to an ERP or other large scale software implementation is designed to be your constant companion…

Until next time… this is Rick signing off…

ERP Software Implementation – Structure and Flow – Part 2

In the last post I introduced you to the the business software implementation from the top down – First by giving you an overview of the implementation phases and then directly below that, the implementation steps. Finally we discussed the implementation elements as the "Runway" level of an software implementation and where most of the actual work gets done.

I left off discussing the first two Elements – the Description and the Deliverable of any given Implementation Step.

Let’s pick up where we left off and move into the Team and Event elements…

Note – If you have not read the last post you should read it before you read this one…

Element C – Implementation Team
Team and Event Element

• There is usually only one implementation team. This team is comprised of senior management, and other key personnel. The members of this team must be hands on in the implementation of your system and act as the steering committee in guiding other teams in overall implementation. The Implementation Project Manager usually leads this team.
• This element provides you with Implementation team focus at various phases in the implementation process.

elements Teams and Events.jpg

Element D – Phase / Activity Teams
Team and Event Element

• Each Phase / Activity team has a specific purpose. These teams are mandatory for the successful implementation of your system.
• Phase / Activity teams are formed and then disbanded once their purpose has been served at any appropriate intermediate step in the implementation.
• Phase / Activity teams are extremely hands on and can be comprised of management, leads and other personnel that are key to that particular Step.
• This element provides you with guidance as to the teams that must be formed, what they should focus on and when they are required in the implementation.

Element E – Project Events / Meetings
Team and Event Element

• Project Events and Meetings occur at many points during an implementation. Many of these meetings are ad hoc, however, others are much more involved and require a great deal of planning.
• This project element allows you to look ahead and plan for these upcoming events in providing available space, ensuring that key personnel are present and that the event or meeting is properly planned and executed.

In the next post we will start discussing the first of the project elements…

Until next time… Rick

 This content is based on my implementation guide – The Business Software Implementation Tracker – Check it out …

ERP Software Implementation – Structure and Flow – Part 1

Hi folks – Ready for another thrilling ride on the roller coaster ride called an ERP Implementation.

The first thing that I wanted to mention is that regardless of whether you are implementing ERP or CRM or any other large scale business software roll out, the implementation process is basically the same. It is for that reason that I might use the terms ERP and Business Software interchangeably in conversation as appropriate… There I’ve said it – I have been wanting to say it for a while … and I feel better…

OK, on with the ride… Over the last 7 posts, we have been discussing the overarching Phases and Steps of an ERP implementation.

The activities at the Phase level are usually strategic in nature and revolve around resource allocation. This is top level stuff and on a day to day basis you will probably not be talking about your software implementation here.

The Phases look like this:

Phase Breakout.jpg

When you go one layer down, the Implementation Steps come in to focus and you start thinking about the implementation in a little more detail. More frequent attention is given to the project at this level… however, it’s still 10,000 feet…

Phase - Step Breakout.jpg

If you want to look at where an implementation "Lives", you should focus on the business software Implementation Elements… The  "Runway" level.

When you move below the Implementation Phases and Steps – you move away from a "Horizontal" view and go "Vertical…

The Implementation Elements are different from the Phases and Steps in that the Elements  span your ENTIRE implementation.

The 200+ Implementation Elements (when put into a matrix across all 14 Steps) weave threads throughout the entire fabric of your implementation and while the Phases and Steps move you sequentially – in linear fashion through the process, the Elements adapt to fit your exact needs in EVERY Phase and Step.

There are 15 Elements and I will discuss the first two today…

These two Elements are what I refer to as "Reference Elements" as they relate to the basic definition of each Phase / Step but are more for clarification and definition only.

Elements.jpg

 The Step Description

The first Element is Step Description and while this one is a "duh" at first blush, without a specific description of each Step, you have a critical portion of your implementation without a name – an orphan without a home – OK – Sorry – there should be NO humor when it comes to implementing business software… But I think you get the point. Think it through – give a specific description.

For example you are implementing a financials package, best of breed, supposedly compatible with your manufacturing and distribution modules. The "Description" of Step 1, the Justification of the package would simply be "Justify and Get the Go Ahead for XYZ Financials". You are generating an action statement for that particular Step.

The Step Deliverable
The second Element is the Deliverable and this differs from the Step Description

The Step Deliverable element clearly defines the completed work associated with each Step in detail.

Lets use the same financials package example.

The deliverable could go something like this:

"A financials package that has been completely justified via a comprehensive list of system, business and external justification drivers, has been presented to the Management team and has been given their full support".

Description vs. Deliverable

While at first glance, the Step Description and Deliverable appear to be the same or very similar…they are different in the following ways:

• The Description simply describes the activities involved in a step and the…
• The Deliverable describes what the step will look like when it is complete; the finished product.

While Reference Elements – Definition and Deliverable, do not require specific action, they are essential to your ongoing success.

Having a Definition and a Deliverable for each Phase Step provides you with clarity and guidance when trying to describe a step and provide you with a method to decide if you have completed that step.

Specifically, the Deliverable element is used during each Step Readiness Assessment review to determine if you are ready to move the next step.

Well, that’s it for now – until next time – Wishing you success…

Rick

This content is based on my implementation guide – The Business Software Implementation Tracker – Check it out …

 

The Business Software Implementation Tracker Just Released

Whether you are thinking about a new ERP, CRM or any other large scale software solution, there are many challenges common to them all. The Software Implementation Tracker provides you with hands on direction and guidance from the very beginning – where your might just be thinking about a new system, to the final steps and ultimately Going Live on your new software.

The Business Software Implementation Tracker will allow you to spend MORE time implementing your software and far LESS time managing your project!

Click Here For More Information

BSIT Cover r02.jpg


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 4 – Installing and Configuring an ERP System

Hi Folks – It’s been a while and sorry for that! I have been spending most all of my free time working on a new implementation guide, but that’s not why you read my blog!

So let’s get down to it… OK – Step 4, Installing and Configuring a new or upgraded ERP system.

The first thing that you need to know, is that YOU WILL need the help of one or more consultants on this one. Unless you are a serious propeller head, just setting up your database (SQL Server) is not for the faint of heart. And even if you are a geek, the "configuration" of SQL to optimize your ERP system’s performance is going to require some tweaking …. tricks of the trade that you would have no way of knowing.

Next, installing your applications software… If you are even a little bigger than about the smallest candidate for an enterprise system, you are going to run your applications on a separate server. Believe me, this is not the time to be a tight wad.

Migrating data… what data do you bring over from your existing system? While you might want to bring all your data… some, actually a lot of it makes NO SENSE to even try and migrate… I am talking about "history"… Order history, inventory transaction history, purchase order history … whatever.. Now you ask… Why Not! you have years of transactions and you don’t want to lose them! Read on …

Let me see if I can explain this in a couple of sentences … A transaction, like a Customer Order in an ERP environment consists of data usually coming from multiple places in the database – the customer master, the inventory master etc… and for that reason, the data is "related" right? That "Relationship" is the reason why it is extremely difficult if not impossible to bring it over… In order for the data to be properly related from one part of your system to another, it almost HAS to be transacted on your new system. If you just "dump" data in tables and hope that it properly relates, it ain’t gonna work! When a real transaction occurs, there are these "database triggers" that "fire" as the transaction is occurring – ensuring proper relationship.

I hope that makes sense… HOWEVER,  if you can’t bring over history, what can you bring over? Actually VERY IMPORTANT stuff … What I refer to as Master files … The customer master, the vendor master, the engineering master… Really key files right? You can’t do business without them…

Next is testing. At this stage, while you don’t know jack about the new system, you can still conduct basic tests, like … does a bill of material cost "roll up" produce the same results as your legacy system? Be kind of a bummer if you went live on your new system and your costing was completely different! I’ll bet there are other things you can think of that you can test at this early stage… believe me, it does wonders for your blood pressure and maybe your sleep patterns…

Well, that’s it for now and I hope I gave you a couple of things to think about. Be sure to check out my podcast at www.ImplementERPFast.com. I have hours of free audio on selecting, qualifying, negotiating, installing, configuring as well as intergrating business processes into your new system.

One more thing… what the heck – I will give a shameless plug for my new guide – "The Software Implementation Tracker": A 400+ page guide that takes you from the mere vision of maybe you are considering a new system alll the way to Go Live. This is a HANDS ON Guide that is kind of like a "Consultant in a Box" – Only YOU ARE in control and not paying a guy $250 / Hour!

The other part of this product that I am VERY excited about is an Excel application that I developed as a companion to Tracker – the Readiness Calculator…that will allow you to – without a bunch of project management gobbledygook – to visually track your progress… your "Readiness", every step of the way to Go Live. Easy and fast, so that you can attend to the real knowledge work of your implementation.

Until next time, this is 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 www.implementerpfast.com 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…

Later….

What is ERP? … a Free eCourse

I have just completed and released a free internet based “eCourse” that answers the question “What is ERP”.

The reason that I did this is simple… I discovered that there are a lot of people out there that want to know! …

Further, if you are considering a new ERP system, are upgrading your existing ERP system or are somewhere in between – ERP Made Simple – an Introductory eCourse does not just define what ERP is, but goes further in explaining what ERP can do for your business, how it can add value, and how your older systems can prevent your company from accomplishing these goals.

If you want further clarification to the question “What is ERP?”, you should check it out..

Enjoy

Rick

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 1

SYSTEM DESIGN

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…

Later…

ERP System Crash – System Compatibility – Root Cause # 2

SYSTEM COMPATIBILTY

If your ERP system was not compatible with current technology, how much more difficult would it be to find appropriate hardware and software components and expertise to assist you in getting it back up and running? Would you be limiting your options?

How compatible is your current hardware and software with existing technology and standards? Maybe there are certain system components that fall into this category.

This can be very important when third party developers are creating tools for other, more current ERP systems and have ceased to develop for your system or version.

Is your system built on outdated technology, proprietary or on a non standard hardware and / or software platform?

If this is the case, then you can’t take advantage of the same tools and functionality that your competitors can.

Perhaps this would be another opportunity to discuss a new ERP system or upgrading to a current version?

ERP System Crash – Root Cause # 1

SYSTEM AVAILABILITY

Your system crashed this morning and you are having difficulty locating and acquiring hardware and software needed to get it back up…

It is no secret that as technology ages, production quantities are reduced and less frequently produced. Over years of working with aging legacy systems I have had power supplies, hard drives, disk controllers and mother boards among others fail without warning.

To compound the problem, one particular system that I was working with was not only old, it was built on proprietary technology and on more than one occasion, it took me more than 24 hours to locate the part and get my enterprise system back up and running!

Can you say “NO job security”…?

Hardware Availability

If key pieces of your system hardware are either no longer available or difficult to find and your system goes down, you are going to lose valuable production time. In extreme cases you might be forced to shut down operations for a prolonged period of time, you might have to send people home …

• Do you run hardware components that would be difficult to source and purchase quickly?
• How long would it take you get them in house?

Software Availability

While software does not usually pose the same challenge as hardware does, if your system is old enough, and you cannot put your hands on that special utilities disk, it can pose a real and present threat to your company.

The older the system is, the more difficult a particular application might be to locate.
• Do you have critical software components that if reinstallation were necessary you might find difficult to locate?

I have had the experience where as system administrator; I was not licensed to have certain utilities, so I would have to wait for a technician to arrive.

Here is another one…
• Have you ever lost the “dongle” or hardware key for a piece of critical, vertical market software?
• How long would it take to locate one?

While the days of the “serial port” dongle are gone, there are still USB based dongles.

If hardware and software are difficult to find for your existing system, it is not going to get any better…

Could the situations posed above start a conversation about system alternatives?

What is ERP?

ERP – Enterprise Resource Planning

An integrated series of software modules and applications designed to run end to end business operations including: Financials, Sales Management, Production Execution and Planning, Purchasing, Human Resources and many others.

What Makes an Enterprise System Different?

What makes an Enterprise System different is the way that it handles the flow of information. From the database tables, to the way that each table is joined to the information in each table, a well designed ERP system is going to put the right information in the right users’ hands at the right time.

Enter it Once, Use it Many Times

Data is usually not entered twice, rather only once and retrievable wherever and whenever it is needed: A one – to – many (infinite) relationship. Data entered becomes information and moved instantaneously across and outside the enterprise to support your business, marketing and manufacturing efforts.

The classic analogy of the old school business system is that of a series of “silos” where data is generated in various areas of the organization, often redundant and not merged to efficiently generate the needed information everywhere that it might be needed. Where these islands of automation exist, different parts of the organization are making decisions inefficiently and often at cross purposes with one another.

Needless to say entering information once and making it available where needed is a far better approach.

Many Names

The name given to such a system has changed over the years too. From Closed Loop MRP (Material Resource Planning) to Enterprise Resource Planning (ERP) to what some refer to now as an Enterprise Business System (EBS), the concept remains the same. A system that will allow the front office, back office, the field, customers and suppliers to all trade information in a real time manner.

So that‘s it in a nutshell, a system that pretty much traverses the organization that minimizes data entry and utilizes that data where and when it is needed.

Are You Ready for a New ERP System?

Good Morning fellow ERP Champions and all around Risk Takers …

Rick Nielsen here, the host of the ERP Roadmap blog …. I wanted to comment today on how important it is to do a thorough justification of an ERP software system as the first step in the process…

Are You Ready for a New ERP System? …

While you might know the answer to this question off the top of your head, I contend that most people need to give it a great deal more thought…

And even if you know that you need a new system (or upgrade for that matter), who else needs to know with certainty? The boss maybe? … all top management maybe? … those people that are neither but influence others behind the scenes?

We all know that the effort required to get an ERP implementation to Go Live requires a great deal of resources (HARD DOLLARS!) and time. If you don’t have the commitment from top management, when the going gets tough, at least two things are going to happen … and maybe a third…

  1. The software implementation is going to get put on the back burner and …. and no less important…
  2. A dart board with your face on it will be used to explain why the companies financial position is not as favorable as it should be!
  3. And …hopefully you still have a job! (I did say Risk Taker didn’t I?

So spend the time to properly justify your system – the FIRST step in the ERP Roadmap*. It really has to be done before you do anything else. Here are a few pointers to get you started:

  • Listen to your user base – what problems are they having? What capabilities do they require that they do not have in your current system?
  • What aspects of your system are preventing you from providing the capabilities and solving the problems that your user base has articulated?
  • Combine the list of problems and capabilities with the system issues – how do they relate?
  • By doing the above you will start a conversation. As you discuss these issues, consensus and support will start to build

Do you need a new ERP system? By simply following the above 4 bullet points, you will start to think more deeply about the question and will involve others in the thought process …

Rock on … Until next time … this is Rick signing off…

**********************************************************

If you are interested in listening to an interview / discussion with a seasoned veteran of systems implementations, and specifically on the justification issue, check out my latest podcast episode at Implement ERP Fast.

* Download my ERP Roadmap Visual Quick Guide by signing up for my newsletter – top of this page on the right.

 

Major ERP Negotiation Tip – Don’t Divulge Your Budgeted System Cost

Providing the other side with your budgeted system cost provides them with a target price. While there are many aspects to a system purchase that you must be open and up front with the supplier, what you are willing to spend is not one of them. Oh, and by the way, if you do divulge your budgeted cost, you can be rest assured that YOU WILL spend at lest that amount.

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.

Optional
• 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.

Battleground Mid-Market / Middleware 2008 – Oracle vs. SAP…

The big boys have been in acquisition mode for a number of years and from what I can see it is not letting up.

Acquisitions have centered on critical business applications such as ERP systems, SCM, CRM and now Middleware. What the heck is Middleware anyway?

At its most basic level it’s the glue that brings the database and the application layers together. It’s about delivering and deploying information in the context necessary to make good decisions. It is business intelligence or BI (Last week SAP acquired Business Objects) that serves up information on dashboards. It’s content or document management where you can store and find information in any format imaginable. And finally it’s process management – just today, according to Computerworld , SAP announced that it will be acquiring Business Process Management firm, Yasu.

And of course, this conversation would not be complete without dropping in the current darling of the Middleware space – SOA or Service Oriented Architecture.

This architecture allows “Software capabilities [to] be connected to one another easily, enabling the efficient movement of information between applications,” according to the document, Introducing Infor Open SOA.

It is no small wonder that Larry Ellison has his sights set on BEA, because in my opinion, a properly implemented SOA could be the killer middleware component. You really should ckeck out Oracle’s list of Middleware components.

Specifically, if a software company could take SOA technology and integrate it into its family of applications, a customer could literally implement an ERP system ONCE and just add capabilities as the company grows without ever having to implement an ERP system again. I know it’s a crazy assertion, but that’s where I see it going…

So the acquisitions continue to happen, database, enterprise system and middleware applications are owned by fewer companies and these now bigger companies are offering products that appeal to a larger audience.

It’s not like ERP companies that once exclusively sold product to the Fortune 500 / 1000 companies have a choice…

The largest companies have been saturated with enterprise solutions for a while. So the Small and Mid-Market sectors will continue to be where the software providers gain market share.

I am not yet convinced that SAP, Oracle and other Tier 1 providers are where Small and Mid-Market business should spend ERP dollars. Organizational / user needs, implementation and consulting models are entirely different for a smaller enterprise than for a larger company.

This consolidation has been going on for a while. Let the market decide.

While our choices might become fewer as to the company we select, my hope is that overall software capability will continue to provide us with greater business agility.

 

The Most Important Factor in a Successful ERP Implementation

I was flying home from a conference the other day and happened to sit next to an ERP implementation consultant … funny how that works. For the next 60+ minutes we talked about implementing systems, what goes wrong, what goes right and as a result the flight was over before I knew it.

She pointed out some key things that go wrong with an implementation including the lack of clear policy and process definition and of course the lack of sufficient training…

I came away thinking that there was an underlying reason, a more basic cause to most implementation problems. What would be at the root of the project going wrong?

To me the answer was obvious… top management buyoff, support and direction, really the first step in the implementation process.

The reason that I point this out is not to blame top management for all our troubles; it’s actually the opposite of that. As the project manager / champion its part of your job to keep top management informed and keeps them abreast of the progress and challenges of the project.

If you do this, if you keep the brass not only informed but also updated on your progress, your forward momentum, you will keep them motivated as well. Some weeks this might not be much – but always have that win in your hip pocket, always encourage them.

What is most important is that you have ongoing support where and when you need it. You know it, everyone knows it.

To be honest with you this same strategy works with subordinates as well and in many cases is even more important. There is SO much that ALL those involved in the project can offer. I could tell you stories about this … and I will, but time is short.

The bottom line result of keeping top management informed, and remember this, is that when it’s time to make the tough labor and resource decisions, the ERP implementation will be given appropriate priority. It will “stay on the radar screen” and odds are you will continue to get the support that you need.

Life is a sales job and the influence that you have on others, good or bad, rests on one person’s shoulders.

What does it take to Go Live? Getting Over the Finish Line…

You are nearing the end of your ERP software implementation and then the big question comes to mind…

How good is good enough? Am I really ready to Go Live?

I don’t have every software module “optimized”…All processes and policies are not perfected… Everyone is not trained on every aspect of the new system that they could be…

However…

Critical, static data has been migrated and validated. Your network administrator is getting comfortable with SQL Server. Maintenance and support with your ERP software supplier seems to be working pretty well…

Processes have been documented, training materials have been developed and key users have been sufficiently trained to conduct business.

And as a result, we do have “a way” to accomplish every business critical task. It might not be the perfect way, but it will “get us off the runway”. We have tested these processes in as many of the day to day scenarios as we could think of.

Ooops! Don’t forget mission critical reports, you know the ones that the president and the controller rely on to run the business. There might not be that many of them, but you better have them done, tested and available.

And they are done…

So while you are nervous and there are so many details left before the big day… It’s been such a loooong haul…

But you ARE ready, you know it, and so does everybody else.

A successful implementation is when Go Live comes and goes and looking back… it was just another day.

ERP Software Negotiation Tips that can Save You a Lot of Money

When negotiating the price of your ERP system, there is an area that you can easily miss.

Most buyers focus on negotiating the cost of the software and consultant time for implementation.

Obviously these ARE two key areas of focus, but in the long run, and really not that long a run, you are going to surpass the money spent on software, hardware and implementation with maintenance and support.

Maintenance and support is usually based on software cost and guess what? … Many ERP suppliers don’t base it on the NEGOTIATED PRICE. They base it on the RETAIL price!

Let’s do the math…

  • Negotiated price of your software = $150,000
  • Retail price of your software = $200,000
  • Maintenance and support agreement is calculated at 15% of $200,000 so…
  • Your annual maintenance and support cost = $30,000 per year.
  • If it was based on your negotiated cost is would be = $22,500 per year.
  • A net difference of $7,500 per year. A lot of money to leave on the table.
  • Over a period of seven years your supplier can get your $50,000 negotiated discount back!

Negotiation Tip # 1
Negotiate your maintenance and support cost not on the RETAIL price of the software, but on your NEGOTIATED PRICE.

Negotiation Tip # 2

Another area where you can negotiate the maintenance and support, is in relationship to “When the clock starts ticking”, i.e. when will maintenance and support become billable?

In most implementations Go Live is a moving target. Many times this is due to delays caused by your supplier – Use this to your advantage. Base your agreed upon maintenance and support cost on your Go Live date, not your software installation date.

So this is another area that you might get some negotiating traction.

Remember, timing is everything; if you just lost a round in the negotiation, hit them with one of these tactics. But don’t hit them with both of them at once.

Save these negotiation tactics for when you feel the time is right.  If your supplier just “won a round”, their confidence will be high and they might feel obligated to “give” in the art of “give and take” negotiation.

Stay tunred for more sweet negotiating tips…

The 7 Essential Traits of a GREAT ERP Project Coordinator

In the middle of an ERP implementation it is not uncommon for the Project Manager to direct the efforts of between 5 and 15 people on a daily basis.

Things change so rapidly in an implementation that keeping track of every employees efforts in system configuration, testing, process definition and training can be very difficult. Or, put another way, implementation can be an activity akin to juggling cats!

The key is to effectively keep your team moving forward without making a rocket science project out of it.

In my last implementation, just one competent person helped the entire team continue making substantial progress on a daily basis. She was also of special assistance to me as project manager in dealing with the overall management of the project in its many details.

We all know that small and mid-market businesses don’t have a lot of money at their disposal to hire someone for a project that can be viewed as an “overhead” position. However, a justification for someone to coordinate the activities of your ERP implementation while key people tend to revenue generating activities can be made successfully.

The essential traits of a great project coordinator are as follows. I know when you review this list you are going to question whether someone exists that could possibly fit all 7 traits. But I have hired college people repeatedly that do indeed fit nicely into all 7 areas.

This individual must:

Be able to get along well with other people

  • We are definitely talking about a people person here, but more importantly someone that is sincere, unassuming and somewhat easy going. If you have someone like this in the ERP support role, even your team “bulldozer” will think twice about bowling them over.

Have a great work ethic

  • This is a person that comes in early and will work late whenever you ask and whenever they can.
  • This individual will always be able to find something constructive to do.
  • When working, this person will give you 110% of their personal effort.

Good communication skills

  • The ability to speak clearly,
  • Present ideas so that they are easily understood,
  • Someone that can write both formally, proposals etc, and informally in emails.
  • Someone that uses common sense in situations and keeps their head where someone else might get flustered or angry.

Be able to learn quickly and on the fly;

  • This one is pretty self explanatory, given the wild, no two days are ever alike in the world of an ERP implementation scenario.
Possess some trouble shooting skills

While you will help him or her develop these skills, here is what I look for in an individual;

  • The ability to clearly isolate a problem and then test one solution to that problem at a time.
  • The tenacity to not let the problem go.
  • The common sense ability to research the problem.
  • The discipline to document their progress and finally…
  • They will think about the problem day and night until it is resolved

Basic Office application skills including: Excel, PowerPoint, Word and Visio.

  • With a good grasp of these tools, they will be able to electronically create, analyze and communicate thoughts and ideas.

A semester of Project Management and a one each in General and Cost Accounting…

  • With a grasp of cost and general accounting, due diligence can be performed on aspects of the financial aspects of the system such as inventory valuation and product costing.
  • Having some exposure to formal project management will ensure that schedules and resources can be properly maintained.

Once you find this person, look out…here are some of the things they will be able to help you with…

  • Maintaining project and task lists,
  • Setting agendas and keep minutes,
  • Documenting processes, policies and training documents,
  • Testing application modules,
  • Update your new systems security settings and
  • Update “static” data, on and on – way too many to mention.

Where can you find a person like this? One great place is to contact the closest state university and talk to the head of the MIS program. Ask them for recommendations for someone that is either a senior or a recent graduate.

Many of these young people would die for an opportunity to play a key roll in an ERP implementation. What a great way to begin their work experience! This is how I have found all those that inspired this blog post.

The way to verify that a candidate is the type of person as I have described is to give them a try and some rein … let them run with an aspect of the project that you have not been willing to turn over to someone. It’s a leap of faith but something that you have to do.

They won’t understand your confidence in them and will doubt their abilities. Spend, no … invest time in and with them….

When they complete the task given to them, give them another, have more faith in them than they do; keep ahead of them with important tasks.

They will work for you like you have never seen someone work. It is a unique feeling for a young person to be valued, appreciated and trusted in an office environment.

Don’t get me wrong, I am not some super mentor, it’s just that a person like this will energize you as much as you energize them.

There is a symmetry where my coordinator complemented my activities and in many cases picked things up where I had left off. Further a synergy developed where the two of will routinely get more done than what you would have ever considered three people could have accomplished.

This time of year can be perfect in perhaps catching someone finishing up their last semester of their senior year. Don’t wait, contact your local university now.

Give someone a great opportunity and give your project a HUGE boost in productivity. You will never regret it!

 

You and Your ERP Implementation Team – One Is the Loneliest Number

It’s 7:05 a.m. on Monday morning and you’ve been staring at a blank yellow pad for the last 30 minutes.

You are in month 7 of your ERP software implementation.

You know the project…
The one that you fought so hard to get buyoff on,
The one that you stuck your neck out there for.

Perfect timing, your monthly budget vs. actual report was waiting for you when you walked into your office this morning. Not pretty, lots of red ink. You have been spending more than you projected. There is so much more to do…

You now have no doubt that you have to move Go Live out another 6 months.

You will be meeting with your implementation team in 55 minutes.

You know that these men and women are the ones that are going to make or break your implementation. You have that all too familiar sinking feeling in the pit of your stomach. You don’t know what to do next; your mind is a blank…

The team needs direction and they need to be energized, you know you can’t bullshit them. They know you and they know the project. You have to be honest with them and tell them that you are going to recommend the move out…

What will they think? Will they agree? Are you sure you need to do this? You have the final say.

You told yourself and you committed to the team and the shareholders that no matter what … the company will not “Go Live Twice”, meaning that you and your team WILL get it right the first time. The software will work, processes will be defined and tested, people will be trained…

Then you realize for the 500th time…

You know that you can depend on the team for good feedback. You also know that they will set you straight if required… but you know this time that they will agree. The project is not moving as quickly as you and your team had planned.

All you have to do is be open and honest with them. This morning when you walk in to the meeting you will “follow to lead”. You will just give them the facts. Where we are in the project today, where we are supposed to be and where we need to be to Go Live.

As stated earlier, they know you; some of them will know what you are going to say before you say it.

Let them talk, and if the question is… should we postpone Go Live or not, the team will give you the guidance that you need. They have given you the guidance you need so many times before … you know they won’t let you down.

Depend on them; ask for their help in spoken and unspoken ways. You will not be disappointed and your team will be strengthened.

And “yes”, you will Go Live when the time is right.

And “yes” you have to answer to the board or the management team for cost overruns and project delays; there is no denying that fact.  

However, if you and your implementation team are on the same page, if the team “owns” the major decisions, there is consensus on the projects direction, you are on solid ground.

Keeping an ERP project on track is so much more about the people than it is anything else. I know it sounds cliché, but I have found it to be so true…

Its 7:55 a.m., whoa, time warp. You get up from your desk and head for the meeting.

Implementing ERP and Scarce Labor Hours – A Question of Balance

Many of you who work or run small or mid market businesses are all too familiar with the dilemma of balancing ERP system capabilities and scarce available labor hours.

Because to most small businesses, labor hours are scarce, revenue generation is everyone’s primary concern.

The thought of spending time operating and maintaining an ERP system is looked upon by many to be non value added activity.

At the same time streamlining business processes and automating tasks to tie your cherished labor hours more directly to revenue generation is a constant goal.

So a balance between labor and automation must be struck in conserving labor and optimizing an ERP system in supplying the right labor with the right mission critical information.

It would make sense that hours spent with your system in the optimization of core business processes would be a high priority. However this is where balance is important. A process is only as good as you have people implement it and to run it.

A highly sophisticated process, one with a level of detail not required in your smaller enterprise would be highly detrimental to revenue generation. In fact, taken to an extreme, a small business with too many such processes would cease to function altogether.

So when considering an ERP system or bringing a post implementation module on line, you must balance Enterprise System operations to your available labor.

Only you and your team have the vested interest, experience and knowledge to appropriately answer this critical question of balance, however, the time you spend in balancing these critical elements will pay your organization back many times.