Critical success factors for ERP implementations

2009 from International Journal of Operations and Production Management – “This paper explores the Critical Success Factors (CSFs) of Enterprise Resource Planning (ERP) system implementation at Small and Medium sized Enterprises (SMEs)…

Operational process discipline. The concept of process discipline has been formalized by Collins and Schmenner (1993) and Collins et al. (1998). In our study, companies were asked about documentation and consistency in executing operational processes (i.e. information flows) prior to the implementation. Companies having greater consistency prior to implementation appeared to achieve more successful implementations regardless of the level of documentation. The two unsuccessful cases had good documentation, but low discipline in adhering to standards set in documents. For example, Company 4 cited ISO audits that revealed non-conformance in sales and engineering. Company 3’s poor record led to problems such as excess procurement to buffer for inaccurate inventory data; as the Accounting Manager indicated, “We were a custom job shop with “craftsmen‟ who would each do things a little differently. The BOMs [bills of materials] were “loose‟ and standard routings were non-existent… it was very dysfunctional.” Consequently, both companies had difficulty adhering to processes that were newly developed by the ERP.

Overall, it seems that having inconsistent operational processes conflicts with the procedural rigidity of ERPs. Where such inconsistency exists, it may be necessary to carry out some process benchmarking and improvement prior to enforcing standardized procedures brought in by the ERP. This finding looks consistent with Schniederjans and Kim‟s (2003) conclusion (from a large company survey) that best implementations involve reengineering processes before rather than after the ERP introduction. Ross and Vitale (2000) similarly stated that ERP implementations posed challenges as they “... were instilling discipline into relatively undisciplined organizations.” (p. 240).

Thus, it appears that operational process discipline should be identified as a major CSF for ERP introduction at SMEs, especially given their frequently informal type of environment..."

180 View – Thanks go to Bluelink for alerting us to this article. For a quick summary of the CSF’s by Bluelink, click here.

I have only copied the first CSF above as it discusses a number of very interesting points. There is an assumption that ERP systems impose standardization. I disagree in that ERP systems have flexibility to accommodate different business processes. However, the implementation team may decide for different reasons that standardization is a good idea.

It seems that undisciplined organizations run into problems with standardization of business processes. This can also happen for many reasons. It may because there are different business units that do things differently to maximize their profitability and don’t want corporate to impose standards.

Another point raised is “that best implementations involve reengineering processes before rather than after the ERP introduction”. I disagree. Reengineering should take place during the implementation. Why not leverage existing business processes embedded in an ERP system than try to reinvent processes or create processes that are too expensive to implement.

In any event, the red flag needs to go up early for an implementation where there is a lack of standardization. When there are strategic reasons for non-standardization, the implementation should accommodate it. When the reasons for non-standardization have more to do with personal preferences or power, the implementation team needs to have the full backing of senior management to enforce standardization.

Magic Quadrant for Midmarket and Tier 2-Oriented ERP for Product-Centric Companies

June 4, 2009 from Gartner via Epicor – “Despite the mergers and acquisitions, there are many ERP offerings for midmarket companies and firms deploying Tier 2 ERP systems. This Magic Quadrant evaluates products that have a global presence and are specifically tailored for product-centric midmarket companies with roughly 100 to 1,000 employees…”

180 View – The Gartner Magic Quadrant has been around for many years and I suspect was and still is a big factor in which systems have been selected especially by larger organizations. There is a lot of useful information in the article. You will also find Gartner acts as a judge in assessing strengths and weaknesses of the various systems including getting feedback from “reference” clients. However, we question whether the feedback from clients can be relied upon. Gartner would need a large sample of clients to draw any conclusions. I did a scan through the report looking for information on how many customers were interviewed and how the customers were obtained – I did not find anything.

The report also discusses a number of trends including packaging of industry-specific functionality, technology modernization using service-oriented architecture (SOA) and the need for global deployments. I agree with the first one about industry-specific functionality. Some vendors have done this by partnering with industry specific developers. The vendor provides tools and marketing, the industry specific developers provide the extensions to the system. I have also heard vendors touting SOA as the road to salvation. Any problem with integrating multiple systems can be handled using SOA… The cynics out there including myself are not swept away by technology hype. Global deployments can be a problem with respect to language, taxation and statutory requirements. However, I don’t agree that the vendor needs a presence in countries all over the world. The preferred approach is to Train the Trainer and let internal resources roll out the system. With the use of low cost communications and remote access over the internet, a physical presence is not always required.

Also take a look at more criticism of Gartner's report by The Enterprise System Spectator by clicking here.

Epicor ERP project sparks customer lawsuit

May 18, 2009 from ComputerWorld – "...Epicor's representatives were given the Requirements list prior to entering any contract negotiations, and Epicor represented its product would be able to perform all of Ferazzoli's requirements," the complaint states...

In June 2007, Epicor officials visited Ferazzoli's headquarters to learn about the business and demonstrate its software. The officials made further assurances that Epicor's technology would be satisfactory, according to the complaint...”

180 View – There are many reasons for failed implementations, and we can’t speculate what happened here. However, we think the problem is not likely the software but more likely the selection and implementation process. In the article, a suggestion is made - "You want to make sure that all demos, marketing materials, and assurances are put into the (contract) document." We partly agree with this recommendation. But demo’s and assurances are too vague. Better would be to include specific requirements from an RFP to which the vendor responded.

CRM On The Cheap: 5 Strategies That Backfire

April 27, 2009 from ComputerWorld - “Your company knows that it wants a serious CRM system. But the CFO, nervous about the costs, starts to suggest strategies that could keep things under control. Meanwhile, you know the implementation team has some ideas that go in a completely different direction. How can you manage executive expectations that may be based on misinformation? This two-part article will cover common traps that you should avoid, followed by advice on the best ways to save some real money.…”

180 View – The article makes some good points that apply not just to CRM. For example – “The complete-system launch, sometimes called a Big Bang project, just doesn't work very well for software. The warning signs of Big-Bang thinking include: Infrequent project milestones; large, complex, monolithic project deliverables; little consideration of political or change-management issues; fake, vague, or overstated requirements, particularly for scope of system integration or historical data; scope creep. Better to deliver incrementally, deploying something of value to the business at least once a quarter.” We believe that during the design phase, you should consider the big picture/bang, but build and roll it out in manageable phases.

Duffield Takes On Oracle, SAP

April 29, 2009 from Forbes – “…Duffield is royalty in the software industry. He founded PeopleSoft, which became the second-biggest applications company in the world, with $2.7 billion in sales, before it was swallowed by Oracle after a long, nasty takeover battle. Now Duffield at it again, trying to take on Oracle and SAP…

Workday is thriving despite curbed technology spending. The firm more than doubled revenues last year, to over $50 million, and is on track to reach profitability within the next 18 months…”

180 View – There is something to be said for starting all over again without any baggage.

Insights from Lawson CUE 2009

April 23, 2009 from The Enterprise System Spectator – “Lawson invited me to attend its annual conference in San Diego this week. I last attended Lawson's CUE in 2005, so this was a good opportunity to catch up on the latest with this vendor of enterprise software…

Here are some of the points that to me were most meaningful, from discussions with Lawson executives and customers as well as from dialog in the analyst meetings. I'll try to comment beyond what is in the announcements and press releases…”

180 View – We think it’s useful to know what is happening at the conferences held by the technology vendors, and appreciate Frank Scavo’s writing about it. I am hearing more about Lawson lately and one can see from this write up that they continue to invest in their systems and should be considered in certain industries such as the fashion industry and equipment manufacturers.

SMB ERP Projects: Don't Forget the ROI

April 1, 2009 from Computerworld – “The average SMB ERP implementation takes 10 months, though the installation work continues long after the go-live date hits, according to recent Aberdeen Group survey data of 920 SMBs. The financial costs can be just as significant: SMBs with less than $50 million in annual revenue will typically pay nearly $300,000 for ERP software and services, while larger businesses (revenues between $100 million to $250 million) will spend $1.4 million, the survey data states.

"Given this level of investment, one would think ROI would be top of mind for most companies,"

180 View – Not surprisingly, we read a lot about ROI (or lack of it) these days. We agree with the article that organizations should determine the ROI of an IT investment. But if ROI was the sole criteria, the investment would usually not happen assuming unbiased building of the business case. But there are other compelling reasons for the IT investment involving intangible benefits and risk mitigation.

The biggest problem with ROI and business case is the underlying assumptions. Be skeptical of the assumptions if the person responsible for the business case will gain by the IT investment. Make sure that the assumptions really make sense and have some supporting documentation.

Recession is ideal time to invest in technology

February 20 from the Financial Post – “With client and customer demands waning for small businesses as the economy lumbers along, this may be the moment to put down time to good use…

We just had our biggest year ever," says Mr. Stroink about sales at his Halifax-based retail business, The Trail Shop, which sells hiking and outdoor gear. Mr. Stroink attributes his recent success, achieved as Canada's economy began descending into a nosedive, to a new information technology system he implemented in his store that simplifies everything from inventory tracking to point-of-sale figures. He purchased the system from SAP Canada, a company that is currently touting IT solutions for small businesses to help them with efficiencies that could translate into cost savings…”

180 View – The natural tendency for most organizations is to put IT investment on hold in the face of economic uncertainty. It’s just about impossible to show an ROI on ERP investments without making unsupported assumptions. But some organizations have no choice as their systems are no longer supported or the system can’t support new acquisitions or business models. Other organizations are recession proof. And other organizations see every problem as an opportunity…

On-demand ERP draws mixed reaction

March 11, 2009 from InfoWorld – “While it has tested the waters of on-demand software with its CRM Online application, Microsoft still has no plans to do the same for its Dynamics ERP (enterprise resource planning) product lines, according to a top company executive.

"We don't see people saying, 'Hey, I wish you had hosted ERP, give me that, or I wish you only had hosted CRM,'" said Kirill Tatarinov, corporate vice president of business solutions, during a question-and-answer session Tuesday at the Convergence conference in New Orleans….”

180 View – We wonder whether the problem with Microsoft and other vendors in not moving faster to on-demand software is more caused by the software itself. The article later points out that “Dynamics CRM 4.0 has a multitenant architecture, allowing a single server to run multiple instances of the application.” If Microsoft ERP systems also had a multitenant architecture, it’s likely they would offer it. The on-demand model makes a good business case for companies that don’t have the resources or infrastructure to support on-premise software.

Compiere Cloud Edition: The Next Disruptive Breakthrough for ERP?

March 13, 2009 from AMR Research – “…Mr. Klaiss briefed us on a new product he was planning to launch in early March, Compiere Cloud Edition. His plan was to be the first vendor to offer an ERP and CRM suite running on Amazon’s Elastic Compute Cloud (EC2)…

What I found most appealing about the Compiere-Amazon pairing is how the two are completely changing the cost structure of deploying ERP. You can subscribe to Compiere Cloud Edition for $795 per month and “rent” Amazon capacity for as little as $2,000 per year. That translates into about $10,000 for 10 users and $80,000 for 100 users. For cost-conscious CIOs, this is worth considering. Some of these cost advantages are because Compiere is built with open source technology, allowing companies to own the source code, eliminating the dependence on a vendor, if needed…”

180 View – Disruptive technology is a good thing as it leads to better prices and/or improved products/services. However most organizations are risk adverse when it comes to ERP systems. Potential disruption (not the intended meaning in the article) to business is the last thing they want.

Tipping Point Reached For Cloud Computing?

January 30, 2009 from ZDNet – “…He says that mainstream adoption within small and medium-sized businesses is “accelerating” – and that 20 percent of enterprise IT workloads will be run “in the cloud” by 2013. This will lower operating costs, reduce IT staffs and cut down on carbon footprints, he says... By the end of 2010, in fact, he expects 70% of companies will have deployed at least one application in the service “cloud”...

180 View – It’s hard to find good stats on SaaS. The survey in this article is based on a survey of 150 chief financial officers with budget authority. So it’s not based on actual SaaS but planned adoption. It’s also based on a small number of companies. Nevertheless we agree that SaaS has become mainstream. There are currently few options for ERP SaaS but that will inevitably change as companies seek ways to reduce costs. The article ends with “70 percent of SAP’s installations of its R/3 set of business applications predate 1998.” Pre 1998 there were not that many ERP systems available and SAP was extremely successful in attracting companies especially those with Y2K fears. But it’s still surprising that 70% predate 1998.

Could the recession be good for enterprise software?

February 19, 2009 from InfoWorld – “The recession has companies worldwide scrambling to rein in technology costs with desperate vendors responding in turn, offering deep license discounts, providing low-cost financing and proclaiming ever more shrilly that their products in fact save customers money…”

180 View – It’s going to be a tough sell for companies to invest in technology if they have just been forced to lay off part of their work force. However, there are companies that will want to scale back their on-going IT costs. They may be able to do this by renegotiating terms with their vendor and in optimizing certain inefficient business processes. Another possibility is replacing a costly system. Costs of the existing system could be high based on annual maintenance fees calculated on the original license fee. Costs could also be high for the internal and external costs to support the system. And costs could be high if substantial work is required for upgrades. But be careful with replacement strategy as the internal costs to implement a new system can be very high too.

Competition Intensifies For The SMB ERP Customer

August 13, 2007 from Forrester – “Despite their challenges, SMBs (small and medium-size business) continue to look to packaged applications to tackle myriad complex business requirements. Recent Forrester surveys reveal that SMBs are:

• Justifying new or additional application investment. Based on Forrester Business Technographics® data, 83% of SMBs believe that application software improves the efficiency of core operations and business processes, and 80% of SMBs believe that software improves workforce productivity. Additionally, 75% believe that software improves the quality of products and services.
• Driving software investments with business needs. SMBs mostly rely on peers and not vendor hype for purchasing information, with industry-specific case studies and word-of-mouth success influencing shortlists. By a large margin, software that supports an industry-specific process leads application purchases for first-time purchase, major upgrades, and minor upgrades. In addition, SMBs want to make the most of existing investments. Sixty-three percent of surveyed users prioritize improving integration between applications as the top initiative for 2007. Specifically, customers could care less about service-oriented architecture (SOA) and middleware, but want the tangible benefits of integration, interoperability, and standards.
• Maintaining a “wait-and-see” approach to software-as-a-service (SaaS). SMBs continue to prefer on-premise delivery versus SaaS; fully 60% of SMBs are not at all interested in SaaS due to concerns about integration, security, total cost, performance, and lack of customization. Although these concerns represent largely unsubstantiated perceptions, most SMBs remain comfortable adopting a “wait-and-see” approach…”

180 View – Although the article is dated, it does contain useful insights and is worth a quick read.

Providing Assistance to Businesses in All Sectors to Invest in Computers

January 27, 2009 from the Government of Canada – “Budget 2009 proposes a temporary 100-per-cent CCA rate for computer hardware and systems software acquired after January 27, 2009 and before February 1, 2011. In addition, the rule that restricts CCA deductions to one-half of the CCA write-off otherwise available in the first year will not apply to these computers.
This temporary measure will allow taxpayers to fully expense their investment in computers in one year. The measure will provide stimulus by assisting businesses to increase or accelerate investment in computers. It will also contribute to boosting Canada's productivity through the faster adoption of newer technology. Businesses in all sectors of the economy, including the service sector, will benefit from this incentive..."

180 View – Great idea but it has limited value as it refers just to computer hardware and systems software. Computer hardware is typically a small portion of any new system implementation. Systems software, according to Canada Revenue Agency “refers to the general operating system that enables application programs to be run and directs and coordinates the different operations of the computer, including all of the input and output between the keyboard, the CRT screen, the printer, the disk drives and other peripheral equipment.” In other words, it does not include ERP or accounting software.

IFRS Conversions - What CFOs Need to Know and Do

2008 from Canadian Institute of Chartered Accountants – “…Converting to IFRS will not merely be a technical accounting exercise, but more a widespread change management exercise that will impact many areas of the business. Any business function required to prepare financial information, or impacted by financial information, has the potential for change. Companies should expect changes to earnings and financial position. The possible implications for key business areas along with some examples are given below:
1. IT and Data Systems (IT) - Capability of system to produce dual financial statements (Canadian GAAP and IFRS) during the transition years, while maintaining system security and reliability…”

180 View – Accountants never seem to run out of work. They had a field day with Y2K, then SOX and now with IFRS. Despite all the courses and articles on IFRS, there is still a lot of confusion. One area that has come up a number of times with our clients has been with handling the transition year. The article states that “The main options available to converters involve either dual GAAP accounting throughout the transition period or some form of restatement from Canadian GAAP to IFRS at each reporting date.” The first option should require the ability to post transactions to multiple ledgers – one for GAAP and the other for IFRS. The second option should be easier to implement by simply just booking any IFRS adjustments to take a set of books from GAAP to IFRS.

Cloud computing

March 2009 from CAmagazine and written by Fred Blauer – “…The traditional software model involves developing source code (program instructions) that is protected by a legal patent (intellectual property) so that no one can use, copy or modify it without purchasing or licensing it from the author. Now there is a shift from proprietary software to open software (which allows you to freely use, copy and modify) and standardized software (which runs on any platform)…”

180 View – There are many open source success stories such as Linux and MySQL, but is it appropriate to run a business? There are a few ERP open source solutions such as xTuple. There are also a number of vertical (industry specific solutions) such as OSCAR-McMaster: An Electronic Medical Record (EMR) system. Although we have concerns about open source to run a business, it's clearly gaining traction. As Fred says in his article, "As new systems mature, this (open source) will become a viable alternative to proprietary software solutions for the business mainstream."

Can Dynamics Gain from Economic Pain?

November 13, 2008 from Microsoft Watch – “That's the question to ask about Microsoft's 0 percent financing option for its Dynamics CRM and ERP products.

Microsoft announced the limited-time promotion today, Nov. 13—and what timing! Yesterday, IDC cut 2009 U.S. IT spending growth projections to 0.9 percent from 4.2 percent. Go on, blame the economy.

Microsoft will offer financing for just about anything, including hardware and services, as long as at least one product is from the Dynamics family. Purchases must be between $20,000 and $1 million, which, like Dynamics products, makes the financing offer most appropriate for small and midsize businesses…”

180 View – Turning a problem into an opportunity is good business.

Oracle turns tables on SAP in ERP battle

November 18, 2008 from itWorldCanada – “(In 2006), the clear victor of the "battle of the architectures," as Forrester termed it, was SAP: It had a larger market presence in applications than Oracle did, plus faster growth. SAP had been able to capitalize on Oracle uncertainty, and it was able to articulate a clearer vision for enterprise applications, the Forrester analysts wrote.

Much has changed since then. Now, as 2008 comes to a close, Forrester analysts John Rymer, Paul Hamerman and Ray Wang have done another comprehensive analysis of the fierce competitors' application strategies. The report, "Which Has The Better Apps Strategy: Oracle Or SAP?", compares the merits of Oracle's next-generation applications play-Fusion Applications-with SAP's inclusive strategy that seeks to minimize disruptions to large organizations.

This time around, Forrester's nod goes to Oracle…”

180 View – The Forrester opinion is based on technology from Oracle that ‘it now seems like will arrive in 2010, according to Oracle's most recent promises.” It is premature to select a winner based on futures. As well, both Oracle and SAP have stiff competition for new sales, and it’s no longer a battle just between Oracle and SAP.

Salesforce.com and Google execs blast Oracle, SAP, Microsoft

November 7, 2008 from ComputerWorld – “…But Benioff wasn't finished, and a few minutes later hit out again at his former boss Ellison, saying that the SaaS approach can't be compared with "mature, dying models like Oracle and SAP, which is maybe already dead."

Girouard also had choice words for traditional enterprise software vendors, saying that they haven't learned from the successes of Web-based software for consumers and are thus failing to meet the expectations of those same consumers when they go to work.

"There's an amazing disconnect between the innovation and user experiences delivered in the consumer world and the stagnant, unenlightened world of enterprise computing that puts the user experience far in the background and focuses on business process," he said...”

180 View – Today, most enterprise applications like ERP are not web-based and not delivered as SaaS (Software as a Service). But that is changing fast. In a few years, we expect that 50% of enterprise applications will be web-based and available as SaaS.

Preparing for ERP with Best Practices

November 7, 2008 from IndustryWeek – The article is for manufacturers but also applies to other industries - “Manufacturers can prepare for ERP adoption by benchmarking the organization against peers and then removing all non-value-adding activities from the supply chain.

Enterprise resource planning (ERP) is not a magic bullet. ERP systems have become more affordable, effective and -- to a significant degree -- essential, but manufacturers need to pause before joining the headlong rush toward implementation. Companies that do not ready themselves before implementing ERP find it nearly impossible to fully utilize their new systems, and risk upsetting their organizational culture with chaotic implementation phases. However, manufacturers can prepare for ERP adoption with straightforward activities that do not require outside consultation, require no investment other than time and can typically be achieved within three months...”

“Additionally, we will see how manufacturers, regardless of their specialty, can prepare for ERP adoption by benchmarking the organization against peers and then removing all non-value-adding activities from the supply chain…”

180 View – The author makes good points about ERP not being a magic bullet and the usefulness of benchmarking. However, we don’t agree that an organization can remove all non-value added activities in advance of the implementation and without the help of consultants. First many of the non value added activities can’t be removed because of limitations in the existing system. Second, why not take advantage of the vendor’s experience and avoid re-inventing the wheel.

Oracle sees progress on Fusion apps

September 2008 from ComputerWorld – “Observers say Oracle is finally making substantial progress on its next-generation Fusion Applications suite, more than three-and-a-half years after the project was first announced…

Oracle has said Fusion Applications will blend together the best features from its various product lines, which include PeopleSoft, J.D. Edwards, Siebel and E-Business Suite…”

180 View – This article is a few months old so we did some digging to find more recent information on Oracle Fusion. We had trouble finding anything more recent except "Oracle Fusion Applications: Is 2010 Delivery Too Little, Too Late, or Smart Strategy?” published on October 3, 2008 by CIO Magazine that included “Jim Shepherd, senior vice president of research at AMR Research, says Oracle realized that there was no overwhelming demand in the market for a next-generation ERP system, and "most of the acquired PeopleSoft and J.D. Edwards customers were much more interested in enhancements for their existing software than they were in migrating to a new product." In turn, Oracle has lowered the priority of delivering Fusion Apps to the market.” We agree with Jim Shepherd’s comments but a next-generation system will also allow Oracle to compete with other vendors who have built or are in the process of building these next generation systems that include easier to use systems, collaboration, Web-based (just need a browser) and offered not just on a licence basis but also by application service provider — the pay-as-you-play model, where you don’t need to invest in the infrastructure.

Implementation is all about people

October 2008 from CAmagazine – “It should be no surprise that all projects depend on people not only outside, but also inside, the organization. Nevertheless, many organizations think they just need to find a system with a good fit, and they are off to the races. Unfortunately they stumble out of the starting block and sometimes never finish. What they really need is the right people at the right time…” This article also discusses responsibilities of the steering committee, project manager and subject matter experts as well as how much effort is required.

Workday: The Next Software Power?

August 19, 2008 from BusinessWeek – “Ever since veteran software entrepreneur Dave Duffield launched his new startup, Workday, a year and a half ago, people have wondered if it could become the next Salesforce.com (CRM). Marc Benioff, Salesforce.com's chief executive, had shaken up the customer-relationship management software world and created a company with a market cap of $8 billion with an online service that replaces expensive and complex traditional software packages. Could Duffield and Workday do the same? Just now, there's growing evidence they can...”

180 View – We think that it’s early days for Workday that will eventually challenge other products more than Salesforce including NetSuite and SAP Business ByDesign. Salesforce is primarily CRM and WorkDay includes accounting and HR. What’s interesting is that there is a lot of investment in the next generation of ERP, CRM, HR… systems using SaaS (Software as a Service).

Epicor 9: The Accomplishment That Eluded Microsoft and Oracle

September 2008 – “Once upon a time, Microsoft embarked on Project Green, an ambitious undertaking designed to take the best of its four ERP systems and converge them into a single code base, albeit a fifth product.

Meanwhile, in a parallel universe, Oracle set off on Project Fusion. This was to be the lunar landing of convergence, melding the best of Oracle, PeopleSoft, and J.D. Edwards into the Apollo of enterprise applications.

Today, Project Green lives on as a set of design principles for future application development. The dream of one product is long past the REM stage.

Project Fusion has become the service-oriented architecture (SOA) framework for connecting the original Fusion ERP components with the subsequent acquisitions (such as Agile, BEA, Demantra, G-Log, Hyperion, Retek, Siebel, and the rest). Given that it’s likely that Oracle has other application purchases in mind, it might have been unrealistic to expect the company to ever deliver one master software suite…”

180 View – Congratulations to Epicor for doing what eluded Microsoft and Oracle. We anticipate that Epicor 9 will appeal more to new customers than existing ones. When merging/fusing different products, the developer’s goal is to take the “best” features from each system. But “best” is a subjective term. Existing customers may rely on functionality that is not considered “best”. As well, existing customers may have customized their system and these customizations may have to be redone.

Enterprise software survey 2008

September 2008 from CAmagazine – “Believe it or not, we’re now in our 10th year for our annual CAmagazine software vendor survey. As always, we have added new functionality and new systems. This year we have 54 systems, 17 more than last year…”

Finance Accounting Solutions Comparison Guide

2008 from TechRepublic – You can access TechRepublic’s “Finance/Accounting Solutions Comparison Guide for Small to Midsize Companies”

180 View – The guide contains information on Epicor, Exact, Infor, Lawson, Microsoft, NetSuite, Oracle-JD Edwards, Oracle-PeopleSoft, QAD, Sage and SAP. We think the guide is not nearly as comprehensive as the CAmagazine survey but it does include vendors that were not included in the CAmagazine survey.

Time to Put Your G/L on a Diet?

August 27, 2008 from BusinessFinance – “Companies historically have dumped anything they needed to report on into the general ledger and added it to the chart of accounts. As a result, the G/L functioned as both a data warehouse and the financial book of record, a situation that ISA Consulting describes as "the fat G/L."

180 View – The remedy according to the article is “I would want to take to my general ledger only the bare minimum necessary to do my filings -- legal entity and natural account. I'm oversimplifying, because most organizations report by segment, but in essence that's what you need.”

But today you can have your cake and eat it too. There are analysis codes, reporting structures and subledgers that can give you the reporting you need without a fat G/L.

SAP Imposes Single-Tier ERP Support Program

July 16, 2008 from eWeek – “SAP is taking a one-size-fits-all approach to product maintenance, in which customers of all sizes will be switched to an Enterprise Support program regardless of their size or IT budgets.

SAP will start transitioning current customers into Enterprise Support this month at no additional cost, but it will start phasing in pricing for this level of service at the rate of 8 percent per year over the next four years starting in 2009, until it reaches the standard cost of 22 percent of product license fees…

SAP contends that the cost of Enterprise Support is below the average maintenance fees charged by other software companies. Cordrey said that the phased-in price increases will help make Enterprise Support affordable for customers of all sizes.

Enterprise support provides a 24/7 service-level agreement, continuous quality checks, produce support advisories, and advanced support for implementing ERP application enhancements and support packages.”

180 View – We anticipate a backlash on 22% product maintenance from SAP customers. We think that maintenance fees will become one of the more important criteria in selecting a new system. Organizations in the selection process should be evaluating NPV (Net Present Value) over 5 years to make a cost comparison between systems. But make sure that vendors have disclosed all maintenance and support fees, which are sometime charged separately.

What is your ERP solution NOT doing for your organization?

2008 White Paper from Exact Software – “Most organizations have already implemented Enterprise Resource Planning (ERP) to streamline manufacturing, distribution, and financial processes. However, existing ERP technology has left them frustrated in their efforts to extend the same level of efficiency throughout the entire organization. Valuable information about customers, employees, vendor relationships, andmore is typically locked within silos—fromindividual databases to file cabinets to employees’ desktops. Moreover, traditional ERP systems don’t encompass interactions with outside parties such as customers, suppliers, and business partners. While ERP does a fine job of tracking manufacturing, distribution and accounting processes, businesses need to understand the context behind these transactions to truly maximize efficiency and effectiveness…”

180 View – Although the Exact White Paper does indirectly promote their system, it also contains useful information about ERP trends.

IFRS - Time to get moving

June 2008 from CAmagazine – “According to a recent CICA survey the vast majority of Canadian publicly accountable enterprises are closer to the starting gate than to the finish line when it comes to preparing for the transition to international financial reporting standards (IFRS).

The survey was conducted in March with 550 senior Canadian executives who are chartered accountants, almost 300 of whom must report using IFRS by 2011. Only 8% of those executives indicate they have begun the conversion process; while 72% have not yet reached the stage of assessing the impact of IFRS on their operations…”

180 View – Every problem for someone is an opportunity for someone else. You can bet that the consultants, auditors and ERP software vendors will reap IFRS benefits other than the benefits intended.

Microsoft Ships New Release Of Its Dynamics AX Applications

June 4, 2008 from ChannelWeb – “Microsoft has begun shipping Microsoft Dynamics AX 2009, a new release of the vendor's ERP application suite with new globalization functionality and tools for tailoring the applications' interface for specific user roles.

Microsoft previewed Dynamics AX 2009 at the vendor's Convergence conference in March. Dynamics AX is geared toward upper mid-market customers that have operations in multiple locations, particularly those in manufacturing, retail, distribution and professional services...

The software also uses business intelligence technologies to provide users with key performance indicators based on their roles. And Dynamics AX 2009 more closely resembles the familiar Microsoft Office...

Also offered in Dynamics AX 2009 is a new compliance center that provides a single view of internal controls, KPIs and other information needed to comply with company policies, local legislation in 36 countries and such regulations as Sarbanes-Oxley. The system also incorporates Microsoft's Windows Workflow Foundation technology for documenting workflows -- expense report management, for example -- and creating an audit trail. The software also provides more support for companies that operate multiple sites within a single country and across multiple countries."

180 View – We think that existing users will be eager to upgrade, and the new version will give SAP and Oracle a run for their money in the upper end of the mid market.

NetSuite Eyes Midsize Manufacturers

June 12, 2008 from eWeek – “Called NetSuite for Manufacturers, the package is part of NetSuite’s effort to compete with SAP for small and midsize companies in vertical markets.

The time is right for NetSuite to release this package, said Mini Peiris, NetSuite’s vice president of product marketing, because SAP doesn’t have a manufacturing suite that is scaled for the budgets of most midsize manufacturers.”

180 View – NetSuite is on a roll. We have not seen their manufacturing suite yet, but anticipate that it will appeal to light manufacturers. Sounds like another good move by NetSuite.

You’re Not Tiger Woods!

March 26, 2008 from AMR Research – “What do software and golf have in common? A lot, actually…Companies can buy all the enterprise software they want, but unless their companies are performing well to begin with, as Tiger Woods is, that software isn’t going to help a whole lot. To most companies, these investments are a cost without an ROI...”

180 View – The article does make a few good points as to why ERP systems fail to deliver ROI and is interesting. However, it’s not clear whether the conclusions drawn can be generalized based on the surveys conducted. Were the surveys for organizations spending millions of dollars or done 5 years ago or for companies with complex processes not found in a typical survey?

Another problem is the suggestion to improve the operational efficiency of the business processes before purchasing new software otherwise you will just have an automated mess. The implication is that organizations should re-engineer their business processes before implementing a new system. This is bad advice for most companies. You could develop the best processes and find that the costs of their implementation would be prohibitively expensive. Why not leverage the business processes already implemented by the ERP vendors than start from scratch? Why re-invent the wheel every time? There could be a few unique processes that make an organization successful, which may require some new processes, but there is a lot of similarity between companies in the basics.