News & Views | ERP

News & Views is published monthly by 180 Systems. Our objective is to provide recent articles to our readers on business technology topics. In some cases, our blog contains a title with a hyperlink to a source article, a quote from the article and our comments. In other cases, we have provided a blog without a hyperlink for original content by 180 Systems. We encourage you to post your own comments. You can also access our blog by topic.

Should you restrict ERP selection to just the major vendors?

ERP, Software Selection

We don’t think so. There are many excellent products built by small companies for specific industries that are worthy of consideration. But there are risks that the vendor will not be around for the long haul. There are a number of ways to evaluate long-term viability:

  • The system is built with old technology that is getting really difficult to support by the boomers ripe for retirement.
  • There is a lack of investment in the system. Ask to see the product roadmap and recent enhancements.
  • The company is not profitable. Private companies will be reluctant to release this but it can be obtained with an NDA late in the selection process. There can be extending circumstances such as the company now offers a subscription fee rather than up-front license fees.
  • There is a lack of good people available for implementation and support. Ask for resumes and meet members of the team.
  • Customers are not so happy with support. Ask for references that can be called or visited in person.
  • The owners are nearing retirement age. Ask them directly about their plans. Systems with a good client base and using recent technology will be purchased and will very likely be maintained and enhanced by the acquiring company who should know better than to alienate new customers. However if the technology is old or not built with industry-standard tools, then who can blame the new vendor from encouraging clients to convert to one of their other systems.

There are also advantages to being a bigger fish in a smaller pond.


How to measure whether an ERP implementation is successful

ERP, Project Management

It’s not time to celebrate when the system goes live. Nor is it time to celebrate even if it’s on time or on budget. It’s only time to celebrate if the benefits in the business case have been realized. Ideally the benefits are in the form of a measurable metric or a Key Performance Indicator (KPI) such as the time it takes to process an order. However many organizations don’t identify these measures of success and even if they do, they promptly forget about them as soon as the implementation starts as they have enough on their plates to consume each day and then some.

So what do you do to keep the KPIs relevant? We recommend that the goal KPIs be embedded in the project from the start so that everyone is aware of them. Subject matter experts involved in designing and testing should be questioned whether the goal metrics are attainable at various times throughout the implementation. Steering committee meetings should include updates of whether the goal metrics are at risk of being attained. Sometimes attaining the goal KPIs puts the budget and schedule at risk. When this happens, you need to get the steering committee to consider budget and schedule variances.



How to get an accurate estimate of ERP implementations costs

ERP, Software Selection

We ask the finalists in our software selection projects for a detailed breakdown of implementation costs by module (g/l, a/r, a/p, purchasing…) and by task (customization, integration, conversion, project management, design…). We provide them with a lot of information to make the estimate possible:

  • detailed requirements
  • business process review which includes process, problems, type of problem, and impact of problem
  • high level process maps
  • access to our client to get the tour and ask whatever questions are needed

The finalists are asked to demonstrate a prototype of the to-be business process allowing them to validate assumptions. But sometimes, even with all this information, the vendors still can’t nail down the costs because of the unknowns. We then ask the vendors to conduct a paid-for consulting assignment to do some of the work they would have done in the design phase to arrive at more accurate numbers prior to signing a long-term contract.


ERP Cost Estimates

Business Case, Contract Negotiations, ERP, Software Selection

Buyer beware when estimating the costs of an ERP implementation. There are so many unknowns that make it really tough to avoid unpleasant surprises. The vendors are very reluctant to fix price anything when it comes to the services required because of the many unknowns – scope of work, who does what, capabilities and available time of buyer resources…. It’s especially difficult for the vendors in the early stages of the selection process. At the same time, the buyers want to have a decent ball park of costs before pursuing a potential solution.

But there are guidelines that will help. When it comes to license or annual fees, it’s fairly easy to come up with a number as it’s based on number of users and high level scope. You should be using a rule of thumb for the implementation services which can be estimated as a ratio of implementation to license fees as follows:

  • 1:1 for a straight forward implementation with relatively simple requirements
  • 1:5:1 for an implementation with some complexity of requirements and little or no customization
  • 2:1 for an implementation with a lot of complex requirements and some customization
  • 3:1 for an implementation with a lot of complex requirements as well as a lot of customization

Other costs to consider:

  • Maintenance – the vendors will provide a % but make sure that it includes adequate levels of support. The vendors have been pushing their maintenance %’s ever higher despite the competition. Assume at least 20%.
  • Travel – it can be as high as 15% of implementation fees
  • Upgrade fees – many systems that are installed on premise or on private clouds will have upgrade costs every few years which should be a small % of the implementation fees.
  • Internal costs – you need to know who will be involved and the extent of their time as well as their approximate cost to the company
  • Legal fees
  • Infrastructure changes – you need to get an idea of the recommended infrastructure for the new system and what it will cost to acquire and install it.
  • Consultant fees – you may want some coaching services from a company like 180 Systems.

ERP software survey 2015


September 1, 2015 from CPA Magazine and written by Michael Burns – “Welcome to our annual vendor survey on enterprise resource planning (ERP) software…” This year’s article is mostly about elusive ROI and what to look for when it comes to technology. The survey includes almost 100 ERP systems with key information for the following categories:

  • Company Profile/Target Market
  • Geography
  • Language
  • Industry
  • Technology
  • Applications
  • Generic Features
  • Business Intelligence
  • Financial
  • Budgeting and Forecasting
  • Fixed Assets
  • Distribution
  • Manufacturing
  • Professional Services
  • Construction
  • Service Management
  • Human Resources
  • Document Management
  • CRM
  • eCommerce


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Technology investment survey (ERP, CRM and BI)

Business Case, ERP

June 1, 2015 from CPA Magazine and written by Michael Burns – “Making a business case for technology investments is challenging – and potentially career limiting. Anything you can learn from our peers’ experience in making these investments can be helpful in crafting a case. That is why we decided to run our own IT satisfaction survey in CPA Magazine. It ran from January to April 2015, and is available by clicking here.


Beyond ERP and new technology, new options


2014 from PwC – “…The brave new world of business application software is rapidly transforming how corporate IT departments source and implement all kinds of critical systems. Perhaps nowhere is this truer than in the realm of ERP systems, the software that runs virtually every large company in the world. CIOs are rethinking their approach to ERP, thanks to modular, cloud-based business applications that offer viable alternatives to the unwieldy, inflexible, and expensive systems that have long dominated the sector…”

180 View – The idea is that you can stitch together best of breed cloud-based/Software as a Service (SaaS) applications with a core ERP system and create what they call “hybrid ERP”. PwC cautions that the “the hype surrounding these new technologies is sky-high.” We believe that technology for integrating different applications has been around for years and has been called different things including web services and service-oriented architecture (SOA). Web services and SOA technologies were hyped as a panacea to integration between applications but gradually the hype subsided and reality set in. Hopefully one day the reality will match the hype.


Would you select an ERP (or any) system from a small vendor?

ERP, Software Selection

We include small vendors in our system selection projects but only when we believe that they have a good client base, are really good for a specific industry and are using recent technology. A small company can also be a successful company and there are benefits to being a bigger fish in a smaller pond. You will see lots of small/unknown companies on our ERP portal at

But what about the concern that a small vendor will be acquired or if the small vendor is facing financial difficulties?  Financial problems may be temporary – for example the vendor might have just rewritten their software to support multi-tenant architecture which is a big change supporting cloud computing. As a consequence, development costs may have gone up and their revenues have gone down as they are recognizing revenue over a longer period of time. However even if the small vendor is ripe for acquisition, it would be a big mistake for the acquiring company to abandon the system when there are many happy clients and the system has a strong/current underling technology.

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Murphy’s Law

ERP, Software Selection

Murphy’s Law is alive and well thanks to ERP implementations. The problems that often arise can be avoided and/or the impact reduced by good planning in advance and strong project management. Here are a few ways to fight Murphy:

  1. Ensure you have the right people (your A team) on the project and enough of their time is allocated to the project. Some key operational team members will need to be backfilled on their day jobs.  Talk to people who have gone through an implementation to get a sense of the time needed.
  2. Ensure the implementation plan proposed by the vendor is adequate. Get each vendor to break out their implementation project into the major tasks and compare them for variances. You may find that one vendor may have low balled one of the tasks such as training.
  3. During contract negotiations, clearly define the scope and the link the contract to the RFP requirements.  Ensure that all requirements are thoroughly discussed and understood.
  4. If  you are taking on the responsibility of creating custom reports, ensure you have someone on the team that has the experience to develop and deliver these reports.

ERP: Lessons From the Field

ERP, Software Selection

March 27, 2015 from CFO – “Senior finance executives share their advice on selecting and implementing enterprise resource planning systems.”…

180 View – CFO asked the executives a number of questions including about value, total cost of ownership, flexibility, how to evaluate ERP vendors and implementation advice. One piece of advice was “Invest your best people in the process.”