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.

Technology investment survey

Business Case, Business Intelligence, CRM, ERP

January 1, 2015 from CPA Magazine by Michael Burns – “We all hear the bad news when a vendor is sued over a failed implementation. When this happens, we assume there are many other unhappy customers whose experiences do not get broadcast, because most companies would rather not litigate. But are there also many happy customers? And what makes a happy customer?  We have a created an online survey to determine just how successful — or unsuccessful — technology investments turn out to be…”

180 View – The survey which can be found by clicking here is for ERP, CRM and BI. Questions will include which industry, company size, system, type of system, costs of system (by license, implementation, hosting fees, maintenance and support, and internal costs), satisfaction with implementation, satisfaction with benefits and lessons learned. The goal is to determine the satisfaction of these investments and to see whether there is a correlation to industry, company size, the system or type of system. Stay tuned.

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I Survived an ERP Implementation – Top 10 Gems of Advice I Learned the Hard Way

ERP, Project Management

November 10. 2014 from LinkedIn – “…Why is it that so many ERP implementations go so wrong? In my current role I meet regularly with ERP survivors and casualties. My best but unscientific estimate is that 90-95% of them have horror stories to share…”

180 View – There is a big difference between a horror story and bumps in the road. We would agree that there always bumps in the road. What you need is someone on your team that knows how to adapt or a coach to get you through it – someone like Pat Wade from 180 Systems who has managed ERP implementations for over 20 years. Pat can be reached at pwade@180systems.com or at (416) 560-0591.

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How Production Systems are Like the NFL

Business Process Analysis, ERP, Manufacturing and Distribution

December 16, 2014 from IndustryWeek – “I sometimes find it difficult to describe what I do to friends and acquaintances who have careers outside of manufacturing and rarely give much thought to how things actually get made. To the uninitiated, if I were to say “I help manufacturers to implement continuous improvement (CI) models” or “I support companies in their production system journey,” I might as well be speaking a foreign language because, while these statements resonate with those of us who live and breathe CI every day, they don’t mean much to the rest of the world…”

180 View – We start all our projects with a kick-off meeting and there are other similarities to the NFL analogy. The article discusses the importance of “What does the business require of this operation to be successful” which we call the Critical Success Factors. We use it to identify functional requirements that will enable attainment of CSFs and also to identify the important metrics or KPIs. The article also discusses comparing metrics to the perfect or ideal standard. This is what we call the goal KPI and how we recommend determining whether a particular investment was worthwhile.

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Project Management for an ERP Implementation

ERP, Project Management

180 Systems has now launched a new practice area. The implementation of a new system is a big project and requires skilled project managers. Our clients often don’t have a lot of experience in project management especially related to implementing new systems. The vendors have project managers but their focus is project management of their own resources rather than that of our clients. It is also possible that there are conflicting views of scope between the vendor and our clients. As project manager for our clients, we will ensure that these and any other conflicts are resolved expeditiously and fairly. Our focus is strictly on project management rather than product or system management. The knowledge of the system should be acquired by the internal resources of our clients as this knowledge is vital to the ongoing support of the system.

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Top 10 Trends in Cloud ERP

Cloud Computing, ERP

May 19, 2014 from enterpriseAPPStoday – “Cloud enterprise resource planning (ERP) software hasn’t really caught on yet. But according to a recent Gartner survey, it will soon. Here are some of the top trends shaping cloud-based ERP…”

180 View – Most of our clients are more interested in finding a solution that is a good fit, not overly difficult to implement, in their budget and supported and implemented by a company that knows their industry really well. They don’t care that much how it’s deployed. Cloud deployment does not seem less expensive than on premise deployment even when factoring in savings in infrastructure and IT resources over a five year period. Today the cloud ERP vendors are still charging a premium for their wares. And some of them just offer annual user fees rather than monthly which would be very good for seasonal businesses. It won’t be long before the prices for cloud ERP drops as each and every ERP vendor jumps on the cloud bandwagon. At that time, the cloud will blot out much of the on premise landscape for new sales especially for small and mid-sized organizations that don’t have or don’t want IT departments.

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The Total Economic Impact Of IFS Applications

Business Case, ERP

2013 from Forrester – “…IFS commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying IFS Applications. The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of IFS Applications on their organizations…”

180 View – ROI is the gold standard for justifying ERP investments. Calculating costs are easy but calculating the benefits is tough. In the Forrester report, the bulk of the benefits come from “one global chart of accounts, which helped the group find synergies and consolidate its supplier base and ultimately realize cost savings.”  These benefits only materialize in years 6 and 7 of the analysis. We think that benefits need to be very specific and should not take so many years for the benefits to kick in.

Our approach to ROI is to link the benefits to our business process review which includes identification of problems with a system. The benefits apply when the problems can be eliminated. This analysis can lead to identification of both tangible and intangible benefits. Tangible benefits apply to the ROI. The intangible benefits may also justify an ERP investment if the intangible benefit is directly linked to an organization’s critical success factors (what the organization must do well in order to be successful).

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Why Big Projects Go Bad

ERP, Project Management

June 26, 2014 from CFO – …In a project’s earliest stages, very little is known about what it will take to execute it. So most companies seek out expert internal opinions — usually from proponents of the project, since they are the most knowledgeable. The problem is bias. Research is clear that project proponents are likely to fall under its influence, favor optimistic outcomes and produce dangerously inaccurate estimates…

Most companies can accurately estimate small projects that may take, say, three to six months, but they are horrible at estimating the time and cost of big ones. There are three key reasons for that…”

180 View – We agree and have learned this lesson based on the school of hard knocks. In a past life, I was responsible for the development of a multi-million dollar system. It was really challenging to get good estimates from the programmers who in the early days of the project don’t know what they don’t know. So we developed tools to assist in the estimates based on the complexity of the system and based on history of similar projects.

The same problem can occur with ERP systems in not scoping the size of the implementation properly. You don’t want surprises during the implementation so analysis is required in advance to ensure the implementers know as much as possible so that they can fix price the implementation.

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ERP Pricing Models

ERP

ERP vendors don’t make it easy to calculate the cost of using their system. There are lots of variables to consider including:

  • License – buy a perpetual license to use the software
  • Hosted – annual or monthly fee to use the software by user
  • Named user – for anyone needing any access to the system
  • Concurrent user – for the number of people needing access at the same time
  • Full users – need multiple parts of the system such as a purchasing manager
  • Light users – need limited use of the system such as someone that just creates requisitions or enters their time or uses a handheld or needs read-only access
  • By module – each module is priced separately by user
  • By system – you get all modules whether needed or not

Our approach is to give the vendors all the variables they should need. However in the end, the costs really depend more on market conditions and how strategic/important the client is considered by the vendor.

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ERP software survey 2014

ERP

September 2014 from CPA Magazine and written by Michael Burns – “Welcome to our annual vendor survey on enterprise resource planning software. Back in 1999, when we published the first survey in CAmagazine, ERP was another mysterious IT acronym. Now it seems that everyone knows about it — although you will still hear a lot of variation on what it really means. Fifteen years ago, we had only a few ERP systems in our survey. Today we have 93…”

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Oracle in the Cloud

ERP

According to IDG News Service, “Oracle is now the industry’s second-largest SaaS vendor after Salesforce.com” As well, “Oracle is also seeing traction increase for its cloud ERP (enterprise-resource-planning) software, adding 120 new customers in the fourth quarter alone”.

This was news to us, so I contacted Oracle directly to get the inside scoop on their ERP cloud offering. Oracle Fusion has been rebranded as Oracle ERP Cloud and there are a couple of hundred implementations across North America with many new opportunities keeping the Oracle sales team hopping. Oracle ERP Cloud is so far targeted to organizations providing professional services, financial services, construction and engineering. Later the system will also include functionality for manufacturers.

Oracle has now jumped on the cloud not only to compete with other cloud vendors but also because it is a more profitable method of software delivery. They won’t make as much at the start of an implementation but will more than make up for it as the years roll by and the annual payments pour in through the clouds.

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