Finding ERP Value - Looking Outside the Box.
March, 2008


Last month we talked about critical aspects of finding value in ERP implementations - Finding Value 

This month we continue with our search for ERP Value by looking "outside the box". Find out what this can mean to you.

 

Finding ERP Value - Looking Outside the Box. By Paul Sita, Principal, Innovative IT Consulting, LLC. Paul can be reached at 631-549-1685 or psita@innovativeitc.com.

Who's Driving? While every good ERP project starts with a list of objectives, once implementation is under way, these objectives can easily get buried in the myriad of tactical issues that arise. Many of these are critical and VERY DETAILED, requiring significant time and effort to address. When this occurs, it's time to ask the key question - Who's Driving? In other words, who is behind your ERP project, who stands to benefit, and who is your executive sponsor? And most importantly, what is it that your driver expects to see as a result of the successful implementation? Our experience tells us that management's expectations of what a new ERP will deliver is very often not the same as the project team, that they have different ways of looking at things, and that what top management is expecting is typically "outside the box", i.,e. requires additional tools and capabilities.

1. Faster reports are not the same thing as analytical tools. Just because the new ERP makes reporting easier, this doesn't mean that top management's vision of the kind of information that will be at their fingertips will be satisfied. High level analytics such as OLAP and Business Intelligence are not fancy reports, they are extensive and sophisticated capabilities that typically live "outside the box". Don't confuse reports of any kind with these kinds of tools.

2. Don't confuse managing inventory with optimizing inventory. Managing inventory is about accuracy. Optimizing inventory is about reduction in dollars invested in inventory to produce the same or better service levels. Accurate inventory is a minimum requirement. Inventory reduction requires advanced forecasting tools and someone skilled and focused enough to utilize those tools. These tools are typically outside the standard ERP box.

3. Tracking what's in your warehouse is not the same as managing your warehouse effectively. Here again, knowing what's in stock in total or roughly by area is a far cry from having a system helping you maximize space utilization, or organized to minimize shipping and storage mistakes. Management very often expects this kind of result, which is once again outside the box of the typical ERP system.

4. Managing workflow requires a lot more than an email. Workflow optimization doesn't come automatically just because your new system can send an email reminder to a user. To really streamline business processes, you need to organize and prioritize work, AND provide users with the information they need to accomplish their work. This may include electronic copies of documents, links to web pages and other databases, Without these sorts of capabilities, your ability to achieve process improvements may be severely limited.

Summing up. Modern ERP systems have extensive capabilities. However, regardless of what the vendor shows you during the software demonstrations, it is critical to really look at the ultimate business benefits that you are looking to achieve, and understand what it will take to achieve them. Very often this will require additional tools and add-ons to your ERP. In other words, you may have to look "outside the box". It may be the case that this is part of a "phase II" implementation. However, it's critical that this be built into the plan and continually reviewed, otherwise you may never get there!!


Tip of the Month

The Basics of the ERP Vendor Upgrade.
By John Pellegrino, Principal, Innovative IT Consulting, LLC. John can be reached at 631-549-1685 or jpellegrino@innovativeitc.com.

For the next few months my tips column will concentrate on a subject that is very rarely discussed or written about, even though it is something that occurs more frequently than ever before - the ERP Software Vendor Upgrade. We'll start this series with a brief description of the types of upgrades and ways to stay informed about them.

The flavors of upgrades. There are 2 types of upgrades, the patch release and the major upgrade. Patch releases occur very frequently, sometimes 2 weeks or a month apart, but in general they are more likely within 3 or 4 months of each other. They tend to correct bugs or provide minor enhancements to functionality that already exists within the software. A new major upgrade will be released by the vendor generally within 12 to 18 months after the previous one. These usually add major new functionality to the software or, at times, change the basic architecture or technology platform (think client/server to web based to software as a service).

Knowledge is power.With all of the communication methods available today it has become easier than ever to keep up with the upgrades and what they fix, enhance or change about your ERP software. Sign up for the regular email notifications of new patch releases and major upgrades from the vendor and any independent user group that may exist. More importantly, take the time to read the email and go to any web site it directs you to in order to understand the upgrade.

Keep an eye on the upgrades.Make sure that you get into the habit of checking any web sites on a regular basis for new information, at least monthly. Also, attend any events (most of these are done via webinars now) that discuss upgrades. Keep in touch with other users, either independently or through a user group, and ask questions about the upgrades. All of this knowledge will be used to ask the next question (for next month’s tip) – to upgrade or not to upgrade?


What's new?

The Question of the month!! Every month we field a question from one of our fearless readers! Don't be shy. Submit your hardest question and see how we do.

Word Scramble time.
“A software change initiated by the ERP vendor that usually adds significant functionality to the system. (2 words)
_ _ _ _ _   _ _ _ _ _ _ _

E R E J M O A S A E L R


Answer to last month's word scramble.

“ Process of continually improving skills within an organization. (2 words)(ONGOING EDUCATION)

Question of the month. This month's question comes from Sandy in Garden City.

Our ERP system generally works well. But we have several issues that although minor, never seem to get addressed. Whenever I bring these issues up I am frequently told that '"we have bigger issues to worry about". How can we tackle these issues that are important to the users? Sandy, we run into this situation all the time. And when we do, we find that not only aren't the small issues getting addressed, the big issues aren't getting addressed either. Instead of pushing for attention to these specific issues, focus on getting an ERP steering committee established to tackle ALL ISSUES, big and small alike. This may be better received by management, and you will have a better chance of being heard as an innovator as opposed to a complainer! Let us know if we can help!  


A Look Ahead To Next Month

In April, we'll continue with our series on ERP Value.  

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Innovative IT Consulting, LLC
(631) 549-1685