ERP Value through Document Management. it's Payback Time!

June, 2008

Last month we talked about slowing down to speed up, how to phase in scope to achieve results in ERP implementations - Finding Value 

This month we switch to a specific add-on that is increasingly finding a place in many ERP implementations - Document Management. Find out what this can mean to you.


ERP value through Document Management. It's payback time! By Paul Sita, Principal, Innovative IT Consulting, LLC. Paul can be reached at 631-549-1685 or

Business Process Improvement is where it's at. In working on many ERP projects from selection to implementation, payback and ROI is frequently a controversial topic for discussion. Reduction in inventory, Days Sales Outstanding (DSO), time to market and others are frequently mentioned, as are generic ones such as “increased visibility of customer demand”, and improved service levels. As ERP customers have gotten more sophisticated, it is now more understood that business process improvement is one of the key areas for payback. And our experience is that Document Management is a key component in achieving BPI.

We don't have that much paper. (Really?)

Documents drive most business processes, and you've got more than you think.

Remember the paper chase! Clients are typically surprised at this. Many don’t think of themselves as particularly paper bound. They think that document management is limited to insurance companies and law firms. While it’s true that those firms have more paper than most, it’s also true that most companies can benefit greatly from the Process Improvements that Document Management can provide.

The key is not to think of just the delivery of paper, invoices and such. Think of the flow of paper and documents throughout the entire process. Every touch point, every document, every time someone needs to review, copy, approve, a piece of paper before you can invoice your customer, and then delivering that invoice to your customer in the way that customer wants. Every time someone needs to get up from their desk to search for an invoice, Purchase Order, work order or other key authorization, the process is held up, not to mention lost productivity when employees are “walking around” trying to find that key piece of paper. It's the paper chase all over again. Latency in the business process is one of the key inhibitors of increased efficiency. Typically it’s not how long it takes to process a transaction, but the number of steps and potential “breaks in the process” during which nothing is happening.

Modern Document Management Systems cover the entire process. Document management systems play a key role in addressing these gaps. Modern DM systems contain not only image capture capabilities, but workflow to control the movement of documents from capture to approval in the business process. Other capabilities include the ability to “electronically collate” or attach required paperwork and supporting documentation when invoices or purchase orders are delivered electronically. Lastly, let you customers and suppliers dictate how and when you deliver invoices or purchase orders to them. Modern DM systems not only capture your documents automatically upon generation, but allow those electronic documents to be delivered to the business partner based on their preferred method, email, EDI, snail mail or some combination.

Show me the money! When the entire business process AROUND the documents is looked at, the payback can be ENORMOUS. Interestingly enough, a new ERP system is not really needed to take advantage of a Document management system. However, many companies don’t want to invest in a DM solution if they view their systems as old and in need of changing within a few years. The payback from a DM solution may be attractive enough to start that process sooner rather than later!

Tip of the Month

Scaling an Upgrade (or Climbing a Slope?)
By John Pellegrino, Principal, Innovative IT Consulting, LLC. John can be reached at 631-549-1685 or

In previous month’s tips I have discussed how to stay informed about ERP upgrades and what factors to consider when deciding if it's time to do the update. This month we look at how to approach the upgrade once you've decided the time is right. As we have mentioned before there are two types of upgrades, the patch level release and the major upgrade so you need to “scale” the effort based on which one you are doing.

King of the hill. The effort needed to upgrade a patch level release is similar to a hike up a hill. First, if you don’t have one from your implementation, set up a test environment. This can take on many forms ranging from a separate data base with or without a separate instance of the ERP software, through a full second deployment including separate hardware. Then, install the patch level release in your test environment. Next, run through some tests based on the bug fixes and enhancements in the release. You may need some limited time from specific users depending on what was changed. Last, if all is well, install the release on the production environment.

Climb every mountain. For a major upgrade the effort will be a little more involved. I guess you would say it will be a “major” effort, more like climbing a mountain. Here are the steps to follow for this type of upgrade:

    1. Come to the realization that you should treat it like a “mini-implementation”.

    2. Put together a team of key people to assist with the upgrade (it’s not easy to climb a mountain without a team). Often this is all or some of the same people that were part of the project team for your initial implementation.

    3. Create a separate instance, possibly with new hardware, to install the new version on.

    4. Install the new version, including any customizations that were made especially for you. Most of the time the ERP software vendor will have a guide to help with this step.

    5. Run through all the same test scenarios you used for the initial implementation and create new ones if the business changes since the implementation dictate it.

    6. If all is well, plan out your strategy for installing into production (More on this next time).

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 complete environment to test and implement a new version of your ERP system. (2 words)
_ _ _ _ _ _ _ _   _ _ _ _ _ _ _


Answer to last month's word scramble.

“ A dangerous situation caused by being an early adopter of new software releases. (2 words).(BLEEDING EDGE)

Question of the month. This month's question comes from Mark in Westchester.

We implemented an ERP system about a year ago. It's stable now, but things are not much better than they were with the previous system. Where did we go wrong? Mark, this is one of the most common situations for ERP and why statistics indicate that many companies are dissatisfied with their implementations. Customers blame the ERP vendors, and the vendors blame the customers. You might have selected the wrong ERP system. More likely than not, the project didn't have clear business objectives, and when the implementation got difficult, as it invariably does, decisions were made to "get it live" without regard to achieving the objectives. An honest assessment of the situation needs to be done. In many cases, this can't be done by the internal staff. Look outside. We can help!  

A Look Ahead To Next Month

Time off for summer! Look for exciting new content when we return in September. Enjoy!!  

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Innovative IT Consulting, LLC
(631) 549-1685