Specialists in IT Strategy and ERP.

October, 2008

This month's features.

Software as a service (SAAS) is a hot topic in general. Of course our interest is ERP, and in this issue we start discussing a topic that is sure to change the ERP landscape in the future. This is must reading for all of our subscribers.

DOCUMENT MANAGEMENT WEBINAR, WEBINAR, WEBINAR . . PLEASE SIGN UP to attend our webinar on 10/30 with our partner Altec. Altec offers industry leading Enterprise Document Management solutions integrated with popular ERP systems. Don't forget that document management is at the heart of workflow, and workflow is a key component for process improvement. Do I hear ROI RINGING??? If you're new to this topic and want a great primer (shameless plug) read our article on Document Management 

For those of you who are local, hear Paul Sita speak on Project Management at the AITP (Association of Information Technology Professionals) on Tuesday 10/21. For more information, or to register, Project Management Panel  

ERP as a Service - Ready for Prime Time? By Paul Sita, Principal, Innovative IT Consulting, LLC. Paul can be reached at 631-549-1685 or psita@innovativeitc.com.

Why do we need ERP as a service? All followers of Innovative Thinking know that we readily acknowledge the huge investment that ERP represents. Last month we talked about the SMB space, and how the complexities and sophistication demanded by the global economy and supply chains have created the “small enterprise”. Those small enterprises have a dire need for what a fully implemented ERP system can provide them , but have financial and resource constraints that make ERP a daunting financial and execution challenge.

Is there a silver bullet out there?

What about Software as a Service (SAAS)? What about software on demand? What about ERP as a utility? Is it for real? Is it the way to go for you? Is it ready for Prime Time?

What exactly is ERP as a service? Software as a service does not refer to outsourcing your servers and hardware. It refers to licensing software without regard to purchasing hardware. It also does NOT refer to companies who have made a business of hosting certain standard apps. Such as Great Plains, or even SAP R3. Those companies merely host your applications and put them on either shared or dedicated hardware and frequently can manage that environment for you, offering a sliding scale of services to allow you to outsource more or less of your IT needs.

Time sharing re-visited. True SAAS refers to applications designed for easy setup and configuration, and a complete infrastructure model designed to support many users of those applications in a standardized way. True economies of scale building on the model of a power utility, into which you just “plug in”. Of course your instance, configuration and data are yours. And as we know with ERP, changing the configuration and setup effectively amounts to changing the system. But you have lots of people running the SAME SYSTEM. You generally pay $xx per user per month. So your initial investment is much smaller. Not to mention SIMPLER, since there’s a lot less to consider, set up and plan.

What is the current state of the market? SAAS started getting a buzz around Salesforce.com. Sales force automation/CRM is frequently either not part of core ERP, or if it is, is a weak component of the ERP vendors offerings, and is usually a bolt-on anyway. So salesforce took off, and really provided credibility for the model in the marketplace. When it comes to true ERP, Netsuite is the most commonly known. Designed from the ground up as a SAAS solution, Netsuite has greatly increased market share in the last 2 years. And just as important, Netsuite has started offering vertical market solutions, integration tools, BI tools and other add-ons ALL AVAILABLE THROUGH THE SAAS model.

I'm waiting for SAP to enter the market. Surprisingly, traditional, staid SAP is also taking a leadership role on SAAS. It’s new mid-market offering, Business-b y-Design, has been designed from the ground up as a SAAS offering. Even setup and configuration is a vastly different (and simpler) process than traditional ERP implementation. SAP had originally planned for a full scale launch of BBD this year, but that has been put off until next year based on market conditions – but it’s coming.

Should you seriously consider ERP as a service? Of course it depends. It’s not a panacea. A lot of what goes into an ERP implementation is business requirements, business process re-engineering, master data cleansing – all things that are critical regardless of whether the solution you implement is SAAS or traditional deployment.

There are some situations in which SAAS is a no brainer. If you’re a sophisticated startup, and explosive ramp-up potential, and relatively straightforward business processes since they haven’t been customized for 20 years – then you’re a great candidate.

We're at the starting line! Here’s what we can say. SAAS is an option that needs to be examined more often than not, and we predict that 2009 will be a turning point in ERP as a service adoption and consideration.


Tip of the Month

Let your ERP do the Indexing.
By John Pellegrino, Principal, Innovative IT Consulting, LLC. John can be reached at 631-549-1685 or jpellegrino@innovativeitc.com.

In recognition of our upcoming joint webinar with Achieve IT and Altec regarding (REGISTER HERE) Altec’s document management solution, doc-link, (see details in this month's intro section), here's a tip on one important aspect of a good document management solution.

Indexing made simple.One of the features of any good document management system is the ability to assign relevant data to a document so that it can be retrieved easily by others using this data. It is very similar to how writers tag their content on the web so that we can find relevant articles. In document management this is typically called indexing.

For example, if you are managing invoices from your vendors you would normally want to index the vendor number and vendor name (among other things) on each document. One way to accomplish this is to ask a person to put in the correct values for both the number and the name each time they scan an invoice.

Don’t let your fingers do the walking (sorry Yellow Pages). However, there is a better way within doc-link. You can set up an Auto Index feature that would use the vendor number as a means to obtain the vendor name from your back office ERP system (eg. SAP’s Business One). The person only needs to input the vendor number (less work than inputting both) and you avoid the issue of inconsistent data (one person may abbreviate “Company” as “Co.” and another person as “Comp.”). With this method you have consistent data that can be used by others to find all invoices for a given vendor by number or name.

Scratching the surface. This example only begins to show the functionality of the Auto Index feature. There are several types of auto indexing within doc-link. And, there is much more functionality beyond indexing. Why not take some time to listen in to the webinar and see how document management in general, and doc-link in particular, can move you and your company into the next phase of a fully integrated environment?

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 capability of assigning relevant information to documents to simplify retrieving them when needed.
_ _ _ _ _ _ _ _


Answer to last month's word scramble.

“ A corporation smaller than a Fortune 500 company with complex needs that require the capabilities of a full-blown ERP system. (2 words)(SMALL ENTERPRISE)

Question of the month. This month's question comes from Carla in Great Neck, NY.

We finally implemented a popular ERP system. However, it took twice as long as we had planned. We're not really seeing the benefits we expected. Do we have to start over?

Carla, this is one of the most common ERP implementation issues. Regardless of what system you implemented, typically the benefits start to come AFTER the implementation, once your organization is confident in and knows the system. However, this takes some focus, effort and investment. Some pace is better than no pace. Try to get management to set aside an optimization budget, and keep your steering committee or project team intact to prioritize and build a pace of getting things done. Every initiative should yield ROI!!! If you need help, call the experts at Innovative!  

A Look Ahead To Next Month

We continue our look at the ERP marketplace and current developments. Stay tuned!!  

We want your feedback. Contact us

Innovative IT Consulting, LLC
(631) 549-1685