Monday, 12 November 2018 09:50

New ERP, Why (x 5) ?

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A couple of disclosures which bias my perspective ~

  • Worked with the ERP now known as Sage 300 since it was ACCPAC Dos.
  • Survived being a project accountant.
  • Learned programming with PUNCH cards and thought Fortran & Cobol were awesome.
  • Stopped using a slide rule in grade six.
  • Been Project Manager and Business Analyst for many Information System implementations, from early DOS based systems to current Microsoft Dynamics Nav systems.

My company, Facilitated Software Solutions, Inc., sells quality management and workflow tools for regulated industries, ISO, FDA, and FAA. We can communicate with virtually any ERP or CRM system, old or new, from SAP and Oracle to MAS90!

Having been a Vendor at times, and a Project Manager for many times, of ERP and CRM implementations, there is always a certain amount of pain and disruption with the implementation of new IS (Information Systems). SMB (Small to medium sized business) team members many times are over extended with job commitments as it is. Let alone, adding to the overload with a requirement to help implementation efforts for a new IS system. How much spare time does the CFO have to help design a new Chart of Accounts if needed? Or, how about the warehouse manager?

As I attend various meetings and forums throughout the “Tech”, Project Management and Quality/Six Sigma communities PMI and ASQ chapter meetings. LinkedIn and other online PMP/Six Sigma forums, I am wondering why, in many cases, SMB’s do not engage in even a few days of third-party experienced business process analysis.

In many cases I have found that by digging into the why’s of the new ERP system there is flawed logic in the hurry to dump the “old” Mas 90 (now known as, Sage 100), or (Navision now known as Microsoft Dynamics Nav) or for that matter, ACCPAC (now known as Sage 300 ERP)!

What is “Cloud Based”?

From a purely practical standpoint, what is the difference between me pointing my desktop computer at an on-premise server (the big box in the closet down the hall) and “The Cloud”? Really, if you step back from all the tech ‘speak’, it is the way your device, laptop, tablet, smartphone etc. connects to a “Server”. One method uses a copper or fiber cable to the server box and the other, your device, uses Wi-Fi or an on-premise modem box, that translates the same request (humor me) using basically similar addresses to find a server box in room 3000 miles away. At least, I’m really hoping it is in a big air-conditioned controlled access room on a well-built server. I’m not sure how you would even plug in a server on a cloud. Perhaps a long extension cord? How do you suspend it from that cloud? Wouldn’t the server fall or drift away? No folks, to me it is a server box stuck in a room somewhere.

Any of the older ERP designs mentioned above, to the best of my knowledge, will operate on a “Cloud Based” server. Where you locate the server or who’s service you use, such as Google, Amazon, or Microsoft, is a business-based decision. Where do you feel more secure? Do you serve multiple locations, etc. This requires extensive analysis. Perhaps in a separate discussion.

One of the other selling points is that newer systems allow you to slice and dice data in different ways. Which data, and in which different ways? It is important that the SMB have a clear understanding of the goal. Maybe it is similar to golf, get the ball in the hole with the fewest number of shots or least effort/cost?
What new data points will the new system store that business cannot report on or analyze now? Or perhaps, how is a business able to generate reports with several Excel worksheets or a workbook with the process taking hours or even days of an executives’ time? This is a reporting tool selection and database problem, not necessarily the current ERP systems. There may be far less expensive solutions if the problem is reporting or analysis gaps.


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What I am driving at, is that the core of the ERP financial system is no longer the center of the business ecosystem. By core, I am referring to the G/L, A/R, A/P, I/C, O/E and P/O reporting tools. These really provide past and snap shot of short-term future data, WIP, Orders etc. If these or just the center of the core; G/L, A/R and A/P, are working reasonably well and providing accurate information as to what business executives may want to examine through proper gap analysis. As well as where the holes or missing data resides and how best to incorporate it in reports or analytics.
Some of the reasons suggested for migration to a new ERP may be a set of newly adopted methods of doing business. The SMB, may want to provide access to some type of order entry and tracking system to existing customers. or to sell widgets though a web store. Perhaps a new customer relationship and integrated marketing system is needed. Again, none of these changes or add-ons necessarily require an ERP change.

The reasons for great caution in moving to a new system are many. I’m not going to suggest that some of the latest ERP’s aren’t great. They are. But, as I stated above, there is significant inconvenience to the stakeholders, if not planned correctly from the outset. That means before the SMB signs any contracts, a SMB can expect a challenging, and some might call it a rocky road ahead, without research and planning.

Many SMB’s neglect these critical steps.

Firstly, inventory all the ERP software and addons, make sure to have a complete list and the functionality of the addons described. i.e. Docusign for signing contracts etc.

Next, in my opinion;

  • The SMB should hold independent third-party facilitated elicitation meetings with their department heads and their primary assistant(s) recording their views of both the shortcomings and strong features of the current systems they work with.
  • Meet with each of the C-suite executives to determine any unmet needs or issues with performing their jobs.
  • Document findings.
  • Take the data and analyze.
    • Document each department’s business process as it is currently with a tool such as Visio so that the various stakeholders can clearly understand current conditions and business process.
    • Next, use Visio to display the new improved business process option(s). Examples: New reporting tools, vs addon databases vs addon integrated third party apps vs new ERP.
  • Also needed is cost analysis of the above options, estimated time to complete and plans to mitigate issues especially with change management. Include SMB staff time requirements for training and eliciting information.
  • Carefully evaluate the budgets and expected benefits from each possible process change. Examine the disruption to the enterprise and the attendant risks. Is there sufficient manpower on staff to take on a project of the suggested scope? Are trusted and vetted contractors required to help the business prepare data etc. for any conversions? Do we have enough room in the project budget with reserves?

In my opinion, based on many years in the industry, there are different best answers for each business. If an SMB has lasted through the last 10 or fifteen years of upheaval in business practices, it is certainly an established enterprise and must be both agile and lean. This underlines the need to preserve historical data. There is historical data that can be very valuable, providing baselines for product or services. What worked and what didn’t. Customer lists with buying history, vendor performance history, etc. Make sure any plan undertaken does not leave that information inaccessible. If the SMB is subject to quality audits (FAA, FDA, ISO etc.) there may be no option but to preserve the data due to legislation.

If, after all the above business analysis is done, a decision can be intelligently made to move forward with an ERP system, to change, thus much of the heavy lifting will already be completed for the basic system requirements (but certainly not all). With the collection of the above data, the SMB will have gathered a exhaustive list of “must have’s” and “would be nice to have’s”, etc. for the New ERP.

With this information the SMB can assemble a request for proposal. The SMB should do independent research of all prospective vendors and software publishers. Will there be multiple vendors providing different pieces of the solution? If so, have they worked together before? Have they worked together with the current versions of their respective software solutions?

A couple of words regarding who is going to act as the Project Manager and make sure all vendors are performing in a timely manner. If it is one of the vendors offering “Project Management”, make sure you are not buying “account management”. There is a huge difference between the two. One directs their in-house programmers and staff how to configure their part of the new ERP system. The other is the orchestra conductor insuring all parts of the puzzle are completed with data migration and systems tested and operating to the SMB’s satisfaction.

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Tom Lyttleton

Tom Lyttleton, President and Senior VP Project Manager of Facilitated Software Solutions, Inc., will be following up this blog with ‘Saving Consulting Dollars on Your ERP Upgrade ~ An Insiders Tale!’ Looking forward to it

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