ERP Selections – Making Friends or Making Enemies

by Chris Shaul

When searching for a new ERP (Enterprise Resource Planning) system, there is the right way and the wrong way. If you were to follow all the presumably right things to do, you can still make some awful mistakes. One of the most dreadful things that you can do is to choose the software and then choose the implementation partner.

Let’s illustrate a typical scenario. A company is looking for new business software. They decide that they will do the best practice way of selecting software. They define their requirements, they then send out these requirements to the VAR (Value Added Reseller) of the ERP solutions. For the sake of argument, they choose four software providers and send the RFI (Request for Information) to four different VARs, one from each of the software solutions. They get back the RFI’s and then start to eliminate the candidates. They drive it to two solutions.

The next step is for them to have the VARs provide demos. If they do it correctly, they have the VARs demonstrate the software according to their business process with their actual data. The demonstrations go well and they now have the decision of which software to go with. They choose X. Then someone on the team says ‘Yes, X is great software, but I am not sure about the VAR. What if we look at some other VARs or implementation partners?’

At this point the problems begin. The company wants to interview and get references on three other VARs. They begin doing the due diligence on these other implementers. You might be asking, “So what have they done wrong? It makes sense to check out all the implementation options. Yes that is true, but what about the VAR that spent days and weeks preparing, demonstrating and learning about the company and their business? They have invested a lot of time and resources.

Some would argue that that is just the nature of competition. True, but, what if you find that there is not a better VAR than the one you began with. Now all you have done is made them feel distrusted and alienated. This is not the way to start an implementation. It could have dire consequences down the road.

You want an implementation partner who is your trusted advisor. Going into an implementation should be a partnership working towards a similar goal. Bringing in other candidates at the end of the selection is not the way to bring a trusted relationship to the table.

If you are dealing with a software company that has various VARs, the ideal situation is to ask the software developer, which VAR they would recommend for your business type and industry. This must be done early in the selection when you have just come to the first list of candidate software providers. They may give you a couple of names. You can then screen these two or three VARs early to choose an implementer who you want to do business with, should you choose their software. Then if they are not selected, they understand that it is your choice in software, and if they are selected along with the software, you have already vetted them and you can now begin an implementation with a truly trusted advisor.

Many people forget that the VARs put a lot of time and money into chasing you the lead. If you choose them early and then choose the ERP software, then you move together in unity. If you choose the ERP system and then choose the VAR, the VAR will hold resentment at having spent the time and money only to be possibly tossed out at the end, when another VAR, who has done nothing, gets the implementation. Should the chosen VAR not work out and you have to go back to the first VAR, there will be little chance of working with them as a trusted advisor. So choose the people early and before the choice of software is made. Doing so will only aid in a successful implementation.

Seven Habits of Highly Efficient Supply & Demand Chains

From QAD’s website: An enlightening article about how to build an effective supply chain and possibly more important, those things that you should not do.

Seven Habits of Highly Efficient Supply & Demand Chains

Supply And Demand Chain Executive, May 2005

By Andrew K. Reese

To go the distance in business you need to take a disciplined approach. Here are some key best practices for making your supply chain hum.

[From Supply & Demand Chain Executive, April/May 2005] Stephen Covey’s The 7 Habits of Highly Effective People first appeared on bookstands in 1990 and went on to sell millions of copies, offering a formula for personal and professional success based on a “paradigm shift” in how people perceive the world and themselves, a focus on character and principle, and the practice of the oft-repeated seven habits.

Seeking to apply the “7 Habits” approach to the supply chain, Supply & Demand Chain Executive asked Jim Tompkins, CEO and founder of Tompkins Associates, a Raleigh, N.C.-based consultancy and systems integrator, to reflect on his 30 years of experience helping companies achieve supply chain excellence and to identify those best practices, or “habits,” that are key to ensuring success in modern supply and demand chains. Our conversation with Tompkins began with the first best practice on his list:

Web Article Details

Infor buys SSA Global!

This is big news. Especially for those that follow Baan (now SSA LX).

UPDATE 1-Infor to acquire SSA Global for about $1.4 bln
Mon May 15, 2006 10:09 AM ET

NEW YORK, May 15 (Reuters) – Infor, a portfolio company of private equity firms Golden Gate Capital and Summit Partners, said on Monday it will acquire SSA Global Technologies Inc. (SSAG.O: Quote, Profile, Research) for $19.50 per share in cash, or about $1.4 billion.

The deal represents a premium of about 25 percent to the $15.59 closing price of SSA Global shares on Friday. SSA Global shares were trading about 22 percent higher at $19.05 on Monday morning.

“With this acquisition, Infor will become the third-largest enterprise software provider in the industry with approximately $1.6 billion in revenue,” Jim Schaper, Infor’s chairman and CEO, said in a statement.

The transaction is expected to close in the third calendar quarter of 2006. SSA Global said stockholders representing 84 percent of its shares have agreed to support the merger.

“In a rapidly consolidating marketplace we have seen that size and scale matter,” said Mike Greenough, chairman, president and CEO of SSA Global. “This transaction brings value to all of our key stakeholders.”

According to Reuters data, SSA Global had 69.57 million shares outstanding as of Feb. 28, giving the transaction a value of about $1.4 billion.

A special committee of SSA Global independent directors was advised by Mayer, Brown, Rowe & Maw LLP and received a fairness opinion from Houlihan, Lokey, Howard & Zukin.

SSA Global was advised by Schulte Roth and Zabel LLP and J.P. Morgan Securities Inc. Infor was advised by Kirkland & Ellis LLP.

CRM: Cost Deflection Out – “ Customer Experience In

Cost Deflection Out“ Customer Experience In!
David Barrow
Expert Author
Published: 2006-05-09

Cost deflection strategies deteriorate customer loyalty.

“Your call is important to us. please hold”

“We’ve automated our phone system for your convenience.”

“Our agents are busy helping other customers.”

As consumers, we are all too familiar with these rote statements that are somehow supposed to make us feel all warm and fuzzy while we cool our heels wishing we could talk to a real live human being. Whether you have a question about your mortgage rate, problems with your printer, or simply want to find out when a movie is playing, chances are you’ll have to run through a maze of options before you get the answer you want. With companies seeking to squeeze every penny out of operating costs, by deflecting customers to use less expensive means of communication (the Web versus the phone) it seems we’re stuck in self-service purgatory. In reality, this drive for cost deflection is alienating customers and eroding profits.

Cost Deflection Out, Customer Experience In

Business Intelligence Spending Seen Picking Up

Business Intelligence Spending Seen Picking Up

By W. Gardner

Spending on business intelligence (BI) in IT departments is picking up steam, two market research reports said Thursday.

Ventana Research said its survey of 320 firms revealed that adoption and plans for adoption for open source BI is progressing more rapidly than previously understood.

“Eighty-three percent of organizations are considering, are in the process of deploying, or have already implemented open source BI,” the Ventana announcement stated. “Only four percent of respondents said they would not deploy more open source BI in the future based on their current experience.”

Intelligent Enterprise Magazine: Business Intelligence Spending Seen Picking Up

CRN | Microsoft Office, SAP, Software | Microsoft Plans More Snap Links From Office To ERP

Microsoft Plans More Snap Links From Office To ERP

By Barbara Darrow, CRN
12:30 PM EDT Thu. May. 04, 2006

Microsoft is touting its Duet links from Microsoft Office to SAP ERP, but Microsoft Business Solutions (MBS) doesn’t want its own Office-to-ERP links to get lost in the hubbub.

Microsoft has eight new Snap modules in the works. These software nuggets will link the upcoming Microsoft Office 2007 front end to MBS’ ERP and CRM back end, said James Utzschneider, general manager of Microsoft Dynamics marketing.

Read More…

Open Source ERP – the list

We have discussed open source ERP here a few times. Finally, someone has put together a list (although we do not know if it is an exhaustive list) of the main open source ERP Packages.

You can see for yourself here:

Line56.com3A20Free20ERP

Causes of ERP Failures

Here is an article that zooms right into the reasons for why ERP implementations fail:

Causes of ERP Failures
by: Bruce Zhang

ERP is the acronym of Enterprise Resource Planning. Multi-module ERP software integrates business activities across various functional departments, from product planning, parts purchasing, inventory control, product distribution, to order tracking. ERP has transformed the way multi-billion dollar corporations conduct their businesses. Successful implementation of ERP systems could save tens of millions of dollars and increase employee satisfactions, customer satisfactions and sustain competitive advantages in every-changing marketplace. Corporate executives are often perplexed by the stories that how reputable corporations (Hershey Foods) have failed miserably and lost ten of millions of dollars in their ERP endures.

The failures of ERP projects are preventable if we can identify the common causes of the failures regardless the companies and industries that implement them.

An ERP system is the combination of ERP software, the business processes that the ERP transforms, the users of the ERP system, and the computer systems that run the ERP applications. The failures of a ERP project is often the result of the failures in one or more of those four components. The failures in computer systems (hardware and operating systems) are much easier to identify and to fix, so we’ll examine the failures in software implementation, business process and user acceptance.

Failure of ERP Software Implementation

Module-based ERP software is the core of ERP systems. Most ERP projects involve significant amount of customizations. Packaged ERP software modules have built-in functionality that work in a standard and simplified enterprise environment. However, every organization is unique in data requirements and business processes. It is the customizations that transform packaged ERP software into ERP software that meets organizations’ individual business processes and operations. Long and expensive customization efforts often result the pass of release deadline and budget overrun. Customizations may make the software more fragile and harder to maintain when it finally goes to production. Major changes may be required in the later stage of the implementation as a result of incomplete requirements and power struggles within organizations

Why New Systems Fail: An Insider’s Guide to Successful IT Projects

The integration of ERP systems (http://www.sysoptima.com/erp/erp_integration.php) with the IT infrastructures also challenges ERP project teams. The use of appropriate implementation methodologies can often make or break a ERP project. (http://www.sysoptima.com/erp/implementation_methodologies.php)

Failure of Accommodating Evolution of Business Processes

According to Anthony, R. A, business processes fall into three levels – strategic planning, management control and operational control. Organizations continuously realign their business processes of all levels in response to the ever-changing market environment. Many ERP systems aren’t flexible enough to accommodate evolution of business processes. many ERP system need a major overhaul in every a couple of years.

Failure of User Acceptance

The users of ERP systems are employees of the organizations at all levels. ERP projects usually modify the company’s business processes which create extra workload for employees who use them initially. They may not think that the workflow embedded in the software are better than the ones they currently use. Ongoing end-user involvement and training may ease the difficult in organization’s adaptation of new systems and new business processes.

About The Author

Bruce Zhang has over 10 years experiences in developing and implementing ecommerce and ebusiness systems in various industries.

He operates a website http://www.sysoptima.com that automatically aggregates the news and new articles in e-business (ERP, CRM,

Supply Chain Management and Knowledge Management) from over 50 sources daily (http://www.sysoptima.com/newsbot/) to help corporate executives, professionals and consultants to keep up with the latest development in enterprise software market. The website offers a knowledge base for understanding business software from a systems perspective.