ERP Social Media Trends

An interesting discussion on ERP social media was raised on a webinar the other day. The topic of the discussion was how companies are building out their knowledge bases for their constituent communities. Specifically, how do you share captured knowledge to people external to an organization?

This lead to a discussion of the methods of communication that people use now. These methods, as you know, are typically through portals, email, and more-and-more are focusing on social media, such as Facebook and Twitter.

Most 18-year-olds today do not use the phone. Rather the prefer to only use text or Instant Message (IM) as their way of communicating. Customer service and help desks need to accomidate these new technologies. ERP and CRM tools needs to evolve to support the move towards social media as a communication channel. There is suddenly a wave to move towards a socialization of business communication, as well as business to consumer messaging.

ERP Social Media is happening now

There are now cases where entire companies are losing their email system in support of a social media style of communication. It is instant, open, secure, and adds value beyond traditional email. Can you imagine email being called a legacy application? Well it is becoming one.

Software such as Salesforce.com (a cloud based CRM) is now focusing heavily in social media as the conduit for business communications. Their Chatter tool is a secure, internally facing, twitter-like application that provides instant user communication and notification on key business events from data updates. Users can choose who and what to follow.

Businesses are moving to ERP Social Media tools. Companies such as Bank of America are using twitter as a support desk tool, with twitter feeding their case management solution and replies posted on the case show up as direct messages to the twitter user. This is one example of how public and ERP social media tools are merging together.

With the use of open APIs (interfaces), Twitter, Facebook, Linkedin, and other types of ERP based applications can be merged with ERP Social Media.

For example, an HR department could use Linkedin as a direct source for their candidate recruitment efforts and pull date directly into their HRMIS solution.

Moving from Legacy to ERP Social Media

With most mainstream ERP software solutions, the source of the data is human data input. EDI, once the method of electronic communications to a Purchasing system are so out of date, yet persistently remain. Eventually we may likely see it evolve to some sort of XML SOAP message initiated by a user perhaps even in the form of a Tweet.

Most output is in the forms of reports or perhaps an email to a user. ERP business systems will need to be udpated to include posting a tweet or a similar ERP Social Media message to notify users of business events.

ERP solutions need to quickly move to this new messaging format. Most traditional ERP systems do not use text messages as a data source, much less even a Twitter post.

This needs to change quickly to support the next generation of students and users. Kids entering college will graduate in four short years. When they enter the workplace, they will find creative ways to make ERP Social Media work for them, with or without the support of the ERP software vendors.

We welcome your comments on this topic as it will soon become a real issue in enterprise business software.

Free Up Cash in a Small Business with Technology: From Invoicing Software to Inventory Management Software

Free Up Cash in a Small Business using Technology

How to free up cash in your small business? If you own a small business, you have to juggle all sorts of things to properly manage your company’s cash flow. You may feel particularly strained if your company makes a profit, but you still don’t have enough cash freed up to pay your dues on time. Fortunately, you can develop an effective system of software and technology including inventory management software to help you work cash flow in your company’s favor.

If you want to free up cash and before you invest in any software, you should get to know your cash conversion cycle pretty well. The cash conversion cycle measures the duration it takes for your company to turn money spent on inventory, production, and sales efforts into actual cash. The cycle comes to an end when you have collected money from customers and have used that money to pay for all your business related obligations. Calculating how many days your cash conversion cycle lasts is very beneficial. Doing so allows you to start coming up with ways to speed up the cycle and get more cash flowing into your company quicker.

Free up Cash with your Receivables Management

Once you have calculated your company’s cash conversion cycle, you are ready to start evaluating your accounts receivable practices. You need to get your customers to pay you on time, before it’s time to pay your own bills. In essence, you need to reduce the collection cycle. You can do this with some high quality invoicing software. Software of this kind provides you with detailed information about which of your customers are not paying you on time. You just have to enter in information about your customers’ accounts each time one is opened. This software allows you to know which customers to contact about late payments. If a customer consistently pays you late, you’ll easily be able to identify that pattern. Then, you can direct your efforts to sending the customer email reminders about payment due dates or charging penalty fees for late payments to discourage such undesirable behavior in the future.

Pay some attention to your accounts payable practices too. This is another place to look to free up cash. It can be a disaster if you have to make payments before you’ve received a good chunk of your monthly payments from clients. It’s best to find some suppliers that will give you payment plans that are flexible. Always, always, always pay your bills on time, though. If you want your company to grow in the future, you’re going to need good credit. As a business owner, it is integral for you to focus on protecting your company’s credit rating.

If you want to pay your bills efficiently, it’s a pretty good idea to set up an electric funds transfer system with your bank. This system allows you to pay suppliers on due dates, rather than quite a few days before due dates. Technology has made electronic funds transfers easier. You simply need to log on to your online or mobile banking account, and you’re a few clicks away from making an easy, fast payment.

Free up Cash in your Inventory

You also need to free up the cash that is tied up in your inventory as much as possible. Essentially, you need to reduce your inventory. Many business owners find inventory management software useful because it helps them keep track of their total inventory costs throughout the year. This allows them to always know how much inventory they have at any given time and how much time particular inventory sits in stock. When they use the software, they simply need to enter in information about what they are ordering from suppliers, how much it costs, and what they have in stock.

This software can actually save business owners money because it allows them to have better timing when it comes to ordering things, so the company never spends extra money ordering unnecessary inventory. Additionally, the software helps business owners figure out what they are selling the most of and what is not making a profit. This knowledge can help owners figure out what products may be eating up money unnecessarily because they are kept in stock for too long. Once those slow-moving, unpopular products are identified, the company can choose to stop carrying them or carry less of them.

Business owners always have to direct their attention to the management of cash flow. To manage your company’s cash flow, figure out ways to see more cash flowing into your company faster. Create accounts receivable and accounts payable practices that work for you. And try out some inventory management software and other technological tools to make your life as a business owner easier. Managing your cash flow properly will guarantee that you have enough money to pay your bills on time, and that’s definitely a good thing!

How not to implement and use ERP software

ERP Software done correctly can be a great tool for improving a business. Done badly, it can demoralize employees and drive down business results.

Case-in-point:

How not to implement and use ERP software — ERP Software should enable business processes, not torture the employees.

“My experience with SAP was of an all-purpose integrated business solution. At the beginning of the day, I clocked in using an SAP applet. Next, I would go through a set of SAP generated planned-production orders, direct work orders, or reported directly to my supervisor. After looking through the routing information (generated through SAP), I would complete the specified task. When the task was complete, I would “clock-off” on the job, which entailed bringing the PPO to a computer, scanning it into an SAP applet, and entering my badge number (employee ID). Another thing I found interesting was the request to clock off on all activities. Even if I had only swept or scraped tape off the floors (it was a slow summer), I was asked to clock off on something called “lean labor.” I found this curious, though I suppose from an efficiency standpoint it was very important. To refer back to these “value-chains,” it is important to know exactly what every employee, piece of inventory, and work order are doing at any given time. Whether it is benig worked on, working on something, or finished, this real-time updating system allows everyone company-wide to see which projects are in progress, which are complete, and which have not been touched. Also from a managerial standpoint, it is important to see how much work each individual employee is doing and how well they are performing, not to mention that employee’s ID will always be attached to that job if future concerns arise.

Now from a business standpoint this is all well and good. But what about the employee? A lot of days, clocking and clocking out I felt as though it did not matter whether or not I was even there. There were simply no jobs to be done for entire weeks at a time, but that did not change that I had to “clock out” for certain jobs. Of course, a business wants to make sure that all of its employees are being as productive as possible, but clocking out on cleaning out the same area 3 times during a week seemed redundant and absurd. Not to mention clocking out on an activity such as “material handling” or “lean labor” is fairly arbitrary. This of course necessitated a manager to scold me when my productivity levels fell (ie playing Frisbee with a cardboard box in the back). It is important to note that I was simply summer-hired as well. Working full time at a job as a number would eventually get fairly tedious. As one of my co-workers noted to me, they had simply clocked in and clocked out for a couple of weeks and clocked off on none of the jobs they were doing. No one said anything to him. So who’s checking these jobs?” – Andrew Mellino

Implementing technology to collect data is one thing, but ERP should not be just about the numbers. ERP ideally should be “process improvement enabled by technology.” It should not be a tool to harass the employees. This is a key concept to understand when implementing and going through the design phase. Which processes are broken and which processes are working fine. Once you have defined that, then see where the ERP software can enable best business practices. It is essential that the employees have a buy in and provide feedback to this step.

If you get the employees to buy into the implementation and how it will change their jobs, you will gain the benefits of higher utilization of the system and overall better adoption. If you fail this step, you will have a failed ERP implementation. There is a saying that you should “drive data collection to the source.” This means that you should have the person who is directly responsible for the source of that data be the one who is entering it. When the ERP system is not implemented with the employees in mind, the employees will be unmotivated to use the system, ensure that the data is accurate, or even bother to put in correct information.

With the help of your line employees, design in best practices and work with them to build a system that they will use and will benefit not only them by making their jobs easier, but also benefit the whole company by driving positive results.

How to determine your ERP Evaluation Criteria

Defining your ERP Evaluation Criteria is essential for paring down the vendors and getting to the final choice. There are two focus areas for determining your selection criteria:

Determining your ERP Evaluation Criteria

1. ERP Evaluation Criteria – Process

The Process analysis for determining your ERP Evaluation Criteria is the method you would use to determine the flow of data through the system and how it would follow along your established or to-be business processes. For example, following a process flow of quoting an order, receiving the order, manufacturing or purchasing the product, shipping, and finally invoicing the order is known as the order-to-cash process flow.

There are other anther ERP Evaluation Criteria processes such as procure-to-pay, which maps the inventory requirement through the accounts payable billings. Another example could be the HR process of recruiting though retirement.

Using Process Flow documentation to determine your ERP Evaluation Criteria

By mapping out these processes in a tool such as Microsoft Visio Standard 2010 and developing a detailed flow diagram, you will have a good understanding of how your business operates. With this knowledge, your evaluation of various business management software will be a lot easier. Further, you can see how closely the software’s process flow mirrors your company’s or how disjointed the software is when it comes to your business.

2. ERP Evaluation Criteria – Functional

ERP Evaluation Criteria for the system is the detailed list of all of the things you need the system to do, from processing purchase orders, processing a sales order, to invoicing a client and producing financial reports. These are the nitty gritty things that your system should do. A good place to start is to evaluate your current system. What are the functions that the current system does well? Include these in your list. What are the things that your system does poorly, include the desired functionality in your list.

Your list should not be 10,000 lines, but rather it should look at those items that make your business unique. For example, most every business has to cut A/P checks. So most systems can do that. So do not list as a requirement that the software should be able to cut A/P checks, rather make your requirement specific to your company, such as “System should be able to cut 3 copy laser checks, with reprint capability.” That very specific requirement will help you distinguish the vendors from one another.

A good place to start is with an ERP Evaluation Criteria Template. ERPandMore has many different templates to assist you in evaluating various ERP software venders and have best practices built in. In using these as a starting point, you will save yourself countless hours in both preparing these criteria templates as well as in differentiating the vendors your are looking at. We hope this has helped to answer How to determine your ERP Evaluation Criteria

ERP Disaster Recovery

One of the most critical plans you can make is to prepare for the worst, especially when it comes to your enterprise software system and the database of all of the company’s critical information. A proper disaster recovery plan is essential, if you are running an ERP system, as it touches all aspects of the company. The plan can be as simple as a backup and recovery strategy, or as extensive as a global hot site fail-over plan. In either case, you need to prepare and test your plan.
ERP disaster recovery
Testing the plan is often where people fail. You often plan for the eventuality of a hard drive crash (and thus you use a RAID array), or you plan for the possibility of natural disaster, but what if you have a hidden hardware problem that is corrupting the database a little at a time?

That happened with one company we worked with. A failing motherboard caused problems with the email virus scanner, which in turn corrupted the email store a little at a time, so that it was unrecoverable. What do you do then? Well, in that case it was restore to the point in time that the email store database was usable. So the net impact was a few weeks of data loss. That is one illustration, but what happens if something like that occurs in your ERP database? Again the key is backups.

If backups are so critical, then why do people choose not to bother with testing and restoring them? This is a key concept in ERP Disaster Recovery. Many people happily back up night after night, but never try to restore a data file or much less a database. Is it too expensive to have a test server? The real question is it too expensive to not have your ERP data after a disaster? What is the company worth? Millions? A few thousand dollars for a test environment seems like a reasonable investment.

Key ERP Disaster Recovery Priorities

Here are some of the things you need to think through when planning for ERP Disaster Recovery:

1. Backups and Recovery procedures
2. Off-site storage of backup media
3. Security of backup media
4. Remote site backups (In a disaster, can you get the business up if the server site is destroyed?)
5. Personnel (In a disaster, can the right people be there to recover?)
6. Priority levels and potential downtime acceptability
7. Costs

ERP Disaster Recovery Resources

There are some excellent disaster recovery resources on the web on this topic. One article that we liked was on making proper backups for your ERP system. We would suggest that you invest the time to learn more about this topic before it bites you. Remember that disaster always strikes at the most inconvenient time, so make the time now.

ERP Disaster Recovery

Project Management Planning vs. Task Management

Project Management for ERP cannot be understated. It is the essential tool for ensuring a successful launch of a new Enterprise Software system. Understanding the Scope, the Time Frame, the Budget, the People/Resources available, and the goals are all important. Many people use a tool such as MS Project to plan the various stages and tasks to complete.

There is a fundamental difference between planning a project and tracking it. On a project team there are various assignments and tasks that need to be accomplished. MS Project is often cumbersome to track detailed tasks. Especially those that come up in steering committee meetings and even on phone calls.

Being able to track them requires a useful tool to manage all the tasks. This is different than Microsoft Project. MS Project is a great planning tool. But to manage the various sub-projects and tasks, we have started using Nozbe. Check it out. We have put up a link on the sidebar of our site to assist you. Another good resource for various project software is http://www.gtdsoftware.net.

Green ERP?

With the drive to being more environmentally responsible, corporate management is (or will be) setting initiatives to reduce carbon emissions. While moving towards Green and reducing the carbon footprint, the question becomes, how do we manage this? Should ERP be modified to include the tracking of carbon emissions?

ERP systems are essentially large accounting systems that capture oodles of data and summarize it in a report to management. Traditionally, they are focused on financial, operational, human resources, and other resource data reporting. It would seem that the next logical step would be to begin tracking and reporting on carbon footprint data. It is surprising though that major ERP vendors have not yet announced this sort of system module or functionality.

[ReviewAZON asin=”0470393742″ display=”inlinepost”]With efforts in reducing the carbon footprint focused on the data center, such as reducing power consumption of the server farms, management may be missing the point. FedEx, for example, has reduced fuel bills by up to 30 per cent through better route planning for its trucks. That justifies a lot of server power.

Without the tracking of this sort of key data, management may be focused in the wrong direction. With proper information and analysis, companies can make better decisions and reduce emissions where it gives the most added value. It seems that an ERP system would be perfect in tracking, analyzing and notifying management on the results of their green strategic initiatives.

What do you think?

Simplifying IT

In this month’s Harvard Business Online, there is a fascinating article on how one bank in Japan rolled out a new business system successfully by breaking all the rules. By adapting a modular approach and leveraging technologies such as the Internet, they were able to take a dying business and revamp it into a major player in their market. The article requires accepting their terms of use, but is really worth reading for anyone who plans, manages, or deploys systems.

Radically Simple IT

By designing and deploying enterprise systems in a different way, Japanâ€™s Shinsei Bank turned IT from a constraint into a launchpad for growth.

by David M. Upton and Bradley R. Staats

Enterprise IT projectsâ€”both custom and packaged â€œone size fits mostâ€ systemsâ€”continue to be a major headache for business leaders. The fundamental problem with these systems is that for the most part, theyâ€™re constructed using what programmer and open source champion Eric Raymond dubbed a cathedral approach. Like the great edifices that Europeans erected in the Middle Ages, enterprise IT projects are costly, take a great deal of time, and deliver value only when the project is completed. In the end, they yield systems that are inflexible and cement companies into functioning the way their businesses worked several years ago, when the project started. Despite recent improvements in the flexibility of packaged software, companies often find it exorbitantly expensive and difficult to modify their enterprise systems in order to exploit new business opportunities.

Read the full article here