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ERP Systems and the Cloud

Nowadays almost every ERP Software vendor is promoting their cloud based solutions as “the next big thing”. The advantages of the cloud are many and quite easy to see. Lower up-front cost, less maintenance, less hardware requirements, easy mobile access just to name a few. It sounds like a slam dunk in favor of the cloud, but there are some disadvantages as well, that need to be taken into consideration before making a decision. By definition a cloud based solution depends on the internet, so reliable internet service is an absolute must. If there are any in-house or third-party integrations or if you rely on an in-house database for analysis and reporting, the cloud is also most likely not the way to go. Security and the fact that your data is stored off-site and out of direct control is another concern for many businesses including the question of what would happen to the system if the cloud vendor goes out of business, leaving you stranded. Many of these issues will depend on the actual situation of a company and there is no “one size fits all” solution. There is certainly great benefit in using cloud based ERP’s for many companies, but it is not a decision that should be taken lightly and solely based on the promise of lower cost. Feel free to contact us if you have any further questions or to discuss how we can help you with your...

ERP Systems – The Technical Side or “What’s under the hood?”

Just as important as the functionality and the shiny new user interface of an ERP System is the technical side of it, especially if you decide to use a “traditional” (on premise) system vs. a cloud based ERP. Cloud based systems are easier on the technical side, but they have other problems and considerations that I will discuss in a future post. What is “under the hood” of a traditional ERP system you might ask? First and foremost there is the database that the system is built upon. Databases can be proprietary systems that are included in the package e.g. QuickBooks and some versions of Sage’s ERP 100, or standalone database systems like Microsoft’s SQL Server and Oracle that are used by SAP and other high-end systems. Each database has advantages and disadvantages that have to be considered when selecting a new ERP system. Proprietary systems are usually simple, easy to maintain and do not have big demands on your IT infrastructure. This simplicity often comes at the price of usability though. Accessing your data for custom reporting, business intelligence and other applications can be difficult or almost impossible. On the other side of the spectrum are the professional database systems like Microsoft SQL Server and Oracle that give you full control over your data and often include tools for custom reporting and business intelligence, making it easier to get the most out of your system. Unfortunately all that flexibility comes quite literally at a price. Most likely the database has to be purchased separately and needs to run on a separate server, significantly increasing the cost of the...

ERP-Installation: Change Management

Installing a new ERP System, or even upgrading an existing one, is a big challenge for any business. According to statistics as many as 50-70% of installations actually fail! Many of these failures happen, because the project team did not implement an effective change management strategy. Change management is the strategic process of getting the users’ acceptance of the new system and the new way of doing things. Many users are slow to accept change, or will outright reject it, reducing productivity, or even worse create animosity in the workplace. This is why change management is very important for any new ERP implementation. It can make or break the project, no matter how well it is planned and executed. How do we manage this resistance to change? The most important point is communication. A company should be transparent about the project and at the same time listen to the concerns of their employees. Basically your employees will want to know why the change is being made, what the change is and when they can expect it to happen. Knowing these things will lessen their anxiety and allow them to be prepared for when the big change actually happens. Of course this does not guarantee that there will be no resistance, but it is a big step towards a smoother implementation of the new ERP software. It is of course equally important to listen to any concerns the employees may have. Many times they are the ones “in the trenches” and they will notice potential problems with the new system, especially veterans who have been with the company for a...

Have you outgrown your accounting software?

In any business there will eventually come a time when your first accounting software like for example QuickBooks, is no longer suitable for your growing needs. Then it is time to upgrade to an ERP software package. As your business grows, you may need specific reports and if your software has an integrated proprietary database it can be very hard to access it and create customized reports. In contrast, most modern ERP systems are based on open databases like Microsoft SQL Server, making it easier to analyze your data and create reports. As an example, if you often find yourself downloading information from QuickBooks to Excel to create reports, it is time to think about upgrading. You may also notice that your accounting software is slowing down. This will happen if the database has grown beyond a certain size or there are too many transactions in your system. If you notice significant inexplicable slowdowns that are not caused by your hardware or network it may be time to think about upgrading. Of course upgrading is not a decision that can be taken lightly, because it may involve significant costs and a lot of work to do it right. If done correctly it can give you the tools and insights to support the growth of your business and help you guide it into a successful...

ERP-Installation: Is your In-House team ready and on the same page?

Long before the application consultants for your new ERP System walk through the door, you should have your in-house project team ready and on the same page. Your team should consist of an executive sponsor and an employee from each department that will be affected by the new system. The sponsor should be an executive or senior manager of the company with authority over all business processes that will use the new system, ideally the CEO or CFO. He or she should be in a position to make things happen when action is needed or decisions have to be made. The team members from each department should have a good knowledge of the business processes they are working with and be able to communicate well with the rest of the team. Their input will help to determine the initial requirements the company wants fulfilled by the new software and can be used to determine which ERP package will be a good fit. Your company should at least have a good idea of what the basic needs and processes are and what the final goal of the new system is before the outside consultants are invited to the party and the installation begins. I have seen cases where the in-house team was either not adequate or not in agreement on important issues, resulting in a system that did not meet the needs of the company and had to be changed several times during the ERP installation. This led to a substantial increase in cost and delays that could have been avoided...

The importance of a functional ERP consultant.

Many ERP (Enterprise Resource Planning) system installations end up failing or not living up to their expectations because there is a gap between the needs and wants of the company and the capabilities of the software, as well as the way it is configured. Almost every ERP system comes with it’s own business flow and process and even though adjustments can be made, it also means that the company will have to make some changes to accommodate the software. This can be alleviated by having a functional ERP consultant on your team who is able to effectively communicate with the users and decision makers of your business as well as the technical consultants or employees working on the system. This person should understand project management, business process design and organizational change management among other things, to ensure that the right software is chosen and the installation is a success. This will give you the system you need to run your business and make the important decisions for your...