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Posts Tagged ‘ERP Best Practices’

proformativeA group (and website) called Proformative provides a web forum (www.proformative.com) for “corporate financial professionals” (Controller, CFOs, etc.) that provides useful information to its audience about a wide range of finance-related topics from HR and Recruiting to ERP and Excel Shortcuts, and much in between.  Proformative boasts of having over 100,000 registered members.

Recently, under the title “ERP Implementation Methodology Best Practices & ROI” (found here) several contributors voiced their opinions about what to expect from ERP.  You can peruse the article yourself, but we thought we’d highlight a couple comments that caught our eye.

Bob Scarborough, CEO of Tensoft, Inc. listed 5 important things he thinks you should consider:

  • IT Costs – It’s more than just the software, but still the easiest to count.
  • Productivity Impact – Rectifying data input errors & redundancy are valid ROI components.
  • Visibility Impact – When new systems provide more/better data access or velocity, it matters.
  • Audit & Compliance Impact – Better controls & repeatable processes reduce audit costs.
  • Risk Impact – How much risk is built into your current system? This cost is real, if tough to count.

Len Green, a Consultant at BT Partners suggests looking out 3 to 5 years for costs from day one.  He notes that some improvements occur only after implementation, so allow for progressive improvements, not 100% gain in year one.  He adds that software costs are only part of the story: additional staff during implementation and integration with other current business systems may affect overall costs.  And don’t count headcount reductions that do not equal a whole FTE.

Emerson Galfo, CFO at C-Suite Services questions whether ROI is really the best metric.  He cites Amazon as having invested heavily in technology since its inception for reasons including pursuit of market share or to support a business vertical.  If they’d evaluated Amazon Fire solely in terms of ROI, it might never have happened.  Yet it has contributed, he notes, “to a thriving Amazon ecosystem.”

And finally, this from Wayne Spivak, CFO at SBAConsulting.com adds: “Implementing a new ERP system that is well thought out in advance, with clear understanding of the pitfalls, the problems, the issues and the costs of both dollars and time will yield better (I’ll never say perfect or even great) results out of the box.  We need to see larger pictures than dollar and cents on every investment…”

 

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roi_imabeInside-ERP writes, at Toolbox.com, of the eight key things companies can do that will give them the best yield on their system investment.  In view of the many failed implementations – most of which failed because they ignored one or more of these – we offer them in simple form today.

Once you have a team of key senior stakeholders in place who set project expectations and ensure that all team members are aware of the plan, they should follow these best practices:

  1. Build a strong internal implementation team by finding and empowering a qualified project manager with strong technical and communications skills.
  2. Refine business requirements before the actual software implementation begins to avoid confusion. This can be easily done by conducting workshops with the internal team and vendor partner to finalize the necessary process requirements in advance.
  3. Get buy-in from the executive team on the project, then have regular check-ins with the executives to keep them apprised of ongoing progress.
  4. Actively identify areas of the business where ROI can be best achieved, particularly where the new ERP software can make the most difference.
  5. Develop a detailed implementation plan that outlines all resources required to complete the project along with a timeline and budget.
  6. Offer training programs to employees at all levels to uncover efficient solutions for workflow gaps that arise during the implementation phase.
  7. Once the implementation phase is completed, organizations should have a change management plan in place to track changes to project tasks and ensure that the changes are not the result of end-user resistance to the new software.
  8. Commit to conference room testing prior to go-live where end-users can test process flows and integrate with all external applications.

Every step above is important, and we believe companies fail to follow them at their own risk.  The full article can be found here.

 

 

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