ERP-Selection-Apoorva-InfoLab

Avoid pitfalls of ERP selection

by with No Comment BUSINESSUncategorized

How to avoid the common pitfalls of ERP selection

Everyone wants their ERP implementation to be delivered on time and on a budget

Many organizations set about the task of selecting a new ERP system and implementation partner for their organization but run aground when trying to compare the various available options or end up making the wrong choice. When selecting a new ERP system, here’s how to avoid common pitfalls

1. Lack of a systems strategy

The first priority to select a new ERP system is to have a clear vision as to what you’re looking for. You need to know what’s definitely in scope. This should be driven by the benefits of implementing ERP – strategic, financial, intangible, and the likely costs of the various options. Unfortunately, many organizations jump straight into ERP selection based on the brand & marketing demo without considering what the business needs and what it’s going to be net cost & AMC cost.

2. Inadequate specification of requirements

Failure to spend time defining and documenting your requirements. You select a system that works perfectly well in certain industries but lacks functionality in your industry. Focus on requirements that give you a competitive advantage, drive business benefits, or that your current systems struggle to manage.

3. Using the vendor’s brand & sales demo to evaluate ERP

Every ERP vendor will be delighted to demonstrate their system to you based on their interpretation of what you’re looking for. Each vendor will have its own interpretation and it will prove extremely difficult to compare what you’ve seen. You can avoid this pitfall by having a structured demonstration that gives you the “apple to apple” comparison you need. A trial run of your own product & process helps better understand of ERP system

4. Lack of focus on the vendor’s ability to deliver

Regardless of the functional capability of any ERP system, a successful ERP project is reliant on the vendor’s ability to understand your business process. Skill to customize to your requirement, user training, and help you get expected benefits. Check implementation history, reference site visits, and calls

5. Focussing on costs rather than benefits

Everyone wants their ERP implementation to be delivered on time and on budget. In general, that’s considered a success. As a consequence, it’s natural during the ERP selection to ensure that software and implementation costs are kept within initial expectations. However, this approach takes no account of the ability of the solutions being assessed to deliver the expected business benefits. A solution that costs 15% more but helps you achieve multiples of that in financial benefits over a period of time is clearly a better option.

ERP Costing-Apoorva-InfoLab

Hidden Costs Of ERP

by with No Comment BUSINESSUncategorized

Understanding the Hidden Costs of ERP.

Not every expenditure for an ERP system is included in the contract. There are other expenses that can be hard to quantify up front in implementing ERP.

The key to keeping ERP implementation expenses under control is forethought, careful planning, less customization, quick implementation, and a tight rein on the budget. 

Implementation overall needs to be checked carefully in an effort to keep costs under control. It’s also important to find out if the vendor’s implementation team consists of vendor employees or third-party contractors. Vendor employees are likely to be cheaper because their compensation is fixed rather than on an hourly basis. 

Training:

It is an area where it is difficult to estimate costs. This is complicated because the goal of training is not just to have everyone take a course, it is to get them all familiar and comfortable with the new ERP system. on-the-job training as part of the implementation will reduce the cost & better reinforcement of learning

Customization:

It is another cost that’s hard to calculate. Although customization is to be avoided whenever possible. But almost all ERP systems will need some customization, and many implementations require extensive customization, especially if the system being implemented is a poor fit for your business.

Business processes often have to be redesigned to work better with the new ERP system. In fact, business process redesign is a central part of an ERP implementation. Much of the savings and other advantages that come from ERP come via business process redesign.

Again, this is an expense that is hard to quantify at the beginning of the project. It is also something that can lead to major cost overruns if it isn’t watched carefully.

Data transformation:

It is another vital step that is hard to cost quantify in the beginning. There will be an expense to translate existing data into a format compatible with your ERP system, however until you get into the nuts and bolts of the job it is hard to know how much money and effort it will take.

ERP maintenance

Once the system is up and running, you’ll have to pay maintenance fees to keep the system current. Typically, these will run around 22 percent of the price of the software.

It’s important to determine up front how that fee will be calculated. Most vendors will base the fee on the price you paid for the software, but some of them will charge a percentage of the current price of the software. As time goes on and the price of the ERP system escalates, so does the maintenance fee.

In spite of the uncertainties, it is still possible to work out a realistic budget for an ERP implementation and to stick fairly close to it. But doing so requires understanding the hidden costs and working hard to keep them under control. 

 

 

Choosing the best ERP Software-Apoorva-Info-Lab-Pvt-Ltd

Choosing ERP Software?

by with No Comment BUSINESSUncategorized

Choosing ERP Software? Get answers to these 10 questions.

An ERP implementation is never an easy undertaking, there is plenty of ERP project that can go wrong: change management, lack of training, and lack of clear business goals. But selecting the right ERP software shouldn’t be one of them. Get detailed answers to these 10 questions. 

1. Does the vendor have customers like me?

Is this software right for companies your size, in your industry, and with your type of business processes? Check the customers they list, ask for a reference, and understand just how well things worked or didn’t, both during implementation and several years in.

2. How well does the platform integrate?

The ERP System is the central nervous system for a company’s financials. It had better be able to talk with other functions Marketing, Engineering, Planning, production, Quality, sales, A/C, and HR -they need to connect to suppliers, customers, etc. Some ERP systems offer a full suite, running ERP, CRM, and e-commerce. Beware, however, that some of those applications are pieced together through acquisitions and offer no greater advantage than well-integrated best-of-breed solutions.  Running a full suite off of a single data model can make a world of difference. If you go with a best-of-breed approach or some combination of a suite integrated with others, be sure the ERP system has a robust set of APIs and connectors, built on modern services-oriented architecture.

3. What’s the vendor’s viability and roadmap?

If you’re going to invest the time and resources in a new ERP system, you’d better know where the vendor you’re buying it from has been and where it’s going. The market for ERP software is relatively mature but newcomers continue to enter. Better be sure they’re viable. Once you’re satisfied with their viability take a close look at where they’re going. Are they moving upmarket? Down market? Are the features and functionality they’re planning to invest in what you want?

4. How customizable is the software?

One common refrain in ERP implementation advice literature is to avoid customizations as much as possible. Indeed, breadth of functionality is an important factor in selecting ERP software. Yet, many businesses can’t help themselves or truly do have specific needs that no vendor is going to satisfy with their off-the-shelf software. That means it had better be easy to customize and configure or else you’ll be spending a lot of extra time and money. Speaking of extras…

5. Are there hidden costs?

You pay more for ERP than just the license costs. It’s important to know where those extra expenses will come in ahead of time. Check annual license cost, the cost for additional users, AMC cost, etc.

6. How frequently (and how easily) is the system upgraded? 

You want your ERP to keep pace with the rapidly evolving demands of modern business. That means regular updates, new features, and a commitment to development. Yet, you don’t want massive, disruptive upgrades that grind your business to a halt, chew up resources, and demand retraining users. Find a vendor with the right balance for your business.

7. What are the SLA commitments and transparency? 

ERP is vital to the business and downtime can cost a company a lot more than what you might get reimbursed in subscription charges for unused time. Does the vendor have a history of reliability? Do they document it? What does the service level agreement look like? Is it negotiable? Is there flexibility with the licenses if you have seasonal periods of growth? What happens with your data if you move off of the software? Are there guarantees for data portability? These are some of the most important questions if you go with cloud ERP.

8.Is it truly cloud or just cloud washing? 

In the rush to the cloud, many vendors will claim to provide a cloud solution, when in reality it’s just their old on-premise software slapped on a hosted platform. If you want cloud ERP, you want a solution architected for the cloud. That means multi-tenancy, giving you the economies of scale and regular, seamless upgrades that cloud computing can provide.

9. How good is the security?

A long history of reliability and security has answered many of the concerns about keeping your financial data in the cloud. The vague, broad refrain, “I won’t store my financial data in the cloud” should give way to specific questions to your provider. More likely than not, their security precautions are going to be more robust than your own, but it’s an area you need to check. What audits have they passed? Do they own the data center or outsource it? What about application-level security? PCI compliance?

10. Does One Size Fit All For ERP?

Can a single ERP system handle everything from General Motors to a retail establishment? “no.” Although ERP vendors like to boast of their scalability. The consequences of picking the wrong size system range from expensive to fatal. Getting a too-big system means that you’ll spend more time and money installing it. (Since size usually correlates with work needed to get the system up and running.) A too-small system will be slow and prone to crashes as it struggles to keep up with demand.

The more you know, the better prepared you’ll be for implementation and you’ll be able to hit the ground running. 

Do Not allow your ignorance to be exploited by Technology Providers