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ERP – Who to Choose 12/30/2012

Posted by TBoehm30 in ERP.
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I’ve often been asked “Did we choose the right system?”  Usually it is right after we experience a serious bug, or something goes wrong causing a project delay.  Would another system have prevented this particular issue?

The answer is always ‘Yes’.  We did pick the right software, despite the current problems.  And ‘Yes’ another system would probably have allowed us to avoid this problem, but would have caused others.  As long as we followed our plan, identified our priorities and compared correctly, we know we chose as best we could.

So what was the plan?  What do you need to plan in order to choose a new software system?

Requirements

The single most import aspect of choosing your new software is the list of requirements.  You need to understand what you need to succeed, and a list of benchmarks so that you know when you get there.  Everyone in the company should have the opportunity to help prioritize the requirements.  This is the chance to visualize the company running at peak operational efficiency and growing as fast as possible.  The new software needs to be able to accomplish all of the current requirements plus future needs.

You need to think about your requirements from a perspective of the future.  Will it be scalable enough?  Does it have the modules to cover functionality that you don’t need now, but could find a use for when there is time to experiment?  What other tools will you need to go along side your new software?  How much data does it need to accept and how?  What other systems will you connect it to?

I make a long list of requirements, and then prioritize them from most important to least important.  Then I like to make a single sheet listing the top requirements with room for evaluation and notes.  These note pages can be used as a scoring sheet for objective comparisons between systems.

Support

You will need a lot of support during the years of using this software.  Make absolutely certain that the company you choose will have smart people who can guide you when you have problems.  You might have to call other companies already using the system to get a good idea of how their support program works.

Some companies charge extra for support, and some have fixed contracts that automatically include support.  You will need to know the structure of support before going into negotiations to buy your new software.

Implementation

Working with another company to implement new software is not an easy project.  You must be ready to accept them as partners.  They should have lots of experience working with companies in your industry and of your size.  They should be ready to explain the process, their expectations, how long it should take and how many people need to be involved.   You need to get a feel for the difficulty of an implementation, and how much work your team will do compared to how much work will be done by outsiders.  Training will take up a large amount of implementation and could be done in different ways; how much time will this one take? 

When getting trained, you will have to make choices on the basic setup of the system and how much to change the out-of-the-box configurations.  Most large software allows you to process similar functions differently depending on requirements; you must have an idea of how many different choices there are to be able to compare the different choices of software.

Loading Legacy Data

Your system will begin either fresh with no data, or have old data loaded into it.  You will need to get some idea of the difficulty of loading data into the system.  Some data may be easily added using standard formats like Excel; and some may require more effort.  You may have to load data compiled from different systems; it will have to be mapped to the new system.  How much help will you get?  How much experience do they have mapping data from your old system?  How successful have other companies been with loading data?

Setup

Obviously your new software will need to run on a computer.  Whether that computer is located in your own office, at a server farm, hosted by a third party, or transparent to you in a SaaS environment is totally up to you.  Make sure that your needs are covered by the company producing your new software.  It would be a regrettable decision to buy software that couldn’t be run as a service and then ask them to setup SaaS.

Interfacing with Other Systems

Any software your run should not be run in a vacuum.  It will need to create send data to people and systems, as well as receive data from people and systems.  You may want automatic interfaces setup to continuously communicate with existing systems.   This should all be possible on any new software that you choose to buy.

One of the main reasons I left my first job was that the software I used couldn’t communicate with anything.  Even creating a report was difficult.  I knew that software like that was doomed to obscurity and I needed to get out before I was left in the dust.

Make the Choice

Using your prioritized criteria, you should be able to make a good decision of which software to purchase.  Don’t look back for regrets; you made your decision the best way you could.  There will be problems that you will be able to solve, don’t let that destroy all of the hard work you put into making the right decision.

Have you been through the decision process?  Did it work for you?  Do you like the new software?  What would you have done differently?  Let me know in the comments.

Be happy with your new software.  You now understand that it’s a global world and Technology makes it happen.

Choosing Your New ERP System 11/29/2012

Posted by TBoehm30 in ERP.
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After you’ve gotten the approval to start the process for a new ERP software system, it is time to start the search and make the decision of what to buy.  It is a project on its own just to make that decision.  It should take one to three months to go through all of the options to determine the best solution.

The way to begin this project is to lay out your plan.  You need to have an idea of what steps you will take and how long you have to finish.  The plan needs to include who will be involved, how much, and who gets to make the final decision.

The first part of the plan is who will be included.  This is an important project and the right people need to be included on the team.  A senior manager that knows how important the project is, and has authority to set priorities needs to be on the team.  Others as representatives of major departments need to be included.  The best person to represent the department doesn’t have to be the highest manager; you need to include the one who understands what is needed, but also has the time to attend the meetings.

As you get a commitment from enough people to fairly represent the company, you will create a meeting schedule.  Once a week may be enough to start, but eventually you will have vendor responses to review and demonstrations to watch.  This will increase the time commitment from the team.  These people need to understand that this project is just as important as their ‘day jobs’.  They will need to dedicate some time to this project, even if it means doing overtime on their normal responsibilities.  This part is crucial because ignoring the project for too long will ensure failure.

Probably the most important part of the selection process is the requirements.  The team needs to define their requirements for the new system and prioritize their needs.  Not all software will do exactly what they need in the way that they want it, so they need to be ready to determine what is critical and what is nice to have.  The requirements should start with replacing what they already do, and then consider what is needed for the future of the company.  You will need to include the details of current operations such as Purchasing, Selling, Accounting, etc.  Also think about reporting, dashboards, paper output and screen design. 

Along with the processes, you will have to consider the technical aspects of the software.  Will you want it in the cloud or on premises?  If you are thinking about the cloud, do you want software as a service (SAAS) or platform as a service (PAAS)?  You need to know the difference, and understand the language so that when a vendor describes their solution you can correctly interpret what they are saying.

Can your IT department support the new demands of the software?  Will you need new people to create reports, customize the software, and support the growing demand for security?  These are import discussions to have before choosing the final software.

Once you have a good set of requirements, you can send out some sort of questionnaire, request for proposal (RFP), or other document to a list of vendors.  Their responses should be evaluated by the full team to determine a short list for demos.

You can have 4 or 5 short demos if your list of vendors is still too long to decide.  That should help you narrow the choice down to 2.  These demos need to be held to under two hours, and the vendor needs to be aware that you will cut them off if necessary.  Doing a lot of demos can be overwhelming to the team and they will forget what the first demo looked like at the end of the process.  You need to make sure that discussions are timely and that notes are taken for later review.

Your final choice should be made from the top 2 vendors.  These final vendors should be given the opportunity to show you their best presentation.  Give them the amount of time that they need to impress you.  This might take several hours for each of them and require a couple of days worth of time from your committee.

I like to prepare a document for the team that lists out the requirements and gives them the ability to write notes about each requirement and give each a grade.  The grades can then be tallied to objectively decide which software is better.  If notes are made using the same format, they are easier to compare.  The notes also make it more difficult to forget the important parts.

One of the hardest parts of this process will be to notify the losing company that they were not chosen.  They may come back with lots of questions that will require more work and put you in an uncomfortable position.  One time, I had a salesman email my boss describing how unfair my process was, and how they thought they were being strung along when the decision had been made in advance.  While embarrassing, I had the full documentation to show that no decision was made until the end, and the notes showed the grades where the number 2 company was very close, but clearly the second choice.

Once you make the decision and notify the winning company of your intentions, it is time to sign a contract.  Make sure that you have professional negotiators at the table to get the best deal possible.

Now that you have decided on your new ERP or other large software project, the fun is just beginning.  You already have a good team who understands the issues, and are ready to work.  They know that it is a global world, and Technology makes it happen.

ERP – The User Conference 08/27/2012

Posted by TBoehm30 in ERP.
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This month I went to the User Conference for the ERP system that I have been implementing.   It is incredibly important to network with other users of the same software.  I met numerous people who have struggled with the same issues I have, and had great conversations about their insights.  I learned about other ways the software can be used, and workarounds for known problems.  I traded contact information with people who might be able to help us in the future, or whom I might be able to one day give a hand.

The conference was huuuge; there were around 4,500 people.  Apparently we trended on Twitter twice during the week.  They included partners who sell and support the software, they had customers, and they had vendors who make bolt-on products.  There was a trade show with booths for companies that work with the software.

I loved walking around the trade show area, where I could learn so much about the possibilities for the IT department.  I viewed demos of scanning equipment which could improve the manufacturing process and integrate seamlessly.  I had a discussion with the people at a company who have a better alert system that reads data right from SQL.  I saw several great BI products to make dashboards or reports.

They had presentations running all day covering all kinds of subjects.  Obviously, the software was a main topic, but they also had generic business presentations to talk about creating a vision, or managing technical people.  I went to all the presentations that I could possibly get to, but there were more than any team of people could cover.

The presentations were great for talking about using the software in new and unique ways.  I had an interesting discussion with an IT director on why he bought some software to automate sending out invoices.  The ERP system could be made to do it, but it would have taken the IT department quite a bit of time and opportunity costs to get it done.  The automation company came in with consultants, talked with his sales staff, trained them on the software and got everything setup. He and his team then got some quick training later to be able to support it.  While all of that was going on, he could concentrate on other more important projects.  It was a win-win for them.  I kept thinking about how I could get the ERP system to do the same thing, but realized how much time it would take to support.

I did a presentation on security that was well received.  I talked about how I helped a company create a very complex security system within the ERP system without customization.  I showed a group of around 80 people what was possible when using the software to its fullest potential.  Hopefully some of them got some good ideas from the hour-long talk and will be able to implement them easily.  One person even surprised me and asked about setting up even more complicated security.

After the official activities were concluded each day, there were cocktail ‘parties’ hosted by companies who wanted our attention.  These were not only fun, but included people that I would not have otherwise gotten a chance to talk to.  These were some of the movers and shakers at their own companies.  They were the IT people who really understood the software and could easily discuss issues and problems.

I saw plenty of people skipping out on a presentation or activity to use the Wi-Fi to dial in to work and fix a problem or two.  I thought about how sad it was that their company couldn’t let them alone for just a few days to participate in this amazing experience.  Instead of learning about new possibilities, they were stuck dealing with the status quo.  But at least they were there and got a taste of the future. 

I have worked with people who couldn’t justify the cost for an out-of-town trip and three to five days out of the office for this kind of event.  I say to them that the cost is higher when no one goes.  An ERP system from a large software company has so many people with good ideas that they shouldn’t hide from them.  They can’t operate in a vacuum and ignore the possibilities that exist.  They have to learn that it’s a global world out there and technology makes it happen.

Why do you need ERP System Testing? 05/23/2012

Posted by TBoehm30 in ERP.
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Testing is one of the first items that are removed from a project when time becomes tight.  Many people wonder why they have to spend so much time doing formal testing when they have spent so much time training with informal tests.  They have spent so much time with the new system that they just know it works.  What is the point of spending a large amount of time on formal system testing?

First and foremost, you need to validate that you are getting what you think you are getting.  A new ERP system is a large complicated piece of software.  Just because individual sections are working, doesn’t mean that each module is sharing data the way it should.  A plan for system testing should include many of the core team, so they can see the larger picture.  You also need to be sure that the right communication is happening between team members.

You need to make sure that when a PO is created and received, that the inventory is added correctly and the journal entries are made appropriately.  You should review the documents and reports generated from the process to make sure that everybody is satisfied with the results.  When the PO is tested separately from the accounting module, it seems to work fine.  However, did anyone from accounting notice that the manufacturing group has automated the POs for inventory differently than expected?  This would be found in System testing with good communication between core team members.

You need to be absolutely certain that each process is testing using the same parameters.  There could be hundreds or even thousands of parameters in a good ERP system.  These parameters should be set based on the way your company does business.  For example, FIFO, LIFO, or Standard should be set to account for product costs.  I have seen software fail because no one realized that parameters were different than expected, or were changed during go-live.

The CYA reason for system testing applies for consultants and/or public companies.  A team who delivers a working ERP system takes a large risk of someone coming back with complaints.  Users can always find something to complain about.  A full, well documented, system test will reduce the risk for the implementation team.  If they have tested every scenario possible, then any complaints should already be documented and signed off. 

Auditors may be allowed to review the implementation process, especially if something goes wrong because of the software.  A good system test would be enough to hand over to show that you did everything you could think of to prevent problems.  When problems occur, you should be able to point to the system testing documentation to show that something new or different has occurred to cause the issues. 

Problems that arise after the system has been in use could become very large problems.  It is much better to find them early on.  A small problem could grow into something much bigger over time.  A problem that is found after a time lag will be more difficult to find and could be more difficult to fix.  System testing should be designed to follow all your processes to a logical conclusion.  If you are using the system for accounting, then journal entries and account balances should be watched during system testing.  If the software is used to run a call center, then you need to run rollup reports containing all possible call types.

IT projects are constantly delayed and have scope cut to meet deadlines or budgets.  A user will be much more forgiving of a delay in a project than he would for bugs in the software.  A problem that should have been caught in testing will be remembered far longer than any scope issue or delay.  Users will grumble and gather to complain about the software, keeping the errors at the top of their mind.  Delays, however, will be forgotten as the software finally comes out to make their lives a little easier.

A good system test will prove that you have done your job well and completely.  You can be positive that the system meets the requirements you were given, and you have documentation to back that up.  You will be able to move on to the next phase of the ERP system, or move on to your next project with confidence.  You know that it’s a global world, and Technology makes it happen.

Have you been involved in a project where testing was shortened, or removed, to the detriment of the company?  Leave your comment below.

ERP – Follow-up Training 04/27/2012

Posted by TBoehm30 in ERP.
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I spent last week in another System Administration class.  There were 9 other people in the class with me.  Most of those 9 had taken the class at the beginning of the project, but now they understand the system so the class actually made sense.

The first time we took the class, it was like drinking from a fire hose.  We saw what the system could do, but there was no possibility that anyone walked away with the ability to fix anything immediately.  We took our notebooks filled with pre-printed material, our extra notes and went home to practice what we learned.   Hopefully, we at least got the big picture.  It would take time to learn the details.

I had taken the class previously as well.  Since I have been heavily involved in the technical issues of this project, I knew most of what we talked about during this round.  I was only there to make sure that when we talked about something that was customized, or company specific, I could lead the discussion.   Several times, I had to interrupt to say that this subject didn’t apply to us, or explain how we had already implemented a particular feature.

During the 4 day class, we covered numerous topics.  Every now and then I would glance around the room to notice how much people were paying attention.  The class was usually divided in their attention since they are the entire technical team for a company covering 4 states.  I expected some division of attention while they had to attend to other duties.

Some topics were easier to understand than others, and some people had more practical experience with some topics.  I hoped that, like me, people were paying extra attention to the few topics that they did not understand completely.  I also hoped that they listened carefully to any topics that seemed new to them.

I walked away from the class with new ideas on how to use the system to improve the flow of information at my client.  For example, the ERP system we work with has a statistical module for storing data over time.  I had created a few dashboards using real-time data, but now I can use the statistical data to show those same dashboards over time.

This is the training model that needs to be followed for a successful ERP implementation.  Like a good presentation, people need to be told what they are going to hear, then they need to hear it, then they should be told what they just heard.  The plan for a new ERP system should include a plenty of training for all users of the system.  They need at least two official training sessions.  The first one gives them the overview of what they will need to learn.  The second one goes over the same material, but this time the users understand the details.

Between the two training classes, people will need to practice with the new system.  Some of them will design and document the new procedures.  A few users will test out the limits of the system by pushing every button, clicking every link, and choosing every option.  Some of them will go back and not think about the new software until the next class.  Obviously, a good implementation plan will optimize the probability of users going back to practice with the new software.

A third class might also be a good idea to plan.  At some point in the future, users will want to see what else they can do.  They will want to go to a new phase where they wring out every improvement possible.  A class scheduled for a year after go-live is a good time for that one.  Users will have a very good idea of what they are doing, some small ideas for what they want to do, and a big appetite for new possibilities.

The good ones go like that because it’s a global world and Technology makes it happen.