Problems in the Search for ERP Software: Lack of Time

February 14, 2012

problem-search-erp-software-lack-of-timeLast week we wrote a post about some problems finding the right ERP software. This week we are going to focus on common problems inherent in the search itself. Let’s begin with a story.

You, the CEO/President/VP of Operations/CFO, are extremely busy. You work for, or own, a small business and chances are you are involved in many aspects of daily operations. You understand the importance of keeping the business running smoothly but at times you are too busy fighting fires to make changes necessary to maintain efficiency. So it is a Saturday afternoon and you have found an hour of spare time between helping your children with their homework and finishing up work for a client meeting on Monday, so your turn your mind towards to finding new software. You jot down a couple of vendors, fill out forms on their sites and eventually have a brief conversation with them on the phone. Then your head starts spinning and you figure you cannot continue the process because you are too busy, so you drop all communication. You continue with the status quo, knowing all-too-well that your current software is compounding the daily problems that keep you pre-occupied.

Does this story sound familiar? It is certainly very common from our perspective.

The good news is that, as a small business, there is a way to get around how busy you are – implementing new software! The first step to making the software the search process easier is by understanding how important it really is. Think of it like this: how much help would it be to have another efficient employee at your beck-and-call? A proper software system can be at least that effective – reducing strain on current resources by eliminating manual work, fixing errors, duplicate data entry etc. Thinking of a new software system as a full-time employee can be a very motivating mindset and can help with budget setting. You can spend $35,000/year on a new employee or $30,000 once on a new system. No-brainer decision, right?

It may seem impossible to add another item to your ever-expanding list of things to do, but avoiding “I’m too busy” is crucial to eventually implementing a system (that will save you a great deal of headaches and free up a lot of time in the future). Think of it as an investment in your mental well-being as well as your business.

The 4 steps to avoiding “I’m too busy” are to:

1 Comment | Accounting, Business Technology, ERP Software | Tagged: | Permalink
Posted by Mark Canes

Hosted Software: Keeping Your Data Safe

January 17, 2012

hosted-softwre-keeping-data-safeSo you are now familiar with the differences between on-premises and hosted software solutions and you have decided that hosted software seems like a great fit for your business – yet you have concerns over the safety of your data. You are not alone in being worried, but you shouldn’t have to be.

Most hosted software solutions are very safe and very stable. Of course, I cannot speak for all the software out there; ultimately it is up to you to have an in-depth discussion with the vendor in question to determine how they keep your data safe. There are, however, a number of things you should look for in a hosted solution and the data centre used by the vendor:

Stated server up-time

The vendor in question should be comfortable stating the historical reliability of their servers. Down-time should be rare for a reliable system so a good level is somewhere north of 99% up-time.

Redundancy

In order to ensure the highest level of security possible for your data, there should be a number of fail-safes in place. These can include multiple power supplies, processors and harddrives per server and multiple data back-up locations. A bonus is the option to keep a copy of your data in-house as well.

Automatic Fail-Over

A proper hosted solution will employ back-up servers that immediately take over if one were to fail. This means that in the event of total server failure there is always another server to take over the task of running your business.

Data Centre Security

One of the biggest benefits of employing a hosted solution is that your data is often far safer than it ever would be if you kept it on-location at your place of business. A good data centre will offer multiple levels of security (BioMetric, PIN code, Access card etc.) and 24/7 monitoring to ensure the servers and data are secure. Most small/medium businesses will not have this level of security in their place of business.

Disaster Prevention

Back-up power generators should be employed in the data centre as well as state-of-the-art fire detection and suppression systems. The implied bonus with a hosted solution is that, if your entire business was to encounter a disaster such as a fire, your system would still be accessible and all your data would be safely running in the data centre.

Ultimately it is your comfort level with these new technologies that will determine whether or not a hosted solution is agreeable to you, however, data security and reliability should not be a concern as most data centres provide a far bigger safety net than most in-house implementations.

1 Comment | Business Technology, SaaS | Tagged: , | Permalink
Posted by Mark Canes

4 eCommerce Implications for Distributors

January 5, 2012

ecommerce-implications-distributorsPreviously, we wrote about some of the opportunities and concerns with eCommerce and inventory management. We are now beginning to see more and more information spring up on this topic and it is obvious that distribution for eCommerce has become extremely important – and that integrated eCommerce and ERP software may be the key.

Consumer demands for eCommerce are peaking – they are demanding faster delivery times at cheaper costs – and distributors are rushing to keep up. So, it is extremely important to ensure you, as a distributor, do whatever you can to make the process more efficient. Derek Singleton, of SoftwareAdvice.com, points out in a recent article 4 ways distributors can capitalize on eCommerce, which we have summarized below:

1.     Make products easier to pick

Ensure fastest-moving products are kept at the front and are easy to access.

2.     Minimize package space

To reduce shipping costs, it is beneficial to minimize the amount of packaging on products. This has the added benefit of also being environmentally friendly – a growing concern in the business world.

3.     Boost efficiencies in delivery routes

If you do your own delivery, a proper software system can help you plan out shipments based on quantities available and help maximize truckloads. Software also exists to integrate with ERP systems to automatically select a shipper based on cost given various criteria from your ERP software.

4.     Critically analyze how orders are shipping

Orders need to be packed on an individual basis but before being shipped there are opportunities for cost-savings. Taking a periodic look at orders ready to be shipped can allow you to identify commonalities on where they are being shipped.

In the modern business environment managers must think about ways in which they can streamline their businesses using technology. These 4 points should help.

Leave a Comment » | Accounting, Business Technology, e-commerce, Inventory Management | Tagged: | Permalink
Posted by Mark Canes

Comparing Hosted (Online) & On-Premises Software Systems

December 20, 2011

hosted-online-or-on-premises-software

We have touched upon the benefits of hosted software before, but we have yet to provide a side-by-side comparison of hosted and on-premises. The following post will serve as an overview guide to the difference between these deployment methods.

The Advantages/Disadvantages of On-Premises Software:

   Advantages    Disadvantages
  • Data is stored inside the organization
  • Increased customization and control of systems
  • No monthly subscription fees
  • No internet connection required
  • Hardware can be shared between other internal systems
  • Possibly quicker performance
  • Easier to integrate with 3rd party applications and other systems
  • Client-owned software
  • Larger initial investment
  • Hardware upgrades and maintenance required
  • In-house IT management recommended
  • Physical space required
  • Software upgrades must be handled on the client end

The Advantages/Disadvantages of Hosted (Online) Software:

   Advantages    Disadvantages
  • Reduced upfront cash outlay.
  • Infrastructure costs pushed to provider
  • No more worrying about backups.
  • Painless upgrades
  • Increases access to expert support (in lieu of an IT department)
  • Remotely accessible
  • Improved security and reliability
  • Possibly increased uptime
  • Immediate or quick access to a broad range of applications
  • Reduced control of systems
  • Data stored outside the organization
  • Internet connection required
  • Client does not own the software

As you can see from the tables above, each deployment method has its strengths and weaknesses. Although many vendors cling desperately to one method or the other, some vendors offer both hosted and on-premises. Depending on your personal preferences and type of business, one deployment method may be preferable than the other.

1 Comment | Business Technology, SaaS | Tagged: | Permalink
Posted by Mark Canes

Implementing ERP Software on a Budget

November 15, 2011

implementing-erp-software-budgetSticker shock is common when searching out an ERP system. If you are preparing to move off of an introductory system like QuickBooks to a proper ERP system you must have be prepared to make a significant investment in your business. The good news is there are several ways to reduce the up-front costs of a new system.

Implement a Hosted (Cloud) Solution

For the uninitiated, a cloud solution is a software system that is hosted on the vendor’s servers and accessed over the internet. Hosted solutions serve to eliminate the need for maintaining your own servers along with other benefits.

Cloud solutions are typically charged on a monthly basis and can be much more affordable for start-up and smaller companies. Many upfront costs, including hardware and license fees, can be saved by implementing a cloud-based system. Instead, you will be responsible only for a monthly fee that will include all costs you would otherwise need to come up with upfront. Upgrades are also included in monthly fees resulting in the elimination for significant expenditure down the road as well.

Reduce Data Migration

As part of implementing a new software system, data from the old software must be migrated (converted). The amount of data brought over, however, is up to you so cost savings can be found if some less-important data can be done away with.

Aiding in the data migration process can also save money. Typically a consultant must spend the time required to extract the data from the current system to move over to the new system. Many hours of migration can be saved if you have your staff help prepare this data (e.g. have your staff export and organize the data in an excel sheet to then be easily imported into the new system).

Ramp Up

Many software packages have add-ons that include specific functionality that may only be wish-list features. As a result, new or small companies can often run their operations very well on the basic system without these add-ons. You can then decide to implement desired features in the future at a convenient time when your budget allows for it.

Financing

As with most capital-intensive purchases, financing or payment options are often available. A deal can be worked out to reduce initial expenditure so that you can get on the proper system now to accommodate the growth you will see in the future.

Perspective

Implementing a proper software system for your business can be an expensive undertaking. It is crucial, however, to understand the importance of such an investment and to treat it like an acquisition of any other significant business asset – such as a truck, person or machine. When viewed in this way, the cost will seem much more reasonable when compared with other business assets.

1 Comment | Accounting, Business Technology, ERP Software, Implementation | Tagged: , | Permalink
Posted by Mark Canes

How to Compare ERP Software

November 14, 2011

How-to-compare-ERP-softwareEnterprise Resource Planning software (ERP) packages are complex systems that accommodate a variety of business functions such as accounting, inventory, order processing, purchasing, contact management & customer communication. Due to the complex nature of ERP systems, it can be difficult to compare them. The following are several ways you can differentiate between software offerings:

Core Components

This first measure is one of the most obvious but still warrants mention. To be considered true ERP software, the system should be able to accommodate a variety of business processes across the organization. Not all vendors abide by the same definition of ERP as it is technically defined rather loosely:

  1. The systems share a database

  2. The systems share information amongst each other

  3. Information is available in real-time

  4. The system and installation is elaborate

Therefore, it is important to compare the overall components. Does the system have accounting & inventory modules? Customer Relationship Management? Etc.

The People

Many ERP systems are similar in their functionality. Where they tend to differ more greatly is in the people behind the software. Evaluating your experience with the people behind the company is important to get a feel for how you think it will be to work with them. Have they been attentive to your needs? Have they been personal and put your business needs first? Do they understand your industry?

The Price

Another obvious, but dangerous, means of comparison is price. Certainly price is very important in making a decision but always be careful. Low pricing may be attractive but may be the result of low-balling. Higher pricing is usually a safer bet in terms of functionality and conservatism, but you may be paying more than you need to. Instead, the art is finding a balance between the two. A system that has a price that is agreeable to you, can meet your business needs, and is being realistic about costs is the appropriate choice.

Meeting Your Needs (Customization & Software Fit)

Software flexibility is a great way to compare software. Some vendors offer a “canned” piece of software that is rigid and cannot easily be adapted to your specific business. Every business has something unique about them that may require customization so it is important to find a system that is able to adapt to these unique needs.

Company History & Current Standing

Look at a company’s history to determine viability. The longer they have been around the better – keeping in mind that ERP software has only been around since 1990. Also, bigger is not always better as large companies have been known to dump software products fairly frequently, forcing upgrades or software upheavals. Instead, look at the company’s success stories, frequency of updates and be sure they are constantly adding to the system instead of winding it down. And better yet – talk to their customers.

Leave a Comment » | Business Technology, ERP Software | Tagged: | Permalink
Posted by Mark Canes

Top 5 ERP Software Implementation Mistakes

November 4, 2011

erp-software-implementation-mistakes 1. Rushing the Process

ERP software is a major investment in one’s business success. It deserves as much care and attention as any other critical business process. You may spend months evaluating software requirements, researching vendors and eventually choosing appropriate software, only to end up having the software implemented improperly. A good implementation team should always be able to make the software work for your business but just how perfectly it fits your needs depends on how much time you spend on the process. Ensure full buy-in and make the implementation a top priority so that you can benefit fully from your new software system.

2. Avoiding Necessary Expenditure

An honest software vendor will be upfront about implementation costs and should overestimate rather than underestimate costs. However, overages can occur despite all efforts to avoid it. It is important that the implementation is thorough and done properly, however. The costs of not completing a thorough implementation are much greater than the costs of a proper implementation.

3. Skimming Over Important Historical Data

When migrating data from your old system, be sure you have all the data you need. Data that was useless in your old system could very useful when pulled into a new system with proper reporting functionality, for example. Some data is safely left behind while most may be useful for reporting on historical data (example: looking at sales trends over the past 5 years by month).

4. Choosing the Wrong Team

It is as important to select a vendor for the team behind the software as much as the software itself. Ask yourself these questions of the team you will be dealing with:

  • Do they genuinely care about your success?
  • Do they offer personalized service?
  • Did they get to know you and your business well?
  • Have they helped you identify business process changes?
  • Will you be receiving canned or personalized support?

5. Not Being Thorough with Training

Ensure the appropriate amount of time is spent on training – not just to get to know the way around the system but also learning to use the specialized and highly functional components that the system was selected for. It may be best to spend time training on the more complex stuff once employees have gotten used to the basic functionality for ease of learning. However, time should be set aside for this in advance or else it may never be done.

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Posted by Mark Canes

e-commerce and Inventory Management

October 20, 2011

Following on from the discussion on e-commerce and ERP software not being islands, let’s consider a practical example that perplexes many business owners and software vendors alike.

Many online webstores are part of a business that processes wholesale orders. In fact, more and more wholesale / distribution companies are selling products online, direct to consumer. And this adds a new dimension to their inventory management: how to allocate products appropriately, even if your webstore is set up to electronically interface with your ERP Software.

Say that you have 2,110 widgets in inventory and available. A consumer who’s never purchased from you before buys 12 of them on your webstore, and pays by credit card. She’s already been “told” online that the product is available and her credit card has been charged. 30 minutes later, your biggest wholesale customer who spends half a million dollars a year with you places an order for 2,100 widgets – and it’s a “ship complete” order.

Now you have a dilemna: you can either fulfill the consumer order and hold up a much larger order for a very important customer because you’re just 2 units short, or you can “steal” 2 units from the consumer, breaking your online “promise” and having to then credit back the difference to her credit card. Neither of these is a good option.

So what’s the solution? Well, there are several ways of going about preventing this, but they all require tight integration between front and back-end software, and well thought out policies properly implemented. As an example, one approach may involve not actually processing the consumer order online, but rather doing a pre-authorization of the credit card (instead of actually processing payment) and providing an order confirmation number, setting the expectation that inventory appears to be available but will be confirmed later by email. Then, when we pick and pack orders, we allocate inventory based on our priorities, and the system automatically notifies our consumer (with apologies) that we only have 10 widgets available, but we’ve only charged her credit card for 10. Perhaps the system also applies a discount as compensation for the short-shipment, to keep the customer happy. And all this without manual intervention.

The reality is that almost every system in place in small and medium-sized companies could not do this today. Here’s one that can do so.

Leave a Comment » | Business Technology, e-commerce, ERP Software, Inventory Management | Tagged: , , | Permalink
Posted by Mark Canes

3 Steps Small & Medium Sized Businesses Can Take to Win!

September 12, 2011

Guest blog post by Bala Deshpande from Simafore.com

Spreadsheet death is a serious malaise that can affect many SMEs! We are of course referring to the “death” of data and the loss of business efficiency that can result from an over reliance on spreadsheets for data management. As SMEs face stiffer competition, effective data management becomes a key differentiator for companies. Data driven decision making is what will keep SMEs competitive in the future. How does an SME inoculate itself against such problems? It turns out to be a three-step process as described below.

As a first step, data silos need to be broken down or at least interconnected. What this means is that information owned and used by various business functions must be made seamlessly available through out the business. For example, the data that inventory management relies upon could be made available for accounting and vice versa (with proper safeguards). An ERP system which integrates accounting software and inventory software, of course makes this task easy.

three-stepsLeveraging data for increasing competitiveness does not stop here, but actually begins with a proper ERP implementation. The good news is that SMEs which have successfully set up ERP systems are now actually sitting on gold mines of information and can leap over competition easily.

Unfortunately, today less than 25% of SME executives (in the manufacturing sector) are fully aware of the possibilities to leverage the data treasures they own. Many are still under the impression that spreadsheets and canned reports constitute Business Intelligence (BI). BI projects can help with identifying Key Performance Indicators (KPI) that affect business and set up processes to measure them. BI dashboards and reports are thus the second step after ERP systems.

According to CIO magazine, BI is not designed to iterate on new scenarios or for immediate response to unanticipated questions. BI has evolved to automate the production and distribution of standardized reports that monitor pre-determined KPIs. BI traditionally stops at delivering the report to the business user and the business user typically takes the data in the report and dumps it into a spreadsheet in order to do their own analysis, in an ironic twist to this battle!

This is where Business Analytics comes in and is the third and final step. SMEs now can harness their ERP investments to wisely leverage the data they are already handling. In today’s hyper connected world, the challenge is being able to quickly respond to a change in the market. Companies should be able to quickly shift resources to where they are needed so that they don’t end up with an overstocked inventory of yesterday’s hot item. Other key areas where analytics can help SMEs are customer profiling, acquisition and retention. Ultimately, with analytics companies can achieve the efficiencies needed to compete in today’s market. The key is to know what data and analytics processes are best suited for a given business.

About our Guest Blogger:

SimaFore helps small and medium businesses deploy the right analytics for the right problems and convert data into information assets. Their vision is to help businesses remove the complexity involved in applying and deploying analytics. To make analytics accessible and affordable to anyone who has data.

Bala Deshpande’s has 20 years of experience in using analytical techniques. He founded SimaFore after 8 years at Ford Motor Co, analyzing data from automobile crash tests and helping to build safer cars. More recently he has been instrumental in promoting information theory based analytical techniques for a range of applications from performance measurement in organizations to predicting patient stability in ICUs.

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Posted by Mark Canes

Magic Wands, Barcodes and Inventory Management

August 3, 2011

Turns out barcodes have been around at least since I was born (and that’s a very long time ago). In my teens I recall laughing at MAD Magazine’s satirical comments on it’s own cover when it was forced to start using UPC codes.

inventory-management-barcodesAnd yet so many of us still don’t understand them. Despite what some may think, using barcodes and scanners is NOT analogous to Hermione Granger brandishing her wand. There is no magic here – and the assumption that scanning barcodes will instantly resolve all inventory management issues in an organization will only lead to costly mistakes.

Judicious use of the appropriate barcode scanners in a properly thought out system can hugely improve accuracy and productivity. But the key words in that last sentence are “appropriate” and “system”. While scanning products ate the grocery store checkout is a commonplace activity, in a warehouse there are many more variables, different points in a process at which you could potentially scan, and huge disparities in the cost of scanning equipment that may be used.

That’s why I’d be very nervous of a supplier who proposes a “barcode solution” for your warehouse. What you need is a comprehensive inventory management solution that can use barcode scanning in different ways to optimize your carefully designed processes.

Leave a Comment » | Business Technology, ERP Software, Inventory Management | Permalink
Posted by Mark Canes

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