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.

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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.

1 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.

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Posted by Mark Canes

Old Clothes and Accounting Software

July 6, 2011

You’ve probably had an item of clothing that seems to fit better, feel more comfortable and just “sits right” on you. Maybe it’s a sweater, a pair of jeans or a leather jacket. I’ll bet you wore it until it literally fell apart, and if it hasn’t yet fallen apart, you’ll still wear it – even if only while gardening.

Many people do the same with their accounting software. The version of the software that they implemented in 1998 worked well then, and still feels good to “wear”. So they’ll keep using it, forsaking all upgrade offers, because it’s comfortable.

But just as that old shirt will eventually unravel, or develop holes, your old accounting software will eventually “fall apart”. Assuming for the moment that the feature set is still fine, and you truly don’t need the functionality provided by newer versions (a stretch, but bear with me) – you’ll start running into problems when you try to install it on a new computer running Windows 7, or when you need assistance and no-one working for the software publisher even remembers how that old version works.

The difference, of course, is that when that item of clothing unravels, you just change into something else. But when your critical business and accounting software fails, or the computer it was running on dies, it’s not that simple to replace or upgrade.

Case in point: last week my company was asked to help a customer running a 1998 version of our software. Yes, that’s not a misprint – 1998! They tried to install it on a new computer running Windows 7, and not surprisingly the installer failed (having been written 11 years before Windows 7 existed). Turns out their only choice was to format the drive of their new computer, install Windows XP, locate and download all the device drivers and patches needed to get Windows XP running on this computer, and then re-install their 1998 software.

I suggest you don’t let this happen to you. Keep your key business software at least relatively up to date.

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Posted by Mark Canes

Data Integration across Systems

May 16, 2011

Week after week, we here at Blue Link Associates receive calls from business owners in desperate need of change to their existing software systems. The existing systems are hindering their business growth and, naturally enough, they want to do something about it. One of the common themes in these discussions is the lack of data integration across multiple systems.

Far too many business owners rely on various disparate systems to meet their needs. Initially, this may make sense – when the business is small, things are relatively simple. As the business grows, however, they soon find that many of these disparate systems have limitations when it comes to integration capabilities, and that can put a significant strain on their operations.

It is natural to want to grow your business slowly; gradually building and ramping up to coincide with sales. The problem with this approach is that by the time business starts to really take off, you may find yourself stumbling and spending money unnecessarily, on Band-Aid solutions and extra people to paper over the gaps.  Business owners would be better served by planning ahead and making some investments to help them in the long-run. This means that instead of adding workarounds to their current systems, they should implement a well-integrated solution to replace them all.

Robin Smith at Virtual Logistics Inc., a Blue Link partner, emphasized the need to have a corporate data integration strategy in a recent  blog article. The reality, Robin says, is that integration is getting more and more complex, and not having a well-defined data integration strategy is going to cost lots of money in the long run. This goes hand in hand with a corporate strategy of defining both needs and objectives to be fulfilled by the ERP package. Blue Link and Virtual Logistics both believe that a well-defined strategy allows a company to handle the ups and downs and manage growth in a cost-effective manner.

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Posted by Mark Canes

SaaS (Hosted) ERP: How Safe is Your Data?

April 17, 2011

The trend towards SaaS (software as a service) / Cloud Computing / hosted software continues, although in the ERP and Accounting software space, it’s an evolution rather than a revolution. In dealing with smaller owner-managed companies, I note that one of the ongoing reservations that business owners have about going the SaaS route is the whereabouts of their key business data.

Sometimes its the geographic location of the data – such as the concern that if data is physically located in a different company, it may be subject to laws of access different from those in your own country – the very legitimate fear that a foreign government may be able to legislate its way into your confidential business information. But more commonly, the concern relates to not having the data in their own building. and not knowing where it is.

saas-hosted-erp-safe-dataIn a typical SaaS implementation, the data is housed inside a very secure data center, usually employing multiple levels of firewall and up to date security, whereas most smaller businesses have network and server infrastructure that is much more vulnerable to hackers. Additionally, the odds of someone breaking into the average small business and stealing the actual server (or storage array) are much better than getting into a secure data center. So realistically (for the most part) your data is actually much safer and more secure in a cloud computing environment than in-house.

However, there is a question around backup strategy in the hosted environment. This post was inspired by a story I heard last week (not sure how true it is, but it could happen): a company provides SaaS using a 3rd party data center, but managing their own equipment in the data center. All is very secure and safe. However, the company’s strategy for off-site backup of client files in the data center is to back it up onto removable media and store than removable media at an employee’s house. What this means is that someone who breaks into that house, presumably less secure than a data center, might walk away with the business data of multiple companies on transportable magnetic media. (Now of course the same often applies non-hosted situations with off-site backups.)

My opinion on this is that, if your data is in a secure and credible data center, and the offsite backup plan involves multiple-encryption and / or equally secure offsite backup locations, then there is no way that your data is less secure in the hosted (SaaS) arena than it would be on your own premises – in fact the opposite is much more likely.

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Posted by Mark Canes

3 Great Sources of Business Advice

April 14, 2011

3-great-sources-business-adviceThe internet is stuffed to the point of bursting with business advice. These days, the problem is not finding advice but rather sifting through the vast amount of information available. To make it easier to find valuable information, I thought I would outline several sources of business advice related to the wholesale/distribution/retail industry. In each of their respective areas, we found these blogs to be particularly useful.

  1. 1.       WholesaleAce

WholesaleAce.com is a wholesaler with a large variety of items for sale. They have a number of great blog posts regarding retail and wholesale operations. Learn how to survive the economic downturn, buying strategy and more. This blog is not software-oriented so is useful from a non-software point of view as well.

  1. 2.       Demac Media

Demac media “designs, develops and delivers” eCommerce solutions. That being said, they have great experience in the eCommerce arena. To find some of their best posts on eCommerce you may have to dig through to some of their older posts but the advice is invaluable.

  1. 3.       Virtual Logistics

Virtual logistics specializes in data integration and their blog focuses on how to avoid some costly mistakes in this regard. Learn how to keep your data costs low and good business practices.

Honourable Mention

EzineArticles.com

EzineArticles.com is a robust repository of articles written by professionals on a variety of topics. Content that is submitted is verified that it is professional in nature and not “salesy”. Be sure to check out my Profile for articles posted there

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Posted by Mark Canes

I Am Inventory – Manage Me

February 28, 2011

Have you ever wondered what it feels like to be a piece of inventory? To travel along a conveyor belt and periodically have your bar-code scanned? Well, that was my experience last week. I repeatedly whizzed down a chute (or several), then edged forward behind other inventory items waiting to be scanned.

Explanation: I spent 4 days at a ski resort (Whiteface, near Lake Placid, NY). And please don’t misunderstand me, we had a terrific time, great skiing on the 1st 3 days in particular, and the lines were not bad at all. But it does feel kind of like living on a production line. The lift passes here (and at many resorts these days) are bar-coded – and the lift attendants scan your ticket with a handheld to ensure your pass is valid. This approach also facilitates issuing a single pass for a flexible, multi-day purchase (such as ski any 4 days during a 6 or 7 day period) – the first scan each day uses up one of the four days.

One downside of this is that it can cause bottlenecks when a lift gets busy, specially when it’s really cold and the scanners (machine and human) are affected by the temperatures, resulting in multiple attempts to scan a single skier. It seems to me that here’s one instance where RFID technology, perhaps combined with turnstiles may in fact be a more cost-effective technology, reducing the number of people involved in the process.

Has anyone out there seen RFID used to track human “inventory”?

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

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