I would do a gap analysis and determine what is required by your company. Then look at the software depending on what the gap analysis tells you. It could be NetSuite, Epicor, or JD Edwards. All have their strengths and weaknesses. It depends on what is the best fit for your company. One other point, this should not be an IT project.
I am the Deputy Head of SAP at a large tech services company.
I am planning on doing a global roll-out. Which is a better ERP approach for doing so: Big Bang or Phased?
Thank you for your help.
I will never do a mass rollout because you will not be able to minimize the impact or know what is the issue. I have been doing this since 1982 and a stair-step approach is always the best. It might take a little longer but the rework is more by doing a global approach.
A Big Bang approach involves implementing the entire ERP system all at once across all locations and departments, which can be more efficient and cost-effective in the long run, but also comes with a higher risk of disruptions and challenges.
A Phased approach, on the other hand, involves rolling out the ERP system in stages, starting with a pilot implementation in a specific location or department, and then gradually expanding to other areas. This approach can help minimize disruptions and allow for more targeted testing and fine-tuning, but may also be more expensive and time-consuming in the long run.
I will always prefer the Phased approach due to the lower risk.
Depends of your actual needs. If a ERP is in Revenue generation stream, you should pay attention on mentioned functionality, and evaluate by it. In case just horizontal process automation, more effective choose the rapid deployment system, more or less near in your requirements as out-of the box. From TCO perspective the license policy, support conditions and user friendly interface must be in focus.
It depends about the strategy, the size of the enterprise, legacy ERP software proprietary or opensource of the company. Whatever the solution is, I will suggest to find a solution based on the cloud. Hybrid solution is the most adequate solution to start with the public cloud. By moving their data centers to the cloud, companies may focus on their own business. Not on IT infrastructure.
In 2030, more than 90 % of data center will be in the public cloud, and maybe 95 % of ERP will be also in the public cloud. Oracle knew it, and did a massive investment on more than 20 data centers distributed around the world. SAP did it also but not massively as Oracle.
Come back to the question, the complexity of the software, implementation and license costs, cost for operation and maintenance (updates, Upgrades, monitoring, expansion data base, BI and Machine learning for a better visibility of the business) are not negligible, and the company has to face the vendor locking paradigm. What does the company must do? Fit for one ERP supplier and request more services or extra application software?
Several important things play into a complex decision like this one for a company. Among them:
- The fit of the software to the customer's style of business
- Flexibility and ease with which the solution can be extended and supported as the company grows
- Viability of the company from which you are buying the software
- Technology being used by the vendor and alignment of the same with the customer's IT and business strategy
- Cost to the customer for implementing and long-term licensing and support
- Time to implement
The Total Cost of Ownership (TCO) including training, 3rd party resources, infrastructure resources, software configuration and customization, ongoing maintenance and support to meet operational and analytical business requirements.
Security, Functionality, easy to use, business process simplicity, simple integration within business process functions.
Our practice is to start with extensive business requirements leading to a Cost/Revenue Model that calculates avoided costs or enhanced revenues via automating transactions, eliminating duplicate entry, etc.
From this we'll see ability for salespeople to look up inventory available to sell saves huge labor costs in the office maintaining inventory spreadsheets - or whatever improvements - but then we see Mobile Sales Inquiry is worth $70k a year in labor savings, Integrated Inventory Management saves $18k, Demand Management eliminating half the stockouts would cut $225k in lost sales - so now we know we're looking at ERP systems with Demand Management, Mobile Sales Inquiry, and Inventory Management - in that order - so we're going to look at the ERP packages that have helped clients save in these areas in years past.
It also sets the goals of the project - we'll cut stockouts from 26 to 13 and the average length of a stockout from 21 days to 10 days - so now, we're driving selection with measurable numbers, driving implementation with measurable numbers, driving user adoption with measurable numbers - so on.
We've found clients following this model achieve 80% of their goals nearly every time.
We also see our clients surpass breakeven on ERP investments whether it's a small, medium or large company effort. Granted we sandbag achievable goals to not over-promise but over-deliver - however, if an ERP project is justified even at low return, with only average returns we'll exceed - or have a pretty good idea why the project is falling short with an early remediation approach.
1 - Functionality 2 - Responsiveness 3 - Ease of Use 4 - Long Term Relationship with the Vendor
Supplier capable, supplier with methodology of implementation, user friendly, integration, training, human resources and key users, infrastructure, gaps, support, migration, adherence to the company business, support for BI tools, good level of problem solving and updates, adherence to current tax regulations and changes. As a programmer, the biggest mistake that i find in projects is the lack of estimates of business gaps, confusing processes and project management.
1. Matches the requirement of user
2. User Friendly
3. Well secured
4. Post Sale Support
Probably there is no single point answer to this question. Putting it simply, an ERP should be evaluated on its flexibility and ease 1) to map with the business model, 2) to adapt to business model changes as we go, and 3) to connect to third party tools especially BI, reporting, analytics/decision support.
Interfaces with third parties and legacy is a critical criteria that an ERP must support. Otherwise implementations and day to day activities can become procrastination and nightmares with project delays.
I am an SAP FICO consultant of 20+ years, so I only have a view on SAP and no other ERPs. SAP is a superb system. The really important part is the quality of the initial implementation and the implementation partner. They should be clear in their communication and focussed on solving your needs, not selling you as much product and labour time as they can. That's pretty general I know, but that is most essential.
Clear , quantifiable objective of ERP implementation is most important while evaluating ERP. Top management should be updated and agree about this objective of ERP implementation project. IT will help ERP project manager to plan ERP implementation successfully.
1 At what extent concerned ERP system has capabilities to meet business specific requirements.
2 Cost and time for implementation
3 Support and sustainability of ERP system.
4 Existing reporting capabilities
I would suggest a quite different set of issues to the functionality focus in previous posts. They have nothing to do with ERP products, features or functionality. Success will be determined by the extent to which you have your senior leadership, from the top down, on board with the initiative. They need to fully understand why the project is being undertaken, the business case behind key requirements and then back that up with sufficient budget and resources to deliver. Evaluating all of that first is the priority. You'll probably get to a shortlist of several vendors equally capable of delivering on the requirements. The next most important is speaking with the case study references from the vendor or implementation partner, and how well you get along with their team.
In evaluating an ERP should be considered several aspects. This under the assumption an ERP reediness evaluation is already performed and the result was positive.
a.- Functionality provided by the ERP should be as much as posible aligned with the target company, and this is not just in "what" the ERP does but in "how" is works. In this case the details are of most importance in order to minimize customization.
Instead of creating an "RFP Classic" work a bit more creating "detailed business cases" that represent the critical issues that has to be solved for the new ERP in this way you can evaluate much better the ERP (but also the consulting firm).
b.- Consulting Firm has proved experience in the ERP and in the industry.
c.- The form it is going ti be deployed. On premises? SAAS? HW Hosting?
Maturity of ERP advocated functionality
Alignment of customer released requirement with ERP delivery roadmap
Easy of use for 3rd party integration using latest best practices SOA/APIs
ERP online support model with Wiki capturing lesson learned and self learning materials
Full integration of release and change management using latest ITIL
Compliance with latest security and privacy practicies
Key aspects to look out for are:-
1. Can the ERP be adopted in your organization with minimal customization ? Evaluate key processes in Sales and Distribution, Materials Management, Financial Accounting and Controlling and Human Resources.
2. Evaluate Costs vs Benefits of different ERP's.
3. For the ERP selected, if level of customization is high or costs outweigh benefits, building the product may be better than buying it. One will need to evaluate In house capabilities vs Outsourcing.
The user needs to define what critical functionality they need from the ERP product and have the vendor do a live demo to show how their software addresses those needs. One size does not fit all with ERP software.
The first thing I look at is the functionality at the operational level. How does it help make direct labor more efficient so it takes less units of labor to accomplish a task.
As far as the accounting flow goes most ERP systems have a great deal of flexibility and parity in GL , AP, AR, Sales Order Processing, Purchase order Processing, Bank Rec Etc.
So the accounting is the secondary evaluation after selecting the best system at the operational level.
The cost required to support the application and its interfaces to other business systems.
The most important point is the fitment with the business processes of an organization. This can also be considered as the functionality available in the ERP aligned with the business practices of the organization. As ERP implementation is a phased approach, hence the requisite functionality should be present even if it is not be implemented in the first phase and which can be implemented subsequently at a later stage. Besides this the ERP should have a future road map and well defined ecosystem with implementation & support partners to carry the product over a long run.
Functionality available has always been #1, and always will be the most important aspect. If a system doesn't support required business processes, other factors automatically become irrelevant.
Campatibility, Security, Flexibility
The most important aspect are: 1) support from vendor 2) good training material 3)easy for integration with other systems 3) flexible for continue changes.