Thought so! You are reading this article because:
A) Your company is running an enterprise resource planning (ERP) package that is in desperate need of an upgrade;
B) Your company has numerous ERP systems installed across your far-flung enterprise and realizes the business advantage of migrating to a single integrated applications suite;
C) Your company's hodgepodge of PC and minicomputer-based systems has run out of steam and top management has tapped you to begin shopping for an ERP system (gasp!).
You're in luck. This tutorial will provide online tools and resources to help accelerate the ERP information gathering and decision-making process. It's not intended as an end-all, be-all, but more of a high-level overview of the conceptual and technical hurdles you must overcome to pick the most appropriate package, which will likely increase the odds of a successful deployment and meaningful ROI over a reasonable timeframe. (Click here for additional resources.)
One caveat: As you begin your research, you're bound to be subsumed with technology and business imperatives that on the surface appear insurmountable. Don't despair: take them one at a time. Before working yourself into a tizzy -- and suffering severe brain and stomach cramps (save the Tums for your vendor due-diligence) -- you'll need to get a handle on a couple of critical starting points. According to MA's resident ERP expert, Joshua Greenbaum, you must:
- Wrap your mind around the critical business issues your organization seeks to overcome by adopting new enterprise software. Assess your business process strengths and weakness -- then examine those application packages that help to enable more productive and efficient ways of conducting business. Many manufacturing companies still do this backwards. Remember: You can't buy technology for technology's sake -- that's so last millennium!
- Make sure of stakeholder buy-in across the enterprise -- from the plant floor to the top floor and all the key functional departments in between. This not only encompasses documenting functional intra-enterprise as well as extra-enterprise requirements, but getting down to the nitty-gritty and prototyping everything from application architecture (data model and flow) through the look and feel of business-critical screens and forms.
- Conduct an extensive integrator capabilities assessment. This is particularly critical for small- to-medium-size companies that may not be purchasing directly from an ERP vendor. Some integrators have expertise in a variety of ERP platforms; others operate as an arm's length extension of the vendor's sales and/or implementation teams. And don't forget about training -- that's a critical requirement that many manufacturers often overlook. Remember: Your back office workers will need different training mechanisms and materials than production managers who may be using your new ERP on the plant floor -- or third-parties checking billing, inventory or planning data.
- Data integration and migration is critical to successful implementations. Know the technical hazards and costs of moving data from proprietary file formats or even quasi-open environments before you lock into a new ERP system. That goes double for companies that still house key financial, HR or production information in manila files organized by haphazard stacks of cardboard boxes. Garbage in, garbage out is a major gating factor to ERP implementation success. Remember: the success of any ERP implementation (i.e., the creation of an applications architecture to manage run- the-business data and generate actionable analytical reports) is only as good as the data put into the system.
- Once these pre-requisites are covered, then -- and only then -- you can begin to explore the technical speeds and feeds of a new ERP software suite. If speaking to key constituents in the organization, including your top technical honcho as well as third-party experts, doesn't arm you with enough insights to conduct a feature/functionality bake-off, then the project was never meant to succeed anyway.
One more word to the wise from Greenbaum: Picking a package because the vendor is offering a VIP suite at an upcoming user conference -- or guest passes to a major PGA event (with the not-so-subtle suggestion of private putting lessons from the course pro) -- is not going to help your career or your company's chances of finding and implementing the right ERP package.
Get the Party Started
OK, say you've gotten this far. There are lots of tools available to assess various ERP packages. A comprehensive directory of all the major suppliers, listing key technical features, vertical market strengths and contact information, is a great place to start the journey. From there, you'll need an effective way of comparing and contrasting the pluses and minuses of each package against the criteria most important to your organization and its business goals.
Try the Managing Automation ERP directory. Product categories are broken down into broad subcategories (Human Resources, Enterprise Asset Management, Supply Chain Management, Financials, Customer Relationship Management). You can even delve deeper into the subcategories (e.g., clicking on Financials will yield specific functional attributes such as Accounts Payable, General Ledger, Fixed Assets, Financial Reporting & Analytics, Cost Accounting & Management, Cash Management, Budgeting and Accounts Receivable & Credit Management).
Say you are a medium-size consumer products manufacturer that runs a potpourri of PC-based and AS/400 applications that share data only under extreme duress -- rekeyed spreadsheets moved between departments via "Sneakernet". You're looking to leapfrog the competition by adopting an integrated applications architecture that handles all aspects of financial accounting, human resources, production planning and materials management.
You think you want it built on a Web services architecture for ease of integration with third-party applications and data feeds, but you really don't know what that means (only what your CTO tells you). You have a distributed operation and want internal users and business partners in various locations scattered across North America and Asia to have access to this data housed in a single, unified database -- or at least to have local copies of the same data that can be easily shared and replicated across the organization for daily, weekly, monthly roll-ups.
Since we're talking mid-market, let's start by using our ManagingSMB ERP directory. Pick the categories and sub-categories you want to explore. Click on the "add to my saved list" link of the companies and products you want to explore (for some products it will be found on the top-level of the directory; for others it can be found in the tool box that accompanies each listing, which displays core product capabilities, platforms supported and markets served by the vendor).
Once you've create a short list, you can start comparing products. Using our comparison tool, you can see how the products stack up on a variety of attributes. Each table in the comparison is divided into cells that show the percentage of features each compared product fully or conditionally supports in a certain subcategory -- based on information provided by the vendor.
If you are more definitive about what features and functions your organization requires, you can create a custom comparison to specify the precise features and functions you desire. Remember, you must be a site member to utilize this tool.
Lastly, you might want to check to see if your vendor has been validated by an independent consultant hired by MA to verify all feature and functionality claims. Here is what one of our MA Validated reports looks like.
Remember, if you can't find the quintessential ERP suite for your organization, you're not alone: many before you have died trying (metaphorically speaking)! In the meantime, get the Tums ready.