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Getting Your ERP Right | eBook

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Getting Your ERP Right | eBook

  1. 1. Getting Your ERP Right.
  2. 2. About The Author: Jared P Shaner A student of the game who believes there are no limits to learning nor humility. I absolutely love staying on top of the emerging trends and technologies for my clients and learning from those far wiser than myself. Ohh and I’m a Makers Mark Ambassador so it’s fair to say I love me some bourbon and the fine smell of mahagony About Plum Tree The Plum Tree Group is an Interactive Marketing and Technology firm, we work to implement enterprise level eCommerce solutions leveraging Magento Commerce. @Jaredism
  3. 3. Maximizing Efficiency: Getting Your ERP Right! Enterprise Resource Planning software, or ERP, doesn’t live up to its acronym. Forget about planning—it doesn’t do much of that—and forget about resource, a throwaway term. But remember the enterprise part. This is ERP’s true ambition. It attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments’ particular needs. This software oftentimes has just as many moving parts as the corporations they help to streamline. In this ebook, we will focus on some of the less technical (but most important) concerns when trying to find success with an ERP. Table of Contents The Human Element……………………….2-3 On-Premise Vs SaaS…………………….…4-6 Top Three Mistakes Made……..........7-9 Tips For Success…………….…........10-12 ERPs That Rock!………………………….13-14 1
  4. 4. The Human Element There is a fundamental flaw in thought within most organizations that ERP system changes are primarily an ―IT Thing‖. That the tech folks hidden in the trenches of the office building are responsible for installing the new software and then ―voilà!‖ the organizations is instantly seeing 30% savings on accounting needs and 25% less time from click to ship. This is false. According to Jasmine McTigue of InformationWeek, ―ERP success is 75% about people.‖ Taming The Human Element A company must fundamentally understand a couple things about human nature within your organization in order to properly mend the technical and human resource needs required for a smooth ERP transition and long term ROI with that implementation People are resistant to change There will be business unit turf wars • Comfortable with current process • Lazy – Don’t want to spend the time to learn something new • How sales inputs an order effects how accounting works • Never underestimate people’s desire for revenge Highlight process changes that will decrease their work load Assign a product leader– As high up on org chart as possible 2
  5. 5. The Human Element The reality is that even with the support of employees and management alike, the company is still bound to face some questions and concerns throughout the process and following the technical implementation of their ERP software Common Employee Question & Management Concern “Should I be doing something differently?” This can lead to “paralysis by analysis” .. Employees are scared of messing up so they do nothing Despite being managers being creative , changes are not occurring with employees Can be handled two ways: 1) Adapt or leave 2) Customize the ERP to fit The process of vetting out potential questions and concerns should be handled by a contracted IT specialist. Yes it is going to cost some additional money to bring in specialists. However, these costs are nothing in comparison to the revenue lost by not creating an well oiled machine. 3
  6. 6. On–Site vs SaaS As if figuring out the complexities of how to get your team engaged and working efficiently on a new ERP system is not complex enough in it’s own right, companies must also consider whether having a ERP hosted in the cloud (SaaS) or having an ERP on premises is a better fit for their needs and technology resources. The Facts The market has certainly indicated that things have shifted in the battle between SaaS and on-site offerings: • In 2010 • • • • • Jared’s Orders Jared’s Other Important “Stuff” Jared’s Finances On-premise = 72 percent of the market SaaS = 9 percent of the market By 2012 • Jared’s Inventory Jared’s ERP On-premise = 58 percent of the market SaaS = 16 percent of the market SaaS ERP usage growing disproportionally among different sized companies (09’-11’) • • • <$50M = 19% $50 – 500M = 9% > $500M = 2% 4
  7. 7. On–Site vs. SaaS • Con: This choice requires the purchase of additional servers on site to keep the ERP running • Pro: The clear winner, all that is required here is an internet connection • Con: Also can require the technical resources to install ERP software on new servers purchased • Con: Can require some serious customization since it’s not in house • Pro: Due to the fact that the software is housed on your servers, you can feel free to do as you please • Con: Requires more research to make sure ERP functionality is a perfect match because you cannot rewrite the software • Con: Requires the company to manually update software for new versions • Pro: Software updates occur automatically through the cloud, this can also be considered a con as you might like the change • Pro: You have complete control over the functionality you desire • Con: Saas ERP often times have constraints on functionality changes • Pro: Can grant control to only certain users • Con: If ERP provider decides they want to change functionality of the software, companies have to go along Simplicity Flexibility Control 5
  8. 8. On–Site vs. SaaS • • Pro: Can be accessed anywhere in the world where you have internet • Con: Often times can’t be accessed remotely • Con: The reliance on internet availability. If your internet goes down, you’re in a world of hurt • Pro: Like ripping off a band-aid, you feel the high pain of the initial ERP implementation and equipment costs and then don’t have to pay subscription fees (Ideal for mostly larger companies) • Pro: Aside from possible integration costs, only cost associated is the monthly subscription costs (ideal for mostly small and medium businesses) • Accessibilit y Pro: No need for internet, everything is accessible in office Con: These subscription costs can become quite expensive as you must pay them for as long as you want your ERP and even more costly as you additional users • Con: Any additional applications that the company needs to communicate with the legacy system usually will require custom integration Cost • • Integration Final Analysis Con: Requires an on site tech specialist unless a company wants to hire a consulting company every time they wish to make changes Pro: Applications often run on company’s existing platform and therefore don’t require much integration In the end it really comes down to the company’s individual needs and size. In general, Plum Tree suggests the use of a SaaS ERP solution for all small and mid-market clients whereas experience has showed up onpremise solutions are a better fit for larger ($500M+ companies). 6
  9. 9. Top Three Mistakes Made Brought to you by Mike Zhang, EVP, RetailOps Mistake #1 Your back-office software system(s) are dictating your business workflows, not the other way around. A common misconception is that back-office and front-end [website/shopping cart] sophistication are mutually exclusive; and because the back-office is in many ways a necessary evil that’s a by-product of growth, it is okay for back-office software system(s) to dictate business workflows because that’s how it has always worked. As a result, this common mistake often leads eCommerce retailers to deploy back-office software system(s) and operational practices that actually hinder growth and limit the efficacy of sales and marketing campaigns. Make your software work for you. Your back-office software platform should facilitate a logical, efficient, process-oriented workflow specifically designed to optimize the processes that drive your company’s growth. 7
  10. 10. Top Three Mistakes Made Interview with Mike Zhang, EVP, RetailOps Mistake #2 Your back-office software system(s) are limiting your ability to affect positive change. Whether it’s due to software being antiquated, disjointed, and/or difficult to integrate with, your back-office is a mess and it feels impossible to dig yourself out of all the systems. That’s dangerous in this day and age where marketing sophistication necessitates back-office agility and flexibility. Get the RIGHT back-office software. Investing in back-office software that’s agile, integrates well with other platforms through well-documented, exposed web services, and is intuitive and easy to use (especially in large organizations with tons of users who will be using the platform on a daily basis) will allow you to affect REAL change on the fly, experiment and improve (i.e. serving up different versions of your product description/sales pitch across different sales channels), and evolve your operations to be superior to your competitors over time. 8
  11. 11. Top Three Mistakes Made Brought to you by Mike Zhang, EVP, RetailOps Mistake #3 Your data exists in silos across multiple software systems. Great marketing and sales execution, both of which are critical to growth, depend on having quick and easy access to accurate data. Your data sucks because it sits in various formats across various back-office software systems. The effort of aggregating data becomes more than a full-time job. The larger you are, the more complex data reconciliation becomes, and the harder it is to affect any change from a sales and marketing perspective, ―locking up‖ your potential for growth. Unify your back-office on ONE platform, with a central repository for all of the data that you need to run your operations and grow your sales and profits. Sell across UNLIMITED channels (multiple web stores, dozens of marketplaces, internationally, pop-up shop, brick and mortar locations, and eventbased sales). The right back-office tools can make the highly sought-after ―hockey-stick‖ growth curve a reality for your business. 9
  12. 12. Tips For Success The process of implementing a new ERP system into your workflow is always going to be a difficult and arduous process. However, Plum Tree through their experiences with many implementation scenarios have found some strong methods to avoid further compounded headache: 1 Before you even get started with the process, create a well defined business objective document and implementation strategy This can act as a roadmap as you are deciding what ERP system is correct for your company 2 Be sure to do your due diligence when it comes to choosing an implementation solution provider ERP implementations are expensive and time consumer … You don’t want to do it twice! 10
  13. 13. Tips For Success 3 Make sure the support team on the vendor side is strong enough to hand hold your team along the process following the implementation It’s a guarantee that employees will resist change, they need someone to help them through the transition and teach them 4 Involve both top management and the end users when preparing the scope for ERP implementation It’s important to properly voice and meet the needs of both the people at the top and little guys … In fact, the people at the bottom often have a better grasp on ERP needs 11
  14. 14. Tips For Success 5 Invest in training your people You just bought a Ferrari, invest in some driving lessons … You want to fully be able to take advantage of all the functionality and process 6 Avoid over customizing your ERP This can be avoided by truly vetting your vendor and their product to make sure it fits your business objectives to a tee 12
  15. 15. Plum Tree’s Two Favorite ERP’s 1) Brightpearl They are serving the lower to middlemarket niche, where the other offerings tend to be weak, and an e-tailer has to have several different solutions to power all of the functionality they need. Brightpearl is able to add tremendous value to the smaller retailers who really can’t afford the enterprise backend systems that will make their lives easier and their business more effective. At the same time, for middle-market e-tailers, they are integrated with Amazon, eBay, Magento, Shopify, Bigcommerce and ekmPowershop, and the software is able to connect to all channels at once, and even several store-fronts. The Brightpearl offering for a multi-channel retailer is tremendous, especially when factoring in cost and hassle savings of connecting all these channels to one system. 13
  16. 16. Plum Tree’s Two Favorite ERP’s 2) RetailOps RetailOps is an agile, cloud-based retail operations platform designed for highvolume eCommerce and omni-channel retailers. The RetailOps platform provides an exhaustive suite of best-inbreed tools to help retailers manage business operations, including intuitive and powerful tools for: Purchasing (POM), Catalog/Product Management and Photography (PIM), Dynamic Feed Management (DFM), Distributed Order Management (DOM), and Warehouse/Inventory Management (WMS). RetailOps easily integrates into marketplaces and shopping carts, providing a unified platform for driving sales across all sales channels. From timely shipping and accurate fulfillment, to inventory accuracy and product data perfection, RetailOps empowers retailers to achieve the operational superiority paramount to driving repeat customer purchases, in effect increasing the ROI on customer acquisition costs by upwards of 200300%. 14