Ibm 1310 Integrated Erp Guide

7/30/2019 Ibm 1310 Integrated Erp Guide

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Integrated ERP Guide:Expert answers to your most frequently asked questions

In collaboration with Tribridge and Aberdeen Group


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One: Prepping or ERP Enhancement

Introduction

Two: ERP Implementation

Four: Change Management& Communications

Three: Growth & Global Considerations

Next Steps

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As companies grow, they get weighed down by

a lot of information siloed in individual systems

nance, accounting, manufacturing, sales and

service, and customer relationship management

(CRM) among them. Getting these data sets talking

with one another effectively is key to operating with

the speed, efciency and individual responsiveness

that customers demand in todays 24/7, always-oneconomy.

Enterprise resource planning (ERP) systems have been

developed to accomplish precisely this: to automate,

manage and integrate the ow of information from

multiple business functions both internal and

external information such as customer and marketing

data in real time.

Many companies are realizing that exible ERP

solutions enable them, for example, to align theirdata on purchase orders, inventory receipts and

costs. They can track orders from acceptance to

fulllment and revenue from invoice through receipt

of payment. And all of this provides valuable insights

to assist sales forecasting and inventory optimization.

Introduction

But how can you achieve the benets of ERP if you are a small tomidsize business (SMB) lacking the capital human andnancial of a larger company?

To nd out, we spoke to three industry experts on ERP transformation in SMBs.

Nick Castellina is a Research Analyst in Aberdeen Groups Enterprise Applicationspractice, who focuses on cloud-based, software-as-a-service models for ERP and ERP

implementation in SMBs.

Luis Gallardo is an Associate Partner for IBM Global Services in the midmarket group

of Global Business Services, with over 14 years of experience consulting in a breadth of

industries from consumer products to life sciences.

Kathy Killingsworth has more than 25 years of consulting and private industry

experience, and oversees the strategic direction of Tribridges national MicrosoftDynamics AX practice, which includes on-premise, hosted and cloud-based nancial and

ERP solutions.

We asked them the questions that midsize businesses most frequently ask about ERP. This guide

summarizes their advice to us.
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Q.What business problems are youable to solve with an integratedERP solution?Nick Castellina: The major benets of enterprise

resource planning are its ability to enable

standardization, visibility, and collaboration. Ithelps to standardize best practices and introduce

formalized methodologies across the organization.

Luis Gallardo: It improves the integration of

operations with administrative functions and,

depending upon the needs of the organization, can

be used to enhance operational visibility, nancial

control, or integration of the supply chain.

Nick Castellina: ERP means real-time visibility

to decision makers, so they can better plan and

execute business strategy. And it helps to connect

employees across the organization, no matter

where they are, in order to improve collaboration.

For example, manufacturing operations to

customer service and delivery.

One: Prepping or ERP Enhancement

ERP helps to standardizebest practices and introduce

ormalized methodologies acrossthe organization

It can enhance operational

visibility, fnancial control, orintegration o the supply chain.


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Q.How do you know if you need anERP upgrade?Kathy Killingsworth: These issues can be

regarded as symptoms of more fundamental

problems in IT.

Are you having problems getting access toinformation about your business?

Is it taking too long to close your books at the

end of the month?

Are your customers nding it hard to get

information about their orders?

Do you have inventory management issues?

Does accounting take too long to do basic

processes?

Do you have outdated processes

manual data aggregation or paper-baseddocumentation?

Additional questions you should be asking and

answering are:

Are your IT resources too time consuming or

costly?

Do you have disparate, stand-alone software

systems?

Do you have a number of different software

applications for different purposes?

Is your companys growth complicated or

hindered by software integration issues?

If your organization is facing challenges in any

of these areas, it might benet from a targeted

enhancement to your current ERP implementation.?


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Q.What specic business problemsare you are able to solve with anintegrated ERP solution?

Luis Gallardo: This is a company-by-company and

even a business-unit-by-business-unit question. It

really depends on the companys circumstances:where the most pain can be alleviated or the

most business benet can be attained. It could

be a question of enhancing business visibility, by

improving theintegration of operations with the

administrative functions; or it could be a matter

ofachieving operational efciency and nancial

control orintegrating of the supply chain. The key

is determining your needs before you implement

the ERP solution, and knowing your objectives and

goals going into it.
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Q.So, what questions should webe asking ourselves as we beginthinking about upgrading our ERPcapabilities?

Nick Castellina: You should start by looking

internally.

Kathy Killingsworth: Come up with an internal

set of questions, based upon what makes you

unique and innovative as a company.

Luis Gallardo: Focus on your culture, what is

important to you in terms of value, current pains

and needs. This will provide core values and

needs based set of questions.

Kathy Killingsworth: Next, put your core valuesto one side and objectively evaluate how the

weaknesses in your companys culture might

impact this ERP project. First and foremost,

is your company exible enough to allow the

change required to accommodate a new way of

doing things? Are your stakeholders prepared

to reengineer their processes to obtain better

results?

Who are the key decision makers in your

company who need to buy into a new

system in order to make it successful? Despite

what they say, people are not always open to

new ways of doing business and managing

change.

What is the message that will resonate with

internal concerns to help gain support for a

new system?

Are people afraid of losing their jobs?

Do you have a project manager who has

enough experience within your company to

manage this project for you?

Should you hire someone to act as your

project manager for this critical initiative?

By asking these questions rst, youll be stress-

testing your companys culture for its ability to

adapt to technological changes.

Luis Gallardo: Next, you can move to the tactical

aspects of ERP: nance, scope of the project and

project management.

Nick Castellina: And you will need to answer a

new set of questions, such as:

What can you afford? What can you support?

Which processes are absolutely necessary for

support?

Who will be using the solution?

Are there any technologies that need to be

integrated?

Is there agreement on the requirements and

budget necessary to implement the solution

successfully?

Oftentimes, successful organizations employ a

third party to help with this process. They can help

devise a list of essential criteria.

TIP!

Strong project management correlates very strongly with a successful ERP

implementation.An ERP implementation should be viewed not just as an IT

solution, but also as a business solution that will transform your organization,

helping it to become more effective and efcient.


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Q.How do you align ERP/CRMimplementation goals withbusiness strategy?

Kathy Killingsworth: The alignment of your

organizations ERP implementation goals with your

business strategy should be accomplished duringthe planning phase of an enterprise project. The

key is to clearly dene your business objectives and

related expectations for the project. This process

typically involves questions in two areas: (1) what is

the desired impact of the project on the business;

and (2) how will the success of the project be

measured?

Answers to the rst question focus on strategic

goals such as reducing total service or product

cost, increasing market share and improving

customer penetration and customer satisfaction.

Answers to the second question typically address

things like on-time and on-budget performance,

implementation of desired new capabilities and

possibly achievement of measurable business

improvements, such as reduced transaction costs

and reduced complexity. Clearly articulating these

goals and expectations will give your team context

and direction so that design decisions can bealigned with, and support, overarching goals.

Luis Gallardo: A good business partner can

help you break down the overall strategy into

its key points and then help you map those to

opportunities within the business and ultimately

to the right ERP solution. Each opportunity will

need to be prioritized by the business value it can

provide to ensure that a proper business case for it

can be made.

Kathy Killingsworth: Looking ahead, your ERP

implementation should be able to adapt to

changes in your business as your company grows.

It should be exible, low maintenance and scalable,

and it should enable end users to readily obtain

the information they need to perform their tasks.

To this end, you will need to determine if your

current staff is trained in the new ERP software. If

not, do you need to consider hiring new technicalexperts? You will also want to consider whether

the company that developed and owns the ERP

package is sufciently innovative and continually

enhancing the software.

Beyond these basics, think about the

improvements you expect from a new ERP system.

For example, if you are focused on product

costing, how will this be handled by the various

ERP solutions? Can actual costs be tracked andcompared to standard or estimated costs? Or, if

you have to accommodate regulatory compliance

business requirements, will the ERP system meet

those needs?

Looking ahead, your ERPimplementation should be

able to adapt to changesin your business as yourcompany grows.


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Q.ERP as Software as a Service (SaaS):Is it now a viable marketplacesolution for SMBs?

Luis Gallardo: The answer to this is undoubtedly

yes.

Kathy Killingsworth: The transformational

element behind cloud computing is that

businesses are now empowered to stop worrying

about what computing power is required for the

tools they need, and instead can focus on building

the right tools to meet business demands.

Nick Castellina: SaaS solutions can be

implemented more quickly, require fewer internal

IT resources, and can be paid for on a month-to-

month basis, rather than tying up a large amountof capital in an up-front expenditure. In addition

to being great for SMBs, this approach can

also be applied by larger companies to a multi

tiered ERP strategy, enabling them to get new

subsidiaries up and running as quickly as possible.

Kathy Killingsworth: Take care, however:

Although your SaaS ERP solution may be in the

cloud, its vital to keep your feet on the ground

when selecting a cloud provider. Because cloud-

based ERP systems are important and complex,

they should be single tenant. A single-tenant

environment allows integration, proper security,

development and the ability to have a segmentedsecurity footprint.

Get all of the information Ask about

risk mitigation, compliance, operational

efciencies, data security and backup,

migration of nancial data, integration with

your other applications, and the ability to run

ERP in the cloud.

Understand the differences in deployments

Do your homework to get the full picture of

on-premise, pure cloud and hybrid solutions,

and the best business situations for each.

Crunch the numbers Accurately compare

total cost of ownership when evaluating

cloud versus on-premise ERP and accounting

solutions.

All that being said, the increased scalability,

faster deployments, reduced dependence on IT,

minimized initial investment and rich integration

capabilities of ERP via SaaS are all very attractive

reasons for midsize businesses to strongly

consider the cloud.

Two: ERP Implementation

SaaS solutions canbe implementedmore quickly,require ewerinternal IT

resources, and canbe paid or on amonth-to-monthbasis

TIP!

Many cloud providers claim

to be single tenant, but

in fact are sharing terminal

servers or database servers

with other customers. Make sure you ask.


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Q.Traditional or cloudimplementation?Previously, we looked at some of the advantages

and challenges of a SaaS ERP implementation.

Now lets step back and take a look at how a cloud

implementation differs from a traditional onsite

approach.

Kathy Killingsworth: Traditional implementation of

an ERP system means on-premise deployment. This

type of implementation includes the procurement

of additional hardware, software, data centers and

IT resources. While many organizations still require

on-premise implementations for a variety of reasons,

increasing numbers of midsize businesses are

choosing to deploy their ERP systems in the cloud.

With cloud implementations, there is no hardware orsoftware to purchase. You simply pay one monthly

fee based on the number of users who access the

system.

There are two types of cloud ERP deployments:

public and private. Public clouds are standardized

and built for massive scale. Public cloud solutions

allow large numbers of customers to share database

servers and application code they are great

(nancially) for the provider, but not particularly

great for you (the customer). Private clouds are

customizable to the needs of an organization.

They enable you to leverage existing IT resourcesand offer additional layers of security, as well as

increased redundancy through access to a co-

location model for data storage.

Private clouds offer:

Reliability and fault-tolerance The hosting

partner is able to host secure, reliable

applications.

No patching or maintenance With less

hardware to manage and maintain, you can

focus on what is important.

The ability to get online fast Private clouds

enables you to quickly deploy both a business

site and business-critical software.

Enhanced control You have greatly enhanced,

often full control over your systems and data.


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Q.How can you ensure your ERPimplementation is a success?Kathy Killingsworth: Executive ownership and

regular reinforcement of the importance of a

successful ERP installation should be emphasized.

Stakeholder engagement and executive sponsorscommitment are critical. The right balance

of executive involvement in an engagement

motivates and, frankly, pushes the team to get the

job done and to do so with a high level of quality.

From a stakeholder aspect, ERP implementations

simply arent successful without a good deal

of involvement from the projects various

participants. This does not mean there must be

full-time engagement from everyone involved,

which would be especially hard for SMBs, but itdoes mean the team must focus on the project

when it matters.

You should conduct, or participate in, a formal

project kick-off meeting with your consulting

team so that you can outline project

objectives, key responsibilities and time-lines.

Communicate a clear roadmap of the

tasks and activities by phase as the project

progresses.

Provide a checkpoint of go or no go after

the design phase and signoff, and prior to

go live implementation. Make sure that your employees take

accountability for their functions of the new

ERP system. A train the trainer approach

works best by function. Not designating

functions can lead to additional needs

and costs for training as the project is

implemented.

Dening a method ofimplementation

Nick Castellina: How you implement your

enterprise resource planning solution depends on

your companys size and on what type of legacy

systems your organization is currently using.

Some companies use an ERP implementation as

an opportunity to restructure the organization.

Others try to implement an ERP based on existing

needs. Whatever approach you take, the method

of implementation should be aligned with your

organizations overall goals.

Whatever approach you take, the methodo implementation should be aligned withyour organizations overall goals.

Stakeholder engagement and executive

sponsors commitment are critical.


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Q.Big Bang or phased rollout?Nick Castellina: Phased rollouts can be quitesuccessful, but organizations should also take

a look at best practices that can be taken from

the ERP vendor or a third-party service; these

practices will help to improve the way the

business is run. Also, rapid implementationpackages may be a good t for some

organizations.

Luis Gallardo: In light of todays economy,

many companies are breaking big bang

implementations into small chunks. The challenge

is to design the larger picture rst. A phased

rollout should always have the end goals in mind

and be aligned with the overarching business

strategy.


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Q.What about a remote ERPimplementation?Luis Gallardo: There is always a correct balance

in life and that applies to ERP implementations as

well.

Nick Castellina: It is certainly possible to doremote ERP implementations, and organizations

have had success with both remote and in-house

implementations.

Luis Gallardo: There are aspects to a project

that are better handled remotely if managed

appropriately while others should not be. If

cost is a big factor, then a larger push to remote

implementation may be appropriate. However,

never underestimate the power of a face-to-faceconversation to truly communicate effectively.

Whether done remotely or in-house, good social

collaboration across the organization is key to any

successful ERP solution.

Companies can get ahead by implementingsocial tools within their ERP.


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Nick Castellina: Best-in-class organizations are

63% more likely than all others to have an ERP

solution that can quickly and easily adapt to

business change. This adaptability is essential

because as the backbone of a business, ERP

should reect the business exactly. Organizations

that aspire to grow must choose an ERP solution

that can accommodate business change.

Luis Gallardo: This is commonly referred to as

scalability and it is a very important factor

in evaluating ERP solutions. Most of the tier

1 solutions (SAP, Oracle, Microsoft Dynamics

AX, etc.) have strong capabilities to grow. The

larger challenge is nding the right system

implementer to help you manage this growth

while also managing the functionality required

to scale and the cost associated with activating

new functionality or expanding to new regions or

businesses.

Three: Growth & Global Considerations

Best-in-class organizations are63%more likely than all othersto have an ERP solution thatcan quickly and easily adapt tobusiness change.

Scalability...it is a very

important actor in evaluating ERPsolutions


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Q.What if you anticipatetrans-national operations?Kathy Killingsworth: If your organization is

considering global expansion or has existing

operations around the world, you should consider

the impact of foreign currencies and languages

on nancial and accounting management when

exploring a new ERP system. Most countries have

unique requirements when it comes to their local

regulatory issues, tax rules and statutory reporting

standards. Conguring ERP software to comply

with local regulations can be difcult and time

consuming. In addition, exchange rates constantly

uctuate; therefore, exchange rate adjustments

are necessary for correct periodic accounting. If

converted foreign amounts are not periodically

adjusted to reect the current rates, nancial

reports can be misleading.

Luis Gallardo: Regarding foreign currency: if

you are U.S.-based company, you need to be

concerned about FASB 52, which focuses on

foreign currency translation, and compliance with

International Financial Reporting Standards (IFRS).

Languages and the implementation of native

language interfaces for different countries are also

keys to effectively and properly using the system.

You dont want language barriers to prevent

people from efciently utilizing the system.

Foreign currencies and languages are just some of

the global issues that transnational corporations

need to consider. Other global issues include

legal and statutory reporting in other countries

and compliance with local labor laws and

processes.

Kathy Killingsworth: Top-tier solutions such as

Microsoft Dynamics AX provide foreign-currency

conversion, localization compliance and language

conversion support for several countries aroundthe world. Localized versions of top-tier solutions

enable foreign subsidiaries to easily address

local legal and statutory reporting requirements,

while still conforming to internal corporate

consolidation and reporting standards.


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Nick Castellina: ERP implementations require

capabilities similar to those generally required

for the management of any project. There must

be a project manager who identies a team with

the skill sets to ensure a smooth implementation.

Scope creep must be managed. But really

this all stems from a project plan that is well

thought out from clear service providers prior toimplementation and communication with the ERP

vendor as well as any third-party.

Luis Gallardo: The most important

obstacle,however, is to streamline/eliminate the

basic human inclination to resist change. There

are many different models and approaches

for helping employees embrace change, and

the issue can be addressed through a change

management program within an implementation

project. There are ways to motivate people and a

good book to read is Who Moved My Cheese by

Spencer Johnson.

You need to send relevant communications to

various stakeholders at the right time through

mediums that are effective for them. This is more

of an art than a science, but system integrators

(companies that assist with implementations, such

as IBM) have effective change communication

programs with methods, accelerators, templates,

examples, etc., that assist in this area.

Four: Change Management & Communications


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Now that youve heard from the experts, you

should have a better sense of what an enterprise

resource management implementation or

enhancement to your existing ERP solution

would be like. The decision whether to move

forward is, of course, for you and your colleagues

to make. But we recognize that you may have any

number of further questions and concerns thatyou would like to address. Our advice is to reach

out to a reputable ERP vendor or implementation

service provider (like IBM or another experienced

provider that you can trust) to talk through these

issues and gain a better sense of where your

organization stands vis--vis a new ERP solution.

And when the time is right, move ahead.

Next StepsFor more informationTo learn more about IBM ERP solutions for the midmarket, please contact anIBM marketing representative or IBM Business Partner, or visit the following web site:http://www.ibm.com/midmarket/us/en/erpconsulting.html

Additional Resources:

ERP infographic:

Getting the Most from your ERP

Analyst Blog:

Take an Integrated Approach to ERP

Analyst Blog:

Let the Chef Make Your Selection for you: Utilizing Business Partners

Analyst Blog:

Creating a Winning Team

Aberdeen eBook:

A Guide for Successful ERP Strategy in the Midmarket: Selection, Services, and Integration.

Aberdeen eBook:

Using Services to Support a New Generation of ERP

Share on LinkedIn Connect with @MidmarketIBM
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Nick Castellina is a Research Analyst in Aberdeen

Groups Enterprise Applications practice. Nick

joined Aberdeen in 2010. His primary researchfocuses on the use of ERP, SaaS, or cloud model,

as well as ERP strategies in small and medium-

sized businesses. His enterprise applications

research explores how ERP is used differently

across industries, and how it can apply to all

roles within the organization. Additionally,

Nick leads a yearly study on nancial planning,

budgeting, and forecasting. Other topics that he

covers include project management, enterprise

performance management, professional servicesautomation, and the ofce of the CFO. In addition

to these activities, Nick plays a major part in the

development of the Aberdeen Business Review.

Luis Gallardo is an Associate Partner for IBM

Global Services in the Midmarket group of the

Global Business Services organization. In nearly 14years his consulting career path has covered multiple

industries, with the core of his work in distribution

industries with considerable exposure in life sciences,

consumer products, food & beverage, clean (green)

technology, electronics, insurance, entertainment, retail,

manufacturing and government. Luiss broad project

expertise is centered around the ERP business software

applications area, specically focusing on delivery

and business development roles for all aspects of ERP

implementations, built upon a solid nancial expertise anancial educational background and process expertise.

His consulting knowledge extends into several different

disciplines, including software selection, business case

development, business transformation and application

management services .

Kathy Killingsworth has more than 25 years

of consulting and private industry experience,

including IT strategy and business processmanagement, systems and software development,

packaged systems implementation projects and

quality assurance. Kathy oversees the strategic

direction of Tribridges national Microsoft

Dynamics AX practice, which includes on-

premise, hosted and cloud-based nancial and

ERP solutions. Major areas of focus for Kathy

include growing the rms AX business, continually

improving the overall solutions delivery

experience, ensuring that the solutions and salesprocess meets the diverse, industry-specic needs

of Tribridge clients, and developing new ways to

enhance customer service. Under her leadership,

Tribridge has been acknowledged with numerous

customer excellence awards for innovative ERP

implementations.

www.tribridge.com/erp

Full Profle o Industry Experts
http://www.tribridge.com/erphttp://www.tribridge.com/erp


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