Call 0844 800 6610

YOU ARE HERE: Home›ERP Software › Articles

Evaluation Centre is the UK’s No. 1 guide to software, services and technology – dedicated to saving you time and money in selecting your next software solution. This Centre provides independent advice on ERP software. Simply search and select from our list of software vendors and stay up-to-date with our growing range of white papers, case studies and advice articles by ERP software experts. REGISTER NOW to get help with your project

ERP Software

Successful ERP selection: Mark Crook, Harriman Green (March 2012)

Let’s first of all define what we mean by an ERP, or enterprise resource planning, system. Its origins lie in the manufacturing industries where initially we had MRP or ‘material requirements planning’ systems. These software applications enabled complex production plans to be put together, ensuring that all the component parts could be made or purchased then assembled into finished products in the quickest time with a minimum of excess inventory. Then came MRPII or ‘manufacturing resource planning two’ which took into account not only materials, but resources such as labour, machines, subcontractors, transport, warehousing, etc and compared demand against capacity so that a production plan could be continuously executed and updated.

ERP on a budget: David Morgan, MLG Management Consultants (December 2011)

There is a general consensus that implementing ERP is an expensive activity. Therefore, IT managers considering such a project are always interested in ways in which such a project can be managed on a tighter budget. However, before considering cutting costs, IT managers need to recognise the elements within the overall cost of such a project. Running through the sequence of implementation, these are: 1. The cost of selection. Exercises to select a package may require only internal resources, but companies may also seek specialist outside help. Either way, there is a cost and this cost will vary with the approach adopted. 2. Buying the software. The obvious third-party expenditure is the cost of the system – which may be a straightforward purchase or some form of leasing/rental arrangement. As with all procurement, IT hopes to get the best deal that it can.

Selecting your ERP partner: S Arnesen & S McKie, SoftResources (November 2011)

One of the most important, yet overlooked, activities in the ERP software selection process is the choice of implementation partner. In fact, the ultimate success of your project depends on the ability of the implementation team to work with you to configure the software to meet your needs. This means your choice of implementation partner should be a key consideration in the whole process. To illustrate this point, a number of years ago we were working with a large company that chose an enterprise software system. Its software selection criteria were sound and it picked a good solution for the company, but it decided to forgo finding a separate implementation partner in order to move forward quickly with the software supplier’s inhouse implementation team. It ended up having a difficult implementation. Why? Because the vendor team could configure the software from a technical standpoint, but did not have experience in the client’s industry to assist with best practices and process optimisation.

Trusting your partner: Simon Lindley, Sourcing Advisory (October 2011)

Implementing an ERP system can be difficult, disruptive and high-risk. Having an experienced implementation partner on board – to provide a proven process, to share best practice and offer technical resources – is therefore a necessity for many organisations. However, even with the best partner on board, your implementation may still prove problematic unless you have the right governance and supplier management processes in place. This article looks at how you can get the best out of your implementation partner. Sometimes in ERP projects the best advice can be the most difficult to give – such as challenging the scope/scale/timing/benefits/approach of a proposed implementation, or recommending a major unwanted change. Unfortunately there are situations where even very capable implementation partners may either fail to give such advice or will be overly cautious in how it is presented.

The EA way to ERP: Sarah Smith, Enterprise Architecture Solutions (September 11)

Introducing or changing an organisation’s ERP system is a major, long-term initiative that demands significant planning, resourcing...and money. Regardless of the reason for the project – whether it’s your first foray into ERP or a consolidation exercise due to a merger or acquisition – there will be a huge number of important decisions to be made along the ERP journey. To effectively manage the risk associated with ERP, you need to provide the right people with the information they need, at the time they need, to enable them to make decisions based on the facts. In reality, this is easier said than done, so this article highlights some ways you can move towards making this happen. First, it is crucial to understand why your organisation is embarking on this ERP journey and what it wants to get out of it.

Life beyond the DMZ: Johny Morris, Iergo (August 2011)

At long last, after many false starts, you finally have the go-ahead to buy and install a new wall-to-wall ERP package to replace the ageing plethora of legacy applications that have been running your business for what seems like forever. Your timeline for implementation may be measured in years; it will certainly be in months. And somewhere down at the end there will be data migration or perhaps data integration – just preceding go-live and hedged about with dress rehearsals, dummy loads and testing. It might not seem much from this end of the telescope – what with project mobilisation, formal product selection, system integrator selection, project scoping and a myriad of other details. It is, however, the sting in the tail of many project implementations; the one hurdle where many projects stall on their way to success.

Risky business: Leigh Wilson, Gradient Consulting (July 2011)

Manufacturers increase their exposure to risk when taking on new projects. Because each bid wagers immediate costs against future revenues, and each project demands investment in manufacturing and back-office resources, there is always the risk that a new project could in fact lead to a loss. Industrial machinery manufacturers that sell one-off, high-capital investment items are a great example of this balancing act. Although a single new project could increase revenue exponentially, the manufacturer must look beyond headline figures and assess the impact of the project on the bottom line. Likewise, manufacturers in automotive, high-tech and metal fabrication sectors that do not sell standard catalogue items, but rather manufacture components to specification, can have fortunes made on the ability to profitably fulfil new contracts. But they also face ruin if the costs of that new business go unchecked.

The world at your feet: Laura Coles, Invenio (June 2011)

With the pace of economic expansion in the emerging economies providing significant growth opportunities for British companies, Prime Minister David Cameron took the unusual step of leading a trade mission to India within just a few months of taking office. Although this was not a trip one would normally associate with a politician wanting to establish a presence on a world stage, the rationale was clear. As Britain struggles to emerge from recession, a new research report from the Asian Development Bank predicts that India and six other Asian economies will account for some 45% of global GDP by 2050, with “Asia’s rise led by China, India, Indonesia, Japan, the Republic of Korea, Malaysia and Thailand”. Lord Green, the trade and investment minister, highlighted the strategic importance that the Government has placed on strengthening the UK’s ties with India – a country that has seen its GDP grow at more than 7.3% and is widely expected to become the world’s fourth largest economy by 2020.

New era for ERP: Simon Holloway, Bloor Research (May 2011)

Business organisations are emerging from the recession with business processes and workflow cycles that are hindering their ability to make the most of the tentative economic recovery. Around 60% of respondents to a recent Computing survey have no formal customer relationship management in place and, of those, approximately 40% still place orders manually. This separation of business processes and the software that underpins those processes has been caused by mergers, buyouts and expansion. It has resulted in an increase of work on hard-pressed IT teams due to “the extra work generated in areas such as backup and disaster recovery, version upgrades, patch management, the management of user profiles and database management”. Separation of processes can lead to significant inefficiencies within organisations. Poor communication both between internal departments and between customers and suppliers is likely to lead to loss of revenue and poor customer retention. And poor data management can lead to poor forecasting.

Planning for success: Ian Henderson & Robin Goodfellow, MLG (April 2011)

While few UK companies are actually pushing ahead with sales & operations planning (S&OP), the subject is now much higher up the business agenda than in the past. In fact, many are claiming that S&OP is in their action plans – “just not yet; we are leaving it until we’ve implemented our ERP system”. So what does S&OP offer? The basic principle behind it is matching ‘demand’ and ‘supply’ – and while S&OP evolved within businesses supplying physical goods, this principle is just as applicable to service operations. However, the term ‘sales’ is not always appropriate – for example, public sector organisations face the same challenge of understanding requirements and balancing these with resources.

Call for consolidation: Cathie Metcalfe, Gradient Consulting (March 2011)

Two key priorities for IT managers now are ‘maintaining service levels with reduced budgets’ and ‘aligning IT with the business strategy’. One way to solve both problems is by consolidating systems – a system consolidation project should increase service levels to customers and internal users alike, whilst adding value by supporting the business strategy. But why consolidate? One key driver is that when systems aren’t aligned to the business strategy, they can hold back the growth of an organisation. For example, it might be that new markets are opening up overseas, but your existing ERP system cannot meet multi-currency and multi-language requirements. Or perhaps you aren’t able to respond to competition quickly enough because your website is separate from your core ERP system. Again, your system may not be functionally rich in the areas you need – 10 years ago you were all about manufacturing, but now you add value through design and engineering and your needs lie with a PLM system.

ERP meets the Apple: Moshe Zeidman, Lateral Solutions (February 2011)

I’ve seen the future of ERP applications and they’re on the iPhone! What, I hear you cry! You cannot be serious – as IT manager of a responsible and serious organisation, I have fought for years to keep consumer gadgets off the network. You are not going to tell me that Apple can have full access to the domain! Before opening up an email to send angry complaints to the editor of Evaluation Centre, allow me to clarify. Some of the biggest improvements in workplace productivity, business control and information processing have come through the innovations offered by advanced ERP systems. Extending well beyond the accounting function to sales & marketing, HR, logistics and other areas, ERP systems have centralised data, reduced duplication, and speeded up the automation of tasks and production of reports. Jobs that used to take hours, or sometimes days, can now be

Don't implement ERP!: Chris Turner, StrataBridge (January 2011)

Don’t implement ERP! A provocative title for an article in a journal profiling ERP solutions? Maybe. An attention grabber? Possibly. An appeal to get you to reframe and reposition the way you approach such a significant investment? Definitely! It’s important that ‘don’t implement ERP’ is followed by ‘…develop organisational capability’. While the first half warns of the problems of approaching this as ‘something technical that you are going to do to the business’ the second half offers a way of making this integral to ‘what the business needs to do and how it will do it to achieve its objectives’. Reframing ERP this way – as a potential building block of organisational capability, rather than a technical product or abstract system – is not just about a way of ‘selling’ it internally.

Solving the complexity puzzle: Darron Walton, De Villiers Walton (December 2010)

The aim of enterprise resource planning systems is to create a collaborative environment across enterprise organisations – yet gaps in standard functionality often result in practical issues for users and performance issues for businesses. Organisations need to address this and tackle some of the complexities inherent in enterprise software. However, in the current economic climate, IT budgets are tighter than ever. So, rather than start from scratch and replace existing ERP systems, many organisations are seeking to undertake smaller projects with a fast ROI. Fortunately it is now possible to adapt existing ERP systems in a way that will succeed in increasing user productivity, enhancing data quality, compliance and customer insight and increasing user motivation and adherence to protocols.

ERP on the up: Cliff Mills, NCC Research (December 2010)

An ERP system is an integrated software package that addresses most of an organisation’s day-to-day transactional data processing needs. Supported by a common database, individual applications are chosen and configured to tailor the software to the requirements of the enterprise. To achieve the full value of an ERP system, organisations must focus on integrating the organisation, optimising business processes and using and analysing system data to improve decision making. Over the years, ERP systems have had a chequered history, but now organisations have gained a wealth of experience and from this year’s Evaluation Centre survey it is evident that ERP systems provide the cornerstone for nearly two-thirds of all organisations’ applications portfolio. A quarter (25%) use ERP packages as their main application platform, while 31% use them in combination with standalone packages and 9% with bespoke packages.

Nightmare continues: Eric Kimberling, Panorama Consulting (September 2010)

Enterprise resource planning initiatives still take longer, cost more and deliver less business value than organisations anticipate, according to research conducted by Panorama among 1,600 high-level employees of global organisations that have completed an ERP implementation within the last four years. The top-level findings of the survey indicate that: 57% of ERP implementations take longer than expected; 54% of implementations cost more than expected; the average duration of an implementation is 18.4 months; the total implementation cost of on-premise ERP implementations is $6.2 million; and the total implementation cost of on-premise implementations as a percentage of revenue is 6.9%. The research reveals that although implementation cost fell from $8.5 million in 2008 to $6.2 million in 2010, 41% of participants failed to achieve at least half the business benefits they expected. This figure is nearly double the finding in Panorama’s equivalent 2008 ERP report (21%).

The greening of ERP: Stephanie Snaith, Gradient Consulting (July 2010)

At Gradient Consulting, we work with the Business Excellence Model whose 2010 rewrite is heavily focused on sustainability – viewing this as essential for all organisations in the 21st century. As a result, we have turned a sustainability lens onto the ERP packages that we work with every day, to see how they might support businesses adopting a sustainability strategy. Clearly, as the world edges out of recession, there is a strong drive to create an economy based on sustainability. This goes far beyond the green aspects usually associated with this term: it’s about ensuring businesses work in partnership with their people, customers and suppliers to secure both their own and the planet’s future. At the same time, people’s trust in the bastions of society has been eroded and we are now empowered to question business ethics in a way that has never been seen before. There is a focus on the triple bottom line of ‘planet, people, profit’ – achieving a balance between economic progress, social responsibility and environmental protection, which can lead to competitive advantage.

Flight time: Ian O'Toole, BSM Consulting (June 2010)

A key benefit of ERP systems is the efficiency to be gained from the integrated processes they support. But these integrated processes depend on accurate and well-maintained data, and any ERP implementation will involve the migration of data from one or more legacy systems. Depending on the scale and complexity of the implementation, this can involve anything from keying in small amounts of data to electronically migrating large volumes of data. Most implementations will demand the latter and a significant effort in preparing and cleansing the data for the migration. This article explains what is required in a migration project, from planning through to implementation.

ERP: good, bad and ugly?: Tony Wild, Dawson Berkeley & Partners (April 2010)

ERP is probably the most powerful commercial system in the world. Most major organisations run ERP systems. And many companies are now on their second or third-generation of such systems, so they are experienced and looking to gain greater efficiency through more advanced features. Because ERP systems have been in general use for 10-20 years, there is a wealth of knowledge about their application and management. They run the majority of large multinational manufacturing groups as well as many diverse enterprises. The continuing development of applications and package options also enables users to have more advanced and specific uses. Of course, when they first appeared, the main benefit ERP systems brought was a great advance in control for enterprises. This was spurred on by the failure of many older systems to cope with the millennium (years starting with ‘2’000 were not available).

It's a vision thing: Nigel Underwood & Alex Nicoll, Design Assured (March 2010)

The implementation of an ERP system is probably the most controversial, costly and energyintensive IT project that any business can undertake. An ERP package will underpin the core of the company, improving effectiveness and efficiency across its front and back-office activities. It’s a project that will touch virtually every part and process of the organisation, more often than not requiring a business change to meet the ERP system’s processes. It is also a project that requires immense experience, and focus – the one thing that is probably the most difficult to obtain. In addition, it is fraught with personal opinions and agendas; everyone seems to be a solution architect and to know what’s best for the business. Then there is the debate on how you go about such an implementation: are there the skills inhouse, should there be an SI (systems integrator) onboard, what about independent consultants, what is the best way to frame the project?

Leaning towards ERP: John Dean & Ian Henderson, MLG (February 2010)

Some people feel the need to always be in one camp or the other. Mods or rockers, trainspotters or anglers, EastEnders or Coronation Street. The same factor appears to push many people into either the lean or ERP camp. Why should this be? Well, there are no doubt psychological reasons relating to the child inside each of us needing to belong to a club. However, when it comes to business methodologies, perhaps the basic reason is that sowing the seeds of doubt and confusion sells books and fills seats at conferences. Dare we say it as management consultants and interim managers ourselves, but maybe the debate is stirred by people who see it as a way of encouraging companies to seek professional support for change programmes?

ERP: better do better: Jeremy Oates, Accenture (January 2010)

The overwhelming consensus among senior IT leaders is that they still have a long way to go in order to maximise the usage and adoption of their enterprise resource planning systems. This is the conclusion of a recent Accenture systems integration research study, which finds that organisations use just 64% of their enterprise system’s functionality. More than a third of the respondents (36%) admit enterprise system usage is under-utilised in their organisations, and 27% undertake little or no data sharing with their customers. Despite this under-utilisation, most senior IT professionals recognise the value offered by their organisation’s enterprise systems in terms of enabling them to manage core business processes and to distinguish themselves. Nevertheless some retain a very traditional perspective on ERP, continuing to view such systems as monolithic and inflexible. Overall, the key findings of the survey make for sober reading.

On board the enterprise: Cliff Mills, NCC Research (October 2009)

Organisations have invested significant time, people, money and technology over the years in developing their ERP and enterprise IT solutions – and in the current financial climate, they are now looking to consolidate and maximise the returns from this expenditure. Not all companies have prospered equally from their investment and some get considerably more value from their ERP systems than others. There can be a number of reasons for the difficulties being encountered: it could be lack of functionality in the software, system performance problems, or ERP processes that fail to adequately match the business processes. Again, systems may not have been optimally set up, with incorrect configuration settings and other issues due to the original implementation. In addition, not all the functionality in the software may have been activated, therefore reducing its effectiveness. On the other hand, the system may be performing correctly but the company may not have established or maintained the right training or change management procedures to ensure the correct discipline and effective business operation of the system. Any combination of these problems can severely impact the success of an enterprise solution.

Host-age situation: Roger Fleury, Ardent Solutions (October 2009)

As IT departments continue to operate on reduced budgets brought about by the recession, companies are aiming to squeeze all they can out of their current IT systems to ensure they are getting the most bang for their buck. Yet at the same time, every organisation needs to be able to respond ever faster to new revenue opportunities and markets – a shift in strategy that typically requires IT support and investment in software tailoring at the very least. So companies face two key questions: given the major costs associated with maintaining and supporting traditional legacy systems, and the severe constraints such systems impose in the ability to react to strategic change, will this recession prove to be the end for un-integrated, ageing systems?: and while it may go against the grain to invest in any new technology today, how many organisations can afford to be inhibited by their current IT infrastructure? Those organisations that best withstand this tough economy will be the leanest and fittest and those that are able to react fast to changing market conditions.

Left with a legacy: Michael Burns, 180 Systems (September 2009)

Legacy systems usually get a bad press. Yet older systems often contain functionality not found in more modern ERP systems, and would be expensive to replace. As well, the legacy system often gets the job done, so many would argue that ‘if it ain’t broke, don’t fix it’. On the other hand, legacy systems clearly lack the improvements made to software over the years, such as a graphical user interface, ad-hoc reporting tools and easy customisations like adding user-defined fields. In addition, the legacy systems are often maintained by ageing boomers, who may not be readily available now and will certainly be less available in the future. One way round the problem is to enhance the legacy system by putting on a graphical user interface or ‘screen scraper’. Again, if the underlying database can be accessed directly or through tools such as ODBC, a modern report writer can be deployed. Another possibility is simply moving data to a data warehouse and using business intelligence tools to get at the information. A compromise solution is a best-of-breed approach maintaining some components of the legacy system.

Pushing the envelope: Dave Darling, Charteris (July 2009)

It’s generally true that the more advanced a technology becomes, the less you notice it. Fly in a First World War biplane and you won’t forget for one moment you’re flying in a plane: the noise, the goggles, the wind in your face and the precarious progress will leave you in no doubt at all. But fly across the Atlantic in a modern-day jet and it’s easy to forget you’re in a plane at all; especially if you fly at night, when big planes resemble flying cinemas, even down to the dimming of the lights. Similarly, when Charles Babbage’s partial prototype cogwheel computer performed calculations, the grinding of its cogwheels left no-one in doubt they were seeing a machine in action, and a pretty cumbersome one at that. But today, computers are so much part of our lives that we often aren’t even aware of them.

Does ERP do lean?: Anthony Chrumka, Logica (June 2009)

Since their emergence in the early 1990s, ERP systems have established a wide user base in medium to large-scale companies. Even today, there are still plenty of firms installing ERP for the first time and existing users upgrading or extending legacy systems. Over the same period, a significant number of companies have expressed similar interest in the ‘lean’ approach to performance improvement. Lean promises to deliver what companies feel they need to be competitive: shorter lead times, less inventory, improved quality and reduced cost. Lean systems thinking becomes particularly attractive to companies faced with low-priced competitors or during periods of recession. With so many companies using ERP and looking to adopt lean, now is a pertinent time to ask: can ERP do lean? Are the two systems mutually supportive? Is there synergy? Compatibility? ERP is an enterprise-wide IT system that acts as the main database for a significant number of modern organisations. Lean, meanwhile, is primarily a management philosophy that focuses a company on continuously improving the way it competes and operates.

Making your system sweat: Frank Crewe, BSM Consulting (May 2009)

During the growth years before the current economic downturn, many organisations implemented new ERP systems – yet most have failed to realise the benefits which were envisaged in the original business case. In today’s economic environment there is little appetite or cash to extend or replace these systems. This puts the onus on companies to understand the reasons why the benefits have not been delivered in order to drive further returns from their initial investments. The success of most ERP implementation projects is judged by the traditional ‘on time’ and ‘within budget’ metrics. Based on these two criteria, many projects are deemed to be successful; the system goes in more or less on time and roughly within budget. However in most cases the original business benefits which were promised as part of the justification for the project are not measured, and therefore it is not clear if they have been delivered. In Figure 1, we consider overall project success as a matrix which takes into account the on time/within budget measure as well as the benefits delivery measure.

Spending for survival: S Snaith & C Metcalfe, Gradient Consulting (April 2009)

Right that’s it, we’re in a recession. Everything stops, we need to cut costs as far as possible, including redundancies, put all projects on hold, stop talking to the supply chain, cut marketing and training budgets and wait until the recession is over. Certainly, all investment in our ERP systems must be shelved. That could be the thinking in many organisations. But in fact this is an ideal time to invest in ERP, with the potential that returns will be higher and investment reduced. Looking ahead, organisations should be seeking to exit this recession in a position of strength. To do this, it is vital that the business knows where its niche markets are, which product ranges and contracts are most profitable and how it can leverage competitive advantage. Unfortunately, many businesses simply don’t have this information. When times were good, orders were flooding in and profits were being made, it didn’t seem important to stop and question which parts of the operation were profitable. It was fine for the strategy to be simply ‘keep doing what we’re doing’.

Are you a winner or loser?: James Campbell, Logica (March 2009)

Organisations have been continually revising their enterprise business processes and systems – whether changing existing processes internally, outsourcing entire processes to a third party or introducing new processes altogether. And many different approaches have been tried: total quality management, process re-engineering, introducing new ERP technology and lean manufacturing, to mention but a few. But which approaches are most successful? To find out, and to assess the impact of enterprise-level business process change, Logica Management Consulting and the Economist Intelligence Unit conducted a multi-industry survey among 380 executives in Western Europe. The survey results show that companies are spending significant amounts on major business process change initiatives – and will keep doing so for the foreseeable future. Nearly three-quarters of the executives say their organisation spends 1-6% of its revenue every year on business process change, with one in twelve spending 7% or more.

ERP means people: Paul Deed, SkillSet (February 2009)

Over the last 10-20 years, companies have invested billions of pounds in enterprise resource planning (ERP) and other enterprise-level IT systems – and yet the anticipated benefits still fail to materialise. In Skillset’s experience, companies can increase the returns from their ERP investments systems in two main ways: applying change management principles to the rollout of new systems – focusing on what is needed to change the way people work; and working with individuals and teams on process improvements, using Microsoft applications. Whether it’s implementing new ERP systems or undertaking a broader restructuring, most of the companies we work with are introducing something new. In order to obtain the promised benefits, it is important to understand how to manage the change process effectively. Unfortunately, many companies suffer unnecessarily by underestimating the work involved and by not acknowledging the effect that people have on a process.

Shock of the old: Frank Crewe, BSM Consulting (January 2009)

Twenty-five years after the philosophy of enterprise resource planning (then known as manufacturing resource planning or MRP II) first emerged on the scene, many organisations still struggle to implement new business systems and often fail to realise the benefits which were envisaged in the original business case. With all the knowledge that has been built up during the last quarter of a century, and with today’s systems being more powerful, more functionally rich and more reliable than ever before, why is this the case? Most organisations find it necessary to review their strategy relating to ERP systems every seven to 10 years. This usually happens because the requirements of the organisation have changed or because the existing systems have evolved to a point where they are difficult to manage or it is no longer economical to develop them further.

State of nirvana?: Prof Andy Neely & Dr Bassil Yaghi, Cranfield (Nov/Dec 2008)

Enterprise performance management (EPM) has taken the world by storm. AMR Research estimates that $57 billion will be spent on EPM and related applications in 2008, around $26 billion of this in the US. Gartner surveys repeatedly rate enterprise performance management and business intelligence as the number one issue for CFOs and CIOs. Gartner’s most recent prediction is that the revenues for enterprise performance management and business intelligence will continue to grow at a compound annual growth rate of 8.6% until 2011. Meanwhile, Forrester reports that 5% of the queries it has received since 2007 have focused on EPM and BI specifically. Meanwhile evidence suggests that EPM and BI thrive in tough economic times almost as well as in good times, not least because of the potential these technologies have to reduce organisational processing costs. The promise of enterprise performance management is that it can help integrate disparate management information systems – ERP, planning & budgeting, forecasting, financial consolidation and statutory reporting, scorecarding and strategic performance management – into a seamless whole, delivering the right information and insights to the right people so they can make the right decisions at the right time.

Cutting costs from cradle to grave: David Dutt, Ernst & Young (September 2008)

Is your (undoubtedly expensive) ERP system leaking your hard-earned revenue? Before you answer emphatically ‘no’, may I suggest you pause for a moment, because the next question is going to be ‘How can you be so sure?’. The wealth of benefits and opportunities offered by ERP systems are well-documented – as are the challenges of implementing them successfully. As the first letter of the acronym indicates, ERP systems are designed to operate at the enterprise level with their related business processes. However, the key enterprise area of governance, risk and compliance (GRC) has not kept up with the integrated world of business processes and ERP systems. I am not referring here to the GRC functionality and tools provided by ERP systems and other vendors but to the overall approach taken to GRC by organisations, and the policies, procedures and mechanisms by which GRC is designed, implemented, operated and embedded. The costs of not keeping up are high indeed.

Do you speak geek?: Ian Robinson, ThoughtWorks (August 2008)

Building enterprise software is a social activity. With IT now a fundamental pillar of many business activities, sustainable business and IT initiatives require input from a diverse group of people – and so communication and collaboration are key. Yet the results are often very disappointing. This article outlines a way to maximise communication in ERP and other enterprise-level software projects. To identify, define and solve the needs of the business, enterprise software teams are required to make models, or representations, of the business. In the course of the project, many different kinds of representation can be made: from natural language representations of a business problem, through logical and conceptual representations of a solution, all the way to executable representations – the working code itself. At each step, some representations prove to be more useful – more expressive, powerful or valuable – than others.

New business process revolution: William Edmond, Sapient (June 2008)

Business process-centric approaches are changing the way we do business, once again. Gartner recently identified business process management (BPM) as one of the top three strategic technology considerations for 2008. This is primarily being driven by cost and consumer pressures from increased competition within the globalised digital economy. Businesses need to do more with less – translating into an imperative for a new level of process agility and a culture of continuous process transformation, with a clear impact on organisations’ core ERP systems. Enabling this requires a rethinking of organisational structures, governance and supporting technology systems. The management discipline that guides this is business process management.

After the party's over: Stephanie Snaith, Gradient Consulting (May 2008)

Well that’s it then – you’ve gone live, temporary staff and vendor representatives have left the building and the old system has been switched off. Your stakeholders have seen all their objectives delivered, the users love the new ERP system and don’t sigh wistfully for how things used to be. The new system seamlessly supports working practices and there are no errors or issues outstanding. If this were always the case, there would be no need to write this article – but in my experience this just doesn’t represent reality. Most ERP investments fail to deliver all that was desired at the start of the project. But businesses do not have to accept this; there is a lot that can be done to optimise an ERP solution. ERP serves as an all-important information pipeline that links finance, manufacturing, logistics, sales and other departments. This allows the various departments to share information and to smoothly process transactions.

The road less travelled: T Lebarnoff & S Heinz, Diamond Consultants (April 2008)

Not long ago, a US-based international publishing company started a longawaited ERP project by launching a small pilot in another country. The company’s plan was to immediately follow that test with a larger installation in its home country. Things didn’t work out as expected. The initial ERP installation failed – miserably. The way the software had been set up to handle specific business processes wreaked havoc in the organisation. To cite just one small example, the company had to hire 20 additional people in a call centre to keep the operations running. The larger rollout was put on hold and it took eight long months to bring the overseas business under control. Unfortunately, what happened at this publisher is not uncommon. These days, ERP projects equate to big business. Companies of all types are turning to the software to manage a wide range of functions – everything from finance operations to human relations and procurement.

Innovate to accumulate: Kartik Iyengar, Wipro (March 2008)

Organisations continue to evolve – either through organic or inorganic growth. As such, they require an IT environment that can easily be adapted to support changing business requirements. For example, when there is a merger or acquisition, organisations need to support a multitude of new IT applications and processes across their value chain. And unless your IT environment is adaptable, it will be very difficult to achieve rapid post-integration benefits. That is why companies are looking for an holistic business process platform from which they can manage change. In the changing world of Web 2.0 and mash-up corporations, there has to be a new approach to solving this perpetual nightmare. So as a solution here, I’d like to propose ‘reverse-engineered composite applications’ or ‘reverse-engineered xApps’ – otherwise known as ‘RexApps’ . It’s time that IT helped the business to monetise their enterprise applications and SOA initiatives – and I believe this approach will do that.

Following the money trail: Jacob Varghese Vaidyan, Charteris (February 2008)

Although enterprise resource planning systems are typically the single largest IT investment any company makes, the business and financial implications of owning, maintaining or implementing an ERP system are not always understood. ERP systems are one of the most-used application in a company, alongside its email and office applications. For most enterprises, ERP is also one of the cornerstones of their IT strategy. This article seeks to improve the understanding of ERP systems for senior finance professionals by looking at these systems from the cost, benefits and business cycles points of view. Firstly, let’s try and answer the question: why is it important for the CFO or any senior finance professional in a company to know about ERP?

Moving mountains: Rod Horrocks, Procertis (January 2008)

Many people underestimate both the power and the difficulty of change. This is especially true when it comes to implementing systems that, by every rational measure, should result in improvements for all concerned. Why is effective change so difficult to achieve? And why, despite their best efforts, are organisations so often disappointed in the results? The answer is they need to set technology criteria to one side, and focus on the context in which their business processes operate. Put technology back in the box, analyse the real needs of the business first, and master the forces of change.

At your service: David Hofferberth, SPI Research (December 2007)

The term ‘ERP’ has moved beyond just core financials to encompass many of the other applications necessary to build a world-class professional services organisation (PSO) and increase both productivity and profitability. Some of these integrated modules include: financial management – the core solution required to accurately collect and report on financial transactions; customer relationship management (CRM) – the running of client relationships to improve effectiveness with communications, sales and services delivery; procurement management – the control of product and service purchases; human capital management (HCM) – the tracking of human resources from recruitment through to termination; project and services delivery (PSD) – the initiation, planning, execution and close of projects and services; and business intelligence (BI) – the assembly and use of information to improve decision making.

One for all?: James Neophytou, IBM (November 2007)

It is generally agreed – both by consultants and companies who have implemented enterprise resource planning systems – that to successfully introduce ERP software, you must review all your current processes and align them with the best way to use the package. For example, with a manual system you can ‘get away’ with poor data accuracy because people will spot obvious mistakes and, since they know which data is uncertain, they can make appropriate corrections. But not only do computer systems not allow for incorrect data, they compound any data errors because each error affects all dependant and related data on all the integrated modules. So a culture of data accuracy is vital if an ERP implementation is to be successful. It is also generally agreed that, with the possible exception of finance, all ERP modules have to be implemented at the same time (big bang approach) as each module depends on the others.

Magic bullet or flash in the pan?: Keith Bedingham, Verax (September 2007)

Enterprise resource planning is as old as the hills. I found a definition of ‘management’ from before the Second World War which describes it as “the planning and organising of resources (human, financial and physical) to achieve pre-agreed goals and objectives.” If that’s not what ERP is about, what is it? Wikipedia defines ERP systems as follows: “ERPs integrate (or attempt to integrate) all data and processes of an organisation into a unified system.” It also says that ERP evolved from MRP (material requirements planning), a system of manufacturing management that was not flexible enough to cope with frequent changes of sales forecasts. ERP is likely to include additional functions including payroll and accounting functions. As you can see, the above description tends to view ERP as an end in itself. Nothing in the definition gives a clue about what ERP does, its benefits, etc. It is in effect a monitoring and control system that ought to provide information to managers to help them make better decisions about running the business.

Maximising performance: Ken Perrello & Mike Hartley, Deloitte (July/August 2007)

These days, IT directors know that information technology plays an increasingly vital role in nearly every strategic initiative – customer relations, marketing, globalisation, R&D and outsourcing, to name a few. What was once a technical, back-office concern has undergone a sea change. Many corporate boards now consider IT to be an untapped mine rich with possibilities for their companies’ future results. This is confirmed by a Deloitte survey of 455 directors at publicly traded companies, each with revenues of more than $1 billion, and across 35 countries. We asked these directors to name their most pressing IT issues, such as how to become more involved in IT strategy, how to link such a strategy to their companies’ performance, and how to monitor and justify IT’s costs and return on investment. But while the survey shows that directors recognise the importance of IT, challenges still exist – namely how to treat IT issues within the context of the board’s role and how to grapple with IT’s inherently complex nature and rapid pace of change.

Uncommon sense: Ian Henderson, MLG Management Consultants (June 2007)

Common sense is, of course, anything but. Indeed when it comes to the implementation of business systems it’s a lot more than uncommon – it’s as rare as rocking horse droppings. This may result from the hype and ever-evolving jargon that surrounds modern packages and methodologies – people don’t like to question things and thus send out signals that they aren’t up-to-date. It may also be that many implementations are now delegated to enthusiasts. ‘Train spotters’ is the appropriate term, conjuring up the perfect image. “Yes, we’re using the MRP option VB for bulk raw materials”, is spoken with the same hum of excitement as “my brother and I once saw the Flying Scotsman and we had matching flasks”.

Marriage made in heaven: Jim Correll, Oliver Wight (May 2007)

For years, companies have often felt they must choose between two approaches to manufacturing process control: ERP or lean manufacturing. Most have installed ERP systems, but many aren’t getting the results they were looking for. Is lean the answer? Are ERP and lean mutually exclusive? Both have powerful capabilities, and every company needs to understand how they relate to each other. For many, the best approach is to learn how to apply the combination in their environment. The payoff can be world-class results. ERP is a combination of software and processes that provide the capability to manage a company’s resources, which include people, equipment and facilities.

ERP survival guide: Phil Robinson, BPIC (April 2007)

The success rate for implementing not just ERP systems but all large software packages has never been very good. In survey after survey, in the US, Europe and elsewhere, less than one third of systems meet the basic criteria set out at the start of the implementation. Too many software engineers know how the software works but do not know how to integrate it into the business in a way that delivers real business benefits. With ERP packages costing hundreds of thousands or even millions of pounds, this is frightening. The question is – how can you minimise the chance of failure or, more difficult, rescue a package that is not delivering sufficient business benefits to justify the cost of implementation? The good news is that, when properly implemented, an ERP package can be the most cost-effective project a company has ever seen.

Do the right thing: Ken Gorf, West Trax (March 2007)

A European study carried out recently by West Trax examined the true value users derive from their SAP enterprise resource planning systems. The results show that some organisations with more than 500 users are wasting millions of euros every year. Industry analysts such as Gartner, AMR, Nucleus and Butler regularly express doubts about whether enterprises gain real value from investments in IT. They point out that while organisations may make great efforts to justify their projects on the basis of expected long-term ROI and business alignment benefits, most fail to conduct ongoing post-implementation reviews to track strategic metrics, such as realised value and benefits against the original goals. After system rollout, many organisations focus on monitoring purely tactical metrics such as service levels and support costs – they don’t measure the actual value delivered. The problem with this approach is it offers no indication of whether the system is delivering its full potential to improve the performance of the business in terms of adding value, increasing productivity or maximising competitive advantage.

Pick me, pick me!: Ceri Williams, The Integration Practice (February 2007)

Should the ERP system drive the IS strategy, or should the IS strategy drive the ERP system? Because when you examine the propositions underpinning ERP system deployment and IS strategy, they look uncannily similar – integration of information, process automation, economies of scale and rationalisation to name but a few. So how can the two approaches co-exist? Are they in competition with each other or are they complementary? This article explores this problem relationship, considers the typical areas of conflict and how this can be turned into a creative tension that promotes both at the same time. ERP vendors are busily repositioning their packages as flexible, modular, composite services platforms that contribute to the top-line. It is true that ERP systems are not the monoliths they were; they now have extensibility and integration frameworks bundled in.

ERP's emotional journey: John Rozek, SkillSet (January 2007)

Major ERP change projects have been a fact of life in the business world for several years now – so why are there so few examples of true success? ERP projects can only be deemed successful when teams have willingly adopted the new, effective ways of working, are skilled in the new methods and are motivated in their work. And whilst the correct organisational structure and the need for suitable business processes must not be underestimated, it is people who really make or break change. The beautiful thing about human beings is that we are all individuals. Different personalities create the wide spectrum of human behaviour – great for variety, but very difficult for the manager trying to implement an ERP programme. Each person responds differently to change. Albeit to differing degrees, every person responds both emotionally and motivationally to the new challenges.

Seven blunders of the ERP world: Rod Horrocks, Procertis (December 2006)

How did ERP become one of the most tarnished silver bullets of business change – and what can we do to unlock its potential? The technology keeps advancing and the underlying rationale for ERP hasn’t evaporated: we still need to reduce inventory, slash the costs of delivering products and services and make our operations more flexible. Yet the best ERP implementations we see in today’s businesses struggle to deliver 20% of the headline promise. The problem isn’t with the concept, or the enabling technology, or the complexity of deployment. The failures all point to one source: the (mis)management of implementation. By recognising the classic mistakes that implementors make, and following some straightforward management guidelines, you can unlock the benefits of ERP to create the efficient, responsive business you need to compete.

'Magnificent Seven' guidelines for success: D Ollerhead, Decision Focus (Oct 06)

In the movie ‘The Magnificent Seven’, a besieged village seeks outside help to relieve itself from bandits. It winds up being helped by seven talented gunslingers. Each has a different reason for responding to the villagers’ urgent call. Organisations in business, besieged from all sides by competitive pressures, can sometimes seem a lot like that village. Faced with the challenge of developing a really effective enterprise systems strategy that plays a crucial role in maximising your competitive edge, it is all too easy for everyday business pressures to render the strategy excessively reactive rather than proactive, or even for it to be sidelined completely.

Delivering the goods globally: Tony Evans, TEA (September 2006)

Currently, two types of software package serve the ERP software market for internationally scaled businesses. Firstly there are those systems that are available across a large number of countries, address local requirements (language, currency handling, inventory accounting, financial rules, etc) and can be used independently across the world. This type of system has been used by companies adopting a common (but not integrated) systems strategy. A second type comprises applications that can be used to support integrated pannational operations in a single implementation. These offer the same functionality as the first group, plus much more comprehensive support for transfer pricing, goods-in-transit visibility and control, and group structures. Other features supporting pan-national ways of working include multilanguage/ multi-currency order taking in a single site, and enhanced decision support in areas like where/when to supply from, where/when to manufacturer or buy-in and, where applicable for faulty goods, where/when to repair/replace/buy. SAP R/3 is the leading package in this second type of ERP system.

If you're not going to make money from ERP – don't do it: P Summerfield (Aug 06)

The papers are still busy telling us that the majority of IT programmes fail to deliver value to the business, and that this trend has increased with major ERP programmes and in the public sector. It is a very sad fact that whilst ERP and IT have come a long way from 25 years ago, far too many companies are still not gaining the full benefits from their investments. So, am I suggesting that companies should stop investing in their ERP programmes? Absolutely not. In fact I believe that the investment should increase if anything, but a change is long overdue and we need to focus on the ‘tipping point’ of benefits-driven ERP/IT. I should explain myself here. Of course, all organisations spend time building strong business cases to justify the major investment in their new solutions and they sign this off at board level before spending their hard-earned money. The processes surrounding this are sometimes nearly as complex as the implementation itself. The business is asked what they need and the plan is built around this. The ERP programme director/manager has a budget to work to and this is given sharp focus during the steering committee meetings. The programme runs and finally goes live. There is a massive interest and pride in delivering everything on, or even under, budget.

Sharpen your edge: Rob Morton, LogicaCMG (July 2006)

You have invested significant capital into integrating your corporate IT systems and installing a new ERP software platform for managing your customer relationships and supply chain; you’ve re-designed your processes to take advantage of the new technology, maybe even offshoring some parts of the work process. yet still the results fail to impress analysts, shareholders or, for that matter, your customers. Despite all the effort and cost of the ERP implementation, the returns seem slow in materialising, and your people feel under as much or more pressure than before. There are steps you can take to realise benefits more effectively, ‘sharpening your edge’ by rigorously engaging people in achieving those benefits. Research shows that the ‘soft’ side of change – people-related engagement, for example – is actually more important in turning enterprise-level technology and process improvement into superior performance.

Buried treasure: Martin Southern, Shark Finesse (June 2006)

Unusually, our work takes us deeper into the world of business cases for ERP than anyone else I know. But before you stop reading, I can confirm that this is not an advertorial – as the majority of readers are never likely to be our future customers. So relax, because now we will share with you some real-life experiences of business cases and provide a light-hearted insight into the murky world of ROI (return on investment) and business case justification for ERP installations. Not interested in this subject? Well bury your head in the sand at your peril – because like everything else in life, there are always lessons to be learned, and no-one knows it all. Businesses exist to generate profits, fulfil their planned objectives and to an extent serve the community at large. Good business decisions are essential to protect long-term business strength and ensure benefits for everyone. But what constitutes a good business decision and how can these be determined from an economic perspective? Let’s take a simple example…

Who's running this business?: Malcolm Hunt & Tony Cowderoy, MML (May 2006)

The success rate of ERP implementations has doubled since the techniques that lie at the heart of modern ERP systems were introduced over 30 years ago. That looks impressive until you compare it to the dramatic advances made to the functionality of these systems over the same period. The sad fact is that still only a minority of companies are getting a realistic return on their investment. Surveys show that the success rate – where success means benefits that exceed the costs – is still languishing at around 20%, meaning that a staggering 80% of implementations fail to deliver any measurable net business benefit, although most can be classed as technically competent.

Better business performance: Cliff Mills, PMP Research (April 2006)

Organisations, both large and small, need to deal with a range of challenges to survive and prosper in the increasingly competitive business climate. The adoption of enterprise software solutions has been one route that many businesses have chosen to meet these demands. But how well are companies progressing in the ERP and enterprise area, and how do they perceive their enterprise solutions? To find out, PMP recently interviewed 100 senior IT and management staff for their views on their deployment. The survey found that controlling and managing costs is still seen as the most crucial issue facing managers but not far behind is the continual requirement to improve the service delivered to customers and hence retain customer loyalty.

Breaking down the barriers: Colin Bezant, KPMG ERP Advisory Services (March 06)

A global ERP solution can seem like a ‘holy grail’, a perfect solution to a CIO’s need to standardise systems and processes across an organisation, while delivering a competitive capability. Yet it appears that very few global ERP implementations are delivering planned benefits and most have stopped far short of their original expectations. Nevertheless, the demand for such solutions has never been higher.

Seven steps to successful ERP: Tony Wild, Dawson Berkeley & Partners (Feb 2006)

A visit to a company using ERP systems can be disappointing. This potentially wonderful system often does not produce the benefits that it should – usually it gives good results in many areas, but does not do all the things originally expected. This should be a warning to prospective ERP implementors, but not a deterrent. For the future survival in business, companies must use integrated controls across the company – and these are embodied in ERP. The barriers to getting ERP working properly are fundamental to introducing any change.

back to top