ERP implementation tips for large companies

Interesting article about how big ERP rollouts can go horribley wrong ,the information is a bit dated but the princilples are the same

Take-Home Lessons from Nestlé’s ERP

1. Don’t start a project with a deadline in mind. Figure out the project requirements, then determine how long it will take you to accomplish them.
2. Update your budget projection at regular intervals. So many things happen during a long project that you will be lucky to stay on target during a particular year, let alone the life of the project. Frequently revisiting your numbers will help minimize troublesome surprises.

3. ERP isn’t about the software. It’s easy to put a new system in place. The hard part is changing the business processes of the people who will use the system.

4. Nobody likes process change, particularly when they don’t know it’s coming. Include in the planning the people whose processes you are changing. Keep the communication lines open while the project is in the works, and measure the level of acceptance before, during and after the rollout.

5. Remember the integration points. It isn’t enough to simply install new systems; you need to make sure that they can talk to each other.

info from

20 ERP implementation tips

An enterprise resource planning (ERP) software project can be daunting for first-timers or veterans handling a migration. Get started on the right foot with the top 20 ERP implementation tips from Linux users, consultants and vendors.

Get your return on investment and then expand. Otherwise, you’ll have a never-ending and unsuccessful project.
Jon Reed,
Consultant, Klee Associates 



1. Know your goals for your ERP implementation. Choose the product that promises to meet those goals and put measurement tools and processes in place to gauge your success, advises Lance Williamson, engineer, Engenio Information Technologies, Inc., Wichita, Kan. In particular, he said, set goals for performance, response time and downtime.

2. Don’t do any project without a plan, particularly an ERP project which touches almost every part of your organization, said Bernard Golden, CEO, Navica Inc., a consulting firm in San Carlos, Calif. Create process with regular milestones and participation from affected organizations. And be sure to test, test, test, all the way through. "All of these things seem like ‘nice-to-haves’ rather than critical elements in a project, but can make the overall project much more successful," Golden explained.

3. Involve users in your ERP project planning phase, said Andy Klee, president of Klee Associates, Inc., a consulting firm in Cedaredge, Colo. "The software is not going to do you much good if you don’t have employee buy-in," he added.

4. Don’t do the planning and implementation alone if you don’t have the in-house skills to make it happen, said Jorg Janke, president of open source ERP vendor Compiere Inc. in Portland, Ore. "Determining which options and features to use requires experience," he said. If the in-house team doesn’t have that experience, Janke advises, find a local ERP expert who is trustworthy and who collaborates well with your team.

5. Be realistic in your cost projections. Double the consulting firm’s estimate, Klee said. "I hardly ever hear of these projects coming in under the estimate," he explained. Also, be realistic about training costs. "Even at the largest level, companies underestimate the training costs," he said.

6. Don’t keep adding to your project. In the planning and evaluation stage, people see the capabilities of products and want to use each new one they discover. "Commit to what you want to do initially," said Jon Reed, a Klee Associates consultant. "Get your return on investment and then expand. Otherwise, you’ll have a never-ending and unsuccessful project."

To host or not to host?

7. If you’d prefer the hosting model for your ERP, then scrutinize your application service provider (ASP) well, says Janke. First of all, you must be able to trust this ASP with your data. "Find out if that hosting company provides cookie cutter solutions or can customize the ERP suite to fit your needs," he advises. "Many outsourcers don’t know enough about ERP to customize it. Then again, if a cookie cutter solution is okay for you, then fine, use an outsourcer and you don’t have to take care of your ERP."

8. Follow the money. "Hosting should take out a lot of internal costs of labor," says Frank Prestipino, vice president of Oracle’s global enterprise applications strategy.. "It should save you money…by spreading payments over a period of time. You should be paying less over a period of time for hosting than you would do it yourself." The hoster should provide this analysis. If you’re not paying less, don’t use an ASP, he said.


9. Choose an ERP package that is industry-standards based. "You don’t want to find yourself out on a limb with customers who can’t interact with your proprietary, out-of-standard implementation," says Oracle’s Prestipino.

10. Look closely at maintenance costs. "You can pay a great purchase price and find that it costs a fortune to maintain," Prestipino said.

11. Evaluate your processes and decide if changing them to fit a particular ERP suite would be beneficial, Klee suggested. "Either you’re looking for customization or going for out-of-the-box," he says. "With the latter, people have to change how they do things in order to conform to the package. That may work for a company that needs to make changes anyway. Often, however, it’s better to choose a suite that can conform to your needs."

12. Discuss a vendor’s stability with the vendor reps and outside experts. Find out if the company is losing market share, which might make it a candidate for a takeover or failure, Pestipino said.

13. "Whenever a company and its ERP package are acquired, it’s not usually good news for the customer," Klee said. "Often, the vendor is buying the client base and is not that interested in the software itself. Instead, they’ll try to get clients to move to their own platform." In this situation, customers may have to migrate without good business reasons.

14. Get the numbers. "Get empirical evidence of return on investment from the vendor and/or a consultant," Prestipino said. Also, simulate the ERP suite in your company and make your own calculations.

15. Get vendors to come clean about their upgrade cycles. "Once they get you as a customer, their goal is to sell you new features and upgrades," Klee said. "You want a company that upgrades and adds necessary features and doesn’t lock you into an expensive upgrade cycle."

16. Find out how much customization assistance the vendor will offer, Reed said. "If you customize the ERP package to fit your business scenarios without vendor support, you can limit your support options from that vendor down the road."

17. Be efficient in contract negotiations. "Don’t spend too much time analyzing details to the Nth degree," Klee said. "If vendor can answer 25 critical questions and give most of what you want, you’re going to be in good shape. Focus more on critical items to get through negotiations more quickly."

18. You can’t get everything you want. "Do accept that there is always going to be a functionality gap," Reed said. "Usually, you have to let 10% go. If the gap is more than 10%, keep shopping."

After the implementation

19. Pay attention to the quality of your data and the daily workflow, Golden said. This is especially important during the transition time after implementation and during periods when your business is changing or growing. Watch for seasonal variations, too. For example, Christmas can cause big jumps in data volume for a retail company.

20. Don’t sign up for long training sessions. Instead, do some initial, condensed training on your own site, and then set up a regular class schedule that gives users time to learn before they move on. "Vendors want to sell customers, say, 40 days of training over six weeks," Klee said. "By the time the class is over, the trainees have forgotten the first half of the lessons."

ERP info from techtarget

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ERP for small business ?

What do you think about all the investing in open-source application companies?

I think the jury is out. I think you will have open-source components making up applications, but I don’t know if you’re going to have open-source applications. With business applications [that run things like call centers, accounting, and human resources], you’re going to want some proprietary-ness to it. They can’t be commodity, and in my logic, commodity is critical, or you don’t have an interesting open-source company.

I have a tough time believing financial applications like enterprise resource planning will ever be open-source. ERP is really complex, and you have companies like SAP (SAP) and Oracle that are being very, very intelligent about adapting their smarts and making them co-exist with open source.

What about selling to smaller businesses that can’t afford Oracle or SAP? That’s what open-source application companies like Compiere, SugarCRM, and MedSphere are doing.

Small to medium-sized businesses are a potential market, sure. You can build a small business that’s incredibly profitable there, but whether you can build a $100 million business, that’s hard in that sector.

Microsoft Dynamics pricing

Business One, All-in-One ,what sets them apart

The two SAP products compete directly with Oracle’s Special Edition for small businesses and Microsoft’s Dynamics AX, an ERP suite Microsoft purchased from Denmark-based Axapta, which has been gaining momentum.

If SAP is selected for consideration, the decision between the Business One and All-in-One products should be made very carefully, Shamia said. Small business owners should consider several questions before choosing between SAP’s products.

1. What are your plans?

If a small company plans to maintain current staffing levels and keep the status quo, Business One may be the right choice, Shamia said. If plans call for aggressive company growth over the next three to five years, the All-in-One suite may be a better choice to manage that growth and the business processes changes, he said.

2. How complicated are your business processes?

A pharmaceutical company that deals with complex compliance and manufacturing processes would benefit from an All-in-One installation, Shamia said. The All-in-One product is scaled down, but has all the mySAP attributes to it and can handle complex business processes, he said. A firm with limited compliance concerns and fewer, less complex business processes should choose Business One, he said.

3. How much do you want to invest in automating processes?

Some companies may have less emphasis on automating business processes, while others depend on up to 80% of business processes and need those processes covered by an application, Shamia said. Small businesses need to start a dialogue within the company to understand the culture and the processes, and to determine what areas could be automated. All-in-One could take on more process automation and is also flexible enough to integrate new processes as the company grows, he said. Business One may be a better choice if only a few processes are being automated, he said.

When small businesses begin to show signs of growth and business processes need to be pulled together and automated, small and midsized businesses (SMBs) look for software suites with more functionality, said Sanjeev Aggarwal, a senior analyst for small and medium business strategy at the Yankee Group.

Larger vendors are competing for a share of the SMB market once small businesses seek software to automate processes beyond payroll and inventory management, Aggarwal said.

Microsoft, Oracle and SAP are all competing in the SMB market segment using channel partners. Other firms, such as Siebel Systems Inc. and offer on-demand services for specific business processes such as customer relationship management.

"As you go up in the midmarket, there is a demand for more functionality in the software and that’s where we start seeing Oracle and SAP competing," he said.

ERP info from searchsap

Fosters boots SAP

Wine producer Southcorp has been forced, despite investing millions of dollars in a SAP ERP system, to dump it after being acquired by the Foster’s Group earlier this year.

The company’s IT assets will be standardized on the Oracle-owned JD Edwards application which Foster’s uses, according to an internal employee memo issued by integration director Michael Brooks in the wake of the acquisition.

Brooks said that following an assessment of the benefits, risks and costs of leveraging the Southcorp systems, Foster’s management decided that Oracle, JD Edwards, and PeopleSoft best meet the company’s mid-term needs.

The decision was based on strategic considerations and integration risk management, rather than a qualitative analysis of the two platforms, the memo said. "Adopting SAP across the business would have involved more risk and time," Brooks said. "It was a choice of migrating two organizations onto a largely new system, mySAP, or migrating Southcorp onto the existing Foster’s platform."

While a company spokesperson was unwilling to disclose the cost of its SAP investment, Computerworld understands it was upwards of $20 million.

"It is important to note that this decision is no reflection on SAP software, we needed to migrate to one system and the JDE platform provided us with the best opportunity," a Foster’s spokesperson said, adding that the integration will take place over the next 18 months.

Foster’s CIO Ian Farnsworth told Computerworld integration planning for the two systems is progressing "very well" and in the last two weeks migration to JDE in the US was a smooth transition.

"In Australia, Foster’s is already well advanced in establishing a common platform for its wine and non-wine operations and a considerable effort has already been made in establishing a footprint to benefit our business operations," Farnsworth said.

Foster’s enterprise systems include JDE in conjunction with a "tailored distribution module" to support the front-end sales processes.

"There is also an industry-specific wine manufacturing module being developed in collaboration between Foster’s and Oracle as a standard application, which will be incorporated in the ERP suite," Farnsworth said.

Oracle’s E1 manufacturing is in use by wine companies globally and is being considered to replace legacy beer manufacturing solutions while its financial suite is being implemented across all Australian-based businesses to take advantage of the vendor’s "clear specialty" in this area, he added.

PeopleSoft is used locally for human capital management and payroll.

"Underpinning the ERP suite, other integrated solutions are being standardized across businesses to provide advanced supply planning, manufacturing optimization, business intelligence and other corporate management needs," Farnsworth said.

SAP Australia’s southern region general manager Allan Fairhurst said it is inappropriate to comment on the Southcorp migration.

Competing enterprise software vendor SSA Global’s Asia-Pacific vice president Jeremy Goddard said when it comes to buying ERP solutions go with the vendor that can solve business issues instead of "just selling you something".

ERP Systems info from computerworld


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CIO’s must change their thinking according to SAP

Facing the threat of being outsourced, corporate CIOs must remake themselves, more thoroughly understand their businesses, eliminate waste and innovate their company’s IT processes.
That was the message from Shai Agassi, SAP AG’s president of product technology, who delivered a keynote address here yesterday at the software maker’s TechEd ’05 conference.

One of the issues Agassi raised was that of IT outsourcing, and he bluntly asked the audience, "Do you matter?" Agassi argued that the industry is headed for another wave of change that will make some IT jobs obsolete unless workers can start thinking strategically and executing "with urgency."

He urged the creation of metrics that show what a company’s IT department is doing to improve business processes, and said that ultimately, a CIO is no longer head of information, but instead becomes a chief process innovation officer. In that role, he becomes the "honest broker" in a company, making decisions about various processes throughout the enterprise and transforming IT into what Agassi called "strategic technology."

Making that transformation requires spending time with business managers, finding out about their processes and then reshaping the IT department accordingly, while cutting waste and helping employees gain new skills, Agassi said.

He told the audience to look at consolidating systems where possible in an enterprise and breaking down silos. Agassi acknowledged that doing so can be tricky, since those who run the systems are going to be defensive. "No one likes to take themselves out of a job," he said. But "don’t protect the past, move to protect the future."

That message hit home with a couple of attendees.

A company must press for innovation in its processes, although "you need to keep the lights on for the existing systems," said Mike Longmore, development manager at Advanced Energy Industries Inc. The Fort Collins, Colo., manufacturer of power supplies and flow controls runs mySAP ERP and the SAP Business Warehouse, among other SAP applications.

Longmore said he feels SAP is on the cutting edge of innovation. And while he said his company isn’t a large ERP user by SAP’s standards, Longmore added that no other ERP provider comes close to providing SAP’s flexibility.

On a different note, SAP also announced yesterday that it had launched an Enterprise Services Community Process. This will allow SAP customers and partners such as independent software vendors and integrators to collaborate in a public forum to improve on SAP’s Enterprise Service Architecture (ESA).

ESA is a Web services-based set of technologies bundled into SAP’s own NetWeaver middleware and integration stack that provides the backbone for a company’s business applications. Among the partners who have signed on to the community process are Adobe and EMC Corp., SAP said. Those companies that incorporate ESA technology into their products will receive an "Enterprise Services-Ready" designation.

ERP systems info from computerworld

ERP Systems homepage


ERP or BoB

The debate over whether to opt for enterprise resource planning (ERP) or best-of-breed (BoB) specialists for supply chain management (SCM) software has been raging for a while, but the issue is at the forefront of supply chain conversations now more than ever. In the past two years, ERP providers have made increasingly aggressive efforts to boost their presence in the SCM software applications market, traditionally dominated by the best of breed providers. This has left many users with a headache from trying to discern which approach is the better option. One reason for this confusion is the sheer volume of management issues that companies face: the continued misalignment of IT and business functions around the ERP vs. BoB issue; the difficulties of estimating the true costs of integration for both ERP and BoB alternatives; the lack of connection that often exists between corporate executives and supply chain leaders on the importance of logistics and SCM; a frequently poor and frustrating software evaluation and selection processes. Business functions such as transportation, distribution and inventory management, are becoming more important as market forces such as shorter cycle times and customer requirements for real-time information come together. This has led many companies to upgrade their technology support in areas like warehouse or transportation management systems, supply chain visibility and other related SCM software applications. BoB providers have traditionally led the SCM market. In recent years, vendors have developed broader suites that provide integrated support across supply chain processes, such as linking inventory replenishment and transportation management. However, the software buying landscape is changing and there is greater competition between ERP and BoB vendors.

ERP info from Line56

ERP Systems homepage