Do you have a roadmap to kill your ERP or you are happily married to it?


If you were doing an IT Job in early and mid-1990s, you would remember the Euphoria around ERP systems. Almost every organization wanted to implement an ERP system so that they have an integrated view of their processes, business applications and financial data. Lot of organizations, consultancies as well as product companies benefitted during that phase of ERP implementations across the globe with US leading the way and Europe not far behind. Especially consulting organizations had a windfall of revenue just because they could package their services along-with Business Process Reengineering and ERP product implementation capabilities which included customization abilities too. Customization became a new tool to make money by consultants and the cost of customization and support for an ERP project started going through the roof sometimes hitting 5 times the size of implementation fees.
ERP has come full circle in last 20-25 years and realization in client organizations as well as ERP product organizations, that customization is not the right way to go, started bringing changes in the solution and the way it was used. ERPs now became liabilities instead of assets because of inabilities to peacefully upgrade or take advantage of a new functionality in product as some or other customization is blocking it to be used in some or other way. The product organizations started a new trend of cloud with leaders like Oracle and SAP leading the pack by introducing products like Fusion Applications or Line of Business SaaS respectively.   The new age is talking only about Cloud based ERPs (mainly Software as a Service Model) and the old guard is expected to give way. The ERP (on premise model) has started dying as all incremental applications have already started moving to Cloud which will be followed by the core business processes also making their way out of organization owned data centres.
Are you ready to KILL ERP?
If you are a services organization, it is highly likely that you already have a plan to kill existing ERP and move to cloud (do you?) but if you are a manufacturing company or a trading organization that deals with mainly products and assets, you still are waiting for others to take the plunge first. It is expected that there will be around 8-10 years difference in ERP life at services organizations and manufacturing organizations as ERPs traditionally have done a good job in mapping the processes and delivering results for a manufacturing company rather than a services company, but the end is near for sure.
The big questions are: Are you ready? What is your plan? Are you still struggling to fix business analytics reports based on ERP because of data integrity issues or have started thinking to move to state of the art best in breed applications on cloud that that have their own analytics capabilities?
Is it really the time to shed your love for existing ERP that you implemented, nurtured and supported all these years or it is time to move on and take on new challenges so that your organization can be early mover and can take a competitive advantage using new technology?

ERP Implementation - What is expected from you?

Often, I have seen discussions happening between the business users, the implementation partner and the IT Team in an organization on who will do what and this becomes one of the bottlenecks in success of a project. Lately, when I was addressing a CIO Conference on the subject of transforming business with the help of ERP and advanced ERP products implementation, this question popped up again and forced me to try and document expectations from each team so that it can work as working standard for the organizations as well as IT vendors.  I will be publishing my understanding of expectations from each team in the next series of posts as I think I have the requisite experience and exposure to ERP implementations in all roles viz. Business User, IT Consultant as well as a CIO across the globe and in multiple industries. To start-with, let me try to put together the expectations (in-fact I would like to mention small activities also which the other two teams expect from the 3rd team) from the IT Team of the organization which is implementing an ERP Solution. I have divided the expectations in 3 major sections that are given below:

Pre-Implementation Expectations from IT Team:
  • Finalize broad scope of work, create and float RFP to potential partners
  • Select product and its fitment into existing architecture, footprint, industry and solution
  • Evaluate Vendor proposals on technical competence, past experience and commercials
  • Arrange executive sponsorship, drive steering committee creation in the organization
  • Drive creation of core user group from all stakeholder teams in the organization
  • Arrange for logistics like sitting area of core users, implementation partner team, desktops, phones etc.
  • Decide on project plan, major milestones and key success factors with steering committee 
  • Plan for Application Instance Strategy (Development, Test etc.)
During Implementation Expectations from IT Team:
  • Organize business users and implementation partner teams interactions
  • Drive sign-offs from business on requirements and other major project milestones
  • Monitor project success vis-à-vis project plan
  • Arrange all requisite IT infrastructure for the project
  • Decide on data upload strategy (how much data, from which systems, by when etc.)
  • Extract data from legacy systems and arrange cleaning by core user team
  • Provide inputs on solution fitment into existing solution
  • Provide inputs on key design elements
  • Approve/Reject Customization(s) suggested by implementation vendor
  • Freeze requirements
  • Arrange business users participation during key milestones like Solution Design & Demonstration, Testing etc.
  • Arrange training for core team users by implementation partners
  • Ensure proper staffing of resources by implementation partner
  • Arrange steering committee meetings for project health check regularly
  • Ensure core team users impart training to other intended users
  • Drive change management steps in the organization for faster acceptance of new application
  • Plan production cutover testing and planned downtime as per application instance strategy
  • Review key success factors delivery by implementation partner
  • Take final sign-offs from core team for going LIVE
  • Drive steering committee for GO LIVE readiness decision
Post Implementation Expectations from IT Team:
  • Hand hold business users to run the new system for first month
  • Set-up central help desk for post implementation related issues and queries
  • Monitor and resolve any IT infrastructural related issues
  • Handle change management issues with the help of steering committee
  • Arrange short refresher trainings for end users to reduce mistakes in new application
  • Ensure proper documentation of project is provided by implementation partner
  • Ensure complete and proper knowledge transfer from implementation partner to application support team

If I can get valuable inputs from readers, I would like to add/delete/modify to these working standards do that it really becomes useful tool for the organizations and vendors alike and helps in making ERP Projects more successful for all stakeholders.
  

Financial Business Intelligence - Can it be successful without financial consolidation?

Today's enterprises do not have a simple structure with multiple business entities at multiple geographies, large number of joint ventures, subsidiaries, acquisitions, de mergers etc. and all this is adding to complexities of financial reporting. Add to this, different currencies, legal requirements, ever changing leadership formats of reporting and you have a substantial challenge in front of you. 

A typical structure of a large transnational organization will have parent organization with multiple subsidiaries and some of these subsidiaries would have acquired few other companies which might have their own subsidiaries in few countries. Then there will be different business lines or verticals which operate independently or have joint ventures. Now, consolidating the financial data from all these entities is a challange and most of the time your transactional system or ERP will not be able to help in this specially if more than one system is being used in these entities. Another important point is that the business intelligence tools will also not be able to help in giving the correct information as data is available in piece meal and the real picture is not captured.

While deploying a business intelligence solution, it is imperative that our data is first consolidated with the help of either a financial consolidation tool or the module of the Enterprise Performance Management tool you have deployed. The major benefits of data consolidation will be:
  • Get a single source of truth: These provide a single version of the truth to support financial management and statutory reporting
  • Accelerate reporting cycles: Substantially reduce the period closing cycles and deliver more timely results to internal and external stakeholders across the globe
  • Improve transparency and compliance: Helps reduce the cost of compliance (as stipulated by the Sarbanes-Oxley Act, IFRS, electronic filing, and other regulatory requirements) and support disclosure requirements, such as sustainability reporting
  • Perform strategic analysis: You will spend less time on processing and more time on value-added analysis
Deployment of Business Intelligence tool will be much easier and highly useful if it is done after financial consolidation exercise and will help you in getting expected results. (Yes, the scope of this article is only financial business intelligence and not includes supply chain intelligence etc.). The benefits that you can reap after deploying your BI tool can be:
  • Aligning the enterprise with its KPIs
  • Assist leadership take faster and fact based decisions
  • Simulation of scenarios and doing what if analysis
  • Allocation and re-allocation of costs and overheads across entities without distrubing the transactional system entries
  • No need to look at multiple sources of data
All above can be reaped in a much better way of we consolidate the financial data first and then utilize the BI tool to provide the required dashboards and reports.