The Wall Street Journal on August 23rd published an article and regarding some of the common pitfalls of Enterprise Resource Planning (ERP) implementations.  The article and report were written by two professors, one a strategy professor and one who focuses on Information Systems.   You can read the article, called “Diets That Don’t Work: Where Enterprise Planning Goes Wrong,” here.

The article agrees significantly with RJMC’s take on ERP – that the software can provide tremendous value as long as the buyer exercises a proper degree of care in the selection and implementation of the system.  RJMC has preached consistently that change management and management of expectations are critical keys to success and the authors of this study concur, writing:

Some companies stumble with ERP at this [process change] stage because they are afraid to abandon old ways of working that have served them in the past. Others stumble later on by embracing technology that simply mirrors older systems already in use. Still others are reluctant to let go of either their old software or old ways of working.

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RJMC agrees that identifying and addressing the processes that are critical to a company’s success and protecting only these processes from significant change is a good prescription for a successful implementation.  Allowing for change to all non-critical processes in order to take advantage of the efficiencies that a new ERP system offers help our clients stay on time and on budget during their projects.  If you have chosen your ERP software properly, you can trust that the best practices built into the software will work for most of the “everyday” tasks that your team needs to accomplish.

A link to the full “WSJ Executive Advisor Report” is available on the WSJ article page.

Rubenstein / Justman Management Consultants (RJMC) is a management consulting firm that prides it on the strong relationships it has established with its many clients over the past 24 years.  RJMC is vendor and solution independent and does not sell hardware or software or perform system implementations.  Visit www.RJMC.net to better understand the scope of RJMC services.

If Enterprise Resource Planning (ERP) software vendors can use a simple webpage questionnaire to tell a buyer what level of return on investment to expect from her purchase, why do many companies that buy ERP not achieve the levels of savings and increased sales that the ERP vendors promise? The answer lies with the buyer of the software – not the vendor. Software buyers must plan carefully to achieve their return on investment goals.

As most IT experts worth their salt will advise, the ERP project is a “business” project first and foremost and an “IT” project second. The goal of the ERP project is to enhance business value and create opportunities for managers and staff to add to the company’s bottom line. This goal must be the focus of most of the planning that is involved in an ERP implementation project if the company expects to see a substantial return on its ERP investment. Allowing ample time for hardware and network set-up, data conversion, and system training is necessary for a project that results in an operational ERP tool, but not sufficient for a truly successful ERP project in terms of value to the business.
Planning to create ROI (enhanced business value) is the only way to achieve the ROI you seek. We offer our five steps to Achievable ROI:

1. Review Current Processes with Functional Teams: Most managers can identify at least a few things that her department could handle more efficiently if she had the right tools. Use some brainstorming sessions with your managers and staff to identify some of the “low-hanging fruit” that can be improved upon with the introduction of a new ERP system. Heavily paper-based or manual processes are the first targets for improvement.
2. Diagnose Areas for Improvement: After the obvious inefficiencies have been identified, challenge your managers to ask about each process “Is this the best way to accomplish this task? What is the obstacle to improving this process?” The solutions to these challenges may be related to the system or may not be related at all. Either way, this is a good time to take a hard look at what each department is doing in order to target problems to be fixed.
3. Understand the New System Tools: While training is critically important before the new ERP system goes live, initial user training (along with solution demonstrations) can serve as a tutorial for your managers and “super users” that allows them to envision how they want their processes to work once the system is live. Understanding what the new ERP system can do should inform that solutions that your managers develop to address their areas of inefficiency.
4. Allow Functional Teams to Set ROI Targets: In setting your Return on Investment targets, make sure that the managers responsible for achieving the ROI are the same people who set the target goals. This is important for two reasons. First, it should provide you with goals that are actually achievable (although allowing those who will be measured to set the goals also means you must validate that the goals are not too easily achievable) as these are the staff that are most closely in touch with the processes to be improved. Second, allowing managers to set the ROI goals creates a buy-in from these managers that will ensure they do not abandon the goals without good reason. It is more difficult to abandon a goal you have set for yourself than to abandon an “arbitrary” goal set by your upper management.
5. Measure Progress Towards the ROI Targets: Remember that if you can’t measure it, you can’t manage it. Clear measurements, clear timelines for results, and some good old positive peer pressure will help your team to the finish line – to the targeted ROI within the targeted timeframe.

The secret here is making sure that your plans for ROI are influenced by (if not outright created by) the managers and staff that will be responsible for achieving the results the company desires. Allow your people to plan for their success, measure their efforts, and reward their success. The ERP system is a tool to help your business achieve its goals. Remember this throughout your project and you will be on your way to achieving the ROI that you expected.

Rubenstein / Justman Management Consultants (RJMC) is a management consulting firm that prides it on the strong relationships it has established with its many clients over the past 24 years.  RJMC is vendor and solution independent and does not sell hardware or software or perform system implementations.  Visit www.RJMC.net to better understand the scope of RJMC services.

For the past 24 years we at Rubenstein / Justman Management Consultants (RJMC) have been assisting our mid-market clients to assess and improve their current enterprise systems or to evaluate and select alternative systems.  Over these years we have noted considerable change in the software industry, the greatest being in the area of consolidation.  Today there are fewer viable vendors and solutions in the marketplace than in the past.   That isn’t necessarily a bad thing, just a fact.

Today, the players in the mid-market space for integrated enterprise solutions include big names like Epicor, Lawson, Microsoft, Oracle, Sage, and SAP.  Then there are the niche players that address specific vertical industries or offer best of breed solutions – too many to list just now.  But one of the larger companies that sometimes slips through the cracks is Infor.  With the objective of getting some clarification as to the company’s strategic direction as it relates to manufacturing, RJMC initiated a call directly to Infor.  We were pleasantly surprised by their overall candor and willingness to discuss product strengths and weaknesses.  Here are a few highlights from our conversation regarding the status of their manufacturing solutions.

• Infor is a U.S. based company with over $2 billion in revenue, 70,000+ customers worldwide, and more than 8,000 employees.

• Infor has grown largely through the acquisition of a variety of ERP solutions, some of which could be classified as legacy in nature, but in most cases, Infor is providing a migration path through its Flex program to allow customers to upgrade and replace their legacy software to one of the other more mainstream solutions in the Infor family of solutions.

• Although there are many ERP-related solutions referenced on the Infor website, today’s focus on manufacturing is largely supported by the following solutions:

• Infor ERP LN / Baan – This solution is targeted for companies over $200M in annual sales with global requirements.  LN is the new name for the tried and true Baan ERP solution.  Infor is the process of introducing tools which will speed implementation to 90 days or less.

• Infor ERP Syteline – This solution for discrete manufacturing received a recent upgrade and is built on Microsoft’s .NET technology and is targeted for companies up to $400M.  Syteline promises deep manufacturing functionality.  Integrated use of Microsoft SharePoint also provides an environment for project collaboration.

• Infor ERP Adage – This solution provides essential process manufacturing functionality for the food, beverage, chemical and life science industries.  The software retains a somewhat dated “look and feel” but seems to pack in a lot of functionality.

• Infor ERP Visual – This solution is oriented towards smaller companies in the range of $40M or less and addresses core back-office financial, sales, manufacturing, engineering, and distribution needs with project management capabilities.

The bottom line is that Infor is a viable option to consider if your business relies on discrete or process manufacturing. The solutions we discussed even covered global supply chain and distribution needs.  Infor offers solutions aimed at different sized companies as well as at different manufacturing modes, such as Make to Stock (MTS), Configure to Order (CTO), Build to Order (BTO), and Engineer to Order / Project Based (ETO).  Infor also addresses its solutions to companies looking to employ lean tools and flow manufacturing methodologies. We were impressed with the depth of the manufacturing expertise and knowledge on Infor’s part – it was clear that this area has been given a lot of focus and attention.

As a company that focuses on representing the best interests of our mid-market clients to assist them in finding the right solution at the right price, Infor should be considered.  From our brief, candid conversation with Infor, we are confident that they will only participate in an evaluation process when they see that they have a way to differentiate themselves from the competition either based upon feature / function, domain expertise, or by presenting a solution with a lower total cost of ownership.

Rubenstein / Justman Management Consultants (RJMC) is a management consulting firm that prides it on the strong relationships it has established with its many clients over the past 24 years.  RJMC is vendor and solution independent and does not sell hardware or software or perform system implementations.  Visit www.RJMC.net to better understand the scope of RJMC services.

In the process of working with a large number of firms over the past 24 years, one question that frequently comes to the fore at the beginning of each project is “How much will a new ERP solution cost?” That can be a very difficult question to answer because each company has its own unique system requirements and there are still many commercially available solutions to choose from.

RJMC has taken some of the mystery out of the equation so that a mid-market company can answer but four simple questions and the RJMC ERP Budget Calculator does the rest to provide both a “conservative” and “best case” all-in estimate.

For those companies that would like a more detailed analysis and presentation, RJMC will provide a custom ERP budget presentation. Call Jeff Dix at 310 / 445-5300 or email jeff@rjmc.net for more information.

RJMC assisted Sunrider to document enterprise-wide system requirements that included global financials, process manufacturing, and distribution.  RJMC also participated in vendor contract negotiations.

philosophy engaged Rubenstein / Justman Management Consultants (RJMC) as its Project Manager for the system implementation effort. philosophy Chief Financial Officer Gretchen Price, executive sponsor of the effort, expressed her appreciation for RJMC’s counsel during this challenging implementation process that promises to provide more flexibility and better operational vision for the entire company.

With guidance from RJMC, philosophy evaluated software options from several providers. Gary Rubenstein, managing partner of RJMC said “We undertook our proven approach to evaluating philosophy’s needs in order to satisfy their unique requirements and support their strategic priorities. We worked with the entire project team to select and implement the system that could best support the complexity of philosophy’s operations and we recommended the Oracle E-Business Suite which has now been successfully implemented and is proving to be the right choice.

About philosophy:
philosophy is a lifestyle brand that celebrates feeling well and living joyously. Endorsed by doctors, celebrities, and most importantly its customers, philosophy wants to inspire you to live a better life by being better to yourself. philosophy offers you a lifestyle makeover that celebrates the idea that there is only one of you in this world and that you must honor your existence.

RJMC participated as internal Project Management for the implementation of new Financials, Human Resources, Advanced Benefits, and Payroll systems.

RJMC was responsible for directing See’s functional teams through complex changes in business processes as the result of the new systems.

RJMC’s assisted philosophy with a Technology Roadmap followed by a full ERP Evaluation and Selection process that included requirements, RFP, vendor demonstrations, and a final selection decision.  RJMC continued on as implementation Project Management.

“In conjunction with our ERP system selection and implementation, we really appreciated your counsel over this journey.” - Gretchen Price, Chief Financial Officer

“RJMC played a key role in our ERP selection and implementation process. Without them we would not have achieved the same level of success.” - Chuck Morehead, Information Technology Manager

RJMC participated in the company’s ERP Software Evaluation and Selection process and contract negotiations.