Best Practice Implementation is Changing ERP. CPiO White Paper. T E CPiO. Part of the Waterdale Group of Companies

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1 White Paper Best Practice Implementation is Changing ERP Part of the Waterdale Group of Companies Part of the Waterdale Group of Companies 1

2 I White Paper I Best Practice Implementation is Changing ERP Management Overview Get the core ERP solution in place, realise the benefits of improved business insight, collaboration and productivity, and then build upon the development as and when required. According to the latest research from Sage, over three quarters (78%) of organisations looking for a new ERP solution are hoping to achieve better insight on business and operations and make better-informed decisions; whilst 73% want to accelerate company processes and improve productivity. Yet despite these pressing business needs, too many SMEs are still reliant upon outdated and inefficient IT solutions. Many are still deterred by the diversity and customisation opportunities available within today s ERP applications. But how valid are concerns regarding spiralling costs and business upheaval? Today there is no need to embark upon excessive customisation or complex process design up front. The fundamental requirement must be to get the core ERP solution in place, realise the benefits of improved business insight, collaboration and productivity, and then build upon the development as and when required. A best practice implementation model, as adopted by Sage ERP X3 Standard Edition, builds on experience in financials, distribution and manufacturing to reduce timescales, lower risk, cut costs and provide a platform for future growth. Indeed, when asked about the main improvements to the business since the adoption of Sage ERP X3, respondents cite: Improved business insight and reduced risks Improved productivity Enhanced collaboration across the organisation and with partners This White Paper outlines the value of a best practice implementation and explains how best to retain control over the implementation, avoid project creep and rapidly realise key business objectives. Part of the Waterdale Group of Companies 2

3 I White Paper I Best Practice Implementation is Changing ERP Introduction The Case for ERP Organisations are looking for cost control, improved collaboration and productivity, faster and better decision making. All great reasons for adopting a new Enterprise Resource Planning (ERP) solution. Business efficiency is compromised by multiple sources of information from the customer database to the product database and finance information. Since Gartner Group first coined the acronym ERP in 1990, ERP vendors have been creating ever more functionally rich solutions to transform finance, distribution and manufacturing processes. Many have added Customer Relationship Management (CRM), reporting and analytics tools; time sheets, expense management and procurement. And, more recently, vendors and resellers have created a raft of vertical market specific add-ons, from ticketing to shop floor data capture, to enable even greater improvements in productivity and cost control. The functionality on offer today is compelling. So why are so many of the UK s SMEs still struggling with inappropriate technology infrastructure? The vast majority are still trying to manage on outdated finance solutions that have not scaled to reflect business growth or embraced even the most basic technology innovations, such as workflow or remote access. Many are still unable to integrate web based orders directly in the sales and production systems. Business efficiency is compromised by multiple sources of information from the customer database to the product database and finance information. Indeed, not only is this data stored separately, but the underlying technology is often different, creating a near impossible challenge of consolidating information and attaining a single view of business operations. The result? Despite decades of innovation, the arrival of new cloud based models for acquiring and deploying technology and the wireless and Internet revolutions, at the most basic level UK businesses cannot answer the most essential questions: How accurate is the cash flow forecast? What is the profitability by customer? By product? By region or sales person? How are suppliers performing? How is supplier performance affecting profitability? How can the business streamline processes without losing control over quality? With no confidence in operational information or the underlying technology infrastructure, how can any business embark upon expansion or confidently assess new business opportunities? Part of the Waterdale Group of Companies 3

4 I White Paper I Best Practice Implementation is Changing ERP Traditional ERP Deployment The Time, Cost and Resources So why have so many organisations failed to exploit ERP to date? In one word: fear. Fear of escalating costs; fear of business disruption; and fear of making the wrong technology choice. Organisations are being pulled in two directions. On the one hand, the economic challenges are demanding greater efficiency, cost reduction and more effective ways of interacting with customers and suppliers, prompting a clear requirement for new, innovative technologies and processes. On the other, businesses are understandably risk averse, wary of taking the wrong technology route and fearful of incurring expensive business disruption. Whilst many organisations have attained businesstransforming benefits from the implementation of ERP, the process can be problematic from spiralling costs to endless project over runs. And, to be fair, these fears are valid. Whilst many organisations have attained business-transforming benefits from the implementation of ERP, the process can be problematic from spiralling costs to endless project over runs. The fear of taking the wrong technology route is also valid. Today s ERP solutions are highly functional and configurable. The choice of features is often overwhelming; and vendors use a growing array of add-on options to attract new business. As a result, even when an initial specification has been agreed, once the project gets underway there is a huge temptation to add just a little bit of functionality here and customised process there. Project creep is rife. However, there is no need to continually reinvent the wheel or create a unique solution. Over the past two decades, hundreds of thousands of organisations have deployed financial, distribution and manufacturing solutions. And while each business will have some idiosyncrasy, it is rarely significant enough to justify upwards of 100 days consultancy and customisation and the attendant risk and cost everything that the business has pledged to avoid. There are several mistakes organisations need to avoid to minimise cost and over run and attain the right technology solution: Over-prescriptive approach to technology: Complex and technically detailed Requests for Tender (RFT) dilute the business objectives and extend the procurement process significantly. Extended project teams: In the bid to minimise the risk of making the wrong decision, too many companies canvass opinion from every user department and IT expert. Sadly, the result is a loss of focus on the key business objectives of the investment. Assuming all business problems are unique: The core requirements of finance, distribution and manufacturing do not vary significantly between organisations. Insistence on highly customised processes and complex technology integration can only extend the life of the project, add cost and risk. The rewards rarely justify this approach. Part of the Waterdale Group of Companies 4

5 I White Paper I Best Practice Implementation is Changing ERP Introducing Best Practice Taking a different approach to ERP design and implementation can drastically reduce risk, cost and project duration. Rather than starting from scratch and choosing from an extensive list of added value features, growing numbers of organisations are taking a radically different approach that builds on the experience of ERP deployments globally over the last two decades. This best practice model enables financials to be deployed from just 35 days; manufacturing from in 50 days at least half the time taken by a traditional implementation approach. During the past few years Sage has invested heavily in the creation of a templated implementation approach that exploits its experience in financials, distribution and manufacturing to deliver a best practice model. Sage ERP X3 Standard Edition is based on a pre-designed model. Rather than demanding organisations choose specific product features and create customised processes, the implementation process is by exception. This means that during the design and implementation process an organisation has to demonstrate a very strong business case to move away from the standard template. This approach ensures the organisation remains focused on its key business objectives throughout the deployment: any changes to the core implementation, from process to technology add-on, have to demonstrate a viable return on investment or meet a specific operational need. An exception to this could be, for example, the Chart of Accounts: using Sage ERP X3 Standard Edition, organisations can opt to map the Chart of Accounts to reflect reporting requirements. The Best Practice Model provides: Predefined yet adaptable implementation framework with standard business requirements and processes Processes mapped to a set of questionnaires that streamline the implementation timeframe Pre-set parameters, predefined user roles and process flows accelerate deployment A Project Quality Plan (PQP) that ensures all the right steps are taken to monitor and manage the project from start to finish Incremental project sign off at key stages ensures on-going commitment and avoids slippage The template includes over 140 pre-defined visual processes, over 400 reports and 50 Key Performance Indicators (KPI) This best practice model enables financials to be deployed from just 35 days; manufacturing from in 50 days at least half the time taken by a traditional implementation approach. And with incremental sign off points throughout the project, organisations have both full visibility and a requirement to remain committed to keeping the implementation on track. In addition, Sage ERP X3 Standard Edition s visual processes are proven to minimise training and improve user adoption. In most cases, a train the trainer approach is highly effective, reducing costs and making it easier to ensure training is delivered in tandem with system roll out to maximise relevance. Part of the Waterdale Group of Companies 5

6 I White Paper I Best Practice Implementation is Changing ERP Obviously one of the most fundamental issues is to retain a focus on business needs rather than technology. Leveraging Best Practice Guideline for Success The shift towards best practice implementation drastically reduces the risks associated with ERP deployment and should allay many of the fears that have deterred organisations from embracing much needed technology change. But best practice is not a panacea. It provides an excellent foundation but it is also essential that organisations take the right approach to technology acquisition, design and implementation to realise the true benefits of this model. Obviously one of the most fundamental issues is to retain a focus on business needs rather than technology. And the exception based best practice approach certainly reinforces the business objectives. However, there are other issues to consider: 1. Be realistic on timescales: Having often spent months on extended Request for Tenders (RFT), once a decision is made, organisations are often tempted to push for a very fast implementation. But this is a mistake: a twelve week implementation cannot be squeezed into six weeks without incurring significant business risk. A realistic implementation schedule is critical to ensure every aspect is managed well from process design to user training. 2. Minimise the project team: Limiting those involved in the project, at least initially, is essential to retain focus and avoid decision making delays. Ensure the project is business led, rather than dominated by IT staff, to retain focus on core objectives. 3. Appoint a Project Sponsor: A project sponsor is a key role to drive acceptance, creating awareness and understanding about the project throughout the business and taking responsibility for ensuring user availability for training. Part of the Waterdale Group of Companies 6

7 I White Paper I Best Practice Implementation is Changing ERP Conclusion - Building for the Future Taking the best practice approach, an organisation could achieve a 90% fit within weeks. Not only is the design and implementation time typically halved but, more importantly, the many months previously wasted in long drawn out RFTs are completely removed. The time from project initiation to realisation is transformed. Furthermore, having achieved the required new ERP functionality within months organisations create both the platform and momentum to realise the key objectives of the investment from improving business insight to accelerating company processes and improving productivity. Organisations need to minimise risk and reduce costs to realise ERP objectives. 1. Enhance Customer Service: With a consolidated data model, every customer interaction is recorded in the same place, irrespective of depot, salesperson, online or telephone sale, or support call. This complete picture enables rapid resolution of queries, supports accurate analysis of profitability per customer and trends in credit history to drive relevant and effective business relationships. 2. Improve Purchasing Power: A consolidated view of supplier spend across every business unit, department or operating company enables the organisation to consolidate suppliers and negotiate better terms. 3. Collaboration: Sage ERP X3 s web-based architecture enables staff, customers and suppliers to conveniently and securely access information wherever they are via web browser or a client-server operation. Combining a single source of data with visual processes and web services enables organisations to improve collaboration both internally and with customers and suppliers throughout the supply chain, realising significant efficiency gains. 4. Business Expansion: Should the business then expand internationally, for example, and require multi-currency and legislation packs, the upgrade to Sage ERP X3 Premium Edition is very straightforward, taking very little time. Organisations need to minimise risk and reduce costs to realise ERP objectives. So isn t it time to embrace a best practice model that demystifies the implementation process, cuts costs and fast tracks ROI? Taking this approach, the barrier to adopting ERP is removed; benefits can be rapidly realised; and, critically, the business has a robust, proven platform that can be expanded and enhanced to support specific new business objectives as they emerge. Part of the Waterdale Group of Companies 7

8 White Paper Limited Fort Dunlop Fort Parkway Birmingham B24 9FD W Part of the Waterdale Group of Companies Part of the Waterdale Group of Companies 8

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