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Showing posts with label ERP selection. Show all posts
Showing posts with label ERP selection. Show all posts

Wednesday, August 28, 2019

The Use and Misuse of PaaS

One of the key advantages of modern cloud systems is that they often come with rapid development platforms that allow the vendor, partners, and even customers to build extensions and customizations to the system without affecting the underlying code or architecture of the base system. These are generally known as Platform as a Service (PaaS).

Examples include the Salesforce Lightning (formerly Force.com) platform, the SuiteCloud platform of Oracle’s NetSuite, Acumatica’s xRP platform, Sage Intacct’s Platform Services, Microsoft’s Power Platform, and many others.

However, as with so many good things in life, PaaS can be used and abused.

Read the rest of this post on the Strativa blog:
The Use and Misuse of Platform as a Service 

Wednesday, July 17, 2019

The Benefits of Business Process Framing

In selecting and implementing a new enterprise system, business leaders have learned the importance of evaluating business processes. “Let’s not make this an IT project,” they say. “Let’s really understand our current business and our vision for the future.” Without a doubt, this is right, and we encourage our clients to do exactly that.

However, business leaders often think that this means they should begin with detailed process mapping of their existing processes. “Let’s have someone come in and map all our business processes,” they say.

At first glance, this seems logical. If we want to define our business requirements, what better way than to map our “as-is” processes?

Why is this not a good idea? There are at least three reasons.

Read the rest of this post on the Strativa blog: The Benefits of Business Process Framing

Monday, June 10, 2019

Getting ERP Users to Upgrade—Cloud vs. Traditional Systems

One of the great challenges facing traditional ERP vendors is getting customers to keep up with the latest version. Cloud ERP systems are supposed to solve this problem, by making the vendor responsible for upgrades and keeping all customers on a single version.

However, sometimes, even SaaS providers need to make changes that are so significant and potentially disruptive that customers resist the change.

Read the rest of this post on the Strativa blog: Getting ERP Users to Upgrade—Cloud vs. Traditional Systems

Friday, May 04, 2018

Big Shift: NetSuite Moving to Oracle Cloud Infrastructure

In recent years, Oracle has been intensely focused on its cloud strategy as the key to its growth. At Oracle Open World 2016, with the announcement of Oracle’s second-generation cloud infrastructure, Larry Ellison said, “Amazon’s lead is over.” It was an ambitious goal: At the time, Oracle’s cloud infrastructure (OCI) business was bringing in less than $200M per quarter.

Uptake of Oracle’s cloud applications is great, but when it comes to Oracle really competing with Amazon or Microsoft as a platform for independent software vendors (ISVs), the story is different.

The absence of multitenant ISVs on OCI is not because of a lack of capabilities. Oracle’s flagship database, since v12c was released in 2013, has built-in multitenancy in the form of database containers, which allow multiple tenants to share a single Oracle database, with individual containers assigned to each tenant. This approach puts the multitenancy into the infrastructure layer, allowing developers to focus their efforts on application development, not on the mechanics of multitenancy.

Oracle’s lack of commercial SaaS providers building on OCI is about to change.

Read the rest of this post on the Strativa blog:
NetSuite on Oracle Cloud Infrastructure: What It Means for Customers

Wednesday, October 18, 2017

In Vendor Evaluation, Don’t Shortcut the RFI Process

In some enterprise software selection projects, clients are tempted to skip the Request for Information (RFI) stage and go straight to a Request for Proposal (RFP). This is a mistake and often the result of not fully understanding the value of a well-written RFI.

What is the difference between an RFI and an RFP? In our software selection consulting services, we develop an RFI near the beginning of the vendor evaluation process. The RFI includes a description of the client’s organization and the client’s project. It also includes a list of key requirements for the new system—not an exhaustive list, but essential functionality or processes that are distinctive for the client. Vendors are asked to respond as to their ability to satisfy those key requirements. Vendors are not asked for a cost proposal at this time. We typically make the RFI available to as many vendors as we think are qualified to respond, or to those that express an interest in responding—usually five or more.

An RFP, in contrast, is published near the end of the evaluation process, after each finalist vendor (typically 2-3) has conducted its demonstrations or other proof-of-concept. The vendors are asked to provide a cost proposal, along with their proposed license/subscription agreements and a high-level implementation proposal with costs and schedules. The vendors’ RFI responses are incorporated as an attachment, which they can revise based on what they’ve learned since they first responded to the RFI.

Read the rest of this post on the Strativa blog: In Vendor Evaluation, Don’t Shortcut the RFI Process

Friday, June 16, 2017

Strategies for Dealing with Legacy Systems

Developing an IT strategy for some organizations can be difficult because of the presence of a legacy system. Legacy systems that are old, out-of-date, and difficult to maintain are a huge obstacle to innovation. As a result, business leaders become increasingly frustrated by their inability to roll out new mobile apps, connect with customers, analyze business performance, or become a digital business.

In recent years, it has become popular to describe organizations with an out-of-date legacy system as being in “technical debt.” I would take this a step further. If an organization ignores the need to update the system for too long, it can lead to what I refer to as “technical bankruptcy.”

We can define technical bankruptcy as a situation where the organization cannot, or finds it exceedingly difficult to, pay off the technical debt. It does not mean that the organization is in financial bankruptcy but rather that its systems are broken or held together in a way that makes them extremely difficult to upgrade.

Significant Percentage of Organizations Are at Risk of Technical Bankruptcy

In work with our clients at Strativa over the past several years, we have gained new insights into challenges facing organizations that have out-of-date legacy systems. We recently took the opportunity to combine those insights with survey data from our sister IT research firm, Computer Economics, to produce a new report, Avoiding Technical Bankruptcy in Legacy Systems. (Click the link to download the report free from the Strativa website.)

Figure 3 from the full report shows the magnitude of the problem as it applies to ERP systems. A small but significant percentage (7%) of organization have not upgraded their ERP systems for 10 or more years. These are likely to already be in technical bankruptcy. But the 13% of organizations that have not upgraded their systems in the five-to-nine-year time frame are in the danger zone: Technical debt is building, and if the organization does not undertake a major upgrade, it risks falling into technical bankruptcy.

Signs of Technical Bankruptcy

What are typical signs that a legacy system has reached the stage of technical bankruptcy? We found five characteristics:
  • Extensive modifications, extensions, and interfaces.
  • Poor understanding of the system by users and IT alike
  • Direct involvement of IT personnel in business processes.
  • Legacy system atrophy as shadow IT emerges.
  • Upgrade or replacement hard to justify.
In the full report, we explore the symptoms of technical bankruptcy and the devastating effects that it has on the organization. We continue by quantifying the scope of the problem specifically for ERP systems, using our research on the typical age, frequency of upgrades, and extent of modification of these systems.

Most importantly, we conclude with recommendations on how to avoid technical bankruptcy and, for organizations that have reached this stage, strategies for getting out and staying out of technical bankruptcy going forward.  

Download the full report, free from the Strativa website:
IT Strategies for Legacy Systems: Avoiding Technical Bankruptcy.
 


Bonus: Watch a Datamation's James McGuire in a video interview with me about the report.

Thursday, May 04, 2017

Software Vendor Implementation Services Not Always Best Choice

In our software selection consulting, clients often seek our advice on implementation partners. In fact, our experience over several decades tells us that the choice of an implementation team is as important, sometimes more important, than the choice of a new system.

In choosing an implementation consulting group, clients often start out thinking that it’s best to choose the vendor’s own professional services group. They think that no one can know the software as well as the vendor’s own personnel. They think that when problems arise, the vendor’s consultants will be in a better position to deal with the software vendor. They also think that there will be less finger-pointing: the consultants blaming the vendor, or the vendor blaming the consultants.

These considerations have merit. But there are other factors to consider, factors that may make an implementation partner, or even an independent consulting firm, a better choice.

Read the rest of this post on the Strativa blog:
Software Vendor Implementation Services Not Always Best Choice.

Thursday, February 09, 2017

Three Things to Like about Acumatica

Since the turn of the century, there has been an ongoing ERP consolidation trend, with Oracle, Infor, Epicor, and others buying up smaller ERP providers. During this same period, newer ERP vendors have risen up to challenge the incumbents. Nearly all of the new entrants are cloud ERP systems.

One of the most interesting of these is Seattle-area-based Acumatica, founded in 2008—just yesterday in “ERP years.” Like many other ERP startups, it initially focused on services businesses but soon added distribution and CRM functionality to its horizontal capabilities. Its go-to-market strategy is 100% through value-added resellers (VARs), who can add their own industry-specific software on top of Acumatica. Its VAR strategy, in this respect, is similar to that of Microsoft Dynamics and Sage. In fact, many of the new VARs in Acumatica’s channel program have come from the Microsoft and Sage ecosystems.

Acumatica’s partner and customer conference in January gave us an opportunity to update our view of this emerging cloud ERP provider. We find that Acumatica is interesting because of three characteristics that are somewhat novel in the ERP world.

Continue reading on the Strativa blog: Three Things to Like about Acumatica

Friday, May 06, 2016

Plex Developing a Taste for Food & Beverage

Plex Systems, a long time cloud ERP provider, primarily to automotive and industrial suppliers, has recently been expanding its focus to the food and beverage sector. T

To see Plex now actively pursuing opportunities in food and beverage indicates that Plex is serious about this market. Nevertheless, even within this sector, Plex is selective in its focus.

This post outlines the capabilities of Plex for food and beverage manufacturers along with steps that it is taking to better serve this industry.

Read the whole post on the Strativa blog:  Plex Developing a Taste for Food & Beverage

Saturday, February 27, 2016

The Role of Fear in ERP Implementation

Photo Credit
One of Deming’s 14 points for management was, “Drive out fear, so that everyone may work effectively for the company.” By this he meant that employees should not be afraid to point out problems, provide feedback, or make mistakes in an effort to improve. Business leaders should engage employees positively in continuous improvement.

But when it comes to business leaders themselves, fear can be a powerful motivator. And, nowhere is a healthy fear more needed than in ERP implementation.

It is difficult to think of a major project that is riskier for an organization than an ERP implementation. It ranks right up there with a major strategic merger or acquisition in terms of potential to disrupt the business. This is because an ERP implementation touches nearly every function of the business, nearly every business process, and nearly every employee. Although ERP systems involve computers, they are not IT projects: they are business change initiatives. Do it wrong, and you may find yourself as a case study on the front page of the Wall Street Journal.

Hopes and Fears

I recently co-led a half-day workshop for a large client in the manufacturing industry that is about to embark on a wholesale replacement of their aging ERP system. The participants were 18 of the firm’s business leaders. We covered the history and role of ERP, reasons for failure, lessons learned from successful implementations, typical processes most in need of improvement, and the roles and responsibilities of business users in the implementation.

At the end of the workshop, we conducted a short exercise that I call, “Hopes and Fears.” We invited the participants to list the things that they hoped would result from the implementation. They responded with a variety of benefits, such as improved efficiency, lower inventory, better planning, and a more modern user experience.

We then asked them to list the one thing they were most worried about, the thing they most feared as they looked forward to the implementation. Here the mood turned more serious as they expressed their fears, such as that they might not get enough training, that inventory might actually increase during the transition, that employees might not speak up when things weren’t going well, and that customer delivery schedules might be disrupted.

But the one thing that worried this group the most was that they wouldn’t have the resources to get the implementation finished while still taking care of their regular duties. Would they have the bandwidth? We had told them that they had to put their best people on this project, but could they afford to do that? Where would they get additional personnel? The top executive in the room spoke up and assured the group that the company was ready to spend the money to make those resources available.

At this point, I told them that I had accomplished my unspoken objective. My goal in conducting this workshop was to put some fear into them, as business leaders. Nothing concerns me more than when I see a company begin an ERP implementation thinking that it is no big deal, that they can delegate the project to the IT department, or to the system integrator. Or, thinking that they can treat an ERP implementation as just another project, like installing a new production line, or implementing a new safety program.

Address Fears in Contingency Planning

Healthy fear can be a strong motivator in ERP implementation. At the same time, fear should not lead to paralysis, leading an organization to not move forward with new systems.The right response is to address each of those fears in the project plan, in the form of contingency planning.
  • Are you afraid you won’t have sufficient resources? Allocate budget to hire additional resources to back-fill the regular responsibilities of project team members. 
  • Are you concerned that business users won’t adopt the new system? Develop and implement a change management plan as part of the implementation. 
  • Are you worried that customer delivery might be disrupted? Allocate extra time in the acceptance testing phase to ensure that doesn’t happen. 
You can never completely eliminate risk in an ERP implementation. But with careful planning, allocation of resources, and management commitment you can greatly mitigate those risks.

Monday, November 16, 2015

Which Comes First, New Systems or New Processes?

Everyone agrees that business process improvement is a key success factor in enterprise system implementation. But, which comes first? Should organizations redesign their business processes before selecting and implementing new systems? Or should they first select a new software vendor and then redesign their processes to match how the new system does things?

This question comes up repeatedly in our vendor evaluation and software selection consulting services. Clients read about failed ERP or CRM projects, for example. They hear the warnings of executives from such companies, telling them to spend more time up front understanding their business processes. They hear about companies that go live but don’t achieve the desired benefits. They vow to do better. They don’t just want to implement a new system. They want to implement best business practices.

These are good reactions. When it comes to enterprise systems, anything that heightens the fear of failure is a good thing. The more business leaders are focused on business processes, the better.

But, how should business leaders deal with their business processes when implementing a new system?
  • Should they improve their processes before implementing the new system, so that the new system is not automating broken processes?
  • Or, should they choose the new system first, so that they can redesign their business processes using the best business practices that are embodied in the new system?

The answer is a little bit of both: the two should be done in parallel. In fact, doing all of one before the other—whether process first, or system first—will result in failure.

Read the full post on the Strativa website:
Which Comes First, New Business Processes and New Systems?

Wednesday, September 30, 2015

Rootstock's Momentum in Cloud ERP

Rootstock Software is an up-and-coming cloud manufacturing ERP provider, built on the Salesforce.com platform. Last year, I covered Rootstock in a post about four ERP systems in the Salesforce ecosystem. This year, the annual Dreamforce conference gave me the opportunity to interview Rootstock executives and customers about the progress the firm has made over the past year.

In short, Rootstock is showing good momentum, nearly doubling its publicly announced customer count over the past 18 months. It is also building out its product offerings by developing its own native accounting applications and extending its business intelligence capabilities utilizing Salesforce Wave Analytics.

Read the full post on the Strativa website: Rootstock Rounding Out Its Cloud ERP Offerings.

Sunday, June 07, 2015

The Problem with ERP Requirements Templates

Companies undertaking a new ERP vendor selection often begin the effort by using a standard template of ERP system requirements. Though requirements checklists may appear to be a time-saving way to get to a requirements specification, this approach can actually make the project longer and cost more than it should. Moreover, use of requirements templates can actually lead to the wrong ERP system being selected.

In this post, we identify the problems with the use of ERP requirements templates and outline a better way for specifying requirements for new ERP systems.

Read the rest of this post on the Strativa blog: The Problem with ERP Requirements Templates.

Sunday, April 26, 2015

Infor ERP Customers and the UpgradeX Roadmap

I was at Infor’s headquarters in New York City recently for Infor’s Innovation Summit, its annual event for industry analysts. It’s a good two day briefing, packed with a lot of information on Infor’s broad portfolio of products and its many new initiatives, along with access to all of its top executives.

One of my goals was to see what kind of progress Infor has been making on its CloudSuite program, and especially its UpgradeX initiative, which is aimed at upgrading Infor’s existing customer base to current versions deployed in the cloud. In our ERP selection consulting services, we often see Infor as the incumbent provider, so knowing the details of these offerings is important in understanding options for these clients going forward.

But Infor faces two challenges. First, it must convince a greater share of its 70,000 customers to upgrade to its latest versions. Then, if it does convince them, Infor will need to have the implementation resources trained and available to support those customer migrations.

Read the rest of this post on the Strativa website: Infor ERP Customers and the UpgradeX Roadmap

Sunday, February 22, 2015

ERP Selection Is Not Just About Vendor Selection


When an organization decides to look for a new ERP system, consultants and vendors often refer to that effort as an "ERP selection project." Sometimes they will refer to it as ERP vendor selection, or an ERP vendor evaluation, but the idea is the same.

I've been advising companies on ERP selection since 1989, and my consulting firm Strativa has been doing ERP selection consulting since 2000. After many such projects, I've come to the conclusion that the whole process is misnamed. Why? Because referring to the effort as an ERP vendor selection project makes the choosing the right system the primary objective. 

Does this mean that it's not important for an organization to select the right system or the right vendor?  Of course not. But picking the right vendor is only a small part of what organizations need in these projects.

What Organizations Need in ERP Selection Projects

So what should ERP selection projects include, in addition to ERP vendor selection? Here are a few critical needs: 
  • Forming a team. I'm always concerned when the ERP selection decision is driven primarily by the IT organization. Part of the ERP selection effort has to be to to draft key leaders from the business side of the organization.  
  • Gaining executive sponsorship. ERP selection is a major business change initiative. Without executive sponsorship, the project will go nowhere. An early activity, therefore, is to ensure that top management is behind the effort. 
  • Business and IT strategy. Many ERP selections arise from organizations changing their business model, acquiring new lines of business, or expanding into new markets. To provide context, ERP selection should start with a review of the current and future business strategy and how IT is aligned to support it. 
  • Applications systems road map. Many of our clients have dozens of systems in addition to ERP, and many of them are connected to the ERP system. Should those systems stay or go? Most organizations would do well to first address the entire portfolio of applications and lay out a strategic road map to understand the impact of a new ERP system.
  • Application platform decision. Will the new ERP system be deployed on-premises, be hosted by a service provider, or will it be a true cloud system? The choice here will also have implications for the applications road map.
  • IT organizational impact. Does the current IT organization have the needed skills to support the future applications road map, including the new ERP system? If not, what new skill are needed and how should the IT staff be organized? Many of our ERP selection projects include side projects for skills acquisition.  
  • Defining key requirements.  It goes without saying, if you don't know what makes your business different from others, or what makes software vendors different from one another, it's difficult to pick the right system. Defining key issues should precede creation of the vendor short list. 
  • Unbiased evaluation of current ERP system. Sometimes insiders, being so familiar with the shortcomings of the organization's existing ERP system, assume that a new system is the only solution. In our ERP vendor selection consulting, however, we find a small percentage of projects where the current system is the best choice, perhaps with a version upgrade. A truly independent ERP selection consultant will include the current system for consideration. 
  • Choosing an implementation partner. ERP vendor selection is not the only decision: most organizations will need to select an ERP implementation partner. Having the right ERP system but the wrong ERP implementation consultant rarely leads to success.
  • Negotiating contracts. ERP selection does not end with picking the right system. There are ERP software license agreement, implementation consulting agreements, and in many cases these days there are contracts and service level agreements for hosting partners or cloud services providers. Your legal counsel can address legal terms and conditions, but most lawyers do not have a clue about broader issues of technical agreements. Contract review and negotiation is another key activity in ERP selection projects. 
  • ERP implementation planning. Generally, the ERP implementation partner has a good handle on the activities it must perform, but the ERP selection team must also plan for the activities required on the client side, such as training, data conversion, procedure writing, and acceptance testing. Planning for client-side staffing is also a key need.
  • Business case approval. You can pick the right vendor and negotiate fair agreements, but if your own organization does not see the business value, the project will not be approved. ERP selection projects often need to include business case preparation, in business terms.
  • Business process improvement. ERP systems can involve major changes in business processes--hopefully for the better. The ERP selection team should also anticipate the business process improvement needed as part of the new system.
  • Change management. ERP implementations rarely fail because of technology problems (though, it does happen). ERP implementation projects often fail because of organizational resistance to change. How you engage the organization during ERP selection is how you gain buy in for the decision, setting the stage for cooperation during the implementation. 
As shown by this long list of activities, very little of what we call ERP selection is the process of coming up with a short list and picking a winning vendor. Most of the process should be oriented around the activities to make a major business change initiative successful. 

Free ERP Selection Is Not Free

The fact that organizations need much more than picking the right vendor hasn't stopped some service providers and consultants from focusing on it, however. Since the 1990s, consultants have been advising buyers on how to create a short list and pick the right system. 

The free vendor evaluation websites are the worst offenders. I won't name them, but you can find them in any Google search for "ERP selection." Most have just one service: creating a short list of ERP vendors for you to consider. What they don't tell you is that their service is free because these sites make money is by selling your contact information to the very same vendors that they are short listing for you. They are not advisory services for buyers, they are lead generation services for vendors.

Some companies come to us for ERP selection consulting after they've used these free vendor selection websites. Invariably, we find the prospect has already been flooded with phone calls and emails from vendors that were referred to them by the vendor evaluation websites.  It only makes our job that much harder while we are trying to focus on the other 90% of what it takes to make an ERP selection project successful.

Buyers Are Getting Smarter

Ironically, while clients come to us for help in ERP selection, I'm finding that the area where they need the least help is in identifying vendors for their short list. By the time clients reach out to us they've already done quite a bit of homework online and networking with associates to find out who the popular vendors are. In some recent deals, I've had new prospects rattle off a list of other companies in their industry and what ERP systems they are running.

Invariably, however, we usually know of a few vendors that should be short-listed that the client hasn't heard of. In addition, the client may have misconceptions about what certain vendors are good at, or not good at. Nevertheless, I'm finding buyers today are much more knowledgeable than ever about the ERP vendor landscape. 

At the same time, clients are realizing their needs beyond selection. They have all heard the stories of multi-million dollar ERP failures, and they realize that not all the blame can be placed on the ERP vendors or the ERP implementation consulting firms. They are much more aware of their needs and making ERP selection much more than vendor evaluation.

Even if they still refer to their efforts as ERP selection projects. 

Related Posts

Strativa Resource: Trends in ERP and How to Ensure Success
A Guide for Cloud ERP Buyers

Wednesday, February 04, 2015

Free Resources on the New Strativa Website

After much work, we've launched a long-overdue redesign of website for Strativa, my business and IT consulting firm.

Visit the new website at Strativa.com

Free Resources

In addition to giving the site a fresh new design and new content, one of our motivations was to be able to offer free resources for download to our website visitors. A starting collection is now online:
These are just the start. We plan to add to this collection over the coming months and will announce new free resources here as well.

Design Principles

The new site was designed by Streetwolf, a digital creative studio in Los Angeles. Click the link to see some of the major brands its developers have worked with. (Disclosure: the founder is my son, Steve Scavo.) They designed the new site with three key principles:
  • Responsive design: The site is written in HTML5, featuring responsive design. If you're not familiar with that concept, it means that the site detects whether you're running on a desktop, tablet computer, or smartphone, and automatically adjusts to optimize viewing on that device. If you're viewing the site on a desktop or laptop, you can see the responsive design in action, by taking your browser out of full screen mode and dragging the window more narrowly. You'll see the site automatically adjust to the new size, and at some point you'll see the menu bar shrink down to a "hamburger" (those three horizontal lines indicating a menu is behind it).
     
  • Readability: The site is content-rich, focusing on the primary services that Strativa offers. It also includes a blog. With so much content, the site is designed for readability, from the font choices to the color palette. The text is primary. Images are spare and serve to illustrate the content, not overwhelm it. 
     
  • Fast: No one likes to wait, especially when looking for information and especially when viewing a site on a mobile device. Images are compressed and we deploy caching of website content where appropriate to optimize the site for fast performance.
If you have feedback on the new site, please let me know through the Strativa contact page.
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