Engaging the services of an independent consultant is often the best approach to making your ERP project succeed. In those cases, it’s a beautiful thing. But sometimes, independent consultants come with baggage that reveals a more beastly side, dooming your project to abject – and costly – failure.
Independent ERP consultants are in business to help companies make the most of their ERP implementations. Like any vendor or business partner, the value delivered may not always be the value you expected. That’s why it’s important for you to own your project, evaluate promises and manage communications and expectations with both internal and external teams. It is also critical to understand the dynamics that can arise between different players, and plan to manage them effectively.
So how do you know when a decision to hire an independent ERP consultant is a going to lead to a happy ending – and when it’s a deadly project risk? Let’s examine a few common situations that can conceal deadly pitfalls:
Driving better outcomes by managing your autonomy: Remember, you are in charge of the overall project. Don’t let an ERP project sideline your team and take focus time and resources away from your core business. Set expectations with all parties from the beginning and check in often to keep everyone on the same page. Lay out terms and conditions when contracts are signed, and establish agreements on all sides for roles and responsibilities.
Assessing consultant-OEM partnerships: When selecting and implementing ERP software, working with a firm that has solid partnerships with their OEMs can be a good thing. But too close of an association with an ERP vendor package can be a sign of trouble.
Educating senior management: Relying solely on an ERP software vendor or independent consulting firm to educate your management is not as convenient as it may look. In fact, ERP education should have little to do with software, and nothing to do with a particular package. The problem is, a sales pitch disguised as education may leave senior management believing the package the vendor is pushing is the "ideal" ERP example.
Scoping service needs accurately: Beware of add-on services. Independents can provide sound advice within predefined project roles – problems arise when your consulting partner starts talking you into paying for additional services your project team could handle, or that you just don’t need.
Managing communications and collaboration: Evaluate potential consulting partners for their ability to provide truly independent views throughout the project lifecycle. Evaluating multiple, independent perspectives throughout the process -- from vendor selection to implementation to optimization -- helps you truly validate progress and flag concerns before they become crises. Know when to leverage your consulting partner’s non-affiliated voice to point out when and where you need to step up, to review the project plan and analyze results. Unfortunately, there are times when an independent firm working on a client's behalf with the primary provider encounters politics or other conflicts. If the client management and project teams begin to take sides, this can become especially very disruptive to a successful ERP project. Allow for independent views and provide political empowerment.
Ideally, your ERP consulting partner is smart enough to know what they know, and what they don’t know. This means understanding what your business really needs -- not just what they think they can sell you. It means taking that understanding and realistically evaluating how their firm’s talent and vendor partnerships can best be combined to help you run your business better today and leverage ERP for a beautiful future.
An effective ERP implementation is a critical success factor for the typical manufacturing organization. Using an independent firm should add value to your ERP project. But failing to understand and manage the potential pitfalls can do serious damage to any project and leave you managing a beast. Teaming with the right independent ERP consultants can help you work smarter and produce beautiful results.
Today’s ERP gives enterprises of all types and sizes access to enterprise-class software technology. But the promised benefits often come with distractions and pitfalls for the unwary.
The decisions you make today – about upgrading, ERP add-ons, ongoing user training or choosing a consulting partner – determine your ability to get the most value from your ERP system tomorrow and in the future. It takes a special kind of intelligence to successfully negotiate the mean ERP streets.
You need to know what you know and what you don’t know. Keep your antennae tuned to economic and industry trends that will affect your business and industry. Know which questions to ask and when. Examine all claims made by solution vendors or consultants.
These ERP street-smart tips will help you look sharp, think fast and get the most of your ERP system.
Manage for continuous improvement: Much of the benefit of ERP comes from continuous improvement gained by refining business processes and ensuring best practices. Understanding and refining your business processes and examining how ERP can facilitate or improve them is one of the most important things you can do to maximize the value of your ERP.
Know when it’s time for an upgrade: Too often, businesses subsist on outdated systems because the fear of disruption to the business obscures the benefits of upgrading. Has keeping your system updated become costly and time-consuming? Do your users have remote access to data? Can your suppliers and other trading partners interact with your system? Leverage your maintenance dollars wisely. An ERP system should eliminate complexity and duplication of effort, while facilitating product quality and customer service.
Educated users make your system more intelligent: Ensuring user success with your ERP is a key driver of competitive advantage. Give your users the training the tools they deserve so they can leverage your ERP system and business processes intelligently and effectively. Too often, companies rely on ‘tribal knowledge’ training to educate new employees. This can lead to process shift and a general lack of understanding in the system.
Get smart about ERP add-ons: Sometimes, key benefits a company wants from an ERP implementation are not part of the purchased ERP package at implementation. ERP add-ons – like CRM, advanced supply chain management and vendor relationship management – provide very specific functionality or technology to complement ERP systems. Add-ons, whether new modules or other “bolt-ons” can help extend the value of an ERP system – but you‘ll need to watch out for functionality and interface pitfalls.
Extend the access to ERP data: Cloud-based, mobile and social capabilities extend the power and reach of today’s ERP solutions, giving users access to critical information from anywhere – user training can make the difference between successful and mediocre outcomes.
When considering a consulting partner, choose wisely: Your ideal ERP consultant will truly add value to the important decisions that can make or break your ERP system. Look for a partner with a proven track record – and the references to back it up – of helping clients get the most value from their ERP systems with upgrades, add-ons, ongoing training, and decisions about evolving opportunities with cloud, mobile and social ERP. The partner should provide both ERP product knowledge and project methodology to the ERP endeavor. Get ERP street smart and stay that way: Leverage your consultant to learn what you need to know to make the most of your ERP system.
Growing enterprises that adopt ERP can reap significant reward for the risk. So why does ERP have such a sketchy reputation? Claims that it’s not up to date, hasn’t changed in twenty-five years, that consultants don’t help, and other outdated myths and fairytales.
Today’s ERP solutions are more flexible and agile than ever, and make the most of new technologies like cloud and mobile. That means businesses from small startups to established enterprises can find an effective, right-sized solution that delivers maximum ERP benefits.
It’s time to reexamine some antiquated ERP misperceptions – and adjust expectations of what software and implementation partners can truly accomplish. Understand common myths and misnomers about ERP applications and implementation partners, learn to ask the right questions up front and enjoy a successful ERP track record.
ERP Fairytale: "Our implementation partner will make us successful." Reality: Your ERP consultant will educate and coach you -- but only you have direct authority and control over outcomes for your business.
ERP Fib: “We need more consultants.”Reality: Most projects do not need more experts: they need more solutions. Too many consultants can overpower the knowledge and experiences of client employees. When the client feels like their concerns are not being heard, it’s a sure sign the consulting partner should be focused on customer needs and objectives.
ERP Fantasy: “ We need our consultants to lead the project.” Reality: The project owner – you – needs to take leadership. Your implementation partner is there to facilitate your ERP selection and implementation. Leverage your consultants to learn everything you need to know to make the project a success and achieve your business objectives. Facilitating ownership requires the consultant to provide education, software knowledge transfer, and establish client resource commitments.
ERP FACTS – In reality, only you can:
- Own and communicate the business case and change drivers.
- Clearly define and communicate project objectives.
- Approve and contain the project scope.
- Limit software modifications – keep it simple.
- Implement and manage changes in operating paradigms, business processes and employee behaviors.
- Engage the cooperation of employees at all levels of the organization.
- Assemble the right internal team to the project.
- Provide internal project team with time and appropriate resources to succeed.
- Hold functional managers and the team accountable
- Manage and utilize implementation partners effectively.
- Tackle project issues and decisions in a timely fashion.
- Engage your staff in taking end-user training seriously.
- Develop a project plan with major milestones that take 6 months or less to achieve
SMB (small-to-medium business) manufacturers – and the SMB segment in general – are getting lots of attention in ERP circles. A common theme is the discussion around whether smaller businesses are unique animals, with unique functionality needs relative to larger enterprises. Many assume all SMBs have fewer processes, are less complex, have less stringent customers, fewer regulatory requirements, and simpler organizational structures. But is that assumption accurate?
For any enterprise, regardless of size, ERP system requirements are a choice – a business decision. Requirements should be driven by the types of business processes within the organization, the complexity of the processes, customer needs, and other key attributes of the organization. The choice may also be shaped by spending limitations, how management views the role of information systems, and the company culture.
There is no proven direct relationship between company size and system needs. In many cases, smaller businesses do not have different requirements; they choose to address them differently -- sometimes outside the ERP system. It is not unusual for a small-to-medium size business to have robust software requirements that can only be satisfied using advanced modules in a Tier 1 package. And, just like their larger counterparts, SMBs are driven by a demand to better analyze and leverage their enterprise data.
It’s a common misperception that small companies require fewer management controls. In fact, to manage increased regulatory compliance and customer expectations more SMB companies are trading in their small business solutions for ERP packages that manage sophisticated requirements such as FDA compliance, lot tracking, bar coding, and EDI transactions. Certain contracts may require full traceability of all materials, parts or other inputs. The need to track, trace and document the procurement, manufacture, and distribution of every finished product results in many more system transactions.
What does this mean for SMBs?
Don’t assume SMBs are universally different from other companies – the unique needs of each enterprise are shaped by industry trends, market forces, regulatory climate, customer demands and more.
An SMB that selects a software package that does not provide certain capabilities that could be used within the business will need to fully understand the implications of performing the tasks manually, outside the system, possibly using elaborate (and un-integrated) spreadsheets
Select a solution that can scale and adapt with business growth. Just because you can run the business on spreadsheets today, does not mean you can do so five years from now.
ERP software packages designed for the SMB market are delivering tangible return on investment through increased automation, paperless warehouse capabilities, comprehensive cost information, and ad hoc reporting. The increased ease of use in ERP software packages and the adoption of software as a service have made the transition to fully functioning ERP more feasible for the SMB decision maker.
Don’t let the Sunshine Act final rule catch you off guard!
The August 1st data collection deadline is just around the corner -- Strategic has a simple, fast solution for QAD users and customers using Concur
On February 1, 2013, the Centers for Medicare & Medicaid Services (CMS) announced the release of the final rule implementing the physician payment sunshine provisions on Section 6002 of the Affordable Care Act (ACA), currently named The National Physician Payment Transparency Program: Open Payments. Most refer to the program as the Sunshine Act.
The intent of the Sunshine Act is to bring potential conflicts of interest to light with the goal of driving down healthcare costs. Under the new program, “applicable” manufacturers of covered drugs, devices, biological products, and medical supplies that participate in U.S. federal health care programs must annually report to the CMS information regarding payments, ownership, investment interests and other “transfers of value” to physicians and teaching hospitals. In addition, manufacturers and group purchasing organizations (GPOs) must report certain ownership interests held by physicians and their immediate family members.
Applicable manufacturers are required to begin data capture on August 1, 2013, and submit their first federal reports by March 31, 2014. Most reported information will be published by CMS on a searchable public website beginning September 30, 2014, increasing pressure to comply. CMS stated in the final rule that it will provide more information and guidance on the reporting requirements and timing of data review and correction.
These are a few of the major requirements addressed in the final rules:
- Which payments or other transfers of value are subject to reporting, and the specific data elements that must be included for each
- Guidelines for reporting payments that relate to research, which must be reported separately, with additional data elements including the study name and principal investigator’s name
- Which companies must submit reports and when related entities can file joint reports or must file separately
- Guidelines for companies that have “covered” products that are ancillary to their primary business
- Reporting obligations for contract manufacturers, distributors and wholesalers
Since issuing the final rule in February, CMS granted six months to prepare for compliance and begin data capture. Even so, collecting the data and preparing to submit the reports is a painful process for many companies. Complying with these national disclosure requirements is a huge undertaking.
Strategic is already assisting customers to meet these new compliance requirements successfully. Planning starts with considering business processes, systems and data needs, then identifying and mapping out the program components needed to effectively source, remediate and report the required information.
Sunshine Act Compliance module key capabilities include:
- Maintenance screens for users to create the records subject to the National Physician Payment Transparency Program.
- Import a CSV file from Concur or other source into the maintenance screen.
- Browse to review the payment records that have been recorded.
- Provide integration to the Supplier Invoice Create Maintenance screen.
- Develop the required reports for submittal (first deadline for reporting is March 31, 2014).
QAD and QAD users with the Concur add-on should take advantage of our “Sunshine Act compliance module”. The application supports the specific data collection requirements mandated in the final rule – and can be implemented very quickly to allow you to comply by the August 1 deadline. If you have any questions or doubts about how to comply with these new requirements, contact Strategic today!
The truth about ERP bolt-ons: Know the good, the bad and the ugly
Sometimes, key benefits a company wants from an ERP implementation are not part of the purchased ERP package at implementation. Business requirements may have changed for an existing system or the organization could benefit from specific new functionality. A business can get missing capabilities and extend the value of their ERP with an additional application or module, fondly referred to as a “bolt-on”.
ERP bolt-ons provide very specific functionality or technology to complement ERP systems. CRM, advanced supply chain management, vendor relationship management and HR are typical examples of bolt-ons.
Here are a few basic concepts to understand about ERP bolt-ons in general:
Not all ERP bolt-ons are equal. Like so many things about ERP, simplicity is elusive and things can get complicated fast if you’re not prepared.
Interfaces may be needed since the systems may not have been designed to work together in the first place. These programs physically extract, transfer, and load data between separate databases, on a less than real-time basis.
Integration implies that application programs utilize a common database, with minimal file duplication, and the data is update across the system in real time. Understand what your provider means when they say their bolt-on application is “fully integrated” with the ERP system.
Know the degree of real-time information your business requires in the application area in question. For some functions, lack of real-time integration is a hindrance to usability.
There are basically four ways to add specific functionality with an ERP bolt-on, and each has its own makeup of good, bad, and potentially ugly risks:
Implement an add-on module from your ERP provider: Usually pretty good A bolt-on developed by your ERP provider to add value to their core product will most likely be fully integrated, use the same platform, and have good support. To reduce implementation risk, some ERP consultants advise new customers to become competent with a core ERP package first, and later circle back and implement a bolt-on. However, if a very substantial part of your ERP justification results from a bolt-on module, you need to either implement the bolt-on at original go-live or find an ERP package with the desired capabilities built into the core functionality.
Install a module your ERP company has acquired: Not quite as good As an alternative to developing additional functionality within their base ERP offering, many vendors purchase third-party applications and sell the acquired software as a bolt-on module. During the integration period, acquired applications can be klugey; consider waiting for the dust to settle before jumping in. Beware of ERP packages constructed mainly of third party bolt-ons – they tend to have data redundancies and integration issues. When an ERP vendor routinely uses optional bolt-ons to provide “point solutions,” it could be a sign that their package is in a state of decline. During a software evaluation, ask vendors about this.
Implement a product from your ERP vendor’s partner: Not too bad Reliable ERP providers and implementation consultants offer their customers bolt-ons developed by partners to help their customers get more out of their ERP systems. This approach can be very successful for all parties when there is a harmonic convergence of platform, interface and integration. Third-party bolt-ons can have connectivity complications, unfriendly user interfaces, and may even have conflicts with other benefits of the core ERP. In cases where bolt-ons are built on a different technology platform than the ERP software, it makes interfaces even more difficult to design, develop, test, and support. When an important interface fails, it can affect the business and users in a significant way. Always ask to speak with reference customers during evaluation.
Unsupported bolt on from a non-partner: Could get ugly Think twice, and then one more time before implementing or integrating any unsupported solution!
Can you talk about ERP without using acronyms? Of course not – but it’s not a trick question. As one of our most common and cherished acronyms, “ERP” itself could almost have invented the TLA (the three letter acronym for three letter acronym).
Of course, it’s not that simple – ERP acronyms aren’t always three letters; and sometimes, the same letters may have different meanings to people from different industries. How confusing is that if you’re new to ERP or manufacturing?
The thing is, the humble TLA -- and other ERP acronyms -- represent a common language. Used appropriately, these expressions allow us to communicate ERP functions and benefits quickly and effectively.
Test your ability to “speak ERP” -- how many of the terms on the list below can you translate?
How many did you know immediately, without thinking? 14 or more? WOW! You must be an APICS founding member! 12 or more? Very good, you have definitely been around the block in the ERP world and know your stuff. 8 or less? You’ll need our handy Strategic ERP Acronym Translator below:
API: Application Programming Interface -- A protocol intended to be used as an interface by software components to communicate with each other.
ATP: Available To Promise -- The uncommitted portion of inventory or planned production available to be promised to new orders. ATP calculations can be used to verify whether an order can be filled within a specific time frame given other demands and currently scheduled supply orders. For example, during order entry, this lets you determine whether inventory will be available to meet a customer’s needs before you commit to a promise date.
BI: Business Intelligence – Software applications and technologies used to analyze an organization’s raw data and transform it into meaningful and useful information for business purposes. BI as a discipline is made up of several related activities, including data mining, online analytical processing, querying and reporting. Companies use BI to improve decision making, cut costs and identify new business opportunities.
CIM: Computer-integrated manufacturing -- The manufacturing approach of using computers to control the entire production process.
CRM: Customer Relationship Management: -- A widely implemented strategy for cultivating and managing your interactions with customers and leads. Provides a fully functional sales and marketing automation toolset designed to improve sales and marketing productivity, including communications and scheduling tools, pipeline and forecast management and customer service.
CRP: Capacity Requirement Planning -- Ensures that the resources, both equipment and personnel, are available to execute the plan. Together, an achievable high level production plan is achieved maximizing efficiency, and driving scheduling, procurement and execution.
EAM: Enterprise Asset Management -- An integrated plant operation solution that enables companies to operate plants more smoothly by keeping equipment running at the lowest cost. EAM manages planned and unplanned equipment maintenance, including calibrations, manages procurement of MRO inventory and manages capital asset project costs.
EDI: Electronic Data Interchange -- The direct transfer of data from one computer to another without the use of paper. EDI provides a streamlined method for managing communications between trading partners, including an end-to-end integration broker for B2B communications.
MRP: Material Requirements Planning (MRP) -- Addresses the need to ensure that materials are available to produce items at the correct time to meet customer delivery needs.
ROI: Return on Investment -- A performance measure used to evaluate the efficiency of an investment; calculated by dividing the benefit (return) of an investment by the cost of the investment; the result is expressed as a percentage or a ratio. Calculating the expenditure for an ERP project is fairly straightforward -- determining the gain is more difficult, because so many key benefits of a successful ERP project are intangible and unquantifiable. Tangible ERP ROI benefits include reduced costs and increased throughput; intangible benefits include things like regulatory compliance (invisible if you get it right, costly if you don’t), accuracy and process improvement.
SaaS: Software as a Service -- Delivering software over the Internet or “Cloud computing”; often associated with a “Pay as you go service”.
SCM: Supply Chain Management -- Integrates supply and demand management within and across companies. It includes important variables such as the planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities. SCM can also include coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers and customers.
SOP: Sales Order Processing – In ERP, SOP does not mean standard operating procedure. The process where customer orders are received, checked for creditworthiness then for product availability; and arranging for delivery to customers is done; finally billing and maintaining records of amounts due from customers is carried out.
S&OP: Sales and Operations Planning -- A decision-making process that realigns the tactical plans for all business functions in all geographies to support the company's strategies, business goals, and targets. A process led by senior management that evaluates and revises time-phased projections for demand, supply, product and portfolio changes, strategic projects, and the resulting financial plans.
TMS: Transportation Management System -- Provides a complete set of tools to optimize shipments by air, sea, parcel, truckload or less than truckload; provides international documentation and assists in compliance with denied party regulations.
UI: User interface -- The parts of a computer and its software that the user can see, hear, touch, or talk to; the set of all the things that allow user and computer to communicate with each other. Like any good communication channel, a user interface is a two-way street. The best user interfaces are the ones users don't have to pay much attention to. When an interface is easy to use, users can spend their time doing work instead of looking for the right button or key. It's almost transparent--users can see right through the interface to their own work.
What we learned at QAD Explore 2013: Ten building blocks for the Effective Enterprise
Today’s manufacturers must constantly adapt their businesses to address new market challenges. Effective enterprises leverage new technologies to drive productivity and performance for their organizations, their supply chains and their customers.
That’s why QAD Explore 2013 showcased the technology tools and information that enable manufacturing organizations to become more effective enterprises. QAD delivers tools and technologies that help companies streamline application maintenance and continuously improve key business processes.
QAD Explore is always exciting! Here are our ten key takeaways from this year’s conference:
QAD Enterprise Applications 2013 delivers significant enhancements – QAD continues to evolve QAD Enterprise Applications to help businesses operate more efficiently, adapt to change more easily and ensure business continuity. Robust architecture, fresh functionality and enhanced usability make it simple and easy for QAD customers to maintain, support and upgrade individual components while continuing to leverage the existing system.
Innovative framework simplifies application support – A new modular deployment framework provides the ability to enhance or upgrade individual components, elements and services within QAD Enterprise Applications. The simplicity of this framework eliminates disruption from replacements of the entire application. QAD users can access a variety of components online from the QAD Store and add them to their systems easily.
New capabilities support item attributes, traceability and quality control – With enhanced capabilities to address mandates for product traceability, the new quality control functionality supports detailed recording of item quality attributes and traceability of materials throughout the supply chain. These capabilities support both current and emerging regulatory requirements, like ePedigree and Unique Device Identification (UDI) in the Life Sciences markets. Serialization/Unique Device Identification (UDI) enhancements are in development.
New capabilities in QAD Enterprise Financials –QAD Enterprise Financials is designed to meet the needs of global public companies with support for regulatory and governmental compliance mandates such as Sarbanes–Oxley (SOX) and the adoption of International Financial Reporting Standards (IFRS). Complete retro-billing capability accommodates fluctuating commodity prices and allows for retrospective price adjustment and on-charging to the customer. This capability combined with the strong logistics accounting capabilities that manage shipping and freight costs before and after the event safeguard businesses against inaccurate freight and material cost variances.
Roles-based usability enhancements – QAD continues to enhance its leading-edge user interface (UI) technology. In the latest release, QAD delivers an advanced role-focused metaphor. This new metaphor collects the functionality a user requires to perform a specific role, via a simple configurable home page. From this home page users can execute their regular functions with a few clicks while maintaining constant visibility of key metrics and assigned tasks. QAD expects to build on this metaphor in the future to further enhance the user experience across the enterprise.
Enhanced deployment flexibility – Building on its goal to simplify upgrades for its customers, QAD’s application architecture enables enterprises to implement a full-strength ERP solution in the cloud, on premise or as a blended deployment containing a mix of on premise and cloud users. Customers enjoy the same complete functionality, business processes and user experience regardless of how their QAD Enterprise Applications solutions are deployed.
DynaSys acquisition delivers cutting edge Supply Chain Management (SCM) functionality – Ariel Weil, general manager of DynaSys, a division of QAD, highlighted advanced demand and supply chain planning solutions users will soon be able to take advantage of.
Cebos acquisition delivers new Quality Management Systems (QMS) functionality – Recent addition to the QAD team Bob Herdoiza, president of CEBOS, a division of QAD, introduced new capabilities to support Quality Management, Regulatory Compliance and Regulatory Control. Stay tuned for more details on how you will be able to leverage these capabilities.
Emerging trends – Tony Winter, chief technology officer at QAD, delivered insights into emerging trends like BYOD (Bring Your Own Device), and how QAD products will help you leverage them -- featuring the latest in mobile ERP, business process management (BPM), Big Data and other technologies.
QAD 2013 Global Partner Award Winner – Strategic Information Group was recognized as QAD’s North American Channel Partner of the Year at Explore. Look for more about QAD Enterprise Applications 2013 and evolving trends in enterprise computing in future issues of Strategic Unleashed. And save the date for QAD Explore 2014, May 5 - 8 in New Orleans!
Lifting the fog around cloud ERP: 11 critical considerations shed light on your decision
The ERP landscape continues to change radically, as more and more traditional, on-site ERP vendors offer their solutions delivered via a cloud-based, software-as-a-service (SaaS) model.
SaaS ERP can provide a relatively inexpensive way for companies to streamline business processes and maintain that competitive edge. On-site ERP deployments require large capital outlays and specialized IT resources. ERP SaaS solutions offer economic advantages like minimal capital expenditure, less financial risk, faster deployment and quicker time-to-market that allow for a quicker return on investment because it offers
Despite the hype, cloud ERP is not a panacea – and on-premise ERP is not going away. Still, cloud is now a key consideration in any ERP strategy. When your system is at the point in the ERP lifecycle where you’re considering an upgrade or migration, it’s a great time to rethink your ERP strategy and consider SaaS ERP.
These 11 tips will shed some light on the cloud ERP decision process:
Examine the differences between on-premise and off-premise ERP scenarios: On premise ERP; the software is licensed, installed at the customer’s site; plus maintenance. SaaS is most commonly delivered via the Internet in the cloud; companies pay monthly subscription fees.
Get to know the infrastructure tradeoffs: Is your existing network infrastructure solid enough to handle running ERP in the cloud? Is your staff knowledgeable about cloud networking requirements? There’s a good chance you’ll reduce network costs. Other network-related issues include compliance, security and ensuring adequate bandwidth and Internet access.
Understand the different types of clouds: The two major types of clouds are: private, for the exclusive use of an organization, typically managed by in-house IT; public, shared, hosted and managed by an external service provider.
Consider a hybrid approach: Another option is for companies to use a combination of on premise and SaaS ERP. A recent Forrester survey of 2,403 IT decision-makers showed that 10% of planned implementations will use ERP SaaS to complement existing on premise ERP.
Weigh cost considerations: The main reason ERP SaaS can be a very economical solution for small-and-medium-size businesses or start-up companies is relatively low initial TCO. Implementation, consulting and overall acquisition costs, along with the limited need for extensive IT infrastructure, make SaaS ERP an attractive option.
Appreciate industry-specific requirements: Industries where there are highly complex operations may not be a good fit for ERP SaaS due to the level of customization that may be required. Recently, ERP SaaS adoption has picked up considerably in life sciences and other sectors that require strong compliance capabilities.
Get the right level of control: You have to make strategic decisions about appropriate levels of control of your data, modifications, and configuration. The very nature of SaaS ERP requires you to relinquish control of software, maintenance and upgrades. But if you don’t like the service you receive from your SaaS provider, get rid of them and find another vendor.
Ensure accessibility and reliability: Even though SaaS provides tremendous flexibility in terms of enabling users to access anytime, anywhere, SaaS access relies on Internet access. SaaS solutions have become very reliable. Reliable vendors have extensive disaster recovery plans in place so that quick restoration of data can take place in case of an emergency.
Think about IT resource constraints: Even if you have the right skill-set to deploy ERP on-site, the number of resources required will be far greater than with a SaaS deployment. If you don’t have the in-house expertise required to undertake a potentially long and extensive on-site ERP deployment, SaaS ERP may be a better option for you.
Know your customization requirements: SaaS ERP is best suited to enterprises that don’t want or need a high degree of customization. In industries where processes are very complex, you need to take this into consideration.
Determine your need for speed: If quick deployment is high priority, then SaaS ERP could be a better option for you.
When bad things happen to good products: Can your ERP handle a product recall?
You care about the safety and wellbeing of your customers and have the utmost desire to cause them no harm. But product recalls happen to the best of companies. Failure to handle a recall successfully can have serious economic and legal consequences. The resulting damage to your company’s reputation can be long-term or permanent.
That’s why it’s more important than ever for manufacturers – especially FDA-regulated companies – to have effective recall management solutions in place. If your enterprise resource planning (ERP) solution lacks the capabilities to help you handle a recall, you are leaving your company open to unnecessary risk.
When a product recall becomes necessary, companies must be able to quickly and accurately:
- Determine where all product inputs originated.
- Determine where the products in question are and how to get them returned, from retailers, wholesalers, customers or transporters with product in transit.
- Provide information – to customers, the general public, media and regulatory agencies governing your industry or product.
A critical ERP capability to support fast, accurate, documented product recalls is traceability. The question is, can your ERP help you identify who supplied, handled, transported, received, stored or bought each product lot, and can it do so with alacrity?
You need a lot tracking system that provides integration with your key business processes and systems, and enables forward and backward track and trace so you can determine the source of a problem to the lot level.
Integrated lot tracking capabilities cross key business functions like accounting, inventory, purchasing and sales. Comprehensive warehouse management functionality includes radio frequency identification (RFID), bar coding, scannable labels, quality management and electronic data interchange (EDI). Just as important, lot tracking provides the necessary accuracy and timely access to records to support compliance.
Advanced ERP solutions also help your employees respond effectively, with enforced workflows and controls that ensure the proper business processes are being followed in accordance with FDA or other regulations and standards. Full transparency into the recall process allows users to quickly notify the customers affected by the recall, track the status of a recall and confirm that 100% of the recalled product was pulled. Just as important, these systems provide complete, accurate documentation that your company precisely followed appropriate recall procedures.
An ERP solution with comprehensive recall management functionality positions your company to plan the recall process in advance. You can constantly measure and improve the recall process to help ensure rapid, accurate, and thorough response in the event of a recall.
You’ve spent a lot of time and money getting your company’s product into the market. No one wants to deal with a product recall, but an effective and well-managed response can mitigate liabilities and protect your company’s brand. With the right ERP in place, your company has a much better chance of surviving a product recall and turning crisis into opportunity.
For manufacturers, the Software as a Service (SaaS) ERP deployment model is truly a game changer. Today’s SaaS ERP securely and reliably delivers all the capabilities manufacturers need to improve response time, meet compliance requirements, increase customer satisfaction and drive measurable performance.
ERP on demand provides an alternative to traditional, on-premise enterprise software that offers low cost and high performance. The SaaS delivery model turns ERP acquisition from a cash-intensive capital expenditure into a more manageable operating expense – with less effort and risk.
SaaS ERP helps manufacturers deliver business results. QAD’s SaaS ERP solution, QAD On Demand, offers security, reliability, availability and predictable expense, helping you minimize your risk while maximizing return on investment.
QAD On Demand helps manufacturers make the most of these seven powerful SaaS ERP opportunities:
Complete Integration: Today’s SaaS ERP is designed to support all of the key processes of global manufacturers. It enables measurement, process control and process efficiency, and is configured with built-in industry best practice processes. QAD On Demand delivers a fully integrated ERP and Supply Chain business solution designed for fast deployment, optimum user productivity and easy upgrades.
Manufacturing Capabilities: SaaS ERP delivers the tools manufacturers need for planning, scheduling, cost management, material control, shop floor control and reporting. QAD provides full shop floor control throughout the manufacturing process, and tracks performance and quality.
Always up to date: One of the most powerful savings SaaS ERP offers is an easier upgrade path and lower upgrade expense. Organizations avoid the costs and disruptions of upgrading – and the temptation to delay the purchase of updates that could enhance effectiveness and provide competitive advantage. When QAD On Demand customers request a software change or new function, the QAD developers make the change and release it to the person who requested it, and also make it available to the entire network. This rapid, on-demand development supports continuous improvement.
Usability, efficiency, productivity: SaaS ERP vendors strive to make it easy for users get up to speed fast and enjoy continuous improvement. That’s why QAD continuously improves its simple, customizable user interface, QAD .NET UI. And, QAD process maps make it easy for companies to establish repeatable procedures and deploy them across business units. These tools enable faster onboarding of new users and greater productivity across organizations.
Qualified for Validation: With this model, one instance of the SaaS ERP application is hosted in a single-tenant private cloud. The core functionality of the application needs to be validated just once. You don’t have to worry about getting systems and IT procedures documented and certified, which is a huge time and money saver. QAD On Demand provides a separate qualified environment to each customer. Just as important, QAD software and procedures meet strict FDA regulations. QAD’s qualified environment also allows compliance with current Good Manufacturing Practices (cGMP) with no additional investment in systems infrastructure.
Quality Management Included: For some manufacturers, quality management is as important a requirement as compliance capabilities. QAD’s Cebos Enterprise Quality Management MQ1 provides the functionality to meet ongoing quality system requirements. Users can configure to business process requirements, to ensure meeting international compliance requirements, ISO standards, FDA requirements, and individual customer requirements.
True Process Improvement: Manufacturers need to be able to define the best practices for their business processes, and measure their efficiency. QAD defines an Effective Enterprise as one where every business process is working at peak efficiency and perfectly aligned to the company’s strategic goals. QAD’s Effective Enterprise philosophy drives the development of solutions that encompass best practices and deliver clear measurement.
ERP has come a long way in the past few years, evolving in unanticipated ways with technologies and in the marketplace. Cloud computing, mobile technologies, and social media mean new opportunities and challenges for the enterprise systems.
ERP still does what it has always done well. ERP collects, manages and distributes information across the enterprise to drive efficiency, quality and productivity. By breaking down information barriers to cooperation and collaboration between critical business functions, ERP helps companies accelerate time-to-market, shorten lead times, reduce costs and improve customer service.
Now that ERP survived the Mayan apocalypse, here are several ideas to consider for improving your ERP in 2013:
ERP in the Cloud – The cost benefits of migrating to a cloud-based ERP make it well worth considering for all companies. Cloud-based solutions and services are easy to deploy, integrate and upgrade -- and they don’t require additional investment in IT infrastructure and staff. Bringing your business into the cloud can be especially beneficial for businesses that anticipate rapid growth, have limited IT infrastructure, seasonal spikes or multiple locations.
Powerful Analytics - Today’s advanced enterprise analytics empower organizations to anticipate change and react effectively to shifts in the dynamic business environment. Integrated analytics capabilities extract and enhance the data in your company's ERP to help you make smarter decisions, faster.
Mobile ERP - To stay competitive, companies are rapidly moving toward a more mobile enterprise model. Mobile ERP tools help companies create better ways for end users to access and interact with information. With mobile ERP apps, mobile workers get easy access to powerful functionality and real-time data anywhere, any time.
Social ERP - As the next generation of ERP systems emerges, social applications are proving their value in connecting businesses internally and with customers. By facilitating collaboration and communication among employees and partners using your ERP system social ERP tools can enable them to proactively solve business problems together.
Easier Configuration - Leading ERP applications provide a full set of functionality and pre-integrated modules, and optimized interfaces – that means configuration is much less costly than it has ever been. Next-generation ERP solutions allow organizations to quickly create new processes, improve existing ones, and add functionality as the needs of the business change. As the need for enhanced functionality increases, these capabilities can be "turned on" for little or no additional license fee.
Today’s ERP solutions deliver return on investment almost out of the box, with easier configuration, cost-effective cloud-based options, and sophisticated analytics. Mobile and social alternatives can help users deliver better service levels and improve productivity. These solutions offer enterprises of all sizes unprecedented opportunities to drive business performance and competitive advantage.
It’s nearly impossible for typical Enterprise Resource Planning (ERP) systems to keep pace with changing business needs.
Aging ERP systems create complexity, duplication of effort, and a dangerous lack of visibility into the business. Quality and customer service begin to deteriorate.
Any one of these warning signs could mean the death of business performance and competitive advantage for your enterprise:
Your ERP system lacks the capability to effectively integrate mission-critical business data. Information silos increase complexity and ensure duplication of efforts, which compromises the quality, reliability, and accessibility of vital information.
Keeping your system updated has become costly and time-consuming. Has your system reached the point of diminishing returns?
Growing maintenance fees are eating your IT budget. Rising ERP solution maintenance fees increase your total cost of ownership over time.
You can’t easily access your data remotely. Cloud-based, mobile and social capabilities extend the power and reach of today’s ERP solutions – if your users can’t get to critical information from anywhere, you’re missing out on competitive advantage.
An upgrade would be disruptive to the business. Upgrades require time to plan and to execute. You’re in trouble if the business has to be ”down” for a period of time to do the conversion.
Suppliers and other trading partners can’t easily interact with your system. Today’s value stream is increasingly interconnected. You have to give your suppliers easy access to your orders and inventory levels.
Your system is not easy for today’s workforce to learn or use. Many older ERP systems are difficult to learn and workers are easily frustrated by instructions like “Press F1 to inquire” or “Press Enter to accept.” Today’s leading ERP solutions provide attractive, intuitive user interfaces that help users get up to speed fast and stay there.
Globalization is too difficult. Legacy systems often require you to run different versions to support various countries. This is not acceptable in today’s global marketplace.
Your company’s ERP system is a key part of your IT strategy. And, just as important, it is one of your most critical and sensitive corporate assets. When it comes to evaluating the future of your ERP system, you have three basic options: stay put, upgrade or replace you legacy system.
But any ERP investment decision requires careful consideration. Staying put seems like the low-cost option – unless your current system lacks capabilities the business needs to stay competitive. Upgrades can be expensive and time consuming, but they add business value by providing new functionality and improving business processes. Then again, sometimes the most strategic option is replacing the legacy system.
ERP systems typically have a 15- to 20-year useful life, but over that time they need to be maintained and enhanced to protect their value and serve the changing needs of the business. Because ERP systems help manage critical functions like accounting, inventory, manufacturing, sales, human resources and business reporting, companies need to plan for periodic updates to ensure the reliability and effectiveness of mission-critical applications. When ERP is integrated into other software such as customer relationship management (CRM), electronic data interchange (EDI) and business intelligence (BI), the result is highly complex and expensive.
When evaluating your ERP strategy and reviewing the options, take time to consider the following:
- Unmet business needs: Does your current ERP system support the business efficiently and cost-effectively? Are the system's capabilities adequate, or are they inhibiting the company’s ability to compete and grow? Are there significant internal control, process, supply chain, compliance or software integration issues?
- Return on Investment: What does the business expect to realize from its ERP investment? Is the current system putting the business at risk? Are you spending more than you should on maintenance? Would an ERP upgrade provide greater ROI? Can the company accommodate the time and cost of an ERP upgrade or migration?
- Organizational capability: Does your enterprise have the ability to take on a disruptive and costly upgrade or migration project? Is the right leadership in place to guide the company through the necessary procedural and organizational changes to gain the most from an ERP switch?
In the past few years, significant improvements have been made in the technologies and functionalities available with ERP systems. ERP deployment options like hosted delivery or software-as-a-service (SaaS) are reliable and cost effective, and make upgrading simpler and less expensive over time. Mobile ERP has evolved from its early adoption phase to a strategic performance enabler. Many companies experiencing improved financial performance following the worst of the recession are taking a fresh look at an ERP upgrade.
Whether you decide to stay put, upgrade or replace, make sure that you approach decisions about the future of your company’s ERP system strategically.
There’s no question that the new Medical Device Excise Tax (MDET) is going to involve cost, complexity and risk. Companies affected by the new MDET risk penalties, interest charges, additional transaction processing time and reconciliation costs to the extent that their systems and processes aren’t ready to cope with the regulation’s demands.
Fortunately, medical device makers with QAD ERP in place are in a better position to reduce these risks and meet the implementation deadline. Strategic has been helping medical device customers get ready to meet the implementation deadlines with minimum cost and maximum compliance.
MDET fast facts:
- In conjunction with the Affordable Care Act, the US Government enacted a 2.3 percent excise tax on the sale of taxable medical devices.
- The MDET, under Internal Revenue Code Section 4191, takes effect on January 1, 2013.
- The MDET is a manufacturers excise tax: The manufacturer or importer of a taxable medical device is responsible for reporting and paying the tax. The tax will attach at the point of sale from the manufacturer to the distributor.
- Companies will have to pay the tax on inventory on hand on December 31, 2012, that is not sold until January 1, 2013.
Which products are taxable? The new law provides that any device defined in Section 201(h) of the Federal Food, Drug, & Cosmetic Act (FFDCA) that is intended for humans will be taxable. The FFDCA is written very broadly to include instruments, machines, implants and in vitro reagents, among others. Section 201(h) also includes associated parts and accessories that are:
- Recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement to them.
- Intended for use in the diagnosis, cure, treatment or prevention of disease or other conditions.
- Intended to affect the structure or any function of the body, excluding products relying on a chemical reaction within or on the body or being metabolized to achieve their primary intended purposes.
- Dental instruments, dental equipment, and research-use-only devices.
There are three major categories of exemptions:
- Devices to be further manufactured.
- Devices manufactured that are ultimately destined for export outside the United States.
- Eyeglasses, contact lenses, hearing aids, or “any other medical device determined by the Secretary as generally purchased by the general public at retail for individual use” -- referred to as the “retail exemption”.
How do companies pay the excise tax? IRS Form 720 must be filed each quarter in the month following the calendar quarter end. In general, however, MDET must be paid twice per month. Processes must also be established to handle registration requirements, exemptions and credit and refund issues.
QAD Global Tax Management is a module within QAD Financials that provides tax management solutions for excise, sales, use and VAT taxes globally, ensuring correct tax registrations and smooth tax reporting. QAD Global Tax Management provides:
- Global tax treatment for multiple tax environments in the same database
- Unlimited number of tax types and rates -- VAT, luxury, consumption/excise, capped, non-recoverable, sales.
- Consideration of geography; item status (taxable, non-taxable); customer/supplier status; effective dates
- Flexible reporting
- API into Vertex, AvaTax, Cytak and other state rate tax providers and filers
Strategic can help you leverage your QAD system to address these critical MDET details:
- The MDET applies to US-only sales; if your company sells to both foreign and domestic markets, this tax is only reported on your US sales.
- MDET is product specific; the system automatically flags applicable products. When invoices are made up of multiple line items, only flagged products are taxable.
- Sales to certain entities (e.g., non-profits) can be flagged as exempt.
- MDET is a Federal tax, however reporting by state is needed.
- Companies have the option to handle the tax on-invoice -- pass the tax to customers -- or off-invoice -- internal, accruing the tax based on calculations.
Process product returns and similar transactions accurately:
- When a product is returned and replaced with another, MDET is not paid on both products.
- When a product is returned without replacement, issue a tax credit to offset the original tax paid.
There are multiple approaches for using your QAD application to comply with the MDET, and we are available to help you understand which approach is best for your circumstances. Once you determine your strategy, we can also do the behind the scenes work to set up your system properly. If your QAD ERP interfaces with outside tax systems, we can help there too.