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The Importance of Documenting Business Processes Before and After ERP Implementation

Tuesday, May 2nd, 2017 by Alex Smith

A common goal through the selection and implementation of a new ERP software solution for manufacturing and distribution organizations is to take the implementation process as an opportunity to streamline and update old and/or inefficient business processes and replace them with more streamlined, efficient, and “best practice” processes. While reaching such objectives is obviously quite achievable, a frequently overlooked task as part of the ERP implementation process is to have an individual or group of individuals on the project team document these new rules and procedures. Read More…

Documenting Processes Before ERP Implementation

In an ideal world, prior to engaging in an ERP selection project, members of the selection team should interview key users in each department (accounting, warehousing, manufacturing, quality control, purchasing, planning, etc.), identify each group’s critical and nice-to-have software requirements, and document each department’s existing processes. Specific processes should be flagged for needing improvement as part of the ERP implementation process, and these processes, along with each group’s respective requirements, should form the basis of what is ultimately shared with potential ERP vendors who will propose a software solution that can meet the organization’s requirements while delivering software functionality that can aid in achieving the desired business process changes.

Documenting Processes During & After ERP Implementation

During the implementation project, the same group assigned to documenting business processes prior to ERP selection should be tasked with documenting any and all process changes that occur as a result of implementing the new manufacturing or distribution software system. This documentation should be used when conducting end-user training on the new ERP solution so all users are aware of the new processes to follow upon system go-live. These documenters should also note why the process was changed and the expected benefit of the process change. The ERP implementation team, then, can refer back to the processes that were changed, why they were changed, what was expected, etc. as part of future continuous process improvement exercises in the months and years following software implementation.

With Enterprise 21’s built-in document management system and Integrated Training System module, ERP implementation teams can actually update all help and documentation inherent in the Enterprise 21 system to match the specific training needs and processes used by their respective organizations. Moreover, once business process documents have been constructed, these documents can be attached to specific screens within the application for users to refer to as needed. These materials can be especially helpful for new users who are brought into the organization who may need to refer to the training materials as they are executing a particular transaction or engaging in a specific process.

Tags: documentation, erp implementation, erp selection
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Managing Change: Critical Success Factors for Paperless Warehouse Management Implementation

Thursday, January 17th, 2013 by admin

One of the most common objectives a business has when evaluating distribution software solutions is to find an ERP system with a fully-integrated, RF and barcode-enabled warehouse management system. Many organizations enter the ERP selection process with the goal of implementing an ERP system that will allow them to operate their warehouse in a completely paperless environment. Read More…

While the paperless warehouse is an achievable goal through implementation of Enterprise 21 ERP’s warehouse management system, there are four critical success factors for achieving such a goal, all of which revolve around the issue of organizational change management. The process of migrating from a paper-based warehouse environment to one of real-time, paperless inventory tracking requires all parties to be equally invested in the process.

The Four Critical Success Factors for Paperless Warehouse Implementation:

1. Take a Phased Approach. Too often, organizations try to tackle more than they (and their users) are capable of doing all at once. Particularly in instances in which no barcode scanning exists prior to ERP implementation, it is recommended to have an intermediate step in the process in which users use a paper-assisted method in which barcodes are scanned via an RF device but a paper pick-ticket, work order, and/or packing slip is still generated. If nothing else, the piece of paper can act as a “safety blanket” for the warehouse users as they become more acclimated with the new ERP system on a daily basis. Once the users are more accustomed to interacting with the system and have demonstrated a willingness to record data electronically in real-time, the organization is ready to move to a more paperless environment.

2. Training, Training, and More Training. Sufficient training on the new ERP system, particularly for inventory and warehouse users, is critical to a successful ERP implementation and reduces the risk of issues occurring upon system go-live. As much training should be dedicated to the warehouse users as possible; the users not only need to learn the functional processing of the system but the business processes and transactions they engage in as well. Ultimately, these users are the last people who see product before it goes out the door to a customer, making their job critical in terms of measuring the implementation’s and go-live’s success.

These users also need to be prepared for situations that they may not necessarily see on a daily basis but that arise on occasion nonetheless (a supplier shipped the wrong product, a purchase order was over-shipped or under-shipped, inventory is not in the right location, etc.). The more prepared the warehouse users are prior to system go-live, the faster they will be able to adopt a paperless warehouse environment in the following months using the ERP system.

3. Senior Management Enforcement and Oversight. Senior management enforcement of user data entry for each warehouse transaction is essential to migrating to a paperless warehouse environment. ERP software and warehouse management systems are only as good as the data they are given. As a consultant friend of mine once said, “Without a change in business process and an emphasis on good data, an ERP system just handles crap data faster.”

Management needs to be willing to adopt the motto, “If you do something, you need to tell the system you did it.” Maintaining complete inventory data accuracy and integrity, and users’ willingness to adopt such methodologies, will prove to be the most critical factor in realizing the benefits and efficiencies provided by a paperless warehouse environment.

4. Make All Users Fully Vested in the Success of the Project. Implementation of a paperless warehouse management system provides an excellent opportunity to build data and performance-based incentive programs for the warehouse staff. Defining key performance metrics to analyze over time – orders picked by picker, line items picked by picker, picking efficiency based on travel time and/or the difficulty of picking one item vs. another – can be directly correlated to financial-based incentive programs for the warehouse staff.

Such incentives can also be non-financial based. A few years ago, one of our customers was in the process of deploying Enterprise 21’s warehouse management system in a paperless environment. To mitigate user pushback and resistance to change, the senior management team made a deal with the warehouse staff. “Implement and use the system as we’ve defined for three months with no complaints, and we promise you will never have to do another physical inventory count again.”

Sure enough, within six months of deploying the warehouse management system, our customer’s auditors determined a 99.97% inventory accuracy and told the management team that physical inventory counts were no longer required, and cycle counts would be sufficient moving forward. What was previously a two day ordeal in which the entire warehouse shut down to count some 70,000+ inventory items became an hour-long daily exercise for one user conducting system-generated suggested cycle counts.

Deploying an ERP system and a warehouse management system at the same time is never easy. Deploying a paperless warehouse management system can be even more challenging. By following these guidelines, organizations can improve their likelihood of adopting a paperless warehouse with success.

Tags: distribution software, erp implementation, paperless warehouse management
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ERP Implementation Critical Success Factor: The Pace of the Game Can Dictate the Odds of Success

Tuesday, June 8th, 2010 by admin

For those of you who are NFL sports fans, you’ve likely noticed there are some NFL teams whose offenses produce better when they play in hurry-up mode – the way in which all teams play toward the end of the game when they’re behind and need to score rapidly. The current day Indianapolis Colts strike me as this kind of team. With Peyton Manning calling the plays from the line of scrimmage, the Colts’ players stay focused and execute in a highly-efficient manner. Read More…

Let’s contrast this to the slow, methodical, grind-it-out NFL offenses that take long periods of time and numbers of downs to get to the end zone. Sure, there are successful scoring drives that can take twelve to fifteen plays to completion; however, the more times a team has to snap the ball and run a play the more opportunities there are for issues to sneak in that stall or end the drive – a penalty, a turnover, or even one dropped pass or missed block can result in an unsuccessful drive.

From my perspective, ERP implementation and NFL offenses have a lot in common. They both require a variety of players with varying skill sets and experience levels to play their respective positions for a successful outcome. In the NFL, all of the players know their roles, and there is a sense of urgency to accomplish tasks in an expedient, highly-efficient manner, and measurable progress occurs. The same should be the case to ensure successful ERP implementations.

Players should be educated on what their roles are and how what they do fits into the overall plans for the ERP implementation. And, while I completely understand that personnel’s day-to-day responsibilities can get in the way of having sufficient time to devote to the implementation project, my recommendation is that by running the ERP implementation like a two-minute offense, key personnel will feel the sense of urgency to execute in a highly-efficient manner thus producing a successful outcome. To contrast this, if there is an expectation that a project can take as long as people want or has sufficient slack time in the project plan, there is a lack of urgency that keeps most personnel from prioritizing the time to accomplish what is necessary to produce a successful result with the implementation.

Tags: erp implementation, ERP Software
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Demand Forecasting within Enterprise 21 ERP: A Key Input for Successful Wholesale Distribution Inventory Management

Tuesday, June 1st, 2010 by admin

When small and mid-market distribution companies start considering that it might be time to evaluate and replace their existing wholesale distribution software systems, they’ll typically calculate a potential return on investment they strive to achieve. From my experience, the one area of tangible benefits that will dwarf all others comes from an overall reduction in inventory investment and associated carrying costs. Generally distributors can pay for the entire new distribution software system and associated ERP implementation costs based solely on the reduction in inventory. Strong ERP systems like TGI’s Enterprise 21 provide the information and processes to enable wholesale distributors to improve overall inventory management. Read More…

There are numerous information requirements when it comes to performing time-phased inventory requirements planning (distribution requirements planning, or DRP), including customer demand, inventory statuses, inventory management business rules, and procurement and supply chain management business rules (and production-related data and business rules for manufacturers). The area of focus for this article is on forecasting – specification of one’s best volume estimates as to the total requirements for finished goods to satisfy customer demand.

Within Enterprise 21, forecasts can be created externally and then imported into the system or can be generated within the system based on historical sales data. A forecast can be defined as granularly as for a specific product, customer, servicing facility (i.e., warehouse or cost center), ship-to geography, and sales person; or it can be at some higher level of aggregation (i.e., all customers receiving a given product from a specified facility, etc.).

When using the system to generate a forecast, one can specify the number of periods to forecast, whether or not to apply seasonality to the forecast, one or more facilities, products, vendors, and buyers, and a range of dates to use for historical sales demand purposes. When the forecast generation process is run, Enterprise 21 analyzes the historical sales demand data and a series of algorithms to determine the best fit formula on a product-by-product basis. Forecast generation can be done separately for subsets of the product mix and then an overall forecast can be created by overlaying these separate sub-forecasts.

Once the system completes the forecast generation process, one can view a graph of historical and forecasted data and the associated best-fit algorithm (i.e., line, curve). Also, the forecast can be reviewed and adjusted manually as desired.

It is common for distributors to work with a series of forecasts such as ones that depict worst-case, best-case, and most likely-case scenarios respectively. A forecast can be used as one of the key inputs to a time-phased inventory requirements planning process for the generation of a series of purchase requisitions for the procurement of finished goods in the case of wholesale distributors (and components and/or ingredients to support production plus a tentative production schedule which ultimately becomes the master production schedule for manufacturers).

By using Enterprise 21’s fully-integrated planning process, wholesale distributors can generate forecasts which are an essential input to the time-phased planning process which becomes a key enabler to reducing and optimizing the distributor’s overall inventory position. Please click here to see a high-level overview demo of Enterprise 21’s forecasting and planning processes from within TGI’s Resources Library.

Tags: erp implementation, forecasting, Wholesale Distribution Software
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ERP Selection and TGI’s No Maintenance Fee Increase Guarantee

Thursday, April 15th, 2010 by Alex Smith

In addition to functional requirements, there are a number of cost-related questions to ask potential software vendors during the ERP selection process, such as: Read More…

1. What is the cost of software licenses? Are software licenses sold on a named user or concurrent user basis?
2. What is your average implementation services-to-software cost ratio?
3. Is the software sold on a module-by-module basis, or is it sold as an all-inclusive ERP software product?

A few important questions that are often missed or overlooked during the ERP selection process, however, are:

4. When do you start to charge new customers for annual maintenance?
5. What is your annual maintenance fee, and how is this maintenance fee calculated?
6. What was your annual maintenance fee five years ago?
7. Are software upgrades and future software releases included in your annual maintenance fee?

Questions 4-7 are crucial to the selection process because they can serve as a basis for the selection team to determine not only the most cost-effective short-term ERP solution but the most cost-effective long-term ERP software solution as well. The selection team must have a reasonable understanding of the future costs associated with purchasing the ERP product for the years following ERP implementation.

At TGI, we offer one year of free ERP maintenance from the date of software installation. Given that an ERP implementation may take between three and nine months to complete, we believe our customers should not have to pay maintenance on a software product when they are not using the software in a live transaction environment.

Perhaps more importantly, TGI provides a No Maintenance Fee Increase Guarantee. We guarantee, in contract writing, that we will never increase the annual maintenance fees charged to each of our customers. This guarantee is designed to provide our customers with a consistent, expected yearly software maintenance expenditure that is free from unanticipated increased fees associated with their software maintenance agreement. We are very proud of the fact that we have never increased our customers’ annual maintenance fees since TGI was founded in 1990.

Why is this guarantee important?

Referring to questions 5 and 6 above, should there be a difference in the maintenance fees an ERP vendor charges its customer today versus five years ago, and the vendor does not provide price protection on their software maintenance agreement, a manufacturing or distribution organization may be subject to escalated software maintenance fees over time. The end result of these unexpected maintenance fee increases could mean that the organization will be forced to allocate funds to their annual software budget that would have otherwise been used for investment in other potential business endeavors.

At TGI, we believe increasing our customers’ annual maintenance fees over time is not the right way to establish long-term partnerships with our customers. As such, we have not and will not increase the maintenance fees we charge our customers over any period of time. Guaranteed.

For a complete listing of questions to ask potential ERP vendors, click here to download TGI’s “50 Questions for Every ERP Software Suppler” white paper.

Tags: erp implementation, erp selection, ERP Software
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Using Enterprise 21 ERP’s Integrated Training System to Train New Employees

Tuesday, March 30th, 2010 by Alex Smith

Virtually every business with whom we speak during the ERP selection process asks about Enterprise 21’s help files and how end-user training is conducted as part ERP implementation. The Enterprise 21 ERP system features help files built directly into the application, as well as an online users manual. These help files exist at the screen level and at the individual field level. In addition, when manufacturers or distributors purchase the Enterprise 21 ERP system, they receive the complete application source code at no additional cost. This enables end users (with the appropriate security permissions) to modify Enterprise 21’s existing help files to meet the specific needs of their organization. Read More…

In terms of functional training, TGI conducts end-user training onsite at the customer facility and provides online, Internet-based training throughout the ERP implementation process. In addition, the Enterprise 21 ERP system features an “Integrated Training System.” This system, which is built into Enterprise 21, serves as the foundation for initial end-user training and features answers to hundreds of frequently asked questions, training courses and certification exams, and “How-To” help. The Integrated Training System also includes a series of multimedia demonstrations that show end-users how to perform hundreds of different functions and process various transactions within Enterprise 21.

Perhaps one of the most important benefits of Enterprise 21’s Integrated Training System, however, is that it can be used to train new employees in the months and years following ERP implementation. Often times, new employees are trained by existing members of the organization who were previously trained by TGI personnel during implementation. A person who is added to the organization’s customer service department, for example, would more than likely be trained by one of the company’s existing customer service representatives. The problem with this approach is that it can lead to a declining level of ERP system knowledge throughout the organization over time as employees are added. Using Enterprise 21’s Integrated Training System to begin training new employees ensures that each Enterprise 21 user receives the same, base level of functional training regardless of whether they have been with the organization for two years or two days. New employees can then take the organization’s certification exams to determine whether or not they are ready to begin processing transactions in a live production instance of Enterprise 21.

Tags: erp implementation, erp selection, ERP system
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ERP for Small Businesses: Taking Advantage of all Your ERP System Has to Offer

Tuesday, March 2nd, 2010 by Alex Smith

Many small businesses with whom I speak, generally, want the same basic functional features in an ERP system. Fully-integrated order management, inventory control, warehouse management, purchasing, manufacturing, financials, CRM, and business intelligence are critical elements to any ERP selection project. That being said, many small businesses also question how they can take advantage of all the software functionality a small business ERP software solution has to offer given their relatively limited internal resources and their desire to complete ERP implementation in a timely, cost-effective manner. How, then, can small businesses take advantage of the complete set of software functionality inherent in their ERP system while still completing ERP implementation in a relatively short time frame? Read More…

When going through ERP implementation, a small business should work closely with its project manager in determining the project scope, which consists of those core functions, rules, and processes that the system must deliver by the project go-live date. At the conclusion of the implementation process, the business must be able to perform all necessary transactions in the ERP system to conduct business on a daily basis in a manner that is faster, easier, more cost-effective, etc. than prior to implementation. The small business, should, in turn, begin to realize a return on its ERP investment.

Following software implementation, the small business should continue to work closely with its project manager in developing a post-go-live plan to roll out additional software functionality, such as leveraging wireless warehouse management with RF and barcode scanning devices, paperless AP functionality to operate the AP department in a completely paperless environment, and/or using automated supply chain processes to continue to streamline the organization’s purchasing, inventory, order entry, and manufacturing departments. Again, this will allow the small business to continue to realize a return on its ERP investment in the months following ERP implementation while taking advantage of incremental software functionality that is already built into the ERP system.

As mentioned in a previous article by Dave Litzenberg, TGI conducts six-month ROI workshops with our customers. These workshops, which consist of the customer’s core team and a combination of TGI’s executive, project management, and sales teams, are designed to initiate plans for the customer to take advantage of additional functionality in Enterprise 21 so the customer can continue to realize an increasing return on its investment in TGI and Enterprise 21.

By closely working with the ERP vendor in the months and years following ERP software implementation, small businesses can develop post-go-live plans to take advantage of additional software functionality and continue to realize ROI without having to purchase additional software, modules, features, functions, or bolt-ons at a later date.

Tags: erp implementation, ERP Software, ERP system
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ERP System Implementation Critical Success Factor: Proper Establishment and Execution of an Implementation Test Plan

Tuesday, January 26th, 2010 by admin

The top three critical factors for a successful ERP implementation are the proper establishment and execution of a training plan, data migration plan, and a comprehensive implementation test plan. From my experience, the proper establishment and execution of a comprehensive implementation test plan is perhaps the most overlooked of the three plans. Read More…

The test plan needs to be representative of how the company does business as a whole and should include the following:

Customer-facing (i.e., quote to cash, customer service, customer self-service);
Operational (i.e., demand to pay on the procurement side, inventory management and warehouse operations, manufacturing planning and execution); and
Compliance and control (i.e., financial management and reporting, lot traceability, quality management, industry compliance).

Let’s discuss how a company goes about establishing a comprehensive implementation test plan. The starting point for the creation of a test plan can be to select some 50-100 customer orders out of the existing customer order files at random. Experienced personnel can review these randomly-selected orders to make sure they collectively establish how the company does business as a whole. Should there be some nuances that need to be added, specific customer orders meeting those scenarios can be pulled from the files as well and added to the list.

Assuming you did a good job of establishing a software demonstration script during the software evaluation process, the script can be another key input into the test plan creation process. The test plan should consist of a series of test scenarios which may also be called “use cases.” Associated with each test scenario would be some narrative about what is being tested, specific data that is to be used in the test, and the expected results of the test.

The test plan should also include some test cases to stress test the system to verify there are no issues with data tables that need to be re-indexed or infrastructure bottlenecks that need to be addressed (network capacity, memory requirements, processor speed, etc.).

The test plan should be executed by functional end user personnel – not just a couple of IT people running through the process by themselves. There are two key benefits to this process. First, the functional end users will be aware of nuances that may not have been addressed in the existing test cases. These process anomalies need to be identified and added to the test plan. Second, this process reinforces the training functional end users have received to date to verify whether or not additional training is necessary to ensure a smooth go live experience.

The test plan document should include space on each scenario to document the actual results of the test, the names of the individuals who performed the specific test case and the date it was performed, and any pertinent observations made during the test run. Results should be documented in writing – or electronically – so the results can be shared with the implementation core team consisting of both customer and software vendor personnel and the customer’s executive sponsor.

The test plan should be a living document, which is updated as the business changes over time.
The test plan should be re-executed when a version upgrade is being implemented to validate there are no business processes that have become broken as a result of the upgrade process.

Additionally, a good rule of thumb for ERP software system enhancements is to establish the associated functional test plan or use case for that enhancement at the same time the enhancement is being defined. This incremental portion of the test plan can be incorporated into the overall test plan.

By effectively establishing and executing of a comprehensive implementation test plan, companies implementing Enterprise 21 can expect their go live experiences to be as smooth as possible with the successful entry, picking, packing, shipping, and invoicing of customer orders day one.

Tags: erp implementation, ERP system
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Small Business ERP Total Cost of Ownership: Looking Beyond Upfront and First Year Costs

Tuesday, January 19th, 2010 by Alex Smith

One of the most significant hurdles a small business faces in deciding whether or not to migrate to an ERP system is project cost. Generally speaking, the total cost of ERP implementation can be divided into three main categories, including software licensing fees, implementation and training fees, and annual maintenance fees. This third category, annual maintenance, is often overlooked in the software evaluation process. It is imperative that the small business’s selection team consider not only the software vendor’s maintenance fee during implementation but the software vendor’s maintenance fees for the years following implementation (and what is included with such maintenance fees) in order to calculate an estimated five-year total cost of ownership. This five-year total cost of ownership calculation will give the selection team a better view of what the business’s projected cash requirements will be for implementation as well as the years following implementation to determine the most cost-effective long term solution for the organization. Read More…

Many software vendors begin to charge their new customers annual maintenance fees the day contracts are signed. At TGI, we believe charging new customers maintenance fees during ERP implementation is inappropriate. Given that a small business ERP implementation may take anywhere between three and six months, we do not believe a business should have to pay maintenance fees on Enterprise 21 when the software is not yet being used in a live transaction environment – annual maintenance for Enterprise 21 is free for one year from the date of software installation, allowing for a more cost-effective first year of ERP ownership.

Secondly, the business’s selection team should consider each software vendor’s maintenance fees for each year following ERP implementation. Do the software vendor’s fees increase after the first year? Do the vendor’s maintenance fees increase each and every year over time? In addition, two great questions to ask ERP vendors are, “What is your annual maintenance fee today? What was your annual maintenance fee five years ago?” While these two questions may seem inconsequential at first, they are crucial to determining the most cost-effective long term ERP solution for the business. The business does not want to be faced with a situation in which its maintenance fees have doubled in the first three years following ERP implementation. When a given vendor’s new software sales start to slump in times of economic downturn, the easiest way for the vendor to make up for its loss in revenue is to increase its maintenance fees for its existing customers; therefore, it is crucial that the selection team search for an ERP vendor with a track record of consistent, non-escalating maintenance fees over time. At TGI, we are proud to say that we have never increased our annual maintenance fees since the company was founded in 1990.

By analyzing ERP vendors’ total long term solution cost, not just the cost to be incurred during the first year of ERP ownership, the small business will have a more accurate view of its budgetary requirements for the years following implementation and be in a position to determine the most cost-effective long term ERP software solution.

Tags: erp implementation, ERP system, erp vendors, small business erp
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ERP System Implementation Critical Success Factor: Proper Planning and Execution of a Data Migration Strategy

Wednesday, December 23rd, 2009 by admin

One of the key elements of any enterprise software implementation is data migration. Exactly what data is migrated to the new system in what level of detail is a key decision point to be considered during the implementation process. Read More…

To be able to make a well-informed decision about what data to migrate, manufacturing and distribution organizations would be well-advised to start with the target of where they want to be with their new system and work backwards.

Assuming there is any reasonable amount of legacy data, the decision to migrate existing data to the new ERP system rather than manually rekey the data becomes obvious. Data can be categorized into five main buckets:

Core base data: including products, customers, prospects, vendors, and associated contacts;
Pricing data: customer pricing and vendor pricing;
Facilities, manufacturing, and product unit of measure conversion data: including bills of material, formulations, and routings; facilities layouts including zones, locations, and bins; and product-specific unit of measure conversion factors;
Historical data: sales history which can be used as an input to generate a forecast and for sales analysis purposes; and
Open transactions and beginning balances: including open sales orders, open purchase orders, open sales quotes, open returns, open customer invoices (accounts receivable), open vendor invoices (accounts payable), and general ledger balances by account; these items must tie to corresponding values in the legacy system (i.e., inventory stock status, general ledger trial balance, aged accounts receivable by customer, and aged accounts payable by vendor).

Once the data migration strategy is defined, the next step for the ERP implementation project team is to execute that strategy successfully. Data migration tends to be an iterative process which can be run three to five times during software implementation. After each test migration, the data must be analyzed thoroughly to make sure the resulting data in the new system is correct and matches up with proper expectations and comparable data in the legacy system.

For a new ERP system to function properly and provide accurate transactions and business information to be trusted for analysis purposes, the core data, which is the lifeblood of the new system, must be accurate. The migration of data from legacy systems is a critical success factor for ERP software implementation.

Tags: erp implementation, ERP system
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