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Cloud Based ERP vs. Web-Based ERP – What’s the Difference?

Tuesday, May 9th, 2017 by Alex Smith

During the ERP selection process, we are asked by nearly every potential new customer if Enterprise 21 ERP is a cloud-based ERP system. When we tell our potential new customers that Enterprise 21 ERP can be accessed from anywhere in the world with an Internet connection, businesses immediately assume that Enterprise 21 ERP is a cloud-based system and that they do not have the ability to have the system installed on their own hardware and infrastructure should they desire to do so. These businesses, however, are incorrect. With Enterprise 21 ERP, businesses can choose whether or not they wish to have the system installed on their own hardware and infrastructure or installed in a data center in which the infrastructure to support the ERP system is managed for them by a third-party. Read More…

Enterprise 21 ERP is a web-based ERP system, not a cloud-based ERP system. What is the difference?

What is a cloud-based ERP?

A cloud-based ERP system, at least by our definition, is an ERP solution in which the business pays a per user, per month fee for hardware and software – it is effectively a lease on hardware and software. The software system and database reside on the software vendor’s (or some third-party’s) infrastructure, and the software system is typically accessed from within a web browser. A cloud-based ERP system’s licensing model is usually subscription-based and does not provide for software ownership (although there are exceptions to this general rule). Please click here for a great definition of “cloud-based.”

What is a web-based ERP?

A web-based ERP system, on the other hand, is simply an ERP solution that is delivered over the Internet, and the system is accessed within a web browser. The web application and database may be located on-premise at the company’s facility, or it may reside in a third-party data center. A web-based ERP system may be sold to a business under a traditional software licensing model (per named user, per concurrent user, per module, etc.), or it may be sold under a cloud-based, subscription model. Please click here for a great definition of “web-based.”

With Enterprise 21 ERP, there is no subscription licensing model available; rather, Enterprise 21 ERP is a web-based ERP application that is sold on a concurrent user basis as an integrated whole. Our customers, then, have three options at their disposal: 1) purchase software licenses and have the system and database deployed on their own hardware and infrastructure; 2) purchase software licenses and utilize TGI’s hosting services to host the application and database for them for an additional per user, per month fee; and 3) purchase software licenses and contract with any third-party hosting provider they are comfortable working with.

The keys are that in any of the three options noted above, our customers do not need to pay a recurring licensing fee, have 100% flexibility and control over where their data resides, and can access 100% of their business data in real-time from anywhere in the world with an Internet connection.

Tags: cloud erp, ERP system, web-based erp
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ERP for the Small Business: Three Ways TGI is Making ERP Software Affordable for Small Businesses

Tuesday, March 29th, 2011 by admin

One of the biggest roadblocks for small businesses that are ready to make the jump from their existing software systems to a fully-integrated small business ERP solution is cost. When it comes to purchasing an ERP software system, all businesses, regardless of size, should examine both the upfront first-year costs associated with purchasing an ERP solution and the potential long-term costs associated with the ERP system, such as customer support and software upgrades. At TGI, there are three things we are doing to make purchasing Enterprise 21 ERP more affordable for small businesses that are ready for an ERP system. Read More…

1. Free Data Migration for Small Businesses that Purchase Enterprise 21 ERP. For 2011, TGI is offering free ERP data migration services to businesses that purchase Enterprise 21 ERP, and currently use a number of small business software packages. We’ve developed a series of mapping files that allow us to export data out of these systems and load the data into Enterprise 21 in a timely, efficient manner. Given that data migration is perhaps one of the most time-consuming, tedious tasks performed during the ERP implementation process, TGI’s free data migration services can save small businesses both time and money, resulting in faster, more cost-effective implementation projects.

2. Interest-Free Payment Plans. TGI offers every small business that purchases Enterprise 21 ERP flexible, interest-free monthly payment plans for software licenses. As opposed to giving the ERP vendor 50% of the total software license cost upfront, in the form of a down payment, and another 50% of the total software license cost thirty days later, TGI allows small businesses to purchase Enterprise 21 software licenses with twelve, equal monthly payments, minimizing the disruption to the organization’s cash flow and monthly budget constraints.

3. One Year of Free Maintenance and a NO Maintenance Fee Increase Guarantee. For every business that purchases Enterprise 21 ERP, TGI offers one year of free maintenance from the date of initial software installation. Given that an ERP implementation may take anywhere between three and nine months to complete, we believe it is inappropriate for ERP vendors to charge their customers maintenance fees during the first year of software ownership. For each subsequent year following the first year, TGI guarantees, in contract writing, that we will never increase our customers’ annual maintenance fees. This guarantee provides our customers with the peace of mind in knowing they will not be subjected to unforeseen maintenance fee increases and escalating yearly software expenditures. Click here to learn more about TGI’s No Maintenance Fee Increase Guarantee.

Tags: ERP Software, ERP system, small business ERP solution
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Small Business ERP Software: Calculating Concurrent ERP Users

Wednesday, June 9th, 2010 by Alex Smith

Virtually every small business with whom I speak has questions about how to calculate concurrent ERP system users as they evaluate various small business ERP software solutions. Many small businesses have difficulty in making this assessment due to the fact they currently use a number of different software systems across each of their organizations’ departments. Read More…

Before I go any further, let’s take a look at the difference between “named users” and “concurrent users.”

Named Users: Named users would be all users who would ever require access to the ERP system. Whether the user accesses the system once a day, twice a day, or uses the system all day long is irrelevant.

Concurrent Users: Concurrent users would be the total number of named users accessing the system simultaneously (concurrently).

On one hand, small businesses will overestimate the number of concurrent user licenses they should be purchasing because they do not know or understand the distinction between “concurrent users” and “named users.” They are under the impression that any person who ever uses the system at any point in time would have to count as a concurrent user rather than a named user, leading to inflated cost estimates and proposals from ERP software vendors.

Conversely, small businesses will underestimate the number of concurrent ERP system users at their organization because they are not used to having all business departments (accounting, sales, customer service, manufacturing, warehousing, shipping, receiving, quality control, etc.) operating on the same software platform.

Generally, when I speak to a small business owner who has questions about how he or she should go about calculating the number of concurrent ERP system users his or her business would require, I try to get the owner to think about the simple task of processing an order from start to finish. First, a sales representative contacts a prospect or customer about a product the business is offering. Then, the customer places an order either with the sales representative, an account manager, or a customer service representative. Procurement personnel purchase raw materials, ingredients, and/or components to make the product. The raw materials, ingredients, or components are then received into inventory. These items are then consumed in manufacturing to produce the finished good, and this finished good is then put away into inventory or immediately allocated to a sales order. The customer order is then picked, packed, and shipped to the customer. Accounting personnel then invoice the customer for the order. Some (hopefully short) time later, the customer pays the invoice, and accounting personnel process the payment.

Once I’ve gone through this somewhat simplified process, I tell the small business owner to think about each point in the process that would involve his or her employees entering information into the ERP system (either manually or with RF and barcode scanning devices). Finally, I tell the owner to think about the number of people who would need to be entering such information into the system simultaneously, on average. This number, in turn, is most likely the number of concurrent ERP system users the small business would have.

Obviously, the simple process of processing an order from start to finish as described above may be an oversimplification, as some businesses may require additional information to be entered into the system, such as quality control data, serial numbers, lot numbers, etc.

Fortunately, to assist businesses in calculating their number of concurrent ERP system users, TGI offers a free ERP software concurrent user estimator template. This template is part of TGI’s Software Selection Tool Kit. To download the complete version of TGI’s Software Selection Tool Kit, please click here.

Tags: ERP system, small business 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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ERP System ROI – How Small Businesses Can Achieve ROI from the Purchase of an ERP Software Solution

Tuesday, November 17th, 2009 by Alex Smith

While there are some similarities between the ways in which larger corporations and small businesses achieve a return on investment from the purchase of an ERP solution, the benefits to be realized from an ERP system implementation for small businesses tend to be more intangible in nature and, at least initially, less measurable. That being said, small businesses who have grown to the point where their existing small business software’s functionality no longer meets their business needs can gain several benefits from a fully-integrated ERP system that will lay the groundwork for future business growth and more efficient, streamlined business operations. Some of the benefits a small business can realize from an ERP solution include: Read More…

Time savings due to the elimination of duplicate data entry. A small business ERP solution can allow the organization to operate on a single software platform. Unlike many small businesses who use one software solution for accounting and financial management, Microsoft Excel to maintain inventory levels, and a separate software package to manage customer orders and purchasing, the small business who utilizes an ERP system can manage all business transactions in a single software package that maintains accurate data for all of the company’s departments. Rather than entering an order in one software package, updating the inventory data for the ordered item in Excel, and then making the necessary accounting entries in a third software package, an ERP system can automate such processes and eliminate the need to maintain products, customers, vendors, customer orders, inventory data, and financial accounts in separate software solutions. In addition to reducing employee time spent on maintaining such data across a multitude of software applications, an ERP system can help small businesses improve data accuracy and integrity, as the likelihood of entering incorrect data is significantly reduced due to the simple fact that data does not need to be entered multiple times.

Faster order entry and processing. By having the company’s customer service, warehousing, and accounting departments integrated in a single ERP system, small businesses can gain significant improvements in customer service. In TGI’s Enterprise 21 ERP software, the system tracks customer order history and buying habits to show customer service personnel the items a given customer orders most frequently during the order entry process. Such a feature can allow the customer service representative to enter orders quickly and easily. In addition, the customer service representative has immediate visibility to real-time order status to communicate to the customer when their order is being picked, packed, and shipped. Furthermore, should the small business choose to integrate the ERP system’s back-end e-Commerce functionality into the company’s website, customers can place Internet orders while still having access to their customer-specific product pricing, promotions, and volume discount opportunities, allowing for more automated order processing and giving the small business the opportunity to process a larger volume of orders on a daily basis.

Flexibility and scalability. When a small business makes an investment in an ERP software solution, it is making a decision for the future benefit of the company that will ultimately result in significant cost savings in the years following software implementation. An ERP system that offers a flexible, configurable architecture can deliver the software functionality the small business needs today and the scalability to take advantage of additional functionality as the business continues to grow without having to invest in a new software package, higher implementation costs, and additional services fees for employee training.

Purchasing an ERP system is an investment in every sense of the word for organizations of any size; however, small businesses can take advantage of the benefits to be realized from a fully-integrated software platform today and additional functionality in the years following implementation as the business continues to grow.

Tags: ERP ROI, ERP system, small business ERP solution
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