Over the past decade, businesses generated an unprecedented quantity of patents, products, and profit models. This trend of consistent expansion is accelerating—2015 being one of the most innovative years in history. In order to thrive in this age of explosive growth and competition, businesses must maximize resource efficiency. And, to do this, they must have tools that are in line with the pace of the 21st-century marketplace.
Arguably the most important of these tools is an Enterprise Resource Planning (ERP) software package. Industry leaders consider ERP software the cornerstone of their company’s organizational and operational efficiency. Yet, some business owners and executives consider ERP software cost-prohibitive due to the oftentimes shocking cost of adopting and implementing an ERP package. However, businesses can avoid many unnecessary costs, and significantly reduce their bottom line, by following a series of steps.
We detailed these steps in a White Paper and broke it down in a series of articles. In the third article of this guide, we will detail why companies should aim to change the process, not the program, and leave infrastructure management to the experts.
ERP systems streamline organizational processes, automate communication across organizational levels, increase operational efficiency, increase transparency, forecast cost and profit projections, and optimize resources. All of these functions provide value to the company, and will inevitably make standard operating procedure less resource intensive. The residual resource (i.e. cost savings) from the efficiency provided by ERP software can then be used to expand the business, enhance the product, or provide value-added services to customers.
To fully maximize the return on cost savings, companies should re-evaluate their operating procedures after implementation, and establish new practices and procedures to fully accommodate the new software. The majority of companies that realize cost savings on ERP projects are eager to change, in terms of culture, people, and processes. Often times, the fatal ideology and mindset of ‘because we have always done it that way’ leads to a change in the software, rather than the process. Most ERP vendors do not include customizations or program changes in their original proposals. Therefore, any change that involves unforeseen programming will ultimately result in a budget overage.
During the pre-implementation planning stage, when the company defines its business process requirements, a good practice is to come up with a list of ‘must haves’ vs ‘nice to haves’ pertaining to software logic, features, and functionality. Decide up front what the ‘showstoppers’ are for the company’s operational needs. If the company has performed thorough and ample research in this process, any customizations that are absolutely necessary to the project will be shared and negotiated with the ERP provider in the budgeting and negotiating phase.
An indirect risk of customizations during the implementation is that it creates a moving target for both the end users and the consultant/project manager. If this becomes a pattern throughout the project, it is inevitable that the timeline and project scope will be compromised, triggering the need for more man hours and another dip into the budget. If a company has chosen the right partner, their consultant should be able to provide ample workarounds or alternatives utilizing existing functionality in order to deter the need for customizations.
Leave it to the experts
As processes change and innovation increases, companies implementing new ERP systems must devote a portion of their budgets to IT infrastructure. Although some of the hardware must inevitably be kept in house (barcode scanners, label printers, workstations, tablets, etc.), many companies are taking advantage of cloud computing, which can dramatically decrease the cost of hardware, personnel, and infrastructure. In fact, statistics from a 2015 survey show that 90% of companies have moved to the cloud in some capacity.
An ERP, if utilized properly, will generate and require data for every facet of a company’s activity. By housing this data in the cloud, the liability of upkeep, maintenance, virus protection, upgrades, and backups is transferred to the ERP hosting provider. Taking advantage of hosted solutions provided by companies like Rackspace, Amazon, or DigitalOcean will allow the organizations to not only leverage the most innovative technology but also dramatically cut the costs associated with hosting a new ERP software platform. Traditionally, in-house IT departments are responsible for an array of timely duties including database tune-ups, load balancing, backups, virus protections, upgrades, and many other system improvement tasks. Headaches and time that would have been spent babysitting, implementing, and troubleshooting the IT infrastructure can be dedicated to more mission-critical duties that contribute to not only the success of the ERP implementation but the company in general.
In the fourth article of this series, we will discuss training, and how to optimize your team’s time to reduce costs.
https://www.abiscorp.com/wp-content/uploads/2021/08/Do-I-Need-to-Customize-my-ERP.jpg533800Derrick Schultehttp://www.abiscorp.com/wp-content/uploads/2022/12/ABIS-40-year-logo-FINAL-signature.pngDerrick Schulte2021-08-18 20:06:332021-08-18 20:33:28Do I Need to Customize my ERP?
How to Create A Winning Internal ERP Implementation Team
Over the past decade, businesses generated an unprecedented quantity of patents, products, and profit models. This trend of consistent expansion is accelerating—2015 being one of the most innovative years in history. In order to thrive in this age of explosive growth and competition, businesses must maximize resource efficiency. And, to do this, they must have tools that are in line with the pace of the 21st-century marketplace.
Arguably the most important of these tools is an Enterprise Resource Planning (ERP) software package. Industry leaders consider ERP software the cornerstone of their company’s organizational and operational efficiency. Yet, some business owners and executives consider ERP software cost-prohibitive due to the oftentimes shocking cost of adopting and implementing an ERP package. However, businesses can avoid many unnecessary costs, and significantly reduce their bottom line, by following a series of steps.
In the second article of this series, we will explain how your company can create an Internal Project Team that will minimize costs and keep the entire project on track.
Although most ERP packages are implemented by a team of project managers and consultants, there is a large amount of responsibility, duties, and workload that must be carried out by the client company. Most implementation firms will always offer to fulfill and execute all the work involved with an implementation, but this only adds hours and cost to the project. With the proper team in place, you can use internal resources from each department to fulfill tasks such as data gathering, data scrubbing, data conversion, SOP definition, testing, etc. Assigning the task of data extraction, scrubbing, and migration alone can eliminate a significant amount of hours and cost from the overall project. Additionally, having internal team members perform some of the work involved in the implementation will also serve as practice and training for the end users—which will ultimately result in cost savings for support during and after the implementation.
“Without a properly structured implementation team, bottlenecks, duplication of work, and other communication obstacles arise, usually resulting in cost increases.”
Involve Core Business Areas
Due to their robust nature, ERP implementations require a large amount of input and commitment from everyone (especially department heads) in the organization. The team must specifically plan for additional resources (e.g. time, costs, personnel etc.) that are directly tied to the ERP implementation. These resources will ensure that the team is successful in day-to-day implementation assignments while not compromising standard operating procedures, and will prevent costly issues like overtime, re-work, and setbacks to the timeline. Most companies form a team involving roles for each core area of their business such as project manager, accounting, logistics, purchasing, etc. Teams that are organized have better interfacing between the consultants and the team. Without a properly structured implementation team, bottlenecks, duplication of work, and other communication obstacles arise, usually resulting in cost increases.
Create a Super User Role
One role that can be created specifically for the implementation is the super user role. This team member, usually a manager or key employee, will be involved in every step of the implementation. Additionally, the super user will usually undergo extra training sessions in order to develop them into a subject matter expert in the ERP. Throughout the implementation, the company will be expected to perform parallel testing and hands-on practice inside the software. If the company is equipped with a super user, many of the questions, support, re-training, and other miscellaneous implementation tasks that usually deplete budget hours can be resolved internally. ERP Implementations require extra resources. These resources include organized labor from teams, training for a team lead super user, time windows for practice and ongoing performance feedback.
In the third article of this series, we will discuss a process that takes a toll on most ERP projects and how to avoid it: customization.
https://www.abiscorp.com/wp-content/uploads/2021/08/How-to-Create-A-Winning-Internal-ERP-Implementation-Team.jpg533800Derrick Schultehttp://www.abiscorp.com/wp-content/uploads/2022/12/ABIS-40-year-logo-FINAL-signature.pngDerrick Schulte2021-08-18 20:01:502021-08-18 20:31:29How to Create A Winning Internal ERP Implementation Team
Over the past decade, businesses generated an unprecedented quantity of patents, products, and profit models. This trend of consistent expansion is accelerating—these last few years have been the most innovative years in history. In order to thrive in this age of explosive growth and competition, businesses must maximize resource efficiency. And, to do this, they must have tools that are in line with the pace of the 21st-century marketplace.
Arguably the most important of these tools is an Enterprise Resource Planning (ERP) software package. Industry leaders consider ERP software the cornerstone of their company’s organizational and operational efficiency. Yet, some business owners and executives consider ERP software cost-prohibitive due to the oftentimes shocking cost of adopting and implementing an ERP package. However, businesses can avoid many unnecessary costs, and significantly reduce their bottom line, by following a series of steps.
We detailed these steps in a White Paper called “How to Cut Costs During Your ERP Implementation: A Step-By-Step Guide To Avoid Unnecessary Costs”. It will put in your hands all the tools you need to search, prepare and plan a successful ERP implementation in your company. We broke it down into a series of articles and in the first one below, you will find the best practices for companies to prepare their search for an ERP.
ERP implementation is a capital investment, and when businesses make good capital investments, they realize returns that make the initial costs worthwhile. Just as a business would carefully consider and prepare for any other large capital investment, it is critical to understand and plan for the acquisition of a new ERP software.
Study and Analyze Your Business
Some businesses err by only considering the software’s features prior to making an investment in ERP software. While considering features is important, it is not the first or even the most important step. Before studying and analyzing the software packages, the company must study and analyze itself.
• What is the company’s volume of transactions?
• What are the customers’ biggest frustrations?
• What is the industry norm for floor production times?
• Is the company using the most optimal equipment?
• How can the company improve lead times?
• What compliance standards is the company required to meet?
• What is the organization’s turnover rate?
• Has the company conducted a detailed SWOT analysis?
• What is the timeline for the project?
• What is the budget?
These are just a few of the many questions that must be answered before starting the search for an ERP package. For instance, a company might have great sales, stellar production efficiency, and unmatched customer service, but they have no handle on their inventory, forecasting, or procurement. Without knowing these specific strengths and weaknesses, the company has no way of knowing specifically what they need out of an ERP platform. Likewise, if a company does not understand its competitor’s innovative competitive advantages, they may not be equipped to make a proper ERP selection (one with enough features and automation to keep up with industry trends and norms).
Often times, companies decide to implement an ERP software before considering the specific needs of the business. When companies do this, they are often confused at the differences between the half-dozen or so packages that they discover from a web search. Without a clear understanding of the specific needs, strengths, weaknesses, threats, and opportunities, the company risks making a poor investment that will not generate the desired returns, and may actually end up costing the company in the long term.
“In many cases, businesses can completely eliminate custom programming costs by performing adequate research”
When companies choose a software that is not ideally suited for their business operations, they end up paying to reprogram the software to accommodate their unique needs. Businesses are often dismayed at the costs of reprogramming an ERP software that does not have the necessary features ‘out of the box’. In many cases, businesses can completely eliminate custom programming costs by performing adequate research on their own business prior to adopting an ERP package. Often times, software and consulting firms offer a preliminary engagement package that involves an in-depth needs analysis of the operations and business practices. Although this comes at a cost, this step helps the customer and vendor ensure that the company’s operational needs are met, and the project is planned and implemented effectively the first time around, thus eliminating additional costs in the long run.
Define Your Budget
For any investment or purchase, it is always important to define the budget before initiating any purchases. When businesses keep the budget ambiguous, they risk ‘cost creep’ on implementation expenses or cost-features negotiations that often devolve into positional bargaining between parties. Both parties benefit when the budget is legitimately defined and expectations are clearly communicated. Imagine shopping at a grocery store without knowing how much money is in your pocket. Regardless of whether or not you or the grocery knows how much money is in your pocket, you will leave with only the amount of groceries for which you had money. The same logic applies in an ERP implementation. If you do not define the budget, you may leave the implementation with some features you don’t need while other legitimate needs may be missed because they were not prioritized.
Defining the budget must be connected to the businesses’ self-study. A properly defined budget and a keen awareness of the business’s needs will help to keep costs down by providing an ongoing line of accountability to the stakeholders of the project. For example, if an implementation were halfway completed, but the project budget is at 75% capacity, key stakeholders will likely pay much closer attention to project expenditures such as custom programming, meetings, or project management. As important as it is to define a budget internally, it is equally important to agree on that budget with your software provider/vendor. Most software and consulting firms track budget as a key performance indicator. By defining the number with the vendor, it helps to harness accountability—as they will likely determine their success in part based on not exceeding the budget of the project.
https://www.abiscorp.com/wp-content/uploads/2021/08/ERP-Software-Selection-Where-Should-I-Start.jpg533800Derrick Schultehttp://www.abiscorp.com/wp-content/uploads/2022/12/ABIS-40-year-logo-FINAL-signature.pngDerrick Schulte2021-08-16 20:12:092021-08-18 20:28:54ERP Software Selection: Where Should I Start?
Managing a business is challenging and even more difficult with companies in the utility industry. You have a remote workforce, logistics and a work schedule to keep. In addition, there are also things like inventory, sales, and administrative tasks. For a utility business, it is important that all these different areas of the business work together, which is something that an ERP system can be a useful tool for. In the Utility Industry, a dedicated Service Industry Software connects all the dots and gives you a centralized tool to manage business operations. Here are some of the ways Adjutant, ABIS’ flagship ERP is benefiting businesses in the utility industry:
1. The Tracking Capabilities Businesses Need
Tracking how your business operates is important. Adjutant gives you a solution to track all aspects of your business in one location. You will be able to keep track of the logistics, production, inventory and much more from a platform that gives you all this data.
2. All Data Centralized For Better Access And Control
With Adjutant, you will have a centralized location to access all your business data, including sales, production, logistics, human resources, and accounting.
3. More Efficient Business Processes
Adjutant’s centralized and fully integrated planning system will allow you to efficiently manage all aspects of your business, including the ability to combine business data to create reports and charts to better understand the principle functions of your business.
4. Transparency And Control Of Business Data
In business, it is important to have clear data that you can use. Through the use of KPIs and other systems, Adjutant can give you the transparency and control you need to manage your business.
5. Forecasting Capabilities To Make Important Business Decisions
Knowing what to expect in an industry is also important, and our ERP system will give you forecasting capabilities that give you the information you need to make important business decisions and stay ahead of the competition.
As a business owner or executive, you do not want clients to wait or have delays due to logistics problems. Adjutant will give you a clear vision of how logistics are working and where changes can be made to improve logistics times.
7. Solutions For Today’s Remote Workforce
With today’s modern workforce, there is always the need for employees to work remotely but that doesn’t stop the need for that information to still be captured into a centralized system. Adjutant will not only allow you to monitor your remote workforce to ensure work is getting done but also streamline their efforts in the field allowing your team to get more done with less time and mistakes.
With a remote workforce that is often in the field and business assets that are often times difficult to track, it is important for utility companies to have an ERP software solution that helps keep them ahead of the competition. Contact us to get the benefits of an ERP software that is designed especially to meet the unique needs of the utility industry.
Manufacturers Eliminate the “Bottleneck” by using Metal Building Software
All metal building manufacturers are familiar with the dreaded bottleneck. It is that part of your production process that keeps all other parts from reaching their full potential. For some it is in estimating, some design, and others detailing and drafting. Once you know where the bottleneck is, how do you remove it? In this article we will examine potential solutions to removing the bottleneck using an ERP for the Metal Industry. We will look at each major step in the production process and offer some advice in streamlining this process.
Sales/Estimating
Fast, accurate quoting is a key for many manufacturers. If you can quote a building within an hour or less, the client will be impressed. Better yet, if you can fax a price, sales contract, a 3D drawing of the building and an anchor bolt plan in less than an hour, the client will really be impressed. Metal Building Software (MBS) Inc. can provide you with the tools to do exactly that. Even better news for your company is, at MBS they don’t estimate buildings. MBS provides hard costs based on the accurate design and detailing of each particular building. The more accurate the cost, the better control you have on your profitability. Each component is designed and detailed, everything from designing the size of wind bents to counting the last screw. How many times have you quoted a building and missed something on the contract? MBS cannot eliminate human error, but it can keep you from quoting a price based on incorrect information. By printing the contract directly from MBS, everything contained on the contract has been accounted for. If a hand written contract is used, something might be missed.
In some manufacturers, your bottleneck is in design. Here the key is to have your engineers spend less time on “simple” buildings. MBS will design/detail/draw dozens of building features: wind columns, and wind bents (portal frames), eave and gable extensions, canopies, facia, crane brackets, strut purlins, multi-surface frames, lean-to and mezzanine loading, among others. Taking the “simple” out of “simple buildings” allows your engineering staff to concentrate on more complex projects. You won’t be afraid to bid the complex buildings if you have software that can handle it. It would take a seasoned metal building engineer days to design an unsymmetrical, multi-surface building with varying base elevations, cranes, mezzanines, lean-tos, eave extensions, canopies, and partial walls. MBS can handle this building in a matter of minutes.
Detailing/Drafting
Here is the big one. Most manufacturers have their bottleneck in detailing. Counting every screw, calculating every panel length, determining every hole location. This is where most of the time is spent and where most of the mistakes are made. It is tedious repetitive tasks. This kind of work is exactly what personal computers were designed for. Just like in design, MBS wants to eliminate having to spend time on “simple” buildings. After a building is sold, it is reviewed by the engineer, spot-checked by detailing and sent off to the shop. There will be no hand editing of the drawings in CAD. Every aspect of the building will be designed, detailed, priced, and printed directly through MBS software.
Shop Process
Shop automation is becoming more and more advanced. More accuracy, more efficiency, less scrap, less staff. MBS provides several ways to increase productivity in the shop. Scaled shop drawings are produced in a DXF format. This allows clips, web plates, stiffeners, etc. to be directly imported into any nesting or plate processing software. In addition, MBS allows you to define your own set of standard parts and pieces. Standardization of the shop process eliminates errors and increases productivity.
The entire sales, design, detailing, and shop process need to be tied together. MBS can provide an “electronic” trail that follows each job through. When a job is ready for the shop, a customized report can be produced by MBS for your accounting software. Accurate job costing can give you a better handle on your profitability. Inventory control is handled by yet another customized report automatically generated by MBS. Keeping a close tab on inventory allows the manufacturer to only have needed stock on hand.
A complex building consists of two or more buildings placed adjacent to each other. Each basic building is fully processed by MBS without any duplication of part numbers. Routines are available to have each adjacent building work together. For example, options are available for the girts/purlins of one building to extend into the adjacent building. The MBS program prepares a 3D drawing of the complex building and, if desired, a combined shipping list for the complete building.
Summary: Improving Productivity
Improved productivity comes from using software that turns out the final product in a form that meets your needs. This includes design, detailing, shop drawings, shipping lists, erection drawings and links to the shop, accounting, and inventory control. Look at your current methods and note the man-hours that can be saved when the process is completely handled by the MBS Software.
About the authors: Dr. James L. Jorgenson holds a BS, MS, and Ph.D. degrees in civil engineering. His background includes teaching, research, and consulting in the area of metal buildings. In 1986, Jorgenson founded Metal Building Software, Inc., a software supplier to 4,000+ users on six continents. Dean T. Jorgenson holds a BS in civil engineering. He is President of MBS. Before taking a position with MBS, Jorgenson spent seven years as a project manager with a large civil/structural-consulting firm in Minneapolis, MN. For more information on Metal Building Software, please visit: mbsweb.com
https://www.abiscorp.com/wp-content/uploads/2021/08/Manufacturers-Eliminate-the-Bottleneck-by-using-Metal-Building-Software.jpg591886Derrick Schultehttp://www.abiscorp.com/wp-content/uploads/2022/12/ABIS-40-year-logo-FINAL-signature.pngDerrick Schulte2021-08-16 19:32:532021-08-20 18:44:00Manufacturers Eliminate the “Bottleneck” by using Metal Building Software
Business Process Management: The Backbone to Running your Business
The goal of any business venture is to grow a strong client base, increase profits, and thrive. Unfortunately, achieving these goals may, at times, seem like an overwhelming and impossible dream. Although it can be difficult for business executives to understand why their operations aren’t expanding the way they’d hoped, the problem can nearly always be traced back to a weak business process management system. The good news is that it doesn’t have to be that way. Business Processes are the heart of what can make or break a business and differentiate you from your competitors.
What is Business Process Management?
Business Process Management (BPM) refers to any related, structured activities that work together to produce goods and/or services in order to fulfill the needs of a client. In addition to describing business processes and protocols, though, BPM goes a step further and calls for the constant improvement of current business models and strives to continuously seek out ways to boost efficiency and effectiveness through innovation, flexibility, and the use of technology. In terms of business process management, good can always be better, and better can always be best. The belief is that through a solid BPM platform, enterprises can operate more smoothly, generate higher revenue, and decrease overhead costs.
There are businesses that are stuck in the older school of thought which supports traditional hierarchy. In this business model, tasks are delegated from the “higher-ups”, down through the chain-of-command, leaving executives and higher-level managers “free” of worrying about these items. The problem with this approach is that certain tasks may seem to fall through the cracks or get lost in the shuffle, and no one ever notices.
A solid business process management model is able to keep everyone on the same page without weighing them down. Not only does a BPM enable all players to clearly understand what is expected of them, but it also simplifies the process of staying involved with company-wide events. By integrating an organizational, industry-specific software system into your BPM, for instance, one could expect benefits like:
Easy contract review and tracking
Ability to instantly review and approve purchase orders
Access to real-time field labor & inventory updates
Streamlined scheduling processes
Immediate access to work orders
Simple creation, modification, and review of invoices
Monitor payment statuses
Ability to create and delegate tasks
Tracking of task progress
Task prioritizing capabilities
Alerts for deadlines and incomplete tasks
This proactive type of BMP system ensures that no customer will ever be forgotten, and no task will ever be left undone while still allowing for significant time savings and reduced overhead costs.
What Does Solid Business Process Management Look Like?
A successful BMP platform will always be clearly aligned to your goals. Change can be difficult for employees to accept, so there has to be a payoff. One of the simplest ways to re-structure your system is to select a software system that will provide fast and measurable results. When workers can see for themselves how much more quickly a purchase order approval can be made, schedule their team, access contracts, and organize tasks by priority, they will feel more confident in the business process management model and more satisfied with their work. Be sure to continuously evaluate your business processes and procedures, interview staff, and talk with clients about areas where improvements can be made.
As a backbone of the modern industry, it affects business and process development, impacts customer satisfaction through better processes and service, and reduces costs and increases revenue. A great business process management system is never complete, but always getting better.
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How To Calculate an ROI for your Manufacturing ERP?
This guide is specific for small to medium manufacturers looking to enhance their business through increased productivity, company-wide visibility, and revenue. The following information will assist you in calculating your Return on Investment (ROI) with the aid of an ERP software system.
What is an ERP system?
ERP systems make processes more efficient and reduce costs. An ERP software system saves you time and enables your business to function smoother and more effectively through integrating multiple systems into one central system. This system will collect, store, manage, and interpret data from your business activities such as: product planning, cost, manufacturing, marketing and sales, inventory management, and shipping and payments. When applied to the Manufacturing Industry, it becomes a complete Manufacturing Software capable of handling any task, process, and activity required in the manufacturing of a product.
How do you calculate the ERP ROI for your business?
This is tricky and will depend solely on your analysis of your business. The cost of implementation is easily accessible, but seeing the benefit of an ERP system will take time. Some additional information you should know:
What happens when you install an ERP system?
When you install an ERP system it will gather all the raw data from your business and transform it into information that is understandable or readable in a tangible way. After installed, this “understandable” data shows you the health of your business and all areas of product management such as: processes of manufacturing, accounts, sales, invoices, inventory, and the performance of your business.
But in order to calculate your ROI with an ERP system, all the data and processes must be given a dollar value so you can calculate the efficiency levels and increase. This is where evaluating an ROI is difficult as you now have to estimate monetary numbers for intangible data.
Examples of intangible data are: Customer Satisfaction, Inventory Management/Coil Tracking, Production, Shipping/Logistics, Task and Time Management, and Project Opportunity.
For those in accounting and dealing with finance, estimating ROI comes easy as they work with tangible data. They can compare the prior year’s revenue and costs.
Some tangible benefits of an ERP system may include:
• Better management of equipment to increase efficiency in manufacturing and production
• Improved allocation of resources to reduce labor costs
• Management of data in one central system to eliminate errors or duplication
• Improved procurement procedures to decrease the cost of materials
• Enhanced planning and control to shorten work-in-progress times
As mentioned above, you must give all intangible benefits a numeric value. If you want to find more examples, we wrote an article about tangible and intangible benefits.
Some of the intangible benefits to consider may include:
• The ability to compare quotes with actuals
• Better accounting control and tighter sales cycle
• Standardized procedures
• Faster order-to-shipment cycle
• Improved Customer Service
• Error-proofing enhanced, increased accuracy of inventory data
• Multiple systems acting as one central system with full-transparency and visibility to all departments
• Analysis of product – improving gross margin and job margin
After you have established a numeric value to your intangible benefits in the remaining areas of your business, let’s discuss a few costs of installing an ERP system.
These may include for example: license fees, consulting fees, support plans, hardware costs, and implementation costs. All of these fees are tangible and go along with calculating your ERP ROI.
We will call all of these fees (costs) your Total Cost of Ownership (TCO). Before proceeding, ask yourself these two questions:
1. How long do I intend to use the ERP system?
2. And what are my anticipate-monetary benefits of its use?
Hint: An ERP system’s primary benefits come from improved production, reduction in labor costs, operational costs, and stocks.
For our example, let’s say your TCO amounts to $200,000; you plan to utilize the ERP system for 10 years, and your anticipated increase in profits is 10%.
The best way to determine which ERP system is right for you, and to assist you in calculating your ERP ROI, is for you to write out your pitfalls for the previous year. For example, perhaps some of these were your leading issues and drawbacks for the year prior:
• Inconsistent data
• Manual data entry
• Duplication of entries
• Inventory overstocked
• Long inventory closing
• Costly errors or delays (order and shipments)
• Slow solutions to problems
So your next questions would be, “How do I improve on these? And, what do I want from the ERP system?” If we are keeping with the examples above, you may say you would like the ERP system to help your business in the following areas:
• Operate with one central system
• Automate data entry
• Remove old business systems
• Reduce duplication of work
• Improve planning
• Improve operational productivity and employee efficiency
Now that you’ve established what your weak areas were (or still are), and how you want to improve on them, you can work to quantify these costs or obstacles to determine your ERP ROI.
To review:
ROI = Total Benefit – Total Investment
ROI (%) = Total Benefit / Total Investment
It is important to keep in mind that the success or failure of your business, as well as your ERP system, is up to you. ERP systems are only as effective as the business that incorporates them. Meaning, an ERP system does nothing if you do not follow or change your business processes based on what the ERP system supports. Oftentimes, businesses purchase an ERP system and expect just by uploading the software that their businesses will be saved, or they’ll see large increases in revenue and reduced costs. This is not realistic if they still function on their old processes. It is evident that if you want to improve an area of your business you must change and adapt. If you maintain your old habits and routines or processes, no ERP system will help you achieve your goals, and sometimes, you may see worse gains.
The trick to a sustainable and improved business is to change and improve your business processes that lack productivity and efficiency. An ERP system will show you the methods and ways by which to do this through their supported processes.
https://www.abiscorp.com/wp-content/uploads/2021/08/How-To-Calculate-an-ROI-for-your-Manufacturing-ERP.jpg533800Derrick Schultehttp://www.abiscorp.com/wp-content/uploads/2022/12/ABIS-40-year-logo-FINAL-signature.pngDerrick Schulte2021-08-16 19:01:362021-08-20 18:43:01How To Calculate an ROI for your Manufacturing ERP?
When I was growing up, I loved The Price is Right. It may have been my favorite show. The combination of luck, timing, and strategy, along with the idea that the contestants were ordinary people, like me, contending for “huge” prizes, was enough to keep me humming the theme song day in and day out. There was one particular game that stood out to me: The Race Game. In The Race Game, a contestant was shown 4 different household items and four different prices, and then asked to match each price with its corresponding item. They had 45 seconds to do this. Once they were done, they could pull a lever down and lock in their prices. If they locked in all the correct prices, the contestant won a new car. If not, a buzzer would ring and they would have a small amount of time to go change around their match-ups. Here is the kicker—the contestant was not told which items were correct, and they only had a few chances (and limited time) to make changes. This is probably why I enjoyed this particular game—the unknowns, the pressure, the guessing—these made the game more thrilling and exhilarating, for me as a viewer. But can you imagine how hectic and nerve-racking this must have been for the contestant; you have somehow been selected out of a huge pool of potential contestants, earned your way through the “One Bid” round, and now you have the chance to possibly win a car. But with each lock in, and each dismal buzzer, you have no clue if you are one match up, or 3 match-ups away from losing that car. You have no idea if you are on the right track, if you have done anything right, what you are missing, where you are wrong—you just know that you have failed at the end goal. I vividly remember seeing the frustration on contestants’ faces when that buzzer went off. They must have agonized: “What did I get wrong?!”
I’ve seen this same exact exasperation in organizations that lack proper feedback.
Psychological scientist and management experts agree: feedback is likely the most important aspect of management. Feedback drives performance, enhances professional development, increases organizational efficiency, and, when delivered in the appropriate form, enhances employee work satisfaction. And yet, according to a recent survey conducted by PwC, less than 30% of employees receive consistent feedback from peers and managers. So, what gives? Why are we so afraid of providing feedback? Is it that we are catering to a more sensitive generation? Is it that we are afraid to have those tough, scary, honest conversations? Is it because we know that, in many circumstances, our subordinate’s failures are in part our own? Do we as managers and team members care more about staying in our comfort zone than creating a thriving team? Has feedback been placed on the back burner because there are simply “more important things to do” as a company? Regardless of the reason for avoiding feedback there is tremendous evidence that, in its absence, there are dramatic negative effects on professional development, relationships, and organizational functioning.
Do we as managers and team members care more about staying in our comfort zone than creating a thriving team?
The truth is, when executed properly, feedback can be the most rewarding and beneficial asset to both individual employees, management, and the organization as a whole. Most of the top performing companies in the world got that way through self-realization, self-examination, and adaptation. When things go wrong or fail, or even if we just fall short, it is crucial to analyze our process, methods, attitudes, and performance- and we do so through feedback.
Here are some of the key ideas the best leaders and organizations remember when they practice feedback.
Figure Out the Why
In order to get the most out of a feedback process, it is important to understand why we give it. The basic and fundamental goals of providing feedback are to:
• Affirm strengths and capitalize on wins
• Point out areas of weakness or areas to improve upon.
• Assess the team member’s ability to fulfill their role and responsibilities.
• Evaluate progress towards goals.
• Determine the team member’s impact on others.
Although these sound obvious, without a proper feedback model, most organizations are in the dark when it comes to these basic areas.
When you consider that most of these serve to assess the employee’s fitness and overall employment, it is surprising that we would ignore conversations and communications about them. When a team member is terminated, or voluntarily leaves, it is generally a result of their inability or poor standing in one of the areas above. In the case of a struggling employee, you are failing as a manager if you do not consistently provide feedback in these areas.
The benefits are not solely limited to situations where improvement is needed- it also serves to build and capitalize on team members who are strong performers. Recognition of a job well done continues to be one of the biggest motivators in the workplace. When people do well, they want to hear about it, it is human instinct. In fact, a recent study by Gallup found that almost 70% of employees say they would work harder if their hard work was recognized. This solidifies the notion that, when we do not provide feedback as managers, we are not only missing out on correcting and improving current weaknesses, but also failing to build on the qualities and wins of our best people.
Delivery and Execution
An organization that does not provide feedback is setting itself up for failure; however, an organization that provides feedback in the wrong form, or at the wrong time, can be just as much at risk. It is important to remember that how you give feedback is just as important as whether or not you give it, and this is especially true for corrective feedback.
When leaders provide feedback, the number one thing you can do to prepare is check your emotions at the door. Having a bad morning? Drained from putting out fires? Feeling overwhelmed with family issues? Frustrated with a customer issue? Do not let outside issues poison your feedback model. When you provide a team member with feedback, it is about them- do not let outside issues influence your interactions with them when discussing their progress, performance or attitude.
Another key element of an effective feedback model is specificity. Remember, the goal of providing feedback to our team members is to help them grow, learn, and succeed in order to produce very specific results. Instead of telling a direct report they need to “communicate better”, point out precise examples where communication was lacking. I try to follow a simple model:
• What is the action?
• What are the consequences of the action?
• How can it be changed or corrected?
By pointing out specific occurrences and actions, there are no assumptions or doubt about what action is being discussed. Being specific in your feedback decreases subjectivity and speculation, which helps team members to understand the facts. It is also imperative that you point out specific consequences of the action, both good and bad. The employee needs to know the effects, both direct and indirect, their actions have on you as a manager, the company, and the employee themselves. Lastly, and most important; offer a solution or corrective measure for the team member. Simply pointing out issues, defects, or behaviors does not fulfill your role as the manager. It is your job to ensure team members have the tools and solutions necessary to succeed. By offering a solution or corrective action, you are fulfilling the role of a leader, rather than just a boss.
Another key aspect of executing proper feedback is effective listening. Especially in situations where negative feedback is being provided, it is crucial to allow the team member to explain or discuss their point of view, or their side of the story. Leaders who listen to their people can instill trust and transparency in their relationships, which helps to build and propagate loyalty. Often you will find that listening to your direct reports will provide an alternate point of view—one that may help to explain, diagnose, and eventually correct behaviors or actions in need of adjustment.
“Leaders who listen to their people can instill trust and transparency in their relationships, which helps to build and propagate loyalty.”
The When and Where
I have read a lot of management books. I have been to many management trainings, attended lectures, and been exposed to various types of management in different organizations. One practice that I confidently disagree with is the annual performance review. My distaste isn’t derived from the effort it takes to put together reviews for all direct reports (usually at the busiest time of the year); and it is not the amount of meetings and resource allocation that is drained. I simply do not like them for one reason: they are ineffective.
Imagine you manage a team member who is great at what she does, the clients love her, she brings in a fair amount of revenue, but she seems to be careless when it comes to the grammar of her emails. Or maybe you have someone on your team who is very committed, great with data management, extremely organized, but lacks in accounting skills (something that he really needs to be at his highest potential).
If you operate under an “annual review” feedback basis, and you somehow carelessly neglect the feedback process the entire year, how will these employees know there is anything wrong? Furthermore, are you ok, as a manager or an organization, with letting sloppy, unprofessional, negative behavior or actions continue to happen for up to a year before pointing them out? Annual performance evaluations proverbially bottle up emotions, and they allow problems, attitudes, and behaviors to fester.
Instead, feedback should be given ALL THE TIME- in meetings, in weekly one-on-ones, in emails–as often and continuous as possible. It is important, however, to understand the sensitive nature of negative feedback and its effect on morale and confidence (if provided in an improper setting). While I believe giving affirmations and positive feedback in front of a group carries many benefits, I would never offer negative feedback to a direct in front of his/her peers. It is important to be very prompt in your feedback– regardless of the nature. When instances and experiences are fresh in the minds of a resource, they are much more likely to accept, understand, and capitalize on the feedback based on these occurrences.
For those of you in the supply chain industry, you could compare this continuous feedback model to an inventory cycle count. Traditional physical inventories are done once or twice a year. Plants usually shut down completely for 2-3 days, and employees perform a count for the entire warehouse. Not only does this have dramatic effects on labor cost, but production (thus revenue) takes a hit during the shutdown as well. Additionally, because the counts are so far apart, the possibility of inventory variance, inaccurate counts, and other substantial issues are dramatically increased. By performing cycle counts once a month, organizations keep the inventory counts fresh and accurate, while avoiding the drain on time and resources (as well as production shutdown). So, by providing feedback to your team members constantly, rather than a few times a year, allows for more communication and discussion with your directs, and translates into increased opportunity for growth, improvement, and success.
Regardless of where and when you deliver the feedback, another essential piece is to remain consistent with your feedback- both positive and negative. If, in the past, you have chastised certain behaviors or actions– it is imperative that you do not make exceptions for these situations due to variables such as mood, resource, current company health, etc. For instance, let’s say you have made it clear to a team member that being late is unacceptable. You have had several discussions concerning this behavior and it is understood. A couple months later, one of the more senior team members starts coming in late, but nothing is mentioned. This type of scenario breeds resentment and distrust. These types of inconsistencies in feedback will likely result in even more issues than you originally started with.
From Every Direction
Most of the time, when feedback is discussed, it is in the context of a manager providing feedback for one of his/her team members. But this brings up a good question—if we are passionate about providing employees with feedback and solutions (from a different point of view) in order to help them change for the better, shouldn’t we be asking the same from them? Feedback is not a one way street. Every organization should actively engage in feedback up the ladder, down the ladder, and unilaterally in order to provide the most comprehensive analysis of managers, team members, and peers.
One of the things I try to do on an ongoing basis is ask my team members for feedback. I value each and every one of my directs—and I rely on them on a daily basis (just as they rely on me). At my company, we hire passionate and intelligent people—only the best. We do not hire team members of this caliber to have them sit and be quiet. Their ideas, innovations, pushbacks, concerns, and visions are not only welcomed, but EXPECTED. This includes constructive discussions on our relationship, and my management. The only way that I can get better as a leader is to ensure my team is getting everything they expect out of me, and more. Hiring smart people and ignoring their ideas and feedback is like buying a Ferrari and letting it sit in a garage. Something that I have had to get better at is taking in feedback from my team without getting defensive. What I have found is this; if you trust your team, and they trust you, the mutual feedback process is ultimately built on each party’s desire for the other to improve, and ultimately succeed.
“Hiring smart people and ignoring their ideas and feedback is like buying a Ferrari and letting it sit in a garage.”
One of the most controversial topics in this arena is peer to peer feedback. If performed correctly, peer reviews can be very beneficial for a team’s growth and success. If you do plan to initiate peer reviews, it is best to go with a structured method of feedback collection, such as the 360 feedback surveys. By providing proper dialect around the meaning and purpose of these reviews, along with assuring their anonymity, most team members are able to understand the value of the exercise, and generally will end up taking away valuable feedback. However, other forms of unstructured peer feedback have a history of spurring resentment, malice, and distrust among team members. It is crucial that you supplement any form of peer review with a thorough background discussion and proper format and execution.
We have discussed feedback from the top, and from below, as well as lateral feedback. This leaves the most significant form of feedback an organization can receive: CUSTOMER FEEDBACK. I could easily write a book on this, so I will save that for another piece; but know, that if you are not having honest and blunt conversations with your customers about your relationship, product, service, delivery, and overall status with them—you are doing it wrong. Most customers will be honest with you if you ask. In fact, most of your customers are likely stewing in their complaints silently; according to a recent study, for every customer who bothers to complain, 26 other customers remain silent. The onus is on the organization to reach out to the customer and ensure they are being treated properly and expectations are being met. And the best part about this process—most of the customers will respect and appreciate the mere act of checking in on them.
“If you are not having honest and blunt conversations with your customers about your relationship, product, service, delivery, and overall status with them—you are doing it wrong.”
As companies continue to improve and innovate, standing out amongst the crowd will be vital to winning and onboarding unique and passionate talent. Adopting and perfecting a structured feedback model for your organization will help secure one piece of the puzzle. Do not be the company that leaves your people “fearing the dismal buzzer”.
https://www.abiscorp.com/wp-content/uploads/2021/08/Feedback-It-Shouldnt-Be-A-Guessing-Game.jpg8121217Derrick Schultehttp://www.abiscorp.com/wp-content/uploads/2022/12/ABIS-40-year-logo-FINAL-signature.pngDerrick Schulte2021-08-16 18:35:142021-08-16 18:35:20Feedback: It Shouldn’t Be A Guessing Game
You have too many ideas and not enough time to do them.
Your processes are constantly delayed or postponed.
Interdepartmental interaction is compromised or malfunctioned.
What should take one day takes a week or longer.
You don’t know if you’ll ever finish or reach your goal.
If you’ve answered yes to any of these questions or had to ponder it for longer than five seconds, then you need an ERP system (or a better one).
Why?
Because all these questions revolve around the same problem: can your business become more efficient or not?
SPOILER ALERT: your business CAN become more efficient.
Look at companies like Toyota, a world reference in terms of efficiency. They apply Kaizan and Lean principles to realize millions – MILLIONS – of improvements every year. Those efficiency gains sometimes only apply to a fraction of second on a process.
But one fraction of second on a process you repeat hundreds of thousands of times every year will greatly improve your bottom line.
If one of the most efficient companies on the planet can become more and more productive every year, you can too.
And at the end of the day, this is what ERP software are about: efficiency and better margins.
MRP developed in the 1960’s from the need to manage demand and orders.
It did not take into account timing, but only the demand (need).
MRP II was developed in the 1970’s to supply both demand and time in the planning process.
ERP originated from these earlier MRP II systems to handle account management and financial applications.
This enabled businesses to manage their inventory, cash, and employee (or customer) resources.
Over the last fifty years, companies like JD Edwards, Baan, Oracle, IBM, PeopleSoft, Infor, Microsoft, and Sage (along with other companies that were consolidated together) evolved ERP into what it is today.
It continues to adjust to the market and the need of businesses.
What part of your business will benefit from an ERP?
If you are a Manufacturer (you don’t need to be in order to benefit from an ERP), what you produce and sell is the most vital aspect of your business.
Without it you wouldn’t have have a business.
So how do you increase your production, while also increasing your demand?
According to MMS Online, you do this by optimizing your processes, improving tracking, reducing errors and costs, boosting productivity, and centralizing your information while making better decisions.
The best ERP also fully integrate it with all of other modules so you have a full-scale automation sequence.
Production work orders outline the requirements, based on a Bill of Materials. As you already know I’m sure, a Bill of Materials (BOM) is an “extensive list of raw materials, components, and assemblies required to construct, manufacture, or repair a product or service.”
ERP systems understand all that information and can they track it from inventory before allocating it to a job.
The ERP will often then execute a Route automatically and schedule tasks that production personnel and managers can see.
Once complete, the item becomes its own inventory that you can track throughout its whole life cycle.
A Project Management module allows you to marry a multi-functional and flexible tool with the production module that allows you to set budgets for every phase of your production.
Now you’re able to monitor the associated labor, materials, subcontracts, general expenses, and overhead costs with an easy-to-use layout.
Not only this, but you can track everything! Tasks, shipping events, linked orders, material usage, buyouts? You got it all!
Having the ability to acquire goods or services, and agree to appropriate terms is vital to continued growth.
Matt Michell, Purchasing Manager at CO Building Systems, explains how an ERP software with forecasting capabilities allowed him to get better pricing and buying power.
It’s a competitive market and it’s key to have the ability to anticipate your needs to make larger purchase and save your company money in the long run.
Matt Mitchell’ situation will probably resonate with many purchasing managers out there:
“our business is way too competitive to buy on an as-needed basis”.
This is why you need a powerful analytical tool to drill down into what your material consumption over the past year, and break it down quarterly or monthly to make accurate predictions about your future needs.
Since everything in an ERP is tied up together, having visibility into your the jobs scheduled is also critical.
As we saw in the Production section, your ERP facilitates the scheduling and management of your production workflow environment.
It’ll manage and execute your predetermined schedule and then automatically update the list of items produced as well as your inventory levels.
This allows you to receive accurate labor or material projections since they are updated in real-time 24/7/365.
If you like to have control over every moving part of your company but hate the hassle that comes with it, then the scheduling portion of an ERP is perfect for you.
It lets you assign people, organizations, rooms, assets, and pieces of equipment as resources with the click of a button.
You can even constrain assignments and scheduling based on specific skill sets if you’d like.
Need to inform certain resources of an availability change?
How does automatically sound? You heard that right!
Auto Alerts will notify your entire company or specific departments of a change without you needing to worry or do a single thing.
If anything changes regarding the work order #5753843 for example, every person involved with that part of the project will be emailed. See below:
But scheduling and acquiring isn’t everything.
What about tracking?
The Time and Material module simplifies that for you.
Enter labor, equipment, and materials on a case-by-case basis and know that your pricing will reflect the current market.
Procurement doesn’t need to be a hassle or a dead weight.
An ERP software is all about efficiency and accuracy.
Select your parameters and let them run on their own.
By building customer relations, you decrease operating costs.
A buying customer today is a buyer tomorrow. You want to ensure you keep track of who your buyers are.
Automating your sales process is simple.
In fact, it’s so easy you could have it up and running just by implementing the following:
Contract
Account
Opportunity management for forecasting
Territory management
Pipeline management
These tools shorten the sales cycle by granting your business access to pertinent customer data.
Work smarter, not harder.
Sales automation also allows supervisors to monitor how their sales teams are performing in real-time.
Bonus: By automating your campaign design management, email marketing, and lead assignment & management, you’ll increase marketing programs effectiveness AND capture vital customer, lead source, and demographic information that marries over with your sales cycle.
Automating sales orders is also a fun feature!
Load Management provides you with order statistics and gives you sales orders automatically and which trucks they’re assigned to.
You can display orders and create load sheets with these route designators.
There’s so much optimization at your fingertips with an ERP software!
Keep your technicians synced with workflow management, accurate costs projections, asset tracking, eliminate redundancy, enable mobile deployment with real-time data dispersion, and a single-point of entry for all departments, including accounting.
Centralize information, reduce costs, improve tracking, make better decisions, and optimize process your processes through your accounting.
There are multiple ways an ERP allows you to maximize your resources with each department.
Accounting is one of the most important teams your business contains.
From accurate reporting to filing taxes to collecting data, accounting is the pulse of your company.
We understand the importance of accurate accounting and that’s why we provide you with an all-inclusive suite of modules to assist you.
Import & Export Manager
Our Data Import & Export module facilitates any data transfer to and from your system.
Want to bring in data from another software?
No problem!
We’ll carry over any pertinent information during initial setup to establish chart of accounts codes, vendors, and beginning balances.
In addition, you have the option to import data on a recurring basis.
Job Cost
We created this module specifically for project-oriented industries and manufacturers.
This module gives you powerful management reporting, detailed accounting capabilities, and total control.
In today’s competitive market, with profit margins getting tighter, the Job Cost module is an essential management tool for keeping a close eye on the job profitability.
Some features you gain from the Job Cost module:
Ability to track cost revenue information for every project (to the smallest of details)
Features included to streamline the process.
Minute-by-minute status updates for bid proposals and projects.
You can integrate Accounts Receivable, Accounts Payable, Time Clocks, Inventory Management, Sales Order, Purchase Order, and General Ledger to ensure corporate information access.
Having access to information from any part of your business is vital to an efficient system.
Auto Alerts keep your staff up-to-date of daily changes in business.
Both are equally important for your company and employees.
If you’ve never used an ERP system or you’re switching between systems, or even consolidating, your end users will need guidance during the transition.
The more aware your employees are of the training to come and what it entails, the more receptive they’ll be when the training comes.
Training also ensures everyone is on the same page and understands how this new ERP system will coexist with their normal day-to-day responsibilities.
Awareness and action are key.
Informing your employees in advance with a detailed breakdown of what is to be expected coupled with a follow-up intensive training will equip them with the tools they need to thrive.
Some third party companies will provide basic documentation and preliminary training, but anything after that is an additional cost and time.
It’s better to train internally so you can run without outside resources—except when necessary to advance and grow beyond your current means.
Setting and sticking with your go-live date is of utmost importance to 1) implementing your new ERP software, but 2) having a successful launch.
ERP implementations take on average 14.3 months according to a study by Panorama Consulting.
And nearly 75% of those implementations plans exceeded the initial go-live date.
What does that tell you about the implementation process?
It means there’s a lot of work involved, many moving parts, and sticking to your date is crucial.
Life happens.
Things come up that require you to put out the fires.
We understand.
But we also know without an established—and realistic—launch date, you’re setting yourself up for more work, more costs, and the potential to never launch and reap the benefits.
There is nearly always a direct correlation between a company who sets pre-defined and realistic expectations and goals for their ERP implementation and reaching it.
An effective project plan will include not only detailed tasks & executions required to complete the implementation, but also supplemental dates, assignees, due dates, predecessors, completion percentages, and remarks sections.
Dates are important.
Plans to get there, with the right expectations, is even more important.
By nature, humans are followers and animals of habit.
We mimic the attributes of those around us that we find appealing or that fit with our own agenda and personal dilemmas.
This is equally true in the corporate world.
It’s a bottom-down mentality that runs through both positive and negative veins.
The quickest way for an ERP system to fail, never be implemented effectively, and to increase costs is lack of buy in from the company and its employees.
Employees will follow their leaders either to the mountain top or the pit.
Which one do you want for your business?
To ensure your company succeeds during this often times stressful and turbulent transition, it’s vital that all executives are onboard 100% with the implementation.
There can be no passive-aggressive remarks, outward refusal or rejection, or manipulative sabotage by any leader in the company.
If there is, they will hold your company back because their teams will mimic their attitude and outlook.
It’s all about having the right people on your team, as we went over earlier.
If you have a team member that’s holding your back from potential growth and development, get rid of them.
It’s better to have like-minded individuals—of quality—than have the #1 developer in the world who resists change like the plague and recruits half the company to agree with his negative stance.
People are copycats.
We learn from our environment and the people around us.
What do you want to teach your employees?
By showing them a unified front with total, unwavering commitment to the system and plan, they will jump on board.
If they don’t, you now know where your dead weight is and can offload it into the sea.
The best way to approach implementing an ERP system is with a clear head.
This means knowing what you’re getting yourself into, the time requirements, costs & training, and having realistic expectations for what it will entail.
In order to do this you must understand how to implement it.
You do not want to jump all in and implement every module in existence all at once.
This will overwhelm not only you but your employees and lead to delays, additional costs, and poor retention after training.
The best approach is by phases.
Say you want and need 50 modules.
But ten of them are the most pertinent and possess immediate positive ROIs.
You’ll want to start with those first.
In addition, there may be modules that can be looped together that attack the same goal like increasing productivity of your services department and accounting.
Then implement the others gradually over time.
This will also ensure your go-live date doesn’t fluctuate and continue to be pushed back.
It also prevents additional costs for implementing and retraining.
While having a longer implementation schedule appears to be more costly, it actually saves you more in the long haul by planning it in stages.
By implementing your ERP system in phases, you build the expertise and understanding of each of your employees and departments, which makes follow-up modules easier to implement and learn.
If you’re only doing a few modules, knock them all out at the same time.
But if you’re doing a more extensive and intensive re-haul of your company and bringing in multiple modules, a phased approach is ideal.
Conclusion
ERP software is an investment in time, money, and people, but brings with it a HUGE ROI if you do it right.
We’d like to help you determine if ERP is right for you and walk you through selecting the right modules and devise a plan-of-attack specific to you.
https://www.abiscorp.com/wp-content/uploads/2021/08/ERP-Software.jpg600800Derrick Schultehttp://www.abiscorp.com/wp-content/uploads/2022/12/ABIS-40-year-logo-FINAL-signature.pngDerrick Schulte2021-08-13 18:59:362022-01-18 15:37:22What is ERP? Everything You Need to Know in One Post.
Before the trees are cleared, the foundation is poured, and any siding or beams are put into place, a surveyor goes out and surveys the land before any home or neighborhoods are constructed. What is he looking for? He’s checking the drainage system, the floodplains, the quality and density of the soil, how to position the road systems, how to angle the homes, which lots can they fit, how many can go in one location, and much more.
But even before all of this, the right tools must be in place in order to complete the overall mission: build a new neighborhood and gain tenants and owners.
As with building a neighborhood, you need the right equipment to perform at your best and to satisfy both your needs and the customer’s. You do this by implementing a strategy. And in today’s world, that strategy is now digital and wireless by means of software implementation. Or as we call it in the corporate and professional arena: Enterprise Resource Planning (ERP). I’m here to guide you on how to go about selecting the best ERP software. There are many out there, but not everyone will do what you need and help you reach your goals.
We must hone in on what your business truly desires to achieve with an ERP system at your disposal. A few key points to get you started:
Line of business
Does your company specialize in a specific field like manufacturing, or do you provide general goods? If your activity is focused on one industry, you should know some ERP vendors provide generic features applicable to every line of business when others may specialize in your industry. Specialists are not only more familiar with your processes, they also probably developed features to meet the specific needs of your industry. For example, ABIS ERP integrates your Bills of Material to define the relationship between a manufactured or processed item and all of its component materials or tasks required to assemble it. It has the ability to maintain unlimited levels of breakdown and works equally well for manufacturing and process industries.
Size
Are you a small, medium, or large organization? Keep in mind, this also includes what you foresee or are striving to achieve with your company. Depending on the size of your business, ERPs will offer different incentives and customizable imprints that you may or may not require. ABIS focuses its attention on small and medium business as this allows for us to really dive in and establish a personal repertoire with our client. Our software is tailored for companies of this size while other larger ERP enterprises focus more on large businesses and their ERP systems would not be comparable or ideal for a smaller or medium-sized business.
Revenue
How much does your business make each year in Gross and Net income? This ties directly into the size of your business. Small companies will not need all of the applications that a highly comprehensible ERP system would provide to a large corporation, and so it is important to know which category you would fit in so an ERP system can be customized to your needs.
Step 2: Do the Research on ERP Systems
Every ERP system is different and each one can be tailored specifically to your needs. Some might be more beneficial to your short-term goals, while others may suit your long-term goals. It is crucial that you know your goal, where you currently stand, and where you want to be. All of these are crucial to your enhancement of your business. This step is all about delving into the nitty-gritty of the ERP system you’re looking at. What kind is it? What style? What format? Who is it more geared for? How long has it been around? And what are the features it includes within its package?
Organic vs. Hybrid
This is very important to note. There are several ERP systems available to you in the market, but not every system is equal. A hybrid ERP system is one that derives its applications and sources from different acting bodies and joins them together to form a new product. This means there are multiple parties working on, developing, and offering a finished product that is merely a section or compartment of the ERP system being offered. Such as adding modules to integrate every function a business may need. This makes for complicated access for user help and tech support.
We at ABIS believe everything from start to finish should be designed and implemented by the same team. This allows for us to be more reactive when an obstacle arises and to correct it more efficiently. The best ERP systems are those that are what we call Organic. This means that every aspect and part of the system is created, monitored, and supported in house: the same organization or business. This gives you the peace of mind that you’ll have supreme customer support when you need it, and know that each category of the ERP system you use was created by specialists who have been in the business for many years and have the expertise that you need to feel confident.
The important thing to pay attention to here is the difference between the two. A generalist is a company or system that pumps out large quantities of products. They do not specialize or sell many ERP systems. Whereas with a pure player, they are invested in you and your success is their primary mission.
Age
As with anything, how long something has been around giving testament to their quality, their customer service, and shows their track record. Before making a selection on an ERP system, see how long the company providing the system has been around. What are their core beliefs and mission statement? Have they improved over the years? Here at ABIS, our mission is to first provide you with a top-notch ERP system, and then help you improve your business. You can take heart in knowing that we aren’t going anywhere as we have been in the business of helping businesses launch into the next level for the last 30 years.
And lastly, what are the features?
Features
List of features, Customizable, Training, Customer Support. Some companies are after the quick sale or take the broad stroke approach. But with ABIS, you get what you pay for.
We believe that the power should always be in the hands of the client, not the software developer. With ABIS as your guide, you’ll receive fully customizable software. We do not sell packages with features you won’t need. We discuss your needs and customize your solution based upon them. We also know that not every business knows the best practices or methods to use with an ERP system, and that’s why our system includes in-depth training along with our software. ABIS sends a specialist to your location to train, instruct, and guide your users. We also provide print and online documentation for later referral.
One of the accomplishments we pride ourselves on here at ABIS is our Customer Service. We consider our client-partners as just that: partners. When you join ABIS, you join a family. Instead of outsourcing our product, we develop the software in-house. This enables us to act proactively when problems may arise and correct them extremely quickly.
Rank each provider based on what they have offered, their incentives, their pricing, and long-term support. Pricing is arbitrary to an extent as each ERP software provider will have varying price ranges depending on what is included in the package. The key is finding a provider who works with you, customizes your software package, and will be with you every step of the way as ABIS promises to do. To assist you further, the following are a list of options you should consider when making your selection:
Software
What does the package include, promise to do, and will it aid you in accomplishing your goals? If you are a manufacturer, the solutions to look for in priority are Order Entry, Manufacturing Forecasting, Purchasing/Receiving, Inventory Management, Production Scheduling, Work Orders, Accounting, Supply Chain Management, Field Service Management and Warehouse Management System.
Implementation
Does the provider offer implantation or assist you in understanding the software? We wrote a complete article about ERP Implementation here.
Upgrades
Are updates and upgrades available to enhance your software package as technology and methods change and improve? You should inquire about the upgrade policy of the provider you will choose. A vast majority of providers chose to enforce an upgrade every decade with extensive costs for your business. This is the type of hidden costs you want to know beforehand since it can impact your business in the future. ABIS updates its software a few times a month for free and will never charge for an upgrade. Our updates also include the latest best-practices from our client-partners so each individual is always up-to-date on the best processes of the industry.
Training
Are you left to fend for yourself when you purchase your new ERP system or does the provider stand by your side through the entire process and after to ensure your success?
Extras
Any extra incentives such as a CRM package, or Accounting package. (These are not normally included and must be added with most Manufacturing ERP systems).
Return on Investment (ROI)
Does your ROI outweigh your Cost of Investment (COI)? With any company seeking growth, it is crucial to keep your numbers in the green. But keep in mind; sometimes you may dip below the red for a period of time during this change. This is normal and nothing to fear.
Some features are not always included with every ERP system package. But ABIS believes you need the proper tools to be successful. That is why the price will be the same no matter how many modules you choose. CRM, Distribution, Supply Chain Management (SCM), Manufacturing and Human Resources Management (MHRM) are all in the palm of your hand, so you don’t have to choose one over another because of a limited budget. You pick what you need, and what is necessary to your business.
The moment you have been waiting for, implementation of your new Manufacturing ERP software and the launch of your new business plan and dreams. The method and format for each ERP system vary from company to company. At ABIS, we keep it short and simple. The following is our short, yet concise method of implantation to get you rolling:
1. Preparation & Planning
Putting together the plan and all participating parties.
2. Analysis
Establish system needs and pre-system requirements.
3. Development & Installation
Hardware and software installation setup and configuration.
4.Data Deployment
Gathering of data needed for migration.
5. Configuration
System Configured around Development & Installation requirements and Analysis.
6. Training
All parties involved go through the necessary training to ensure all functions, methods, and procedures are understood.
7. Testing
Test-proofing and corrections made if needed.
8. Go live
The finalized stage before launching the new ERP system.
Conclusion
The selection of an ERP Software is a long and daunting process that usually takes a few months but it is critical to make sure you take the right decision since it will impact your business for the next few years and sometimes decades.
The next important step is to determine which areas of your business you want to see impacted by the ERP system. You need to know which modules your ERP provider is offering and how they will seamlessly integrate your business. The third white paper will detail which modules you should be looking for.
https://www.abiscorp.com/wp-content/uploads/2021/07/How-to-choose-an-ERP-Software.jpg533800Derrick Schultehttp://www.abiscorp.com/wp-content/uploads/2022/12/ABIS-40-year-logo-FINAL-signature.pngDerrick Schulte2021-07-27 19:33:282021-08-20 16:19:34How to choose an ERP Software?
About ABIS
ABIS was founded in 1983, and in the 40 years since, we have established our niche in the steel sector. Our team continues to build upon industry best practices to offer the most comprehensive, robust business process management software available – the Adjutant Software Platform. We’ve built ourselves on the premise that you shouldn’t need any more than one great software to effectively automate your operations, and we’re determined to spend the next 40 years continuing to make business smarter across North America.
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Contact Info
At ABIS, we welcome the opportunity to speak to discuss how we can help equip your business with the tools it needs to succeed. Our solutions are built by our team and tailored for your industry.
Please provide your contact information and we will reach out to you as soon as possible. We look forward to hearing from you!
ABIS, Inc. 1415 North Loop West, Suite 1200 Houston, TX 77008713-680-2247info@abiscorp.com
