The Little Geeni

Key No 1 – Charting the course of success for your technology investment

Is your current ERP system is lacking in functionality? Does it limit your ability to respond quickly to customers’ requests? Where are you placed in comparison with your competitors, and does your existing system help you or hinder you in meeting industry best practice or benchmarks? Are you simply unhappy with your current supplier and their ability to respond to your requirements, let alone those of your customers?

Whatever the case, you are unlikely to stand alone in these areas – many companies have faced similar issues with their ERP systems, so no user is likely to be unique. There are common drivers you can consider in your deliberations over a replacement ERP system, and these include the measures you use to chart the success of your technology investment, the major issues you need to address and the consideration of how much pain you are willing to put up with to achieve your ultimate goal.

According to Aberdeen Group’s 2007 ERP in Manufacturing Benchmark Report, 328 companies out of 1245 companies surveyed were planning to replace their current ERP systems at one or more locations within the next three years. In other words, at any one time, a quarter of companies are looking to replace their existing ERP systems.

In the past, enterprise resource planning has garnered a mixed reputation. While there are fundamental reasons and obvious benefits for going down the ERP path, many have feared – rightly or wrongly – that ERP entailed major organisational disruption if not re-engineering, at high cost and high risk.

Aberdeen Group reports (“When Replacing ERP – Size Matters”, June 2007) the primary driver for large companies is consolidation and rationalisation strategies. An underlying issue, considering the proliferation of ERP and other enterprise applications, is the need for integration. For mid-sized and small companies, on the other hand, the concerns are more with gaining functionality and integration. These sized firms are also more heavily concerned with updating their outdated user interfaces, an important factor in raising employee productivity and efficiencies.

Other issues include requirements of expansion, pressure from trading partners, compliance with regulation and even disastrous events, but overall companies looking at ERP implementations are primarily seeking “low cost options that minimise risk”.

Risk and cost in combination imply a concern for return on investment, but Aberdeen’s surveys show that fewer than 25 per cent of respondents consistently estimate ROI to cost estimate ERP projects, and 20 per cent or less measure the actual post-implementation costs and gains to calculate ROI.

In contrast, “best in class companies are on average 88 per cent more likely to estimate ROI before initiating projects and are 130 per cent more likely to measure ROI after project completion. As a result, these best performing companies produce, on average, 93 per cent more improvement across a variety of metrics such as cost reductions, schedule performance, headcount reduction or redeployment and quality improvements.”

The reality is that minimising risk with an ERP implementation is an achievable result and, by minimising risk, costs should also be kept under control. By following a formal process of charting the reasons for your implementation, assessing the various offerings from your current supplier and, importantly, from suppliers who might be new to you, and checking off against the various criteria for selection, an ERP implementation need not be a nightmare; in fact, it could prove to be the instigator of quantifiable benefits for all concerned.

Specific success markers

Getting down to brass tacks, there are a number of key aspects of an ERP system that need to be addressed, both prior to any decision to move to such a system and certainly as part of selection criteria. Near the top of the list is total cost of ownership, which incorporates:

Software and implementation costs;
Costs associated with any interfaces or system modifications;
All costs associated with system communications;
Costs associated with employing additional or specialised staff; and
Annual costs for system upgrades and helpline support.

Other specific areas of consideration that will impact on the success or otherwise of your ERP program include:

Functionality;
Ease of use;
Integration capabilities;
Ease and speed of implementation;
Ability to tailor functionality without programming; and
Software licence price.

Added to this, or overarching these considerations, is return on investment. Whether and how quickly you achieve this is dependent on many factors, not least the rigour and realism applied to the assessment of current circumstances and the contribution made by the ERP system as outlined in initial business cases. An article as far back as the European Journal of Information Systems in 1996 reported on a survey of the 200 largest UK companies that found that 47 per cent openly admitted to overstating the benefits to get approval for IT investments.

But wishful thinking and creative accounting aside, these are all relevant considerations. (And in future articles, covering total cost of ownership, selection criteria, best and worst practices, and maximising ROI, we will look at them in more detail.) But it should be noted that the level and mix of these factors and how successfully they are achieved is specific to individual sets of circumstances, including size and type of organisation, intended purpose, individual business priorities and, of course, budget.

The big picture

The overriding consideration that affects all organisations, large or small, regardless of industry sector or even of budget, is alignment with the business objectives of your organisation.

Jerry Luftman and Rajkumar Kempaiah of the Stevens Institute of Technology suggest (“An update on business-IT alignment”, September 2007) that the issue of achieving IT-business alignment was first documented in the late 1970s and was in the top 10 IT management issues from 1980 through 1994, as reported by the Society for Information Management. Since 1994 it has consistently been issue #1 or #2.

Nonetheless, it has proved to be an elusive target. Luftman and Kempaiah suggest a number of reasons for this, including that, while IT might be aligned with the business, business is rarely aligned with IT. They also add that organisations have often looked for a ‘silver bullet’, whether technological solution or improved communications, as well as improved governance to identify and prioritise projects, resources and risks. Another reason they suggest for missing the alignment target has been the lack of an effective tool to gauge the maturity of IT-business alignment.

On this last point, they suggest a set of six components that indicate (if not mandate) alignment maturity: Communications – exchange of ideas, knowledge and information between IT and business; Value – balanced measurements to demonstrate the contributions of information technology and the IT organisation in terms that both business and IT understand;

Governance – who has authority to make IT decisions and set IT priorities;

Partnership – including IT’s role in defining business strategies, the degree of trust and how each perceives the other’s contribution;

Scope and architecture – IT’s provision of flexible infrastructure, evaluation of emerging technologies, driving business process change, and delivery of customised solutions internally and externally; and

Skills – HR practices of hiring and retention, encouragement of innovation, developing individuals’ skills, and the organisation’s readiness for change, capability to learn and ability to leverage new ideas.

Interestingly, they say that “business executives score alignment maturity higher than IT executives”. In other words, it is the IT side of the business that feels most that alignment is not being achieved. Whether your organisation complies with these suggestions – and it should be added that sometimes these factors can be seen as reflections of alignment maturity as opposed to stepping-stones for achieving that heightened state – any IT implementation, especially one as significant as ERP, should keep all of these factors top of mind.

Supply chain criteria

Many ERP systems are implemented as part of the supply chain process of an organisation. Here, again, the above success markers are relevant, but Tim Payne of Gartner (“Supply chain and IT strategies must align around five key themes”, August 2007) suggests that “enterprises should focus on five technology areas – business process agility, data management, analytics and performance management, collaboration, and sensory networks – as the sources of technology-enabled supply chain innovation”.

Payne says “focusing on these technology areas will give the IT organisation more credibility as an ongoing participant in the dialogue [with the supply chain organisation]“. He goes on to recommend:

Periodic demonstrations of new technology capabilities, coupled with the co-development of supply chain initiatives, as new capabilities arise in these areas;

Developing a plan for incorporating new infrastructure components that are needed to support innovation areas; and
Evaluating the supply chain IT strategies and SCM vendor-sourcing criteria with the supply chain organisation for conformance and alignment based on the five key themes and related discussions, adjusting IT and sourcing strategies to address perceived gaps.

All well and good. But, despite the best planning and setting of firm criteria, there is always the issue of compromise – that such an important and far-reaching a system as an ERP will not perfectly match your organisational set-up. The Aberdeen report suggests that “if your business processes were developed over time – in an unstructured way – the possibility exists that no ERP system will match exactly. Search out ERP solution providers with customers in your industry, evaluate the fit, and balance the need to adapt your business processes to conform with the software against aligning the software to your processes. While some customisation of software may be necessary, (only 11 per cent of respondents have zero customisation) it adds expense and effort to the initial implementation, and the complexity of future upgrades.”

In other words, if you bend a little to accommodate the ERP, while still maintaining your markers of success, you will find that the ultimate payback is a system that works well with an organisation in sync with itself.

It is important overall, therefore, to look at all options, and that includes a range of suppliers, to assess the issues, drivers and pain points that you may have been facing in the past, and that you might be looking to deal with or, hopefully, avoid in the future to ensure the best fit for your organisation.

The next article in this series will look at “Managing the total cost of ownership – What you need to know”.

IBS Australia develops ERP solutions, ERP Systems and business management supply chain software for inventory management systems, manufacturing ERP software, business intelligence systems and integration ERP software.

Peter Clarke will present on ERP Systems at the Gartner 2008 ITxpo, 11-14 November to be held in Sydney, Australia

References:

•Jutras, C., and Barnett, R., “The total cost of ERP ownership in large companies”, Aberdeen Group, July 2008
•Jutras, C., and Dalle Tezze, H., “When replacing ERP – size matters”, Aberdeen Group, June 2007
•Jutras, C., Trost, J., and Dalle Tezze, H., “Taking the ERP plunge for the first time”, July 2007
•IBS, “5 things you should know about total cost of ownership (TCO) for ERP systems”, IBS Australia, March 2008
•IBS, “6 essential considerations when selecting an ERP system”, IBS Australia, February 2008
•Luftman, J., and Kempaiah, R., “An update on business-IT alignment: ‘A line’ has been drawn”, MIS Quarterly Executive, Vol 6 No 3, September 2007
•Payne, T., “Supply chain and IT strategies must align around five key themes”, Gartner Research, August 2007
•Ward, J., Daniel, E., and Peppard, J., “Building better business cases for IT investments”, MIS Quarterly Executive, Vol 7 No 1, March 2008
•Ward, J., Taylor, P., and Bond, P., “Evaluation and realization of IS/IT benefits: an empirical study of current practice”, European Journal of Information Systems (4), 1996, pp 214-225 (as cited in Ward et al, 2008).

ERP Directive, Keys, Maximising, Optimal, Performance, Software, Through

SAP is an acronym for “System Application & Products” whose function is to create a centralized database for all possible applications within an organization. SAP has been designed with such a versatility way that it efficiently handles and effectively coordinates all functional departments. It needs to be noted that today major companies including Microsoft and IBM are using SAP products to run their own businesses.

SAP products are generally focused on Enterprise Resource Planning (ERP) and its applications are built around R/3 system which provides the expertise to manage product operations, cost accounting, assets, materials and personnel. The R/3 system of SAP runs on majority of platforms including windows 2000 and it uses the client/sever model.

SAP NetWeaver is the most recent technology introduced into the market by SAP. SAP products are primarily aimed at large organizations which mainly comprises of Fortune 500 companies and is arguably the number one choice for ERP system worldwide. SAP has software solutions called SAP Business One (SAP B1) and SAP all in one which are mainly created for small and mid sized organizations. SAP products are used by more than 75,000 customers worldwide and in more than 120 countries and the numbers are constantly increasing.

As the world’s leading provider of business software, SAP delivers products and services that help accelerate business innovation for business people. The phenomenal growth of SAP is due to their technology of innovation, co-innovation with customers and partners. Despite stiff and growing competition from Oracle, Baan, JD Edwards and more recently from Microsoft, SAP has managed to retain its market share and be the market leader. SAP ERP solutions provide a reliable means to integrate all these information systems thereby improving process efficiency and operational productivity. The distinct advantage of SAP solutions is that they are up-gradable and can also be customized according to the evolving business requirements of any business house.

Today SAP solutions have become almost indispensable for international businesses as almost half of the world’s Fortune1000 companies have implemented ERP solutions from SAP. This proprietary enterprise resource planning software conveniently automates the entire transactions of an enterprise. Presently SAP has the expertise to implement ERP solutions in more than twenty-five different industry verticals.

SAP has a growing demand in the emerging markets of Asia and Africa and several small and medium enterprises have realized that implementing SAP not only helps manage day to day operations efficiently but it also sharpens business insight by providing real time access to timely information. SAP R/3 solutions is capable of running on several databases Oracle, ADABAS, Informix, DB2/400, Microsoft SQL Server 6.0. With its latest offering my SAP, the company intends to get a stranglehold grip in the enterprise software market. Its future business strategy is to introduce existing ERP customers to mySAP. mySAP has helped the company obtain considerable market share through e- business applications like mySap Customer Relationship Management, mySAP Supply Chain Management, and mySAP Product Lifecycle Management.

During recent times, the ongoing demand for persons skilled in SAP technologies is growing at a rapid pace according to Foote Partners LLC, an analyst firm in Vero Beach, Fla., that tracks pay rates for IT jobs. The salary for SAP persons is rising particularly for those with skills centered on SAP’s latest NetWeaver platform.

A distinction should however be made between SAP employees and the SAP consultants who work with the vendor’s partners. “As a result of the strong demand and market uptake for SAP solutions, there is a corresponding increased demand for IT consultants with SAP skills. We are actively working with our partners to build the pipeline to meet this demand,” – a SAP spokesperson said.

ERP demand, Increasing, System

As your business grows, the increasing number of employees, clients, products, services, and functions increases the complexity of organizing the data associated with each of these entities. One way to streamline system processes and data control is with the implementation of Enterprise Resource Planning (ERP) software.

ERP solutions are designed to integrate all of the data and processes within your company into a single system. A single system allows for data from one process to be used by a second process, with a single database tying the systems together.

Businesses without a central ERP system spend a lot of time performing redundant tasks, re-entering data, and reconciling duplicate data. Data entered into one system may appear different in another system. These additional tasks result in increased labour and personnel frustration. An ERP system eliminates vertical data silos in your organization, breaking down the virtual walls between departments.

One database contains all company data, and all departments pull data from the same database.

While the end results of a streamlined system include increased productivity and data availability, the prospect of selecting and integrating an ERP software solution into your business can be daunting. It is certainly a major undertaking to uproot many of your entrenched systems and train personnel to use the new system, but understanding how the ERP software system will improve your business processes and creating a strategic implementation plan will keep the end benefits in your mind and smooth the integration of the ERP software into you business.

Selecting an ERP Solution The first step in the implementation process is to select the ERP software solution that is most appropriate for your business. This requires you to determine what your goals are as a business and what you want an ERP system to do to help you achieve those goals. You need to look at the people who will be actually using the software, including which department functions will be included in the integration and how to include your personnel in the decision process. You need to determine what you want the ERP software to do for your business and to list the functions that are required for your business. Finally, you ll need to research different ERP software vendors, since each package has pros and cons that may or may not be right for your company s needs.

Determining Your Goals When researching potential ERP packages, you need to have a clear understanding of what your goals are as a business, and what you want out of an ERP software system. You need to ask yourself specific questions to determine what the precise needs of your business are. Some of these questions may include:

- What process and productivity goals are you trying to achieve through the new ERP system? One of the primary reasons for implementing an ERP system is to improve productivity across the company by streamlining how different departments are connected and how they use each other s data. Knowing the specific goals for your business will make it easier for you to select the right vendor and software package to meet your goals.

- Which departments will be most affected and should have the most say in the decision? Some companies that integrate ERP software into their business only focus on specific departments within their business, such as accounting and payroll. Others want a system-wide package that will impact all departments. Knowing which departments will be affected will allow you to build a planning and implementation team with representatives from all of the affected departments.

- How will you determine success? What are the success metrics? Within what timeframe should it be implemented? It will be impossible to achieve success if you do not know what success means to your business. Knowing the metrics that you want to monitor will allow you to manage the implementation process to ensure that success is met. Your business goals are the direct driver behind selecting an ERP software solution.

If a certain system will not help you directly achieve your goals, then any investment in that system is wasted money.

On the other hand, you may discover through this goal evaluation process that an ERP solution is not the right solution for your company at this time. An ERP software system is a significant investment in time and resources, and committing to this sort of investment for the sole reason that other businesses like yours are making this investment is not a logical conclusion. Your goal at this point may be to find the right ERP solution for your business, but it is important to keep an open mind. You should not invest in such a wide-reaching system if your business could be better served through process improvements or a redesign of your organizational structure.

Before you embark on the ERP planning process, it is useful to perform a process study on the existing functions within your business. This evaluation will act as a baseline from which you can evaluate potential improvements during the ERP planning process and actual improvements after the ERP system integration.

Evaluating the Vendor Landscape

With your requirements list in hand, you can now begin to research potential products that meet your requirements and vendors that can help your business achieve its goals. But where do you start?

A good starting point for evaluating potential ERP system vendors is not the vendors themselves, but independent research organizations who have examined the marketplace and have unbiased opinions on different vendors. Forrester Research and Gartner Research are two examples of independent market research firms who provide insight and advice to companies on a variety of technology and business topics.

With your requirements list in hand, review the data on as many different vendors as you can. Take note of potential matches as you go, and you will end up with a “short list” of vendors that at first glance meet the needs of your business. Once you have developed a short list of vendors, now is the time for more in depth examination of each vendor. Some potential questions to be answered include:

- What is their experience in your industry? – What local support do they provide? – How well funded are they? – How long have they been in existence? – What future developments do they have planned for the system?

While your company could theoretically mix and match modules from different vendors to create an “ideal” solution for your specific business needs, this concept provides additional headaches in terms of multiple phone numbers and contacts for support and sales, and non-compatibility between modules of differing vendors.

Having one vendor supply a complete solution eliminates these problems, giving you a single point of contact and a seamless application across your business. It also avoids the problem of blamestorming amongst multiple vendors when a problems does occur.

As with any large investment, you should have several potential vendors and software platforms on your short list, rather than placing your faith in one or two packages. Investing up front in quality background research will ensure that you find the right vendor, the right software, and the right system configuration for your specific business, industry, and requirements.

The installation and integration of an ERP software system is a significant decision on the part of a company, and a significant commitment of time, personnel, and funding. Choosing the right ERP system for your business can be simplified if you have a good understanding of your requirements, research available ERP software packages, and perform due diligence, asking potential vendors the right questions.

In a nutshell, your preparation for selecting an ERP software system should include: – Clarifying your business goals – Creating an ERP implementation team – Determining your system requirements – Examining the vendor landscape and create a short list – Performing due diligence of potential vendors and software options and performance – Creating a detailed implementation plan to include training, integration, analysis of success metrics, and post-implementation support. – Planning for post-implementation hurdles such as short-term productivity loss while your team negotiates the system learning curve After your preparation is complete, you should have extensive knowledge of the ERP market and be ready to move forward and select a vendor to implement the right ERP solution for your business.

The full white paper can be obtained at crm-erp.com

ERP Best, From, Getting, Overview, Paper, Software, White

SAP training, like with most areas of Information Technology, is decided upon and paid for by the employee. And now, more than ever, employees are responsible for making their own investments and decisions with regard to which training they will pursue. Since SAP training has the highest probability of a big payoff it is an increasingly popular choice amongst IT professionals.

Everyone knows that SAP skills are the highest compensated IT skills on the planet. Considering that a good SAP consultant can expect to earn USD$150 per hour, one might ask a simple question: Why are SAP people paid so much? There are several reasons. First, SAP skills are higher compensated because they’re difficult to acquire, and this constrains the supply of qualified SAP consultants in the marketplace. As many people know, making a move into SAP from other areas in Information Technology can be difficult.

It’s difficult for many reasons but mainly because there is no formal process of apprenticeship or training in IT, and SAP skills take a lot of time to acquire. SAP can’t be learned on your own like a programming language or an operating system because the most important aspect of training involves a deep understanding of business process and the integration with many other touch points in a large organization. Also, an experienced SAP consultant will send to have going though for or five complete implementation cycles installing the software for clients in many different industry vertical segments.

So skills are hard to acquire and this keeps supply low. But the second (and admittedly related) reason SAP consultants are paid so much is that the demand is high. Employers are always looking for people with SAP Basis/ Netweaver, BW/BI, and SAP functional consulting skills. Experienced SAP consultants are in demand because the work they do is very efficient from a productivity standpoint, and an effective SAP implementation can help companies achieve large reductions in head count, efficiency in business process, and savings on custom programming. SAP is in demand because it helps businesses save money, even if consulting fees are high.

So what is an aspiring SAP resource to do? A few companies have developed online SAP training programs designed to help you Break Into SAP. These programs walk the student through the preparation and early hiring phases of a career in SAP. Students have said that “we do see a big difference with this sort of program” I think it’s great. They’re well planned and organized. Rather than walk you through the entire configuration for a particular module, breaking into SAP programs train on the details like the recruitment process insofar as they help you get a job in SAP.

Interview Question books are also a popular alternative and a search for SAP interview questions can yield many good results. Others hire personal coaches to train them on the technical details of a module in SAP. But all of these training methodologies reveal one truth: there is no easy solution to the SAP training game you can move into SAP from other areas in IT, but time, money, hard work, and dedication will be required.

ERP Into, Skills, Transitioning

Enterprise resource planning and implementation in any organization needs knowledgeable selection of the right ERP software. ERP is an IT tool that facilitates business process. It helps companies keep abreast with changing business practices.

For efficient implementation of ERP the organization must consider the following issues before selecting an ERP software:

• The choice of ERP software and its suitability.

• Inherent flaws in the existing business processes.

• What the benefits of ERP systems are.

• The ability of the ERP system to adapt to changes in technology and business needs.

The 10 essentials of an ERP system are:

1. Understanding clearly the “whys and hows” or ERP software. To prevent disasters and business losses you must put together a team drawn from different parts of your business to understand ERP and what in your case are the most important deliverables and objectives.

2. Delineating practically the difference between the existing system and ERP process. Identify what are defined as the functional and non functional gaps in the existing and planned systems.

3. Keep the ERP system simple. Customization at stage 1 could confuse matters. Experts in ERP recommend implementing ERP in stages. So begin with a standard off the shelf software system and once the system is functional and kinks worked out then consider stage 2.

4. Implementing ERP in any company means changing mind sets across the board. It is important to “socialize” the change by teaching about ERP systems at every stage in the organization. Unless stakeholders are convinced about feasibility ERP implementation will run into troubles.

5. Implementing ERP needs a project management team and a quality/centre of excellence team. These two working in tandem will be able to manage the change and work towards stability.

6. ERP needs existing data bases so introduce business intelligent systems in your organization early so that ERP can work efficiently.

7. Know the risks and complexities of ERP systems. Find out what are the technology risks and business process risks. Insisting on testing cycles. Although this is a long drawn process it will iron out flaws and problems.

8. Audits and compliance are essentials. ERP systems are finance and accounting based and so need regulatory systems in place. So in ERP implementation you may need to consider upgrading or altering the financial systems.

9. ERP has many advantages but you need to select the software based on individual needs and business plans.

10. Get ERP expertise to help you select a workable system. Never buy software based on what a vendor has to say. Determine your needs clearly.

ERP systems have great benefits provided you implement a system that fits well with your business processes. Keys to ERP success are selection of appropriate software and stepwise implementation with troubleshooting.

ERP enterprise, Essential, Know, Planning, Regarding, Respurce, Should

The 12 Cardinal Sins of ERP Implementation

Introduction

Enterprise Resources Planning (ERP) is an outgrowth of Material Requirements Planning (MRP) initiated in the 1970′s as a new computer-based approach to planning and scheduling of material requirements and inventory, featuring the time-phased order point. MRP evolved to MRP II (Material Resources Planning) the “closed loop” process, to Business Requirements Planning (BRP) and eventually to ERP. As MRPII came into vogue in the late 1970′s and early 1980′s, software companies began to develop software packages around MRPII concepts.

At the same time, research of integrated data bases was in progress at a university, and out of that research emerged data base management systems (DBMS). One of the earliest successful commercially-produced data base management systems was IDMS (for IBM-based systems) and DBMS (for DEC-based systems) produced by Cullinane, who’s company name was later changed to Cullinet. IMS, a structured data base management system for high transactions, was another data base management system produced by IBM.

The idea of the integrated data base as the engine for fully integrated software was probably one of the greatest outgrowths of Ollie Wight’s and Dave Goddard’s MRP. Eventually, the acronym ERP was conceived to represent what had already been developed by software companies.

The early software packages were developed by way of a transactional approach, and were highly unfriendly to a user. With the advent of the personal computers, the development of Microsoft’s Windows NT, and the mid-range IBM AS/400 computer, client-server systems began to emerge. Windows, used as the base operating system, allowed software packages to become more and more user-friendly.

Today, ERP systems have proliferated extensively, and have reached a stage where development has become industry specific. Thus it is plausible to search for an ERP package developed for one’s specific industry idiosyncracies.

The Issues

The biggest single issue in ERP is the failure of a successful implementation. It is mind-boggling to continually encounter companies who make major ERP gaffes in this day and age, especially since most of the trials and tribulations of MRPII implementation were suffered and learned from in the early 1980′s with alpha, beta and gamma releases.

So what constitutes failure?  Several things come to mind:

(1) Not making the promised return on investment,
(2) Inordinately extending the implementation schedule and start-up date,
(3) Running over budget by unconscionable variances,
(4) Grinding the organization to a crawl pace, or the severest of all consequences,
(5) Stopping production and/or not delivering orders to your customers. 

Industry statistics show that >60% of ERP implementation starts historically fail.  Does this mean that you are doomed from the start?  Of course not, if you learn from the mistakes of others.  So the pertinent question is what are the main causes of ERP failure and what can be done to prevent this from happening to you?

The 12 Cardinal Sins of ERP Implementation

There are twelve major reasons for why companies get bogged down or fail in implementing ERP.

(1) Lack of Top Management Commitment
The propensity of top management to delegate the oversight of an ERP implementation to lower management levels often results in (1) being “out of touch” with critical events, or (2) the lack of understanding of the size, scope, and technical aspects of the project, and subsequently, the lack of proper commitment of time and resources required for a successful implementation.  The result is a failure waiting to happen.

(2) Inadequate Requirements Definition
Surveys have shown that inadequate definition of functional requirements accounts for nearly 60% of ERP implementation failures. This is simply a matter of not comprehensively and systematically developing a quality set of functional requirements definitions. This leads to the second greatest cause of ERP implementation failures: poor package selection.

(3) Poor ERP Package Selection
Poor package selection occurs when a company has inadequately developed functional requirements definitions. It also occurs when staff members assigned to ERP projects do not take the time to run the screens of the new system, as they would during their daily work tasks, to find out if the software package features are adequate for their needs.

Another reason we have found is executives, familiar with an ERP system from a last job they held, implement the same system in their new company without defining functional requirements. We have also encountered companies who made major gaffes by selecting a package at the top levels of a company without intimately knowing its characteristics. What often results from this is the ERP package doesn’t fit the organizational needs, or that the package selected takes longer to process daily work tasks.

We have also seen executives select a distribution package for a manufacturing environment, or a manufacturing package for a distribution environment, for obscure reason, such as liking one salesman over another.

(4) Inadequate Resources
The third greatest reason for ERP implementation failures is inadequate resources. Many companies will attempt to “save dollars” by doing everything on an overtime basis, whether or not there are adequate skills within the company, extending individual work loads to 150%. This approach can be a “kiss of death” for the program. Time and time again we run across this mistake in ERP implementations. The financial and emotional drain of what seems sometimes to be perpetual extensions, reschedules and delays of implementations takes its toll. People burn out after having put in extensive hours over a long period of time.

(5) Resistance to Change/Lack of Buy-in
The lack of a change management approach as part of the program can prevent a program from succeeding. Resistance to change is quite often caused by (1) A failure to build a case for change, (2) Lack of involvement by those responsible for working with changed processes (3) Inadequate communication (4) Lack of visible top management support and commitment, and (5) Arrogance.  A lack of buy-in often results from not getting end-users involved in the project from the very start, thereby negating their authorship and ownership of the new system and processes.

(6) Miscalculation of Time and Effort
Another cause of ERP implementation failure is the miscalculation of effort and time it will take to accomplish the project.  Companies who treat an ERP selection, evaluation and implementation comparable to buying a washing machine are doomed to failure.

(7) Misfit of Application Software with Business Processes
One of the main causes of ERP implementation failure is the misfit of application software with the company business processes. This failure — to examine underlying business process flaws, and integrate the applications with the business processes, causes loss of productivity and time, and ultimate benefits.

(8) Unrealistic Expectation of Benefits and ROI
Another significant cause for ERP implementation failure is the unrealistic expectation of benefits and return on investment.  Software providers are notorious for overstating the benefits in terms of ROI, when the  total costs of the project have been understated.  Often left out of the total costs are costs of planning, consulting fees, training, testing, data conversions, documentation, replacement staffing, and the learning curve performance drop.  When this happens, a company doesn’t stand a chance of achieving the ROI it anticipated.

(9) Inadequate Training and Education
Another of the biggest causes of ERP implementation failure is inadequate education and training, which are almost always underestimated. ERP-related training is crucial as most employees must learn new software interfaces and business processes which affect the operation of the entire enterprise. The corporate culture is impacted by changes in the company’s business processes, and shortchanging this part of the ERP implementation leads to much pain and suffering downstream.

(10) Poor Project Design and Management
A major mistake is to short-cut critical events in the project plan, such as time for documentation, redefining and integrating processes, or testing before “going live.”

Another common mistake is made when a company leaves out the self-examination of business processes and uses ERP to cover-up weaknesses. It is easier to buy software than to perform the more difficult task of identifying weaknesses and opportunities for improvement. 

(11) Poor Communications

One of the causes of ERP implementation failure is poor project communications, beginning with a failure to announce the reason for the up and coming effort, and continuing to advise the organization of the progress and importance of the ERP implementation to the company.  Poor communications prevent different parts of the organization from assessing how they will be impacted by changes in processes, policies, and procedures.  Communications are a vital part of managing change in a corporate environment.

12) Ill-advised Cost Cutting
Another of the key causes of ERP implementation failure is ill-advised cost cutting.  In an effort to avoid temporary conversion costs, some companies take a very risky route and go live at multi-plant sites simultaneously, subjecting all plants or some plants to a total shutdown should there be a false start-up.  This is suicidal.  Others attempt to unrealistically compress the schedule in order to save on expenses, only to eventually overrun both schedule and budget.  We feel that ROI should take a “back seat” when upgrading an important part of a company’s infrastructure: the information system.  Instead the implementation should be treated as an upgrade to the company infrastructure that is necessary to maintain or gain a strategic and competitive advantage.
Pragmatic Applications

The first corollary of ERP or information systems implementation is:
Information systems are part of a company infrastructure, and therefore are strategic to the company’s survival and success.
If a company does not consider IS as one of its critical success factors, chances are, the competition does.

The second corollary of ERP or information systems implementation is:
ERP and information systems are there to support business functions and increase productivity, not the reverse.
The driver for an ERP implementation should be to increase a company’s competitiveness, not the adoption of a new religion that bends or distorts how a company conducts its business.

The third corollary of ERP or information systems implementation is:
Learn from the successes and failures of others and don’t attempt to reinvent the wheel of ERP implementation practice.
There are time-proven approaches that can enhance the success of the ERP implementation. Here are a few:

High Employee Involvement

Get as many employees to participate heavily as practicable in accomplishing the functional requirements definition. The workers know their work and what they need to compress time. If they do not, use an outsider who does. Use a knowledgeable team to review and select packages. Get as many employees as practicable involved in the implementation phase. This will foster ownership and buy-in.

A Comprehensive and Systematic Approach

Use a comprehensive and systematic master plan that addresses all parts of an ERP systems implementation: development of IT strategy, requirements definition, review/selection of software, hardware, communications, unit testing, systems testing, conversion, resources, education/training, resistance to change, etc.

Adequate Resources

Provide adequate technical and administrative resources to allow employees breathing room. Perform cost/benefit analyses so that you know how much the entire implementation is going to cost and identify the results that will be achieved.

Extensive Education & Training at all Levels

Provide adequate training for most employees, including upper and middle management.

ERP Cardinal, Implementation, Sins

Successful & Resourceful SAP ABAP Developer

I have the privilege of being a ABAP developer for past 9 years and IT industry as a programmer for 12 years and now being a ABAP technical expert and development manager for 12 SAP implementations, I have come across different working patterns of a professional ABAP developer. During this time I have met a few ABAP programmers that were very good with technical aspects and also some that were excellent ABAP development consultants who could manage every aspect of a SAP development project whether undertaking a custom development, BADI implementations or enhancement project. Remember that as a technical SAP expert you are the critical piece of a project responsible for realizing the vision of SAP customer business processes into production. I think it is very important to know a lot of different programming aspects during an SAP implementation project and follow certain guidelines that can make an SAP ABAP professional very successful in your career.

Steps for being an Efficient SAP ABAP Programmer or SAP Technical Team Lead

1. Review Business Requirements & Write Functional Specification

The first part of any ABAP development project begin with meeting the end users or business experts and understand the business requirements that need to be implemented in the SAP system during the realization phase. A best approach is to conduct workshops to gather all the business requirements. Make sure that if any SAP function consultants are involved than they are in the meetings as well. After all the business requirements are collected, either a SAP functional consultant or business expert will write a detailed functional specification. Review the functional specification until the document has all the details, different business scenarios and expected goals clearly defined. A well defined functional specification should contain UML diagrams and test case scenarios. It is important to have an official signoff on the functional specification before continuing with design and development.

2. Review ABAP Development Standards

In ideal case, your SAP Project Lead or ABAP Development Manager should have created a programming standards and guidelines document. Review this document so that you follow the naming conventions for function modules, classes, dictionary objects, software components, name spaces and proxies (if using SAP XI / PI), program input/output parameters, etc just to name a few. Following the guideline for the project helps maintain a consistent coding approach and also helps other functional and technical analysts to read and debug your code. ABAP objects naming should begin with Z if it will be migrated to SAP production system and Y if it will not be migrated into the production system. 

3. Write and Review Test Cases

 The test case documents are written by the business experts or functional SAP consultants in most SAP implementation projects. But on some SAP implementation projects a programmer may be required to write test cases. Before writing a test case review the functional specification document thoroughly and review the written test case with the business users or functional consultants. Get a sign-off as mentioned in most steps in this article. As an ABAP Development Manager for a variety of SAP implementation projects, my goal has been to keep my team motivated and always cover the team against any change of scope on the development tasks. Having a sign-off at each phase of a SAP custom development or enhancement tasks always helps the SAP implementation team and project management team keep in sync which is a vital to complete the SAP implementation in time and budget.

4. Write and Review Technical Design Specifications

Read the functional specification and list all the development objects that would be needed to implement the required functionality in the SAP system. First step is to draw a flowchart and review with technical and business experts. The technical design document should include a technical overview, list of new database objects, ABAP objects that can be reused, a data model and class diagram (if using ABAP OO classes). It is highly recommended to have a rough prototype in the sandbox system (Development system if no SAP sandbox system is available) if the development being done is complex or if the end deliverable is not well defined. You should then review your prototype with functional experts and business users. Make sure that the ABAP Development team lead or manager signs off on the prototype. If effort required to complete the ABAP programming task is not presented and approved by the senior project management then this would be a good time to get the development estimate and timeline approved.

5. Realization of the Specification – ABAP Development

During this step you will be creating development objects and implementing the code in the SAP development system. Before you begin, if prototype was done in the sandbox system then analyze the prototype and design specification. Remember that quality and reusability of existing ABAP objects are more important than strictly following the design specification. Determine which existing dictionary objects can be reused for this topic. If new dictionary objects or classes needs to be created then ensure that these objects can be extended and reused for other development tasks. It may require extra effort to develop objects that are reusable and flexible. This one time effort for building reusable ABAP objects during the course of a development project can potentially save a lot of work for programming similar objects that could otherwise utilize already built objects. Review your approach with an SAP technical team lead or a development manager on your project before deviating from the technical design specification and implementing your own ideas. If you are involved in SAP XI (now Process Integration) related tasks or creating enterprise services then this is the best area where you could reuse existing objects. Review the message types that already exist within your SAP business unit and see if any existing messages can be extended with new fields. Review with the team lead whether the communication should be synchronous or asynchronous before you generate proxies.

6. SAP Development Best Practices

SAP ABAP (or JAVA if working on SAP Netweaver) development best practices should be followed throughout the development lifecycle of the project. Although this aspect depends on your project technical manager, I personally have maintained a checklist for developers in my team on all projects and it has been a tremendous success in delivering high quality output on all development tasks. Here are a few best practices worth adapting in your project. Check whether you adhere to all naming conventions as described in the programming standards set for your implementation project. Include comments in your code to allow someone else to easily understand your programs. This is particularly helpful when you work in large teams and multiple people work with same objects. Ensure that you have check for user authorization if you are building transactions or web user-interfaces that will require human interaction. Check that you do not have ABAP code segments that could take a hit on performance like nested loops, nested select statements (use views if desired), excess database commits (persistent objects or buffering alternatives may be a good option), etc. Field symbols are a great asset when it comes to processing internal tables and also variables with unknown data types that are resolved at runtime. Field symbols are very similar to concept of using pointers in OO programming landscape. Check if all exceptions are handled and error messages are communicated accurately to the end users. As an ABAP programmer it should be well accepted by now that short dumps should not be OK to occur. All these do occur in unknown special case scenarios the short dumps should be fixed.

7. ABAP Code Reviews and Performance

As a ABAP programmer you should test your code upon completion for all possible scenarios. Verify that end results are same as that expected in the documented test cases. Perform ABAP runtime analysis to check for performance of your code. Seek suggestions from your technical team lead or manager on how to improve code performance if you notice any red flags during the runtime analysis. Schedule a formal code review with your mentor or a senior ABAP developer once the development is completed and tested by all responsible developers. Make any revisions and retest your code against the desired output as documented in the test scripts. Remember that code reviews is not to find flaws in your programming but it will only make you a better ABAP developer and maintain consistency.

8. Documentation

Make sure you write an end user documents with overview of the functionality or enhancement upon completion. Include screenshots where possible. Prepare documentation keeping in mind that an end user unfamiliar with your deliverable can read the document and test the functionality. Include contact information in this document for users to easily reach the SAP technical team for any questions.

9. User Acceptance Testing

Now that your ABAP coding is completed and reviewed by technical experts, it is time for the business users to perform a formal user acceptance testing. UAT testers will check whether the output meets business process requirements and suggest any improvements or modifications to the delivered functionality. After completion of these fixes or modifications you should request a formal sign-off on the functionality.

10. Migration to SAP Test System and Production System

Quality assurance engineers will test your functionality in the SAP QA environment to verify that everything is working in your delivered functionality as tested during user acceptance testing. Also any problems in transporting your ABAP objects across SAP systems will be identified and addressed during this step. If no problems are found then your transports will be approved to be migrated to SAP production system in the next transport cycle.

You have just learned how to be an efficient SAP ABAP Developer or per say a high quality Senior ABAP expert right from writing specifications until realizing your implementation in production system. Use this article as a guideline as there are many more aspects to improve yourself to be a good ABAP programmer which is not possible to cover in a brief article like this one. You can always contact me with any suggestions or ideas you may seek for your SAP implementation.

ERP Abap, Developer, Development, Manager, Succeed

The emergence of the Internet, evolving customer demands, pressure to accelerate business process, and the need to establish more collaborative relationships with key suppliers and business partners are all pushing organizations towards ERP solution. So, what is ERP?
Enterprise Resource Planning (ERP) is described as an “information system package that integrates information and information based processes within and across functional areas in an organization” [1].

Traditional stand-alone applications were designed for specific customers, with limited functionality, and isolated from other applications. On the contrary, ERP is a business tool that integrates all the applications required by an organization as a whole, and connects the organization to other enterprises in a network form. It is usually compromised of several modules such as: a financial module, a distribution module, or a production module. Today, ERP have added new functions such as supply chain management, product data management, electronic commerce and warehouse management. Thus, ERP opens a window of opportunity for businesses to compete globally, respond to competitive pressures, and increase revenue.

ERP Characteristics & Basic Operations:

ERP facilitates company-wide Integrated Information System covering all functional areas like Manufacturing, Selling and distribution, Payables, Receivables, Inventory, Accounts, Human resources, Purchases etc.

- ERP performs core business activities and increases customer service satisfaction.

- ERP facilitates information flow across different sections or departments of the organisation.

- ERP bridges the gap between business partners allowing ongoing collaboration.

- ERP is a good solution for better project management.

- ERP is built as open system architecture, meaning it allows automatic introduction of the latest technologies such as: Electronic Fund Transfer (EFT), Electronic Data Interchange (EDI), Internet, Intranet, Video conferencing, E-Commerce etc.

- ERP not only addresses the current requirements of the company but also provides the opportunity of continually improving and refining business processes.

- ERP provides business intelligence tools like Decision Support Systems (DSS), Executive Information System (EIS), Reporting, Data Mining and Early Warning Systems (Robots) for enabling people to make better decisions and thus improve their business processes.

- ERP tracks a wide range of events in an organisation, and plans for future activities based on these events.

ERP driving forces:

1. The need to increase supply chain efficiency.

2. The need to increase customer access to products or services.

3. The need to reduce operating costs.

4. The need to respond more rapidly and flexibly to a changing market place.

Global ERP Implementation:

Historically, most international companies have managed their systems on regional basis, because there was no single solution that was globally acceptable.

In today’s dynamic business environment there is a strong need for the organisations to become globally competitive. The key for success lies in customer satisfaction, through understanding customer needs, and providing quality goods and services in the shortest time possible. To support a global outlook, many firms implemented or are in the process of implementing Enterprise Resource Planning (ERP) Systems, in order to improve level of coordination among national entities of the same firm, and also with business partners. However, to achieve this level of coordination it is important to have a global market strategy, a common IT infrastructure, and business processes in place.

An analysis of past global ERP projects, highlight on the importance of aligning organisation structure with business process and business strategy with IT strategy in order to compete in the international market. ‘Threads’ is a good example of an international company that replaced its legacy system with ERP. ‘Threads’ had a national organisation structure that operates on country by country basis.

To obtain a global view ‘Threads’ decided that its time for change by transforming the company from a local to a global geographical perspective. Hence, making Europe as one market for their business operations, and also ensuring competitiveness through a focus on the quality, price, and customer service. The intended organization structure and supporting global ERP is shown in [2].

Enabling Technologies:Traditional ERP systems required sophisticated and expensive information technology infrastructure such as, mainframe computers. Nowadays, with the advancement of information technology and the cost reduction of computers it becomes possible for SME’s to think about ERP Systems. Moreover, the power of Three Tier Client Server architecture and scalable relational data base management has made it easier to deploy ERP Systems in multiple locations.
Implementation of ERP

Implementing an ERP project is a process consisted of many phases. Following, a step by step approach will simplify the process and is more likely to yield a better result. The normal steps involved in the implementation of an ERP are as below:

o Project Planning

o Business & Operational analysis including Gap analysis

o Business Process Reengineering

o Installation and configuration

o Project team training

o Business Requirement mapping

o Module configuration

o System interfaces

o Data conversion

o Custom Documentation

o End user training

o Acceptance testing

o Post implementation/Audit support

In short, implementing ERP can transform the way an organization conducts business. It helps the enterprise link its resources, utilise and allocate them in the best possible manner and control them on real time basis. For instance, in the case of ‘Threads’ the transformation from Legacy system to ERP system resulted in a reduction of data redundancy, reduction of overheads, an increase in customer responsiveness and customer service levels throughout the firm. This has been facilitated by implementing a common global ERP system throughout its European operation.

Critical factors for Success of ERP:

The successful implementation of an ERP project requires management to plan carefully, and have all needed human and financial resources in place. Below is a list of the main critical factors for the success of ERP:

1- Top Management Support:

Among the most important factors for the success of ERP project is the top management commitment and support. The role of top management includes, developing an understanding of the capabilities and limitation of the proposed system, setting goals, and communicating the corporate IT Strategy to all employees [3].

2- Project Management:

Another important factor for the success of ERP is managing the project life cycle from initiating to closing phase. The Project Manager (PM) has sole responsibility and authority for planning and controlling the project scope to meet the deliverables in the given time frame and budget.

3- Selection of the appropriate package:

Selecting the appropriate package is an important managerial decision. Analysing and evaluating the organisation needs and processes help in taking the right choice that best suits the business environment. A careful selection of the right package results in minimum modification and successful implementation and use. On the hand, selecting the wrong software may mean a commitment to architecture and application that do not fit the organizational strategic goal or business process [3].

4- User training and education:

A quality implementation can de derailed by poorly trained employees who do not know how to properly operate the ERP system. The knowledge transfer to employees is arguably more important than the quality of the system. For that reason, companies should use consultants to run training sessions on how the system works, and how they relate to the business process.

5- Business Process Re-engineering:

Business Process Reengineering is a pre-requisite for going ahead with implementing ERP system. An in depth BPR study has to be done before taking up ERP. Business Process Reengineering brings out deficiencies of the existing system and attempts to maximize productivity through restructuring and re-organizing the human resources as well as divisions and departments in the organisation

6- Dedicated Resources:

One of the main critical factors for ERP success is determining the human and financial resources needed to implement the system. This should be done at an early stage of the project. Failing to commit the required resources often result in schedule and cost overdue.

7- Project Team Competence:

Another key element of ERP success or failure is related to the knowledge, skills, abilities, and experience of the project manager and team members. The project team should work in a coordinated way to achieve one goal. Hence, it is vital for team members to have technical and business skills to complement their work.

8- Clear goals and objectives:

Setting clear goals and Identifying the Objectives of the ERP Project is the third most critical success factor. The initial phase of any project should begin with a conceptualization of the goals and possible ways to accomplish these goals. It is important to set the goals of the project before even seeking top management support [3].

9- Ongoing Vendor Support:

Ongoing vendor support represents an important factor with any software package. ERP systems require ongoing vendor support to keep them up to date with the latest modules and version. In addition to this, vendor support provides technical assistance, and maintenance.

10- Interdepartmental communication:

Good communication is a key component for the success of ERP. Hence, it is essential to communicate effectively between team members and the rest of the organization, in order to keep everything working properly.

To conclude, ERP implementation could become a complex and risky process, if not managed properly. Organizations need to identify the critical issues that affect the implementation process. Such as: selecting the appropriate software package, securing commitment and support from top management, cooperation from business partners, having adequate knowledge among team members, training employees and keeping them informed. All those issues and other more can minimize the failure of ERP project and maximizes the success of ERP implementation.

References:

[1] Kumar, K. and Van Hillegersberg, J. ERP Experiences and Evolution, Communication of the ACM, (43:4), pp. 23- 26, 2000.

[2] Holland C. and Light B. (1999) Global Enterprise Resource Planning Implementation Retrieved August, 27, 2005 from: http://csdl2.computer.org/comp/proceedings/hicss/1999/0001/07/00017016.PDF

[3] Somers T.M., and Nelson K. (2001), The Impact of Critical Success Factors across the Stages of Enterprise Resource Planning Implementations, published in 34th Hawaii International Conference on System Sciences 2001, Hawaii

[4] Holland C.P, and Light B. (1999), A Critical Success factor Model for ERP implementation, IEEE Software, May/June 1999, pp. 30-36

[5] Hammer M. and Champy J. (1994) Reengineering the Corporation, New York, Harper Business.

[6] Kerchevak M. (2005) Five Steps to an ERP Solution, Retrieved September 3, 2005 from: http://archives.tcm.ie/businesspost/2005/06/05/story5254.asp

[7] Robinson S. (2004) A Developer’s Overview of ERP, Retrieved September 1, 2005 from: http://www.developer.com/design/article.php/3446551

Mr. Nidal A. Bousaleh
Masters Information Technology (Web Engineering & Design)
University of Western Sydney

ERP enterprise, Planning, Resource

SAP Training is required for both by SAP users and other IT professionals. To remain relevant, you have to be equipped with domain and functional knowledge with some basics on IT. SAP Training is an opportunity to proactively move your function experience and IT career to SAP domain.

Ten very important things you must consider when you are thinking about SAP Training.

SAP Training focuses on both the theory and practice, SAP Training–the acquisition of skills and knowledge. It is therefore an activity that seeks to fill skills and knowledge gaps. If you are a SAP professional your need might be for SAP certification. Before embarking on training you must know what your training needs are. What gap needs to be filled? Is the training need for an organization or an individual? What is your desired career path and specialization? What do you need to know? Are you sure training will close the gap? Set your training objectives carefully. The purpose of your training should be well defined. To acquire configuration & practical SAP skills, the best training approach is that which uses the “See it, Hear it, Do it.” i.e. interactive and participative. Listen to concepts and ideas and practice them yourself. Training must combine the right blend of theoretical and practical sessions. The quality of SAP training varies widely to choose training provider based on substance. They should be assessed with respect to quality of materials, competence of trainers, degree of instructor support, training skills of trainers, counseling facilities, track record, quality of facilities and other quality related issues and should be able to gain from the real world experience of the trainers. The focus of SAP training should be on effective learning by participants. The gap has to be filled, Training outcome is Key. The trainee has to check the skills and knowledge acquired relevant and adequate. The value of training he has received. The outcome should be much that the trainee must not only learn, but he must also be able to apply the learning. The primary focus of SAP training should be the acquisition of configuration skills and knowledge; Certification is secondary. Training is not only about immersing in knowledge, it’s also about creating opportunities for the better career. If you want to build a career in SAP and you should have a respective educational and functional knowledge. You need to acquire these skills and knowledge to advance your SAP career. Cramming for tests and reading text materials alone are not enough to establish your IT career. Cost is a major issue in SAP Training, but price should not be your sole determinant for choosing SAP Training or a Training institution. Always do a proper cost benefit analysis before deciding. How do you value the investments, should compare with the training needs. Think not only of your immediate costs but also for present and future opportunities. All the best instructors, world-class facilities cannot learn for you. You must be prepared to make the effort to learn SAP. Learning involves more than routine attendance of lectures. Your primary role is to learn with a good training setup, there is no mystery to learning. Have to be very committed towards the SAP Training. This often arises due to poor planning and or insufficient motivation. Each day after training, you should go over concepts you’ve been taught and practice on your own. Else your learning reserved for the classroom only. You need to consider some important factors when choosing the right learning solution. Each of these important pieces should be used in determining the right training model for you. Instructor-led Online SAP Training seems to achieve more beneficial for students than other training options, most particularly when there is a focus on in-depth hands-on exercises. Instructor-led Online Training is regarded as the most effective means of acquiring SAP skills and knowledge. You must however be prepared to learn at the pace of your training institution. The training focuses on the acquisition of SAP skills and knowledge. However, if you want to build a career in SAP, there are more issues where you need to work more on technical skills and getting acquitted with SAP knowledge. Need to have soft skills (presentation, communications, marketing, project management, etc) to enhance your value. Your tech skills and training decisions are important, but marketing yourself is also very important.

Furthermore, attitude is important in the real world. Attitude will determine your altitude. Issues like professionalism are important. As an SAP professional you need to develop professional skills and know how training fits into your career plan.

Please go through this table and find which module is suitable for you based on your skills….

SAP Course

Experience/Education

Professions Suitable

SAP FICO

Who has Graduation and Masters in Financial Accounting or masters in Business Administration (MBA) Who has work experience of minimum 3 years as a Financial Executive in any Financial Sector or any Industry related to finance Who has work experience as Finance and Accounting and worked as end user in SAP

CPA,
Chartered Accountants
Accountants
Financial Analyst
Finance Managers
Financial Controller
Cost Accountants

SAP HR

Who has Masters in Human Resources Management Who has work experience in Human Resources Management as an Junior or Senior Level Who has work experience in Recruitment, Payroll and Administration

HR Manager
HR Executive
Recruiter

SAP MM

Who has Mechanical Engineering and worked into Logistics
Who has the work experience in Manufacturing Industry

MRP Controller
Mechanical Engineer
Electronics Engineer
Production Supervisor/Manager/Executive Plant Manager
Operations Manager

SAP ABAP

Who has Bachelors or Masters in IT This is module is advisable for any programmers (.Net, Java, Oracle PL/SQL etc) or any programming language.

PL/SQL Programmer
Java Programmer
.Net Programmer

SAP XI

This is very good for the people who are integrated with Java and web services This module is advisable for who are already into SAP Technical Consultants

Java Programmer
ABAP Consultants
EP Consultants

SAP PP & PM

Who has Mechanical Engineering and having work experience in Production & Planning

Plant Maintenance Manager
MRO Manager

SAP BI

SAP BI is Techno Functional Module, who have experience in integration tools like Data warehousing or any technology.

Data Warehouse Consultants
ABAP Consultants

SAP BASIS

Who have work experience in Networking and System Installations This module is generally advisable for Database Administrators, Database Programmers, Network Administrators

Network Administrators
DBA Administrators

SAP Security

This module is advisable for Network Administrator or SAP Basis Consultants Who has experience in any Information Technology can comfortably learn Security.

Java Consultants
Basis Consultants

SAP APO

New dimensional tool, which is advisable for all SAP Technical and Functional Consultants.

Planners
Supply Chain Executives/Manager

SAP SRM

SRM is advisable for SAP MM Consultants to enter into the next level opportunities

SAP Logistics Consultants(SD/MM)
Logistics Manager
Operations Manager
Plant Manager
Production Supervisor/Manager/Executive

SAP SCM

SCM is advisable for SAP SD & MM Consultants for the better prospects.

SAP Logistics Consultants(SD/MM)
Logistics Manager
Operations Manager
Plant Manager
Production Supervisor/Manager/Executive

SAP SEM

SEM is advisable for SAP FICO Consultants

FICO Consultants

SAP WM

SAP Warehouse Management is advisable for all SD & MM consultants.

SD Consultants
MM Consultants
Plant Managers

SAP IS-Retail

This module is advisable for SD consultants

SD Consultants
MM Consultants

SAP PS

SAP Project Systems is advisable to all SAP Consultants who want to maintain the SAP Project Management

FICO Consultants
Project Managers

Workflow

Workflow advisable for the ABAP Consultants

ABAP Consultants

Webdynpro

Webdynpro is advisable for the ABAP and XI Consultants

ABAP Consultants
JAVA Consultants

Please call us 978 223 9023; Our SAP Training Advisor will be happy to help you. Also please note that we provide the first class free in any SAP Module.

http://www.ezsap.com/sap_breakinginto_sap.htm

ERP Online, Training

Key No 1 – Charting the course of success for your technology investment

Is your current ERP system is lacking in functionality? Does it limit your ability to respond quickly to customers’ requests? Where are you placed in comparison with your competitors, and does your existing system help you or hinder you in meeting industry best practice or benchmarks? Are you simply unhappy with your current supplier and their ability to respond to your requirements, let alone those of your customers?

Whatever the case, you are unlikely to stand alone in these areas – many companies have faced similar issues with their ERP systems, so no user is likely to be unique. There are common drivers you can consider in your deliberations over a replacement ERP system, and these include the measures you use to chart the success of your technology investment, the major issues you need to address and the consideration of how much pain you are willing to put up with to achieve your ultimate goal.

According to Aberdeen Group’s 2007 ERP in Manufacturing Benchmark Report, 328 companies out of 1245 companies surveyed were planning to replace their current ERP systems at one or more locations within the next three years. In other words, at any one time, a quarter of companies are looking to replace their existing ERP systems.

In the past, enterprise resource planning has garnered a mixed reputation. While there are fundamental reasons and obvious benefits for going down the ERP path, many have feared – rightly or wrongly – that ERP entailed major organisational disruption if not re-engineering, at high cost and high risk.

Aberdeen Group reports (“When Replacing ERP – Size Matters”, June 2007) the primary driver for large companies is consolidation and rationalisation strategies. An underlying issue, considering the proliferation of ERP and other enterprise applications, is the need for integration. For mid-sized and small companies, on the other hand, the concerns are more with gaining functionality and integration. These sized firms are also more heavily concerned with updating their outdated user interfaces, an important factor in raising employee productivity and efficiencies.

Other issues include requirements of expansion, pressure from trading partners, compliance with regulation and even disastrous events, but overall companies looking at ERP implementations are primarily seeking “low cost options that minimise risk”.

Risk and cost in combination imply a concern for return on investment, but Aberdeen’s surveys show that fewer than 25 per cent of respondents consistently estimate ROI to cost estimate ERP projects, and 20 per cent or less measure the actual post-implementation costs and gains to calculate ROI.

In contrast, “best in class companies are on average 88 per cent more likely to estimate ROI before initiating projects and are 130 per cent more likely to measure ROI after project completion. As a result, these best performing companies produce, on average, 93 per cent more improvement across a variety of metrics such as cost reductions, schedule performance, headcount reduction or redeployment and quality improvements.”

The reality is that minimising risk with an ERP implementation is an achievable result and, by minimising risk, costs should also be kept under control. By following a formal process of charting the reasons for your implementation, assessing the various offerings from your current supplier and, importantly, from suppliers who might be new to you, and checking off against the various criteria for selection, an ERP implementation need not be a nightmare; in fact, it could prove to be the instigator of quantifiable benefits for all concerned.

Specific success markers

Getting down to brass tacks, there are a number of key aspects of an ERP system that need to be addressed, both prior to any decision to move to such a system and certainly as part of selection criteria. Near the top of the list is total cost of ownership, which incorporates:

Software and implementation costs;

Costs associated with any interfaces or system modifications;

All costs associated with system communications;

Costs associated with employing additional or specialised staff; and

Annual costs for system upgrades and helpline support.

Other specific areas of consideration that will impact on the success or otherwise of your ERP program include:

Functionality;

Ease of use;

Integration capabilities;

Ease and speed of implementation;

Ability to tailor functionality without programming; and

Software licence price.

Added to this, or overarching these considerations, is return on investment. Whether and how quickly you achieve this is dependent on many factors, not least the rigour and realism applied to the assessment of current circumstances and the contribution made by the ERP system as outlined in initial business cases. An article as far back as the European Journal of Information Systems in 1996 reported on a survey of the 200 largest UK companies that found that 47 per cent openly admitted to overstating the benefits to get approval for IT investments.

But wishful thinking and creative accounting aside, these are all relevant considerations. (And in future articles, covering total cost of ownership, selection criteria, best and worst practices, and maximising ROI, we will look at them in more detail.) But it should be noted that the level and mix of these factors and how successfully they are achieved is specific to individual sets of circumstances, including size and type of organisation, intended purpose, individual business priorities and, of course, budget.

The big picture

The overriding consideration that affects all organisations, large or small, regardless of industry sector or even of budget, is alignment with the business objectives of your organisation.

Jerry Luftman and Rajkumar Kempaiah of the Stevens Institute of Technology suggest (“An update on business-IT alignment”, September 2007) that the issue of achieving IT-business alignment was first documented in the late 1970s and was in the top 10 IT management issues from 1980 through 1994, as reported by the Society for Information Management. Since 1994 it has consistently been issue #1 or #2.

Nonetheless, it has proved to be an elusive target. Luftman and Kempaiah suggest a number of reasons for this, including that, while IT might be aligned with the business, business is rarely aligned with IT. They also add that organisations have often looked for a ‘silver bullet’, whether technological solution or improved communications, as well as improved governance to identify and prioritise projects, resources and risks. Another reason they suggest for missing the alignment target has been the lack of an effective tool to gauge the maturity of IT-business alignment.

On this last point, they suggest a set of six components that indicate (if not mandate) alignment maturity: Communications – exchange of ideas, knowledge and information between IT and business; Value – balanced measurements to demonstrate the contributions of information technology and the IT organisation in terms that both business and IT understand;

Governance – who has authority to make IT decisions and set IT priorities;

Partnership – including IT’s role in defining business strategies, the degree of trust and how each perceives the other’s contribution;

Scope and architecture – IT’s provision of flexible infrastructure, evaluation of emerging technologies, driving business process change, and delivery of customised solutions internally and externally; and

Skills – HR practices of hiring and retention, encouragement of innovation, developing individuals’ skills, and the organisation’s readiness for change, capability to learn and ability to leverage new ideas.

Interestingly, they say that “business executives score alignment maturity higher than IT executives”. In other words, it is the IT side of the business that feels most that alignment is not being achieved. Whether your organisation complies with these suggestions – and it should be added that sometimes these factors can be seen as reflections of alignment maturity as opposed to stepping-stones for achieving that heightened state – any IT implementation, especially one as significant as ERP, should keep all of these factors top of mind.

Supply chain criteria

Many ERP systems are implemented as part of the supply chain process of an organisation. Here, again, the above success markers are relevant, but Tim Payne of Gartner (“Supply chain and IT strategies must align around five key themes”, August 2007) suggests that “enterprises should focus on five technology areas – business process agility, data management, analytics and performance management, collaboration, and sensory networks – as the sources of technology-enabled supply chain innovation”.

Payne says “focusing on these technology areas will give the IT organisation more credibility as an ongoing participant in the dialogue [with the supply Key No 1 - Charting the course of success for your technology investment

Is your current ERP system is lacking in functionality? Does it limit your ability to respond quickly to customers' requests? Where are you placed in comparison with your competitors, and does your existing system help you or hinder you in meeting industry best practice or benchmarks? Are you simply unhappy with your current supplier and their ability to respond to your requirements, let alone those of your customers?

Whatever the case, you are unlikely to stand alone in these areas - many companies have faced similar issues with their ERP systems, so no user is likely to be unique. There are common drivers you can consider in your deliberations over a replacement ERP system, and these include the measures you use to chart the success of your technology investment, the major issues you need to address and the consideration of how much pain you are willing to put up with to achieve your ultimate goal.

According to Aberdeen Group's 2007 ERP in Manufacturing Benchmark Report, 328 companies out of 1245 companies surveyed were planning to replace their current ERP systems at one or more locations within the next three years. In other words, at any one time, a quarter of companies are looking to replace their existing ERP systems.

In the past, enterprise resource planning has garnered a mixed reputation. While there are fundamental reasons and obvious benefits for going down the ERP path, many have feared - rightly or wrongly - that ERP entailed major organisational disruption if not re-engineering, at high cost and high risk.

Aberdeen Group reports ("When Replacing ERP - Size Matters", June 2007) the primary driver for large companies is consolidation and rationalisation strategies. An underlying issue, considering the proliferation of ERP and other enterprise applications, is the need for integration. For mid-sized and small companies, on the other hand, the concerns are more with gaining functionality and integration. These sized firms are also more heavily concerned with updating their outdated user interfaces, an important factor in raising employee productivity and efficiencies.

Other issues include requirements of expansion, pressure from trading partners, compliance with regulation and even disastrous events, but overall companies looking at ERP implementations are primarily seeking "low cost options that minimise risk".

Risk and cost in combination imply a concern for return on investment, but Aberdeen's surveys show that fewer than 25 per cent of respondents consistently estimate ROI to cost estimate ERP projects, and 20 per cent or less measure the actual post-implementation costs and gains to calculate ROI.

In contrast, "best in class companies are on average 88 per cent more likely to estimate ROI before initiating projects and are 130 per cent more likely to measure ROI after project completion. As a result, these best performing companies produce, on average, 93 per cent more improvement across a variety of metrics such as cost reductions, schedule performance, headcount reduction or redeployment and quality improvements."

The reality is that minimising risk with an ERP implementation is an achievable result and, by minimising risk, costs should also be kept under control. By following a formal process of charting the reasons for your implementation, assessing the various offerings from your current supplier and, importantly, from suppliers who might be new to you, and checking off against the various criteria for selection, an ERP implementation need not be a nightmare; in fact, it could prove to be the instigator of quantifiable benefits for all concerned.

Specific success markers

Getting down to brass tacks, there are a number of key aspects of an ERP system that need to be addressed, both prior to any decision to move to such a system and certainly as part of selection criteria. Near the top of the list is total cost of ownership, which incorporates:

Software and implementation costs;

Costs associated with any interfaces or system modifications;

All costs associated with system communications;

Costs associated with employing additional or specialised staff; and

Annual costs for system upgrades and helpline support.

Other specific areas of consideration that will impact on the success or otherwise of your ERP program include:

Functionality;

Ease of use;

Integration capabilities;

Ease and speed of implementation;

Ability to tailor functionality without programming; and

Software licence price.

Added to this, or overarching these considerations, is return on investment. Whether and how quickly you achieve this is dependent on many factors, not least the rigour and realism applied to the assessment of current circumstances and the contribution made by the ERP system as outlined in initial business cases. An article as far back as the European Journal of Information Systems in 1996 reported on a survey of the 200 largest UK companies that found that 47 per cent openly admitted to overstating the benefits to get approval for IT investments.

But wishful thinking and creative accounting aside, these are all relevant considerations. (And in future articles, covering total cost of ownership, selection criteria, best and worst practices, and maximising ROI, we will look at them in more detail.) But it should be noted that the level and mix of these factors and how successfully they are achieved is specific to individual sets of circumstances, including size and type of organisation, intended purpose, individual business priorities and, of course, budget.

The big picture

The overriding consideration that affects all organisations, large or small, regardless of industry sector or even of budget, is alignment with the business objectives of your organisation.

Jerry Luftman and Rajkumar Kempaiah of the Stevens Institute of Technology suggest ("An update on business-IT alignment", September 2007) that the issue of achieving IT-business alignment was first documented in the late 1970s and was in the top 10 IT management issues from 1980 through 1994, as reported by the Society for Information Management. Since 1994 it has consistently been issue #1 or #2.

Nonetheless, it has proved to be an elusive target. Luftman and Kempaiah suggest a number of reasons for this, including that, while IT might be aligned with the business, business is rarely aligned with IT. They also add that organisations have often looked for a 'silver bullet', whether technological solution or improved communications, as well as improved governance to identify and prioritise projects, resources and risks. Another reason they suggest for missing the alignment target has been the lack of an effective tool to gauge the maturity of IT-business alignment.

On this last point, they suggest a set of six components that indicate (if not mandate) alignment maturity: Communications - exchange of ideas, knowledge and information between IT and business; Value - balanced measurements to demonstrate the contributions of information technology and the IT organisation in terms that both business and IT understand;

Governance - who has authority to make IT decisions and set IT priorities;

Partnership - including IT's role in defining business strategies, the degree of trust and how each perceives the other's contribution;

Scope and architecture - IT's provision of flexible infrastructure, evaluation of emerging technologies, driving business process change, and delivery of customised solutions internally and externally; and

Skills - HR practices of hiring and retention, encouragement of innovation, developing individuals' skills, and the organisation's readiness for change, capability to learn and ability to leverage new ideas.

Interestingly, they say that "business executives score alignment maturity higher than IT executives". In other words, it is the IT side of the business that feels most that alignment is not being achieved. Whether your organisation complies with these suggestions - and it should be added that sometimes these factors can be seen as reflections of alignment maturity as opposed to stepping-stones for achieving that heightened state - any IT implementation, especially one as significant as ERP, should keep all of these factors top of mind.

Supply chain criteria

Many ERP systems are implemented as part of the supply chain process of an organisation. Here, again, the above success markers are relevant, but Tim Payne of Gartner ("Supply chain and IT strategies must align around five key themes", August 2007) suggests that "enterprises should focus on five technology areas - business process agility, data management, analytics and performance management, collaboration, and sensory networks - as the sources of technology-enabled supply chain innovation".

Payne says "focusing on these technology areas will give the IT organisation more credibility as an ongoing participant in the dialogue [with the supply chain organisation]“. He goes on to recommend:

Periodic demonstrations of new technology capabilities, coupled with the co-development of supply chain initiatives, as new capabilities arise in these areas;

Developing a plan for incorporating new infrastructure components that are needed to support innovation areas; and
Evaluating the supply chain IT strategies and SCM vendor-sourcing criteria with the supply chain organisation for conformance and alignment based on the five key themes and related discussions, adjusting IT and sourcing strategies to address perceived gaps.

All well and good. But, despite the best planning and setting of firm criteria, there is always the issue of compromise – that such an important and far-reaching a system as an ERP will not perfectly match your organisational set-up. The Aberdeen report suggests that “if your business processes were developed over time – in an unstructured way – the possibility exists that no ERP system will match exactly. Search out ERP solution providers with customers in your industry, evaluate the fit, and balance the need to adapt your business processes to conform with the software against aligning the software to your processes. While some customisation of software may be necessary, (only 11 per cent of respondents have zero customisation) it adds expense and effort to the initial implementation, and the complexity of future upgrades.”

In other words, if you bend a little to accommodate the ERP, while still maintaining your markers of success, you will find that the ultimate payback is a system that works well with an organisation in sync with itself.

It is important overall, therefore, to look at all options, and that includes a range of suppliers, to assess the issues, drivers and pain points that you may have been facing in the past, and that you might be looking to deal with or, hopefully, avoid in the future to ensure the best fit for your organisation.

The next article in this series will look at “Managing the total cost of ownership – What you need to know”.

IBS Australia develops ERP solutions, ERP Systems and business management supply chain software for inventory management systems, manufacturing ERP software, business intelligence systems and integration ERP software.

Peter Clarke will present on ERP Systems at the Gartner 2008 ITxpo, 11-14 November to be held in Sydney, Australia

References:

•Jutras, C., and Barnett, R., “The total cost of ERP ownership in large companies”, Aberdeen Group, July 2008
•Jutras, C., and Dalle Tezze, H., “When replacing ERP – size matters”, Aberdeen Group, June 2007
•Jutras, C., Trost, J., and Dalle Tezze, H., “Taking the ERP plunge for the first time”, July 2007
•IBS, “5 things you should know about total cost of ownership (TCO) for ERP systems”, IBS Australia, March 2008
•IBS, “6 essential considerations when selecting an ERP system”, IBS Australia, February 2008
•Luftman, J., and Kempaiah, R., “An update on business-IT alignment: ‘A line’ has been drawn”, MIS Quarterly Executive, Vol 6 No 3, September 2007
•Payne, T., “Supply chain and IT strategies must align around five key themes”, Gartner Research, August 2007
•Ward, J., Daniel, E., and Peppard, J., “Building better business cases for IT investments”, MIS Quarterly Executive, Vol 7 No 1, March 2008
•Ward, J., Taylor, P., and Bond, P., “Evaluation and realization of IS/IT benefits: an empirical study of current practice”, European Journal of Information Systems (4), 1996, pp 214-225 (as cited in Ward et al, 2008).

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