The Little Geeni

Key No. 3 – 7 essential criteria for selecting your ERP solution and technology partner

Once you’ve made your decision as to why you are considering an ERP implementation (covered in article #1 in this series) and investigated the total cost of ownership (article #2), there are several aspects you should consider in detail when selecting a specific system for your situation.

The seven most important of these are

• Functional compatibility with current and future business requirements
• Total cost of ownership
• Operational Metrics
• Flexibility
• Time and ease of implementation
• Vendor support and relationships
• Industry expertise and customer references

A survey by the Aberdeen Group (June 2007) found when it asked respondents what criteria were most important in selecting an ERP vendor, “remarkably little variation was visible across company size … functionality is the clear top priority for all companies, followed by total cost of ownership”.

1. Functional compatibility

The first question you need to ask is: what applications can accommodate your business needs?

As Christina Soh and Siew Kien Sia point out (MIS Quarterly, 2005), vendors create enterprise systems based around a number of common structures – “ES packages are not custom-built for each implementing organisation”.

”Vendors must make many assumptions about organisational requirements in such areas as organisational policies, structures, standard operating procedures, user knowledge, and interfaces. These assumptions manifest themselves in the processes and features in the ES package”, which the authors refer to as ‘package-embedded structures’.

”ES vendors claim that their package-embedded structures reflect best practice, However, many customers have found that these configuration options do not meet all their specific needs, and many question whether the ‘best practices’ truly do apply to all organisations.

”Developers’ context – that is, their reference organisations – may differ from potential implementers’ contexts, particularly those located in different countries or industries. Even within the same country and industry, contextual differences can exist.”

The system should be able to provide functionality for all of your current and future business processes. To ascertain that this is the case, you first need to define and prioritise your company’s processes, identifying the core business functions and developing a comprehensive requirements list based on input from all stakeholders.

This means that, as Soh et al recommend, “implementing organisations identify, as early as possible, misfits between the package and their organisation. They should create a basis for ascertaining when to align through organisational adaptation and when to align through package customisation.”

’Misfits’, missing critical features or unsupported business processes, could be the elements that transform an otherwise great fit into a complete mismatch. Very often, these only surface upon implementation.

Buyers should be very wary of future promises from software vendors. If the system does not have the necessary functionality right now in the current release, then you should discount any claims of functionality being available in the future.

The Aberdeen survey warns that, while functionality may be the top selection criterion, “ERP is often considered a commodity today. Don’t assume the functionality you need is available. Take a ‘show me’ attitude in demonstration.”

One who has documented this ‘road test’ guide to assess the suitability of a specific solution is Esref Akpinar (2005), who describes a software selection process for a liner shipping company using fuzzy logic decision making. This entailed five scripted scenarios to understand how software packages would handle specific key operational situations. A demonstration evaluation document was prepared, with every question in the document given a weighting according to their importance. An evaluation table was prepared of the results of the demonstrations which clearly indicated which product best fitted the company’s operations and requirements.

2. Total cost of ownership

Prospective buyers should ensure they fully understand the true cost of ownership beyond the initial software licence fees and hardware cost. These may include costs such as those for integration, interfaces, systems communications , extra staff required, upgrades and helpline support. This topic is so important that it has been covered in great detail by the second article in this series, “Managing The Total Cost Of Ownership – What You Need To Know”.

3. Operational Metrics

It is imperative to ensure that not only the costs, but also the benefits of an ERP system are controlled and measured during the implementation project. The benefits generally come in the form of cost savings and operational improvements (e.g. lead time reduction). Cost savings should be built into budgets and operation measures progressively tracked.

Legacy systems often do not support the operational metrics and these have to be assessed manually. A key selection criterion for the new system is thus also the ability to support these operational metrics.

4. Flexibility

Can the application be modified and scaled according to the changing needs of a dynamic and growing business?

Look for an ERP solution that will accommodate new operating protocols, future business growth, market expansion and any other initiatives that might arise.

Things to consider when evaluating flexibility:

• System parameters and default settings;
• Customer screen and menu options;
• Tools for modifying standard forms;
• Data access options and custom reporting; and modular format.

5. Time and ease of implementation

Key questions you should ask regarding the implementation process itself include:

• How long will it take to implement the ERP system?
• Will it cause any major disruptions to your normal business operations?
• Is there an implementation control process (ICP) in place to manage this?
• What sort of business process re-engineering will be required in order to implement the system?
• How long will it take to train staff to use the system?

6. Vendor support and relationships

Your software vendor decision is one that, hopefully, continues well beyond the normal, five-year decision cycle. To that end, three questions are important:

• Does the vendor have a sustainable presence backed up by experience in your industry and a proven track record on installations to similar sized organisations as your own?

• Will you and your management team have a comfortable working relationship that extends to their knowing you and your business intimately? Do they show a sense of responsibility and accountability for making your system choice a success?

• Do you have ‘one throat to choke’? In the event that issues need to be resolved, do you have a direct executive contact who is accountable for making sure your customer service experience is consistently at the highest level?

• How many total vendors will you deal with on your ERP package? Sustaining multiple vendors is cumbersome.

7.I ndustry expertise and customer references

Key questions that will determine the reliability of the vendor include:

• Does the vendor have a proven track record in your specific industry?

• Can the vendor point to a number of companies in your industry who are already using the software and who will confirm that they made a sound decision.

One issue that cuts across many of these selection criteria is the issue of customisation of the software, so it is worth briefly flagging the topic in this context. As Aberdeen Group points out (July 2007), only 11 per cent of respondents to one of its surveys got away with zero customisation.

According to Soh et al, the simplest form of implementation – so-called ‘vanilla’ implementation – requires the organisation to bend to accommodate the software package. “[Vanilla] promotes organisational adaptation, either by conscious redesign and substantial change management, or by piecemeal, evolutionary workarounds, such as individuals and groups adapting. Their adapted practices lead to new organisational structures. Package [software] modification can range from customising the package code to interfacing with custom-developed modules or modules from other vendors.

”Users tend to push for package modification to minimise the amount of change they will have to make. Consultants and project managers tend to advocate organisational adaptation, to simplify package implementation and avoid the tangible costs (time, resources and risks) of package modification.”

The playoff between these two apparently conflicting viewpoints can be a key ingredient to the success of the ERP project, particularly the total cost of ownership, and should therefore be a prime consideration among your selection criteria.

References:

•Akpinar, E., “Software selection for a liner shipping company using fuzzy logic decision making”, paper submitted to the Institute for Graduate Studies in Science & Engineering, Systems and Control Engineering, Bogazici University, 2005
•IBS, “6 Essential considerations when selecting an ERP system”, IBS Australia, February 2008
•Jutras, C., and Dalle Tezze, H., “When relacing 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
•Soh, C., and Siew Kien Sia, “The challenges of implementing ‘vanilla’ versions of enterprise software”, MIS Quarterly Executive, September 2005

ERP Keys, Maximising, Optimal, Performance, Selecting, Solution, Through

Something that is borne out in every survey of those who have implemented an ERP system, or those who are contemplating doing it, is that the three most important concerns are functionality, ease-of-use and total cost of ownership.

Functionality and ease-of-use are both purely technological issues that rely on a proper understanding of your requirements and how well the system or systems under consideration comply with and, hopefully, anticipate those needs. Total cost of ownership, on the other hand, extends well beyond the IT/user arena, into wider operations, finance, management, and even into sales and marketing as it can impact on profitability as well as efficiency. There are cases where a disastrous IT implementation has taken down the whole organisation, or at the very least severely damaged it, so you had better get your numbers right from the outset.

The emphasis should always be on the “total” cost, and this figure can be sliced and diced a number of different ways.

Firstly, the upfront or project costs are those costs related to the initial purchase & implementation. They include:

• Software licensing & hardware costs, although these can be deferred though leasing or hosting options.
• Implementation costs contained in the supplier’s proposal;
• Costs associated with any interfaces or system modifications;
• Costs associated with data conversion from the legacy system

Secondly, ongoing costs you will face during the system’s lifecycle (and don’t forget that this could extend up to a decade). These are:

• Leasing or hosting costs depending on the method of initial purchase.
• All costs associated with system communications;
• Costs associated with employing additional or specialised staff; and
• Annual costs for system upgrades and helpline support.

These costs are influenced by a number of factors, including:

• Number of users; and
• Amount of functionality implemented (i.e. number of modules).

Finally and most importantly, there are business benefits achieved, which should be incorporated into the cost equation as a positive, as they are influenced by functionality (and whether and how well you use it), ease-of-use and efficient and effective upgrades and customisation. These potentially include:

• Improved delivery performance percent on-time and complete shipments;
• Improved back-office efficiency due to order processing automation
• Reduced order lead time
• Reduced levels of inventory;
• Fewer number of days needed to close a month;
• Reduction in administrative costs.

Immediate cost issues.

The five immediate cost issues mentioned above can be dealt with through a variation of mechanisms.

Software and implementation costs

You should firstly avoid any ambiguity when communicating the specific requirements of your business. You should ensure that potential vendors are given every opportunity to understand your business processes and needs as well as you do. It also means avoiding big unknowns such as conversion, customisation and integration – activities for which vendors can legitimately say they are unable to give you a fixed cost.

You should also be aiming for, at least, a 5 to 10 years relationship with your vendor. A 2007 benchmark report on a survey by the Aberdeen Group on ERP in manufacturing found “the average age of implementations to be almost nine years, implying the longevity of these solutions often exceeds the anticipated life”.

With software and implementation, there is the opportunity of seeking a fixed price proposal, where the software vendor contractually accepts some of the risks associated with your system implementation.

Interface customisations and system modifications

Wherever possible, you should try to avoid any modifications or customisations. Modifications in particular should be avoided at all costs unless they are absolutely ‘show stoppers’ or business critical. This is particularly because modifications often prevent upgrades from being applied and you will be stuck with outdated versions of the software.

This is not as easy as it sounds, though. Aberdeen reports that only 11 per cent of respondents to its survey of organisations undergoing ERP implementations had zero customisation.

”If your business processes were developed over time – in an unstructured way – the possibility exists that no ERP system will match exactly.”

But it agrees that, while some customisation of software may be necessary, doing so does add expense and effort to the initial implementation and the complexity of future upgrades.

Rather it recommends you 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.

System communications

One area often neglected by many organisations is the significant disparities between different vendors when it comes to the efficiency with which their systems manage data behind the scene, i.e. the speed with which information is processed and transmitted around the organisation.

As surprising as it might sound, there can be a cost difference of 5-7 times between vendors for exactly the same transaction. Multiply that over the system’s lifetime and then by the number of users in an organisation and the figures mount up.

Additional or specialised staff

Implementing a new system can mean new recruits in your IT department, such as database administrators or systems analysts or additional training of existing personnel. This has obvious salary and employment costs, particularly as, in a competitive global environment, specialists are in high demand and regularly headhunted and enticed away with better salary packages and career prospects.
A key criterion in deciding which software vendor you choose should include whether you can implement your ERP system without having to increase the number of technical staff. The implementation of new technology should be seen as an opportunity to reduce the IT burden instead.

System upgrades and helpdesk support

This is probably the easiest cost to determine, because it is normally presented as an annual percentage of the vendor’s software pricing list.

One thing to keep in mind is that you are normally much better off if your support comes directly from the software vendor – agents do not qualify as part of the vendor’s organisation. There are too many cases where support has been outsourced offshore, with the service quality suffering accordingly.

Aberdeen points out that, very often, “the ratio of services to software costs is indicative of both ease of use and ease of implementation”.

Users and modules

It is a corollary of software implementation that, the larger the organisation the more users you have, and that means the total cost of software and services will rise as well.

However, it is not always a linear increase.

Surveys by Aberdeen of medium and large-sized ERP users shows that average maintenance cost per user might actually drop when you reach certain economies of scale, thanks to potential volume discounts.

The number of modules implemented will also impact on TCO, since the more extensive the implementation, the more services may be required.

Of course, the larger you are, and the larger the deal, the more bargaining power you may have over the TCO. But again Aberdeen warns that “with rising costs and weakening economies, we see evidence that cost savings are becoming harder to produce”.

Ongoing business benefits

While later articles in this series cover in greater detail the potential business benefits you can achieve on an ongoing basis through an ERP system, in summary it is fair to say that, when implementing a new ERP system, you have a great opportunity to improve business processes. So it is important to not just simply re-implement existing processes. Not only may you may be able to save costs during implementation, but also achieve significant benefits from an improved business process on an on-going basis.

Aberdeen research has shown that those organisations which pay the closest attention to the ROI of a project reap far more rewards. “Yet few demonstrate the discipline to closely monitor this level of payback and performance.”

”While TCO has proven to be a significant factor in software selection, it is important to keep both costs and benefits in mind throughout the life of an ERP implementation and beyond.”

Whether you are an IT or operations manager, or a C-level executive, it is vital that you consider all elements that comprise an ERP system’s TCO. In addition to evaluating whether the ERP system fits your business requirements, you need to consider what the ongoing costs will be in the long run. If not careful, these may add up to significantly more than the initial capital outlay for the software and user licences.

In simple terms, you need to table a comparison of all of these cost elements for your preferred supplier and their competitors. What you will glean from this exercise is a clear insight into the true life-cycle costs associated with running an ERP system and a much better perspective on your ROI.

The next article in this series will look at “7 Essential Criteria For Selecting Your ERP Solution & Technology Partner”.

References:
• IBS, “5 things you should know about total cost of ownership (TCO) for ERP systems”, IBS Australia, March 2008
• Jutras, C., “The total cost of ERP ownership in mid-size companies”, Aberdeen Group, July 2007
• Jutras, C., and Barnett, R., “The total cost of ERP ownership in large companies”, Aberdeen Group, July 2008
• Jutras, C., Trost, J., and Dalle Tezze, H., “Taking the ERP plunge for the first time”, July 2007

ERP cost, Keys, Know, Managing, Maximising, Need, Optimal, Ownership, Performance, Through, Total

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

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).

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

Search engine optimization (SEO) is a substance foreign to many people. Rarely a day passes when I do not get asked a few questions on the topic. So I decided to publish this article in the FAQ hopes it will help people to understand the basics, and make them a little more comfortable with the whole area.

Q: Why Search Engine important to me?

A: 85% of all website traffic is driven by the search engines. The only online activity more popular than research is a messaging service. 79.2% of American users do not go to page 2 of the results. 42% of users click on the no.1 result. For the under-40 years, the Internet will become the most used in the media the next 2-3 years.

Q: How do search engines decide their ranking? SEO Expert

A: IMPORTANT: You can not pay a search engine in exchange for a high ranking in the natural results. You can get a high if your content is deemed relevant by the search engines.

The search engines to identify content for their search results by sending spiders robots exploration (analysis) and index your site his (record) details. Complex algorithms are then used to determine if your site is useful and should be included in the search engines search results.

Q: Can I simply not pay for a senior?

A: No. The biggest concern for companies search engine like Google and Yahoo is to find the content that will bring them more traffic (and thus more advertising revenue). In other words, their results must be relevant. The results relevant is a good search engine; irrelevant results allows for a short-lived search engines.

Most search engines these days with two kinds of results, whenever you click Search:

“X Natural / Organic is the real search results. Results that most users are looking for and which form the largest part of the window. For most searches, the search engine displays a long list links to sites with content that is related to the word you searched. These results are ranked according to their relevance and importance.

“X Pure Paid advertising. This is how search engines make their money. Advertisers pay the search engines to display their ad whenever someone is looking for a word that is related to their product or service. These ads are similar to that of search results, but are usually labeled Sponsored and normally take a small portion of the window.

Q: How can I get a good ranking?

A: There are four stages:

Step 1 – Use the right words on your site

Step 2 – Get lots of relevant sites to link to yours

Step 3 – Use the right words in these links

Step 4 – Have a lot of your content and add more regularly

Q: What is search engine optimization (SEO)?

A: Search Engine Optimization (SEO) is the art of creating a Web site that is search engine. That means:

1. using the right words in your copy

2. using the right words in your HTML

3. structure your site correctly

4. design your site

For more information on these elements 4, download our “SEO eBook” Secrets of Seo Services .

Many people use SEO also describe the other ingredients in a high-ranking, “Link Popularity”.

Q: What is the link popularity?

A: Think of the search engines as a big election. All sites in the world are candidates. The backlinks are votes. The more votes (links) a candidate (website) has, the more important it is, the higher its ranking. Link popularity is all about the number of links you have, and how you can get more.

Links to your site on search engines to tell how your site is important. They assume that if it ¡| s important enough to many other sites to link to it ¡| s important enough for them to appear at the top of the ranking. Links are the most important factor in the ranking. In general, the more you link to your site from other sites, the higher your ranking.

Q: Are there any links better than others?

A: Yes! Ideally, such as those related to:

1. from relevant sites (sites that use the same keywords);

2. comes from important sites (have a good ranking);

3. include your keyword within the text link;

4. includes various link text (not the same link text each time), and

5. comes from a page that contains links to several other sites.

When a search engine sees a link that meets most or all of these conditions, she said, Hey, this site must be credible and important, because others in the same sector are pointing towards it.

Q: How do I get lots of links to my site?

A: There are several possible ways to generate links. Some are dubious (like auto-generation software and sites set up by webmasters simply to host links to other sites) and I won’ t discussed here. Others, such as those discussed below, are legitimate.

1. Add your site to DMOZ and Yahoo directories (and other free directories)

2. Check where your competitors links are from

3. Write and submit articles for publication on the Internet

4. Swap links

5. Partner websites

6. pay for the bonds

Q: What do you think is the best way to get a good number of links?

A: Article PR. Writing articles useful and leave other webmasters to publish free of charge in exchange for a link in the byline. PR of the article, you do not have to pay for the link, you determine the content of the page containing the link, you determine the link text and the link is more or less permanent. A single article can be replicated hundreds of times, and each time is another link to your site!

For more information, read divinewrite.com / seoarticles.htm or visit ArticlePR.com.

Q: How can I write a good article PR piece?

A: See divinewrite.com / seoarticles.htm.

Q: How can I get a good classification using free reprint content?

A: See our signature.

Q: How long does it take to get a high rank in search engines?

A: A long! It is impossible to say how long you will need to spend generating links, but you can be sure it will be a while, whatever the method of generation link you are using. You just have to keep at it until you have achieved a high ranking. Even then, you will still have to devote some time during the task, otherwise your ranking declines.

Q: What is the Google Sandbox, and is it true?

A: The Google Sandbox theory suggests that whenever Google detects a new website, it withholds its rightful ranking for a period while it determines whether your site is a genuine, credible, long term site. It does this to discourage the creation of SPAM websites (sites which serve no purpose other than to boost the ranking of some other sites).

There is a lot of anecdotal evidence supporting the theory, but there are also many discount. Nobody categorically proved its existence.

Q: What is the link Google depreciation filter, and is it true?

A: The depreciation Google Link Filter theory suggests that if Google detects a sudden increase (ie several hundreds or thousands) in the number of links to your site, they can sandpit for a period (or in fact penalize you by lowering your ranking Or of a blacklist of your site).

There is a lot of anecdotal evidence supporting the theory, but there are also many discount. Nobody categorically proved its existence.

Q: What do I SEO firms beware of?

A: Beware of SEO companies that promise or guarantee results within a given time frame, especially if they will not expand their ways to link to your site.

Q: I am confused by all the terms used in SEO, can you help?

A: See our signature for be SEO Expert.

Q: What is keyword analysis?

A: The first thing you need to do when you begin to run after a good search engine ranking is deciding which words you want to rank well. This is called conduct a keyword analysis. The keyword analysis involves a bit of research and a good understanding of your business and the benefits you offer your customers.

For more information, download our free ‘SEO eBook “Secrets of SEO Expert.

Q: Should I submit my site to search engines?

A: Theoretically, no. But I do not want to risk not to do so – especially since it’s free. As soon as you register your domain name, submit it to Google! Even if you haven ¡| t built your site, or thought about your content, submit your domain name to Google. In fact, even if you have not fully articulated your business plan and marketing plan, submit your domain name to Google.

For more information, download our free ‘SEO eBook “Secrets of divinewrite.com / seosecrets.htm.

Q: Should I submit my site to search engines more than once?

A: No need. Although some search engines let you do this, there is really no need.

Q: What are the directories and do I submit my site to them?

A: Directories are sites (or Web pages), which lists simply great site and give a brief description of the site. Some are free and some require you to pay for an ad. Free directories are useful because you get a free link. However, the links are not worth much. Paid directories can be good if they are relevant, but can be expensive in the long run, so choose carefully.

An essential for any directories website is the DMOZ Open Directory Project.

SEO Basics, Expert, Faqs, Some, Through

Free is cheap and many souls have wrought to play online games on free flash portal site web sites. While the stocks begun to smash in October 2008, free online games industry was doing more benefits. Most of the online publicizing servicing have seen their incomes slip dramatically but not the online gaming sites.

The online gaming flash portal sites saw presentation advertisement reckons lace to more than 29% checking to Comscore who did the paper younger in 2009. The terminus free online games put on for break-time connected games to play or mini games downloadable from flash portal games. With Americans constraining their whack, this industry is giving everyone as reacted to video game cabinets. Online games companies have more agencies to make gross, such as charge players for downloads or tourney plays or licensing their games to third parties or bidding greatest accounts in which you have to fix a average amount. It’s far away easier and nearer for gamers than go to the restaurant or discover a movie. mass may be attending it as an alternative to other more dear forms of amusement. This job valuable fits perfectly with the expeditious setting.

Opposite head that could number to the advantage of such parties is that mass who are out of work have more spare multiplication to play free online games. But what makes browser based games so popular? The terms, the greatest, the mobility, the approachability and the sort are good components in which individuals can play online games freely. Mortals runs to reckon that browser based games have short graphics and content but this is not the case at all. Despite the fact that directx and 3d accelerator engines are not suffered, the flash technology offers an alternative to show prime graphics. Javascript Frameworks like Yui, Dojo or JQuery allow the developers to get more watch over graphic components such as Ajax and drag ‘n drop. Peculiarly, the bulk of North America and European traffic has at least a 1 MB DSL connection which is so far sufficient to play free online games. All these brokers allow web browser games to vie largely with the desktop games.

Online games to play online have many benefits unlike desktop games. Souls use to see ads on sites and they also incline to spend more times online playing free online games. Why? Because sites have many more helps to offer such as chat, forums and fast support by the community of interests that lives by itself. Ultimately, more times eaten on sites also mean more gross. New technologies like mobile gaming are placed to overtake PCs and video console gaming. The damage is really secret specially in the economic context of use and free online games will probably grow faster than any other gaming marketplace. Definitively, people of all ages will continue to play online games and this is the main intellect why the free online games industry is here to stay amongst the big brothers. For more information of play free online games,free online games, free games visit at  http://www.gamekrunch.com/

Jquery come, Free, Games, international, Market, Online, place, recession, Through

All of us know that free cheese can be only in mousetrap, but if it concerns free computer games, then this statement can be argued.  You can find any type of computer games online, but what is more attractive that it is possible to find your favorite games and download them without paying. It is not a cheating.
Today there are a lot of websites which offer computer games of various genres. You can play them alone or with friend. It is also possible to upgrade some of these games. Of course upgrading is not essential feature and it is up to you, but you should know that it doesn’t affect the game; it only gives new more advanced features for the game.
Nowadays computer games serve as a kind of entertainment for people after routine working days. So, if you have a desire to spend some time playing computer game, then you have wide choice of games which you can get free. These are racing games, fighting games, shooting games, arcade games, puzzles, adventures, role-playing games, sports games etc.  Among advantages of free computer games the good quality can be mentioned. You can be lucky to get free computer game of super quality.
Some people don’t trust free online computer games and prefer to buy expensive gaining consoles. It is not true that online games are worse then gaming consoles. You may play these games online with other players from all over the world or you may download then on your computer.

Computer Games Computer, Download, Games, Internet, Paying, Real, Through, Without

How can you can connect PC to switch with straight or cross-over cable, what is the difference between these two ways, Straight through cable vs Crossover cable? Why are their two types of cables? What do they do?Straight through cable means, the cable wire goes through straight, transmission wires over to the reception end. You use a crossover cable when you are connecting two PCs together directly (NIC to NIC). To connect Router to Router and Computer to Computer need Crossover and the usually the rest need Straight-through cable.

You use a straight-through cable when there is a hub, switch or router between the two or more PCs (NIC-Hub/Switch/Router-NIC). The is no difference in speed, it’s just a method of communicating. It depends on the hardware, all you need is either a free LPT or com port on each computer and a cable plugged into these ports between each computer.

The simple answer is a crossover cable is used when you are connecting two PCs together directly (NIC to NIC), to connect two computers to each other, you use a crossover cable. When two crossover cables are connected in series, as when going through a patch panel, the result would no longer be a crossover.

Take a good look at the picture above, it shows what I mean. In a straight through cable, both ends are arranged as end A, while in a crossover cable, one end is arranged as end B.

This can also help if you want to make a cable yourself

You use a straight-through cable when there is a hub, switch or router between the two or more PCs (NIC-Hub/Switch/Router-NIC). The is no difference in speed, it’s just a method of communicating. It depends on the hardware, all you need is either a free LPT or com port on each computer and a cable plugged into these ports between each computer.

Reply With Quote In order to connect two computers with crossover cables, you must set their IP addresses to be in sequential order. For example:

You use a straight-through cable when there is a hub, switch or router between the two or more PCs (NIC-Hub/Switch/Router-NIC). The is no difference in speed, it’s just a method of communicating. It depends on the hardware, all you need is either a free LPT or com port on each computer and a cable plugged into these ports between each computer.

Reply With Quote In order to connect two computers with crossover cables, you must set their IP addresses to be in sequential order. For example:

Computer Security cable, Crossover, Networking, Security, straight, Through