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Small Business ERP

Finding the right Small Business ERP for your company

Small Business ERP is a unique category of enterprise software. It typically needs to have all the functionality of large corporate ERP software, but it needs to have as few clicks and screens as possible to ensure that the users are not overburdened with a lot of time spent entering data. The size of the business does not necessarily change the functionality required in the software. Rather, the small company often has a need for higher efficiency since they cannot afford the manpower to maintain the system.

When you look at ERP software, there are three tiers of applications. Tier 1 is large multi-national software solutions, such as Oracle, SAP, and JD Edwards. Tier 2 is the mid-market level. These applications are suitable to businesses in the range of 50M to 250M. This is the sweet spot of the market. Like any bell curve, the mid-market has both the most customers, as well as the most product offerings. The last tier is the Tier 3 offerings which is the small business ERP category. These are systems suitable for 1 person startups to about the $50M level, although some of these products become inefficient if they have more than 20 users on the system. So while they claim to be Small Business ERP offerings, they are for the smallest of companies.
Small Business ERP

Things to look for in Small Business ERP

When evaluating small business ERP solutions, it is important that you properly screen the potential software candidates to ensure you get a software that fits your business. If you don’t you will run into many different issues. Here are some tips:

1. Make sure that the small business ERP software you are looking at fits into your niche.
2. Make sure that the data entry is simple and efficient
3. Make sure that the database platform can be managed by you or your staff
4. Look at the support offerings of the small business ERP provider to ensure that it is tailored to your needs
5. Determine that the small business ERP reseller provides enough training to properly get your staff up and running

Let’s discuss these points. First you need to make sure that the software you are looking at fits within the business model or industry that you work within. A retail store should not use a software designed for distributor. See what other customers that the software provider has worked with in the past and ask for specific examples of companies in your industry.

You need to make sure that the users do not become slaves to the system. Make sure that the data entry screens are simple, efficient and do not require a lot of bouncing around to other screens to input simple things such as invoices or purchase orders.

The heart of the system is the database. You need to make sure that the database does not require a full time system admin to maintain it. It should be designed to be self maintaining and easily managed. Learn a little bit of the technical requirements from the Small Business ERP solution provider. You do not want to be in the situation where you need to bring in a specialized database administrator if later something goes wrong.

Small Business ERP should have support designed for you the small business owner. You should easily be able to call in and immediately speak to a rep for support. You don’t want to have to wait for days to get answers. Be careful of small systems with small support staffs. Especially be wary where the system is developed and maintained by one or two people. Yes, they are also a small business, but it will be a big problem when they are not available to assist you.

Lastly, you and your staff need to have enough training to properly operate the application. Do not skimp on this point. You need more training than you think. In fact, it would be good to plan on training to go live and at least one other training session a month after go-live to answer any questions and resolve any problems from a lack of knowledge. You won’t become experts on the system in a day, so plan on future training sessions.

The future of Small Business ERP

The future of Small Business ERP seems to be one of two paths. There are those systems that will continue to be operating on a small network of computers and do quite well on them, such as Quickbooks or DBA Software. The other path is that of small business ERP companies such as Netsuite, who are leading the charge to bring small business ERP to the cloud. This means that you will have access to the application through a browser and no installed software will exist on your site. You are licensing access to a system that stores your data remotely and operates via an internet connection.

People often are concerned with this model as your data lives somewhere else. The fact of the matter is it is probably safer there than on a computer sitting in your back room. The data center security policies and the high-levels of authentication that are enforced by cloud computing providers truly lock down your data and its accessibility. Whereas your server in your back room is often open to anyone who happens to wonder by. This seems to be riskier. Nonetheless, whichever path you choose, you can be assured that the small business ERP industry is continuing to grow and develop.

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Small Business ERP

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Manufacturing ERP Fundamentals

What is Manufacturing ERP?

Manufacturing ERP (Enterprise Resource Planning) software is a much more complicated system than standard ERP systems. Before we talk about software though we need to understand that Manufacturing ERP also consists of the business processes that it takes to run a manufacturing operation. Unlike distribution or service businesses, there is a complete set of processes that enable the create of value from raw materials. These materials are supported by a supply chain which also needs to be managed.

Setting the software aside, there are inventory processes, shop floor processes, design processes, procurement processes, quality control measures and processes, and order management processes that need to be properly managed in the manufacturing ERP system. Many people have tried to solve the issues related to all of these processes by applying a new software solution to manage the process and have failed.

A blend of people, technology and process factors needs to be evaluated and optimized. If any of these three areas are missing or weak then the overall manufacturing process will not succeed. What will make you successful is improving the processes before you apply a manufacturing erp software solution.
Manufacturing ERP

When evaluating Manufacturing ERP software, it is important that the functional requirements for each of the three factors needs to be evaluated. How will the people be managed and evaluated in the Manufacturing ERP system? How will controls on the machinery and other technology be managed in the manufacturing ERP system? How will the technology enable efficient operations?

A trend in manufacturing over the last decade has been to apply Lean Manufacturing principles. Essentially, you want to remove waste from a process before automating it. If you do not, you will make the inefficiencies operate faster, creating more in-balances in supply and demand. It really doesn’t matter what you produce in terms of products, or what you utilize as your input raw materials. Lean principles balance out your supply and demand and in doing so, create better throughput. With the advent of Lean Manufacturing principles, many ERP software systems have incorporated a lean thinking into their systems.

Using a combination of Lean principles and common sense, you can work at creating operational efficiencies that will help when you apply any manufacturing erp software system to help manage the business processes. Bottom line: don’t automate a mess.

Manufacturing ERP Software

Looking at Manufacturing ERP Software, you need to evaluate how well it manages the manufacturing business functions (such as creating purchase orders, the business processes (such as managing the demand planning process), and how well it manages the data (as in providing efficient access and ease of reporting). That being said, all systems typically have a set of financial modules, a collection of inventory modules, manufacturing modules, and sales and order modules. These various modules each have certain functionalities that help you run the core business.

The differentiation between these various systems is in how well they accommodate the niche business that you are in. If you are a process manufacturer making blends then there is a certain set of Manufacturing ERP systems that work best for you. If you are a machine shop, then another class of Manufacturing ERP solutions work for you. If you are a complex or project based manufacturer, then you will look for different software than others. The good news is that there are ERP vendors that specialize in these different niche areas and others.

Understanding the class of software you want to evaluate is key to creating a short list of vendors. Keep in mind that there is a class of ERP software that fits in as a generalist niche solution. In other words, these software do all aspects of manufacturing fairly well, but do not have a specialty in any certain industry. Often these manufacturing ERP solutions will rely on their value added reseller chain to create add-on modules to fit certain industries. For example, there may be a generalist solution that has a set of 3rd party modules (written in the native toolset) that provides the process manufacturing functionality.

Things to look for in Manufacturing ERP solutions

When you evaluate Manufacturing ERP software, it can seem overwhelming. There are hundreds of manufacturing ERP software vendors all looking to be the next system at your company. If you step back and look at the industry that you belong to and evaluate the systems based on those that are successful in your industry, you will have taken the first step.

Second, you need to look at those systems that support all areas of your business. If you have unusual requirements make the vendor demonstrate how they will handle these unique functions. Many vendors claim to support various business processes, but when you make them show them in detail, there will be a clear distinction between those that can and those that only think they can handle your requirements.

Thirdly, you should evaluate the standard functions, but do not spend too much time on those things. Being able to cut a check or create a debit memo are pretty standard these days. Rather, have the vendor spend time showing you how they will handle your unique Return Merchandise process or your specialized Quality Management requirements. There is a consulting joke about the fact that “you as a customer are unique just like everyone else.” This is both true and false at the same time. Every business thinks it is unique on the whole. But the reality is that you probably do a majority of the things that most other businesses do. However, there is probably 20 percent of the things you do that make you special and make you successful. You want to make sure that these are the things that you drill down on with the vendors to ensure that you can continue to be special in those areas.

Taken step-by-step or with an area-by-area focus, Manufacturing ERP systems can be selected and implemented with great success.

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Manufacturing ERP

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How to Have a Successful Selection Project

What to do right in a Business Software Selection Project

An ERP selection project (or any business software selection project) is a difficult endeavor. There are many things that need to be managed. There have been projects that seem to go well and then suddenly things end up on the wrong track. The critical thing about an ERP Selection project or any business software selection is that it lays the ground work for the implementation project. So if it is done correctly, you will have a higher chance of success in your implementation. If you have a weak selection project, then you are likely to have an equally weak implementation.

Things to ensure success on your Selection Project

There are several things you can do to ensure success on your selection project. Firstly is to gain top management’s support for this project. If the project is not a high priority at the top, then it will never succeed. This is one of the most important things that needs to be in place for a project to be successful. Good project management dictates that you have support for the selection project before undertaking the project. If the staff see that management doesn’t really care, then they will not care. However if people realize that management has made this a priority, they will shift their work to accommodate this new project.

The next thing that will help to ensure success is to have well defined expectations. This means that you need to map out the goals that you want to achieve with the new system. Often people will define their requirements for the system, but they have no higher goal. What is driving this need for a change? What is the expected successful outcome. Any successful project begins with the end in mind, but an ERP selection project is driven by the overriding goal of a successful out come resulting in significant positive changes. This goal will get you through the difficult times. Without it, the project is destined to achieve mediocre results and will likely take longer and be more difficult.

A focused timeline will also aid to the success. If you can define and manage to a set timeline and stick to it, the selection project will move at a reasonable pace. If you do not set a timeline and manage to it, the project will move at the pace of the vendors and will likely flounder. Again, this goes back to the management support. It needs to be a driven project. A selection project that is treated like just additional work will not be successful.
Selection Project Success
Focused and available resources are also key to the successful ERP selection project. Typically there are two teams, which may overlap. First is an executive steering committee that will decide on key things such as issues that arise where departments are competing with one another, or issues where time and budget are involved. This team is usually composed of senior management and at least has people empowered to make strategic decisions. Second is a functional team that represents the various areas of the business. Accounting, Quality Control, Manufacturing operations, Purchasing, Order Management, Inventory Control, etc. are all key areas that should be represented in the functional team.

This team needs to have the time to dedicate to the project. Companies that are truly committed to the success of the selection project often will move key people out of their jobs and give them full time responsibilities to the project. This is often very difficult and creates a short term gap in the various departments. But usually the remaining staff rise to the challenge and the leader from the department will provide invaluable insight into how the software system should function. The best people to assign to the project are the people you can least afford to remove from their jobs. They are the movers and shakers of the company and they make things happen in their departments. But this personality is exactly what you need on your selection project. They will give insight and a sense of drive to the project that will ultimately make it and the company a success.

Another key area to keep in your area of focus is the acceptance of change. Change management is one of the critical things you can do to ensure that the implementation is a success. But why talk about this in the selection project? Because the selection is where the change management process begins. If you can communicate your goals and visions for the project and get people enrolled into the idea of a change to their working environment, and make them excited about the change, then you are on your way to being successful. Change management boils down to effective communication. If you can over communicate the needs, the reasons for the projects and the successful vision, then you will gain the trust and support of those who will likely be doing more work in the short term to make the selection project a success. This includes those who are not directly involved, but will ultimately be users of the system. You need to make sure that everyone is involved.

This ties in with the last success factor and that is the communications plan. A plan needs to be drawn up to help communicate the goals of the project, the status of the project, they impact the project will have on users and even communicating bad news. Be sure to build into the project the communication plan. For example, at initiation, communicate the goals and desires of the project to the employee community. Along the way, communicate the status of the project. Make people feel involved or at the very least they are not being kept in the dark about the project.

What a Successful Selection Project looks like

If you have done the above mentioned items well, then a selection project will look like and will be a success. There are many aspects to a selection project, including people, processes, and the technology. Managing all of these factors well will result in your success. But communication and support are critical. You can not over communicate too much. Be sure that you have support and that everyone understands why you are undertaking the project. If you do this, you are on your way to choosing the right software and ensuring a successful outcome to your implementation, all thanks to the good work you put in on the ERP selection project.

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10 Steps to selecting ERP Software

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