Executive Guide to ERP Part 4

(originally posted to SYSPRO.com)

Johan Du Toit | August 12, 2021 | Reading Time: 8 minutes

thinking about erp manufacturing

Part of the process of selecting an ERP system is to appreciate how the software is going to be used. In Part 2, I discussed the ‘Dimensions of Change Model’, a method of how to think about the process, system and structural changes that an organization will go as a result of an ERP implementation. In Part 3, the process and steps for selecting an ERP were covered – the role players, and the issues of best practice and customization. The Dimensions of Change model also comes into the selection process – that is what will be addressed now.

To recap, in the Dimensions of Change [Executive Guide Part 2] we use the term ‘degrees of freedom’ to define the dimensions in which a system can move. For an enterprise, those dimensions are the IT systems, the business processes, and the organizational structure. An ERP implementation will involve a system change at least (the ERP solution), and may also include one or both of the other dimensions.

what is erp The following strategies each need to be considered when evaluating and selecting an ERP system, with variations depending on which level of change your ERP project will encompass.

  • Decision-making authority
  • User participation
  • Business process requirements
  • Policies and guidelines
  • Structured selection process

For a One Degree of Freedom ERP selection

This type of project is about the ERP solution rather than business processes or organizational issues. The aim is to get benefits from a better system, not from better ways of working or organizing.

  • Decision-making authority: Since this is primarily a technical project, someone with IT knowledge should lead the selection process. This may be the IT manager but outside assistance may be needed if ERP expertise is required.
  • User participation: Just because this is an IT-oriented project does not mean it is also IT-only. To get a solution that delivers benefits to the whole enterprise, the selection team should include staff from various functions, not just technical people. The non-technical staff are there to ensure the ERP solution supports current business processes.
  • Business process requirements: In this type of project the aim is to minimize any changes to existing business processes.
  • Policies and guidelines: The key criteria for the selection team is for an ERP system that will fit current business processes. There may also be other criteria such as cost, availability of support, and amount of training needed.
  • Structured selection process: The main benefits in this project come from the new ERP system. Any major customizations, or requirement for external applications, will have a significant negative impact on the selection of a system.

A Two Degree of Freedom (Business Process) ERP selection

The reason for this type of project is to change the way the organization works, i.e., the business processes. Achieving this requires a new system.

It is recommended to first design the business processes at a high level, then select an ERP system that enables those new processes. Doing the selection process this way means the important parameters, the business processes, are defined first and thereafter the ERP application must fit in.

  • Decision-making authority: This is not a technical project but rather one of discontinuous change with the ERP system enabling that change. It is common practice for functional heads to sign off on the design of new high-level business processes. The executive decision-maker should play a major role. However, in most cases, this role requires more time (and probably expertise) than the executive can afford so a project manager is brought in to represent the executive.
  • User participation: Obviously with this type of project, functional representatives are involved in the selection as well as IT staff. In the business process design phase, the non-technical staff determine and lead the project, perhaps guided by an external consultant. When it comes to the ERP system, then IT people can take over, with the functional personnel ensuring that the new system can support the new processes.
  • Business process requirements: When redesigning business processes, both As-Is (existing) and To-Be (new) processes need to be mapped. The reason for this is to set a starting position (As-Is processes), with the To-Be processes as the goal.
  • Policies and guidelines: It should be stated that enabling the new businesses processes is key, and that they will not be modified to suit an ERP system. An ERP system must verify that it can support these processes, and very little change to organizational roles will be allowed.
  • Structured selection process: There are several stages to this.
  1. Scope the processes that will be changed.
  2. Identify functional process owners and give them training on processes and what is best practice.
  3. Evaluate whether the scoped business processes need re-design.
  4. Design new processes and then have the project team, and other parts of the organization, assess and decide whether to accept them or not.
  5. Using the short list of potential ERP providers, evaluate how the ERP solutions match the new business processes, and how much modification is needed for the software to support the processes. This stage requires in-depth and thoughtful work, and oversight by senior executives is advisable.

A Two Degree of Freedom (People-Organization) ERP selection

Organizational re-structuring is the justification for this project. An ERP system is seen as the way to rationalize functions and automate tasks. Even though business process change is not intended in this project, some significant changes will be needed.

  • Decision-making authority: Because this project directly affects people, it is a sensitive undertaking. Whether work is done completely in-house, or with the help of external consultants, it needs to be driven by senior executives to ensure concerns are managed.
  • User participation: There is usually not much choice for the people involved in the change, but change is usually on a limited selection of an organization’s structures. Nevertheless, staff buy-in is important for this type of project to succeed.
  • Business process requirements: The process of changing organizational functions will inevitably mean some business process changes. Accompanying the structural changes, To-Be business processes will need to be defined.
  • Policies and guidelines: Because the project focus is on structural changes rather than process changes, policies to limit scope creep are important.
  • Structured selection process: As in the previous case, there are multiple steps.
  1. Identify the organizational aspects to change.
  2. Design the new organization structure, and associated processes,
  3. Get the changes reviewed and approved.
  4. The evaluation of the ERP vendor short list should be based factors such as on task automation, quality of user interface and experience, culture-fit and capability.

A Three Degrees of Freedom ERP selection

This project is rare, and potentially high risk. But it can occur when new divisions are created, or after major acquisitions and mergers.

  • Decision-making authority: This project has to be led from the top and therefore should have a board-level executive full-time on the project.
  • User participation: No person, function or process is exempt from change in this type of project. Communication and involvement are imperative to reduce sensitivities and ensure buy-in from staff.
  • Business process requirements: The business processes developed form the blueprint for the organization, in the same way as an architect’s plan show how a house is to be built.
  • Policies and guidelines: In a project like this, there will be few policy constraints and the team usually has freedom to consider many options. The major constraint is time, as the organization has to go ‘on hold’ and cannot be like that for too long. The team also has to ensure their decisions do not go against the strategies that direct this project.
  • Structured selection process: In this case, the design elements (people, function, process) have to be established first. Then the selection process can begin. The evaluation of solutions can be more extensive as the issue of future-fit will be important, bearing in mind that there is also a risk because the new designs are unproven.

Moving to the next stage

While each type of selection project follows five strategies, the way they are executed, the amount of work and who does it is completely different. That is why it is important to understand the ‘Degrees of Change’ model. However, if it properly applied, then at the end of the selection process the organization has an ERP system, business process blueprint and, possibly, new organizational design with which it can move forward. The next stage is how to make the change happen – the implementation project.

Johan Du Toit
Johan du Toit is the Strategic Sales Executive for SYSPRO Africa. He has more than 20 years’ experience in delivering complex technology and business transformation projects in Africa, Europe and the Far East. Renowned for finding practical solutions for complex problems, serving and contributing to the IT Steering Committees of a number of blue chip organizations on a continuous basis. Johan is dedicated to growing and maturing the SYSPRO Channel network.

CRM for SYSPRO Improved

SYSPRO just announced their latest release of their CRM enhancements.

What is CRM?

CRM for SYSPRO is a feature-rich, enterprise-class solution that allows customers to strengthen relationships across the entire supply chain. The solution provides access on the go through mobile responsive forms or from a standard browser. The 360° view of each relationship, including related ERP data from SYSPRO, is available in an easy-to-use format with customizable grids and views, empowering users to collect and analyze business data from multiple resources to enhance relationships, reporting and decision making.

As businesses find themselves coming out of the COVID pandemic, getting back to business is vitally important. At the end of 2019, CFOs were surveyed about the expected priorities for 2021. Maintaining margins and performance levels and managing cash flow was the lion’s share of answers. These priorities were closely followed by improvements is ERP utilization and performance visibility.

The relationship between CRM and ERP is super critical because it helps us connect with the consumer and helps us connect with product from our side.” – Benchmade Knife Co.

The new CRM release provides SYSPRO customers with continued growth capabilities.

  • Focused improvement in the set-up, configuration, and use of the Leads module—making it even easier to use and adopt into existing processes, and providing extended support for business process automation
  • Improved user experience through additional support for seamless integrations, allowing for further extension of CRM for SYSPRO use

Internationalization Improvements

Further support for global enterprises
The latest release of CRM for SYSPRO provides enhanced support for international companies that require their CRM to further support global regions and time zones. This includes enhancements in calendar and schedule views, updates to localization presentations in the UI with variable date/time, and SYSPRO integrations.

Enhanced Salesperson Integration

Say hello to increased flexibility and control of data and classifications
SYSPRO’s latest release now supports the updating of an Accounts Salesperson via SYSPRO CRM, with changes reflected immediately back in SYSPRO. This allows for further flexibility and control of data and classifications within SYSPRO’s CRM.

Account and Contact Duplicate Checking on Lead Qualification

SYSPRO has vastly improved its Leads module duplication checking capability in the latest CRM release. This enhancement reflects the same duplicate checking options available in the Account and Contact modules. This makes the Leads module easier to use with less administration and risk of data redundancy.

Lead Module: Process Automation

Work smarter with enhanced lead qualification automation
This release sees significant improvement to the workflow and process control automation of CRM for SYSPRO. Specifically, this enhancement allows for the Lead Qualification feature to trigger process automation in Account and Contact creation.

Lead Module: Lead Field Mapping to Accounts & Contacts

Preventing duplication and aid management of leads, contacts, and accounts.
SYSPRO created a new configuration utility that allows you to set up custom field mapping for better management of specific field information from a lead opportunity to a newly created Account or Contact module. This further streamlines the lead management process and prevents costly double-work.
Find out more
There are a lot of other benefits to this latest release to help businesses get quick traction and stabilizing in this new year. Contact us and find out if this latest CRM release is for you.

CAPTEK’s VP Supply Chain

Tom Griffin is CAPTEK® Softgel International’s VP Supply Chain and has worked with ORG/Julia for almost 20 years. I spoke with him about the advantages of using an ERP system – and what value Julia and the ORG Team bring to his business priorities.

CAPTEK™ Softgel International is a privately-owned, full-service contract manufacturer of custom and retail dietary supplement formulations. Griffin works in multiple departments – customer service, inventory, and logistics – his main passion is in manufacturing and continuous systems improvements.

Customization

Our conversation started by touching upon the complexities of cost accounting and forecasting in MRP; and keeping accurate reports with Work in Process. An ERP system like SYSPRO has become mandatory to keep up with today’s complexities and demands on business systems.

Griffin has worked with SYSPRO, in addition to other ERP systems for over 30 years. One of the main aspects he appreciates with SYSPRO’s platform is its cost-effective design; one only pays for modules that are used. Also, he stated the user-friendly dashboards along with the fully customizable nature are appealing.

Access Groups

Appropriate access accounts have been created for CAPTEK™’s CFO, hourly warehouse personnel, and appropriate levels in-between. Along with CAPTEK™’s IT ability to create appropriate access groups in multiple plant locations, SYSPRO is supporting “work from home” groups since last March when the COVID pandemic changed the work landscape. The same data/dashboards are accessed from multiple locations simultaneously – and seamlessly.

Instantaneous Reports

As demand for instantaneous, accurate reports has increased, SYSPRO continually improves their platform to keep up with these business demands. The platform is continually improved upon and SYSPRO works with other third-party platforms to keep customizations at the forefront of ERP. In fact, Griffin pointed out that SYSPRO’s ability to provide user-friendly reports on customized, complicated queries to be one of the most useful aspects of the platform. From R&D to invoicing, Griffin is accurately tracking and projecting CAPTEK™’s manufacturing lines with SYSPRO.

Working with ORG/Julia

As Griffin and I were ending the call, he wanted to make sure that I was aware of the value of Julia Maynard, head of Operations Resource Group, has brought to his business operation. In his words, “Julia is a business process expert. Her experience and expertise help the customization process develop in a manner that supports the mission of the business. It is obvious she not only knows what she is doing, she also loves what she is doing.”

The Future is… Communicating and working together

I dislike attempting to predict the future; it seems like misplaced energy to me. Concentrating positively on current realities is the best way to show responsibility for the future. Anyone who’s communicated adamantly about the future has usually eaten their words in my experience. So… why am I posting about the future?

Well, first off, that opening paragraph is saying; take this post with a grain of salt. That caveat out of the way…

The Holy Grail

Over the past few months of my reading other’s posts and articles about business system improvements, there is always a holy grail: all processes working together for instantaneous control and tracking – across all departments. Many business process management systems have implemented modules so that different departments are integrated into the ERP. It is common now to see a customer management system (CMS), and/or a warehouse management system (WMS) rolled out with an ERP upgrade.

It is the holy grail to know instantaneously every phase of materials to shelf; financial data, materials on hand, projected sales, traceability – all to be communicated clearly with live data; now.

One world

As the demand for instantaneous data/reporting is increasing it is natural that the various technical platforms need to communicate with each other. The time for multiple stand alone systems is past us. Sharing data and information is not a dream of the future; it is necessary now.

A Forbes article posted today is looking at the demands of instantaneous, accurate data in the realm of transportation. The author states, “The most difficult problem to solve seems to be streamlining data across multiple players in a single transaction.”

ORG excels at bridging different systems and processes, customizing to the unique needs of companies. However, our goal is always to standardize whenever possible. Communication is most effective when the same language is spoken.

I have seen the future

So, here I go out on a ledge… my prediction is a means of communication, standardized in such a manner, so that all ERP systems can communicate with each other. Systems will exchange information in datablocks as processes progress. We can expect a standardized code language that is borderless, on all platforms, and instantaneous in communication exchange. You’ll know where your wigit is, how much it cost, and how many are being purchased this quarter. And since it is cloud based, you’ll access the information from anywhere.

Are you ready for the Future?

Your competitors are certainly planning for it.

Planning your ERP transition

According to a recent global survey conducted by SYSPRO, 60% of manufacturers and distributors were impacted by supply chain disruptions due to operational shifts brought on by COVID-19. 47% of businesses surveyed were unable to function due their reliance on an in-person/on location workforce. Many of the participating businesses expressed transitioning to emerging ERP technologies to stabilize the extreme impact on operations experienced in 2020.

Chief Innovation Officer, Kevin Dherman of SYSPRO, recently posted about the expected steps to future-proofing and risk-proofing your business. He highlights four technologies that have the potential to make a positive impact on manufacturing and distribution in the next five years.

SYSPRO also just released a simple e-booklet for a person to quickly learn of the current technologies in today’s ERP, with some key questions to ask when considering transitioning or upgrading to new business systems. Managing traceability and forecast accuracy are just a couple of bullet points in the booklet.

“Like many other businesses, electronics relies on multiple, interconnected supply chains—some physical and some digital. Leading organizations apply future-ready ERP technology to enhance operational performance throughout all their supply chains.” – Document Excerpt

Use the brief form below to download the e-booklet; Chaos Vs. Control: Transform your business with this tactical guide to ERP.

Chaos vs. Control e-booklet
Sending