Many organizations are comprised of inefficient, manually intensive processes, disparate systems and data structures that are not integrated.
21. www.megham.net 21 Customer Profile A leading Automotive services company, one of the best wheel repair centers in the United Kingdom. Comp any offers full factory refurbishment along with repair services. Business Pain Points Company has grown in silos and adopted multiple applications along with manual process of business critical functions. CASE STUDY
12. www.megham.net 12 Customization & integration Customizations and other features can be built and deplo yed into the same environment giving you as much control over how the software is shaped as you choose. Integration tends to be a strong point with on - premises ERP systems. This can allow for seamless operations between business processes handled by the ER P and third - party systems. Performance management And since applications can be run off the same resources or even servers, you can monitor and control performance yourself with the ability to dedicate computing resources to solve problems. This can be i mpossible in a cloud system sharing resources with many.
22. www.megham.net 22 Our Solution : We’v e looked end to end business processes, redesigned and developed the application to fit into the business
13. www.megham.net 13 Costs of switching ERP Beyond the direct costs of the software, required modules, changes to the infrastructure and additional training for the IT team and employees, these extras await. Implementation The most significant cost of the ERP implementation is the cost of the implementation itself. Businesses often underestimate how long it will take to shift to the new system (anywhere from six to 12 months or more). In 2013, ERP projects we nt over budget in more than 50% of cases, and over schedule in 70% of projects. Ouch. Disruptions and downtime You can beat the statistics by having a mitigation plan in place from Day One. DIY approaches, if not intricately planned, can result in disr uptions that affect the bottom line. Poor preparation often leads to rushed implementation and bigger trouble once you go live. Internal expertise The other common pitfall is not having the internal expertise to handle the intricacies and risks of imple menting an ERP system. Your IT team might be experts at maintaining your legacy system, but do they have the technical knowledge to handle the new one? Do an honest, thorough skills audit of your team beforehand. Probe the vendor Beware the standard ve ndor promise that their system is the easiest, quickest and cheapest to implement. Risks are downplayed and when problems arise, they’re often buried in the detail. Probe the vendor exhaustively for details about how it’s going to play out. Who can forget the cautionary tales of Waste Management who sued SAP for $500 million and the legendary FoxMeyer Drugs’ bankruptcy?
24. www.megham.net 24 We Work Hard To Make Technology Easy For You We at Megham aim to help companies transform into High - Performance Businesses. We add value through a holistic approach by integrating Technology with People, Processes & Projects to deliver business RESULTS Talk to us how to see how we can add value in transforming your business; Contact us Megham Limited | Tel: +44 (0)20 8 819 2123 Email: firstname.lastname@example.org | Web: www.megham.net
17. www.megham.net 17 Trading through the transition process To reduce delays and downtime during an ERP switch, prepare as if you were implementing a new system from scratch. Here are 5 key steps to take before you hit the startin g blocks. 1. Choose the right ERP system You’ve got to put some grit into researching your internal needs, risks, opportunities and vendors’ claims from four distinct points of view: 1. on - premises versus cloud - based solution 2. implementatio n strategy 3. live operations needs 4. support (implementation and ongoing) Here are the top criteria other organizations use when selecting the long - term effectiveness of an ERP solution. Top ERP Selection Criteria Sourc e: The Aberdeen Group
1. www.megham.net 1 Business and Technology Innovation Company T: +44(0)20 8819 2123 E: email@example.com www.megham.net Megham Limited | London City Point. 1 Ropemaker Street, London, EC2Y 9HT United Kingdom Redefining Enterprise Modernisation Innovation in Business Solutions
10. www.megham.net 10 3. Constant support With an on - premi ses ERP system, you might get assistance from the vendor to set up the system, train your people and select the modules you need but once your system is running, your team is usually on its own. Additional help with maintenance, or if something goes wrong, costs. Cloud - based system providers are responsible for maintaining your ERP system and are generally highly motivated to keep you happy. They make their money from long term clients. 4. Easier upgrades Many businesses continue to use their legacy ERP systems, despite functionality drawbacks, because a significant upgrade involves the major hassle of removing and re - implementing all their customizations. With cloud - based ERP, customizations aren’t tied to the software, but to your account, so the syst em can be upgraded by your service provider to the latest technology, without affecting your customizations. 5. Better performance, improved access Cloud - based ERP solutions generally provide better performance than on - premises options because the lates t software is designed with the higher performance business needs of today in mind. Access is easier because you only need an internet connection and a smartphone, tablet, or laptop to tap into your business data. That’s going to make answering queries at tradeshows, customer meetings and conferences pain - free.
20. www.megham.net 20 5. Choose the best people Transitioning to a new ERP system carries a lot of risk, which is why you have to have your best people on it. That means people with experience and th e authority to make decisions to prevent delays. There’s no room for Mr Nice Guy on this one. Conclusion Sitting with ERP uncertainty is not an option. The race toward faster, smarter, business decision - making in this era of data explosion started years ago. And it’s being won by organizations with ERP solutions that provide immediate, proactive responses to daily business demands. Planning, we know, is crucial to a smooth ERP implementation. Rigorous analysis upfront helps to minimize the delays and do wntime that can affect your bottom line during, and post, transition. Once you’re clear on your goals and the associated risks, choosing independent technology partners you can trust, with track records and customer references that give you the confidence to move forward together, comes next. Now that you have the overview, give us a call if you’d like anything explained further. We won’t waste your time. But we may dip it in gold. Contact us Megham Limited | Tel: +44 (0)20 8 819 2123 Email: firstname.lastname@example.org | Web: www.megham.net
18. www.megham.net 18 2. Analyze your existing reporting system and improve it You already have a reporting strategy in place, but is it still suitable? Self - service reporting Companies now choose self - service business intelligence (BI) technology to m ake swift, smart decisions to stay competitive during this era of data explosion. The days of hounding the IT or finance department for analytics and reports are done. As testament to that, from 2016 industry analyst Gartner will refocus its annual Magic Quadrant report on BI technology from IT - department driven analytics and reporting solutions to self - service BI solutions that put users in the driver’s seat. What do you really want? It’s so important to figure out what information you need from the system before you design the process and make decisions on configuration. Take time to analyze your existing strategy and to modify it according to your current and future needs. Be best of breed ERPs come with inbuilt (or bundled) analytics and reporti ng capabilities but BI is not a core strength for ERP vendors. Users typically find their daily queries must be handled by specialists, which means executives and middle managers are left waiting for business data - and the ability to make decisions - for days, weeks, even months. Whatever BI solution you choose, it needs to interface quickly and easily with your new ERP. Otherwise you can’t see the data you need to run the business.
5. www.megham.net 5 Why Businesses Change ERP Systems Source: The Aberdeen Group Outdated technology - 32% Your ERP system was great when you first implemented it, but technology and your business have evolved so that your system no longer has the functionality you need. It’s become difficult to use, is slow and lacks flexibility, and it’s basically making your life harder, when it should be doing the opposite. Maybe you aren’t getting the help you need from your ERP supplier in a timely fashion. Your processes are suffering because you don’t have the control you need, and you’re not able to keep up with the market and your competition because of it. When your ERP system starts costing your business, it’s time to make a change. Lack of features - 29% If you’re the decision maker, and having a tough t ime accessing and sharing information to make decisions quickly, it’s time to question your ERP solution. For example, invoicing and order entry are a core part of your needs. But not all ERP systems support sales channels like direct point - of - sale and e - commerce retail platforms natively. Many ERP solutions now provide functionality designed to enable other sales - related and analysis processes, such as CRM or Business Intelligence (BI). But rarely do they have best of breed CRM and BI. So it’s wise to co nsider an ERP that’s built with third - party integration capability.
4. www.megham.net 4 Is it Time for Change to a New ERP ? Ar e you wondering if there’s ever a good time to change your ERP system? You’re not alone. Small inefficiencies are adding up Business needs are outgrowing ERP capability Customer needs aren’t being met Your workplace dynamics are changing Employees are mob ile and information needs to be, too You don’t have access to real - time information Your ERP isn’t keeping up with changing regulations People work outside of the ERP system Deciding when to change your ERP software is never easy. The important thing is t o regularly review your system and processes, look at how your business requirements may have changed, and check how your current system is performing. New technology, new developments and new price structures can make a strong case for changing your ERP s olution, and it is unlikely to be anywhere near as painful as last time. Changing your ERP system can be a catalyst for a wide range of positive changes throughout your business. Just don’t leave it too late!
19. www.megham.net 19 3. Choose the transition approach When deciding how to transition from old E RP to new, there are two critical questions. 1. Are you going to transfer all your data, or just key data? 2. How will you manage access to operations information during the transition? You’ll need to devise a comprehensive plan that takes into account the complexities of your business. Short cuts in this step affect the bottom line when business is delayed through lack of contingencies. Why intermediary BI works We’ve worked on hundreds of successful ERP transitions with companies that choose to implement a BI product (er - hm, ours) to host their key data during transition. These are the honest - to - goodness benefits we see time and again. 1. They have consistent access to their key data during transition. 2. Users have real power for the first time to do analytics and reporting with genuine ease. 3. New data can be easily added to the BI during, and after, the transition. This solution does involve an additional cost, but it’s much lower than attempting to harmonize two completely different systems to achieve a clean import of all existing data. And it’s more effective from a business perspective than running two systems concurrently to provide access to historical data. 4. Hire an independent project manager Why? Because the project manager has the big picture view, communication, leadership and political skills to make sure your ERP switch is a success. They’re managing the scope, budget, coordinating people and making sure what you’ve asked for is actually delivered. The systems integrator needs their head firmly wedged in the technology and applications side of things.
16. www.megham.net 16 4. Technical risks Plenty of technical issues come about when switching to a new ERP and they’re pretty hard to predict. Some of the ris ks include: • adequate knowledge transfer from vendors or system integrators to the support team • infrastructure issues with hardware resources • stressed networks and insufficient bandwidth, especially for high demand processing • lack of appropriate backups and disaster recovery • ongoing maintenance and support. 5. Customization risks Old transferred to new Customization adds risk, time and cost to an ERP implementation but more than 80% of businesses do it to include business processes, features or dat a storage that they consider are key to their operations. Sometimes customization is included to replicate ‘how the old system did it’ or how manual processes are performed, which can be wasteful. If the ‘old system’ had all the right customization alread y built into it, then why upgrade? Justify the benefits Effective customization can be managed with planning, but many companies struggle to control this aspect of implementation. Even customizations that start out small can morph into highly technical challenges that derail projects. The best advice is to do your homework to justify the benefits of even the smallest customizations, and to manage them tightly. True cloud ERP solutions have a strong track record of allowing customization to be done indep endently of core system functionality. In older systems, customization was so tightly integrated that if the customization was dodgy, core functionality didn’t work either. But cloud solutions generally allow you to do upgrades and maintenance to the core system without touching any customizations.
8. www.megham.net 8 Why transition from on - premises to cloud - b ased ERP systems? An increasing number of businesses are shifting to cloud - based ERP systems. Industry analyst IDC forecast 24% growth would take place in the worldwide cloud IT infrastructure market in 2015 as businesses began to discover the agility a nd benefits of cloud set - ups. Here are some reasons why you might consider shifting from on - premises to cloud. 1. Flexibility According to Gartner, by 2016 highly customized ERP systems will be a thing of the past as market conditions demand more agile an d responsive solutions, which legacy ERP systems cannot offer. This is especially the case for small to medium - sized businesses. Cloud - based solutions can adapt more easily as a business evolves, and continues to grow. Cloud’s key benefits include: • reduc ed IT infrastructure costs • reduced IT personnel costs • quick scalability to match business growth. Improvements gained through flexible ERP solutions by % Source: Aberdeen Group, August 2014
3. www.megham.net 3 Introduction Today’s businesses need to act quickly and decisively to improve the efficiency and effectiveness of their business functions. Organisations need to align the operations or departmental functions with their company’s strategy to manage through the expected recovery by creating a more flexible , cost efficient , l ean organization. Many organizations are comprised of inefficient , manually intensive processes , disparate systems and data structures that are not integrated . “Business Applications (CRMs/ERPs) are no longer a luxury” We’ve worked on a number of ERP implementations. This eBook shares our observations on the most common problems and how to avoid them. We’ll outline tested ways to make the process of an ERP transition safe and more accountable too.
9. www.megham.net 9 2. Lower initial and maintenance costs An on - premises ERP system requires significant investment initially, and over time, to keep the hardware, software, and customizations updated as your business grows. You need personnel to maintain and manage the system, which may require more money if your IT team isn’t large enough, or doesn’t have the expertise. So, either you invest from the start in an infrastructure that’s larger than your current needs and pay for capacity you won’t use for a long time, and might never use, or you grow your infrastructure along with your business by overhauling the system on a regular basis. A cloud - based ERP system requires a lower initial investment. You pay for the software, usually in the form of a subscription service, and any customizations. You pay for these for an on - premises deployment too, but with cl oud solutions, because the system provider maintains the infrastructure, there’s no investment in hardware and IT resources to manage servers, networks and other on - premises infrastructure costs. All you do is implement the system on your end, which can be as simple as accessing it via a web browser. A Hurwitz & Associates study found that a cloud - based ERP solution can be as much as 50% cheaper than an on - premises solution for a company with 100 employees over four years. Other flow - on benefits of cloud - based systems can include: 1. freeing IT staff to focus on more important tasks related to your core business 2. simpler budgeting and cash flow management due to the subscription model used by most cloud service providers. Gartner predicts that by 2018, at least 30% of companies focused on wholesale distribution, manufacturing, services, retail and e - commerce will switch to cloud - based ERP solutions to improve revenues and lower costs, which is a pretty powerful trend.
6. www.megham.net 6 Cost of maintenance and support - 18% Your ERP system is becoming very expensive to operate and maintain for a number of reasons: • lack of support from the developer or third parties because the system is old and cranky • cost of support is high as you’re paying for skills that are in short supply • your hardware is antiquated and less than reliable • constant customization and modification overcomes the limits of the software. ERP can’t integrate changes to the business - 13% A decade ago, a webstore was a groovy addition. Nowadays, without one, businesses lose money by the fistful because they’re competing with leaner, low - overhead organizations. __________________ If your ERP syst em doesn’t provide support for evolving vitals like online selling and collaboration, then it’s probably time to consider a hefty upgrade, or the big switch. But first you must decide: Do you stay on - premises or move to the cloud ? Do you migrate everything, including data and customizations, or start fresh? How do you avoid joining the 7 out of 10 ERP projects that run over budget and schedule ? 1 2 3
15. www.megham.net 15 Manage the change Use change management techniques from the beginning, like making staff aware of the benefits the y’ll enjoy, and the issues and drawbacks that will affect them. Involving them in the decision - making process encourages them to take ownership of the change and, in our experience, makes it a much easier transition. Face - to - face communication with employ ees from the senior sponsor of the project is very powerful. That can be at a department level, or a company meeting. Make time for questions and answers so people feel engaged, and that their opinion counts. If that’s not possible, appoint key ‘change age nts’ in the project to play that role. 3. Data management risk Switching from one ERP to another requires conversion of your historic data, which you can do a couple of ways, but each has a downside to manage. 1. Import data into the new system • Th e old structure may not match the new one. • Customizations may become obsolete. • Data may get corrupted, or worse, lost. • Different numbering systems might crop up (e.g. people on the shop floor know existing item - part numbering systems by rote; a new sys tem can be confronting for the ‘old hands’). • The process can become expensive and time consuming. 2. Keep historical data on a separate system • Collating information from multiple business systems usually causes delays – from hours to weeks. • You los e the benefit of manipulating historic data using the new ERP’s functionality. 3. Or, use BI for the transition An intermediary solution is to store key operations data on a business intelligence (BI) solution during the ERP switch. So you extract ke y information like sales history or inventory holdings, and store it in the BI system. Once the new ERP is live and new transactions are fed into the BI system, they’re simply added to the existing information. It feels like business as usual. This approac h is safer and can be more cost - effective than importing all your data and trying to keep trading at the same time.
11. www.megham.net 11 Reasons to stay on - premises Reality check Of course, a cloud - based solution either in part, or entirety, isn’t the right solution for everyone. In its article “The Top 10 Cloud Myths”, Gartner offers these tips to stay on track as you assess on premises versus cloud - based solutions for your business. 1. Just because it ’ s “ cloud ”, doesn ’ t mean it ’ s necessarily good ̶ or right - for you. 2. Don’t assume you’ll save money unless you’ve done your homework. 3. Cloud solutions don’t benefit all workloads equally; analyze applications case - by - case. 4. Identify busin ess goals first and map potential cloud benefits to them; analyze potential drawbacks. 5. A one cloud strategy/vendor may not be the answer for your organization. 6. Check that cloud vendors have the adequate security for your business needs. 7. Cloud solutions don’t have to be all or nothing; hybrid solutions can play a role too. 8. Note to self: cloud and data center strategies are different things - make sure yours are. 9. Distinguish between applications hosted on the cloud, and cloud services. 10. Use the right ter m to describe what you are building; is it cloud or virtualization? Security Having your ERP on - premises means owning and accepting total responsibility for securing your data. You choose which elements of your software or networks to expose externally . Good internal security offers a certain level of comfort, knowing that outsiders can’t easily access your systems and if they do, you’ll know about it pretty quickly.
7. www.megham.net 7 Why ERP (Enterprise Resource Application)? Enterprise Resource Planning (ERP) systems are design ed to automate and integrate core business processes to improve the efficiency and effectiveness of your business. An ERP system should help you: Efficiency . An ERP system eliminates and streamlines repetitive processes and greatly reduces the need to m anually enter information. Integrated Information . Instead of having data distributed throughout a number of separate databases, all information and processes updated and kept in a single location. Reporting . ERP software helps real - time reporting easi er and more customizable without relying on help from IT for smarter decision making . Lower cost of operations . Organisations grow in silos and inherit number of legacy system with huge maintenance and support from various suppliers and service providers . Integrated platform will cut more than 40% of IT costs and will lower other operational costs. Customer Service . It’s easier to provide high - quality customer service and improved relationships by interact ing with customers better and faster. Competiti ve . Companies are transforming the way they interact with customers and the way they use cloud, data and offering products and services faster and cheaper by leveraging systems and processes. Compliance . Having the system in control means organizations ca n better comply with regulations. Further, the most important and recurring regulatory requirements can be built right into the system. Security . A new system will improve the accuracy, consistency and security of data. Restrictions to data can also be en hanced. And the flexibility, efficiency and scalability of the ERP you choose will be the difference between surviving or thriving in this era of the data explosion - big data, structured data, unstructured data.
14. www.megham.net 14 How to mitigate risks when switching ERP? The larger the ERP system, the greater the risk of destabilized business processes once the sys tem goes live. Manage these important issues during your planning phase, and you’ll stay in good shape. 1. Timing Companies too often fail to take into account possible delays and issues that might arise (both internally and externally driven) to disrupt the schedule. Because your ERP system is interdependent, if one area suffers delays, the rest of the system (and business) suffers too. Common causes of delay include: • poorly defined scope • scope changing mid implementation • data issues from migration to transformation • company - assigned resources lacking expertise. Your implementation team must set clearly defined milestones - with built - in buffers - so that if the unexpected does occur, there’s wriggle room. In our experience, it can take 6 - 12 months t o switch to a new ERP system. However, y ou can adopt Agile Framework, which encourages to prioritise the requirements and development the system in iterations to benefit from actual usage of the system whilst managing the ever changing business demands. 2. Resistance to change There are always people who resist change, especially when they don’t understand why they have to switch. You’d be surprised how much that resistance feeds further delays. You hear stuff like: • “We don’t need a change” • “This’ll fail, for sure” • “It’s going to make processes harder and longer” • “Doubt I’ll see any bene fits; management probably will” • “There hasn’t been enough consultation / training / communication for a change this big” That attitude creates this ugly mess: • conscious reduction in output by slowing down • u nusually high employee turnover • requests to transfer out of teams or departments • petty arguments • or worse, hostile or toxic working environments • complaints and negative behaviors that erode the project and exis ting good will.
2. www.megham.net 2 Table of Contents Introduction 3 Why ERPs – Benefits 4 Why transition from on - premises to cloud - based ERP systems? 6 Reasons to stay on - premises 9 Costs of swi tching ERP 10 How to mitigate risks when switching ERP 11 Trading through the transition process 14 Conclusion 17 CASE STUDY 17
23. www.megham.net 23 Business Benefits It was a complete Business Transformation Project, redefining the business process, looking at efficiencies, modernizi ng technology Business Challenge Solution Benefit Job O rder Processing Job Order Integrated Application • Saved 450 Man Hours/month • Saved £75,000 per year • Self - help portal automated Job orders Exchange Sales Stock in Take and accounting treatment • Saved 30% man hours/month (£60k) • Integrated stock movement Webs ite, ecom & ebay sales Integration • Saved nearly 20% accounts time in payment reconciliation (£30K) Consignment Partner Portal • Automated manual / excel based process • Saved 40% of process time Dis - joined workflows Integration & Automation • Account credit check : Duedil integration • SO Card payment: Merchant Integration • Deliveries: Courier Integration • Vehicle Check: DVLA Integration • Sales order : SO automation, portal integration Visibility & Management Reporting Real - time reporting & Dashboards • Saved 50% of management time • (Value saved £75,000 per year) • Implemented real - time Dashboard tools Transformation Operational Excellence Overall Cost Savings: £ 250 k per year Saved 35% management time , 25% Em p l o yee Time: Increase d capacity to process orders Integrated operations , Improved efficiency
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