“E.T.O. Phone Home”: Using Discrete ERP in an ETO Environment Will Leave You with an Out-of-this-world Experience

A brief journey of what functionality ERP engineer-to-order systems must support.

Just like the mythical character in the film E.T., who was far from home in an unfamiliar environment, companies that have years of experience working with a discrete ERP system sometimes feel that they are out of this world in trying to adapt the system to the unique elements in the engineer-to-order (ETO) world.

In many respects,this is related to the complexities of the products and the manufacturing process in an ETO company. The requirements of an ETO environment primarily consist of organizations whose products have custom specifications and require unique engineering design. Other aspects of ETO can include customer orders that require a cost estimate, and may involve a unique set of components, bills of materials (BOMs), and production routings for a unique, one-time build or assembly.

ETO companies may not carry inventory of assemblies or raw materials until a confirmed customer order is placed. Generally speaking, requirements are not based on large production volumes because typically, products are made as single units, with long lead times from both the supplier and production area .These products are usually multilevel BOMs, and customers are heavily involved throughout the entire design and manufacturing cycle. Some examples of ETO products include aircraft, railway cars, and industrial machinery, such as printing presses; machine tools; die tools and molds; etc.

Due to the complex nature of the production, the ETO system has to be able to support integration to a computer-aided design (CAD) system in order to support the specific engineering tolerances and changes in both confuguration and design capabilities. One of the challenges inherent in the ETO environment is that standard discrete ERP systems cannot adequately plan for the fluctuations in market demand and, by extension, the reduced capacity use in manufacturing. From a procurement perspective, the customized nature of the raw materials or the processing of materials by a subcontractor may result in long lead times, as well as make negotiating for reduced costs based on volume difficult.

The emphasis of an ETO environment at the procurement stage is to treat each job as a project, with product specifications linked to quality, and the arrival of raw materials and subassemblies to coincide with the requirement for the stage of the build schedule. Typically in the ETO environment, we are speaking about products that are for the original equipment manufacturer (OEM) market, where support for after-sales service (in the form of field service or engineering service) as well as scheduled and unscheduled maintenance may be a requirement.

One other factor that limits conventional discrete ERP systems in the ETO environment is the frequency of changes in design engineering, as additional functionality and features are built into subsequent versions of the final end product. Managing configuration control and versions having links to a CAD system becomes a primary consideration for an ETO system.

Just as E.T. had to “phone home” to receive direction and guidance for his journey back from another world, you need vendor information on product offerings that will bring your ETO business back to its own world, where it belongs. Here is an excellent place to obtain further information on ETO software products and vendors.

Straight Up on Leads Management

No, I’m not about to launch into a Paula Abdul cover (I won’t even dignify that with a link).

Lead generation is a process that uses information to create interest in an enterprise’s products or services. It’s end objective is to generate sales.

Several steps are involved in this marketing process. Before a company begins, it needs to define the market that its product or service caters too, segment that market, and then identify its most profitable areas. Once this is done, the leads generation process begins. The leads generation process involves prospecting, preapproach, approach, and close. As a prospect moves through the leads cycle, information is being created and filtered. Sensibly, a business should use this information to follow up with its customers to see if they were satisfied with the service or product, and then generate leads metrics which will be used to further refine the leads generation and sales process.

The leads generation process gathers a lot of information and involves a lot of tracking, and it should generate dialogue not only between the company and customers, but within the company between sales and marketing in particular. A leads management solution uses different methodologies and practices to govern this information and distribute it to the appropriate people within an organization.

There are a couple of factors that are spurring the need for effective leads management tools. The biggest factor is that consumers are becoming more savvy, and are not easily compelled by traditional marketing. Companies are seeking to effectively target their core market by catering to their target’s specific needs.

The following white paper by BLUEROADS (original caps), outlines a some of rules that vendors should adhere to when managing leads distribution. Some recommendations include

* Using clear terminology for each stage of the lead pipeline
* Using partners that are relevant and experienced in a particular area.
* Having realistic expectations.
* Using lead pull methodology.

Given this, enterprises need to find software that is appropriate to their needs. In his excellent blog, Brian Carroll points readers to a Forrester Marketing blog by Laura Ramos which highlights four key buckets of leads generation technology, aimed at improving the efficacy of leads generation. I’ll repeat them here (but I do encourage you to visit both sites)

1) web analytics
2) database services
3) marketing automation
4) pure play leads management

Needless to say this involves a lot of technology and integration with existing CRM and SFA systems. On its own, a leads management system will not be a panacea for a business’s slumping sales. On this, Carroll reflects

“Software will not spontaneously generate collaboration between sales and marketing…I regularly encounter organizations that invest in expensive software before they fully understand the fundamental operational processes that it will be supporting.”

In other words, enterprises do not appreciate the type of information they need and who will be using it within the company. (He also writes how his company spent over a million dollars and nearly a decade to almost perfect their current leads management system. Brian, if you’re reading this, I invite you to try TEC’s tool…) A good leads management system is one that is used. There must be management buy-in, and the sales and marketing teams must be diligent in imputing and extracting information. For stakeholders to use the system, it must offer tools that they need. Failing this, money and resources are wasted housing dirty data—data which has no form or function outside of confounding business.

Enterprises should use a decision support system to help them map out their needs and measure their priorities. The decision process itself can be long and arduous if it is not managed correctly (It’s detailed here as a part of TEC’s software evaluation and selection methodology)

For different vendor’s take on leads management issues, visit our white paper site.

Here’s a sampling:

B2B Demand Generation
5 Keys to Converting More Leads to Sales
How to Convert Web Site Visitors into Leads for Efficient, Successful Prospecting
Falling through the Cracks: The Hidden Issue that May Be Crippling Your Sales, Marketing, and Customer Service Database

Have any other resources or sites that have been helpful in your leads management quest? I would love to check them out.

Sage Advice on Selecting Analyst Services

Step away from the decision–let’s look at the meta-selection. The SageCircle blog features some recent posts on selecting analyst services. So here we are, TEC, guiding all sorts of people in their selection processes for software, recommending best practices, developing custom research, etc., and the interesting thing (if I read the SageCircle blog correctly) is that our recommended software selection best practices can be applied for clients seeking analyst services, of the sort we offer, hence a meta-selection.

According to the SageCircle post, companies often fail to purchase the right analyst services because they haven’t “documented their reasons” for doing so in advance. Sage Circle observes that

“Two prime beneficiaries of this type of mistake are Gartner and Forrester because they are often the only firms with any significant mindshare with buyers.”

This is similar to the sort of observation we make about purchasing software. We recommend that clients understand their business requirements through a formal process ensuring those relate to a request for information (RFI) about the software they’ll purchase. The idea is that if you don’t initiate the selection process properly you’ll end up paying down the road for software that doesn’t suit your needs. Clients sometimes come to us with the notion of purchasing an ERP system from one of the several well-known tier 1 vendors; it’s rarely that cut-and-dry though. I’ll explain before returning to the analyst selection link.

There are at least two issues at hand in this type of situation. One issue is that the term “ERP” for example, is a commonly used term and something that people keep in mind but a company, upon examining its business requirements, might not actually need a full ERP system. Sometimes, after understanding the requirements, it turns out that a system focused on distribution concerns or accounting could be the most appropriate. Another issue is that the company may only seek software from the commonly-known (tier 1) vendors. However, there are hundreds of other vendors to consider. Each with their own strengths and weaknesses and each with their own sort of focus. It’s entirely possible that a different vendor will provide a more apt solution at a better price point than one of the famous tier 1 vendors.

How does that relate to selecting analyst services? I’ll paraphrase SageCircle’s recommended technique for selecting analyst services: 1) identify topics needed for decision support, 2) analyze the info you’ll need for that support, 3) make a system to prioritize that info, 4) make a scoring system, 5) make a list of accesses for influencing, and 6) generate an RFI.

If we modify this a little bit, it’s much like selecting software. 1) Instead of topics you probably have some business processes you need help with. 2) Instead of information needed for decision support, you map those business processes to software functionality. 3) You still need to prioritize. 4) You still need a well-defined apples-to-apples scoring system. 5) You should get some references and contacts from the various vendors. 6) Still need to generate an RFI–that’s how you’ll gather all the right data to put your priorities and scoring system to work supporting your selection.

The SageCircle blog states

“Bottom Line: Buyers can avoid spending too much of their analyst budgets with the big brands by carefully identifying the reasons for purchasing analyst services. This information can be the centerpiece of RFIs/RFPs sent to analyst firms and built into purchasing decision frameworks.”

Although I’ve worked with clients to provide custom research reports and software selection decision support (and vendors in related capacities), I’ve never received an RFI from a potential client about obtaining these types of services. The closest was a survey that SAP sent us, probably about five years ago. Is the complexity and range of analyst services providers increasing to such a degree that companies will regularly follow this practice in the future? If we spend so much effort guiding companies through a similar process for selecting software I wonder if I can expect to see that process initiated prior to a client engaging us for our decision support help?

Why Selecting an ERP System Is Like a 12-Step Recovery Program

So, I was looking over this article, and it suddenly occurred to me that there are uncanny similarities between AA’s 12-step program and the ERP selection process.

Is your business on the road to recovery? Find out!

*Step 1
“We admitted we were powerless over alcohol—that our lives had become unmanageable.”

ERP selection translation: For “alcohol,” substitute “broken business processes” (by extension, for “alcoholics,” read “employees”).

Step 2
“… came to believe that a Power greater than ourselves could restore us to sanity.”

ERP selection translation: For “Power,” substitute “project team.”

Step 3
“… made a decision to turn our will and our lives over to the care of God as we understood Him.”

ERP selection translation: Creating the business case for a new ERP system. For “God,” substitute “ERP system.” [Warning: do NOT substitute “CEO” for “God.” That’s just foolishness.]

Step 4
“… made a searching and fearless moral inventory of ourselves.”

ERP selection translation: Interviewing your stakeholders.

Step 5
“… admitted to God, to ourselves, and to another human being the exact nature of our wrongs.”

ERP selection translation: Business process modelling, part 1—defining your “as is” processes.

Step 6
“… were entirely ready to have God remove all these defects of character.”

ERP selection translation: Business process modelling, part 2—defining your “to be” processes.

Step 7
“… humbly asked Him to remove our shortcomings.”

ERP selection translation: Sending your RFI to system vendors.

Step 8
“… made a list of all persons we had harmed, and became willing to make amends to them all.”

[Note: Applicable to CRM systems only]

Step 9
“… made direct amends to such people wherever possible, except when to do so would injure them or others.”

ERP selection translation: [redacted by Legal Department]

Step 10
“… continued to take personal inventory and when we were wrong promptly admitted it.”

ERP selection translation: Reducing your customization requirements.

Step 11
“… sought through prayer and meditation to improve our conscious contact with God as we understood Him, praying only for knowledge of His Will for us and the power to carry that out.”

ERP selection translation: For “prayer” and “meditation,” substitute “scripted vendor demos.”

Step 12
“… having had a spiritual awakening as the result of these steps, we tried to carry this message to alcoholics, and to practice these principles in all our affairs.”

ERP selection translation: User training.

*

Sadly, selecting an ERP system requires a number of additional steps that AA doesn’t address. Find out more. And for the record: AA’s 12 Steps.

Oh, and our sales department will kill me if I don’t insert a plug for our ERP Evaluation Center. Here. Note: It’s only as anonymous as you make it. For best results, you may wish to define your requirements explicitly and accurately.

Job Scheduling Maze in Distributed IT Landscapes – Part 2

Part 1 of this blog series outlined the problem that, as the number of systems, applications, databases, and whatnot platforms increases, the IT business community requires a holistic approach across all these various systems to provide a single point of running IT jobs and workload automation. It also pointed out the difficulties in achieving this noble idea, and introduced Advanced Systems Concepts Inc. (ASCI) and its ActiveBatch cross-platform enterprise job scheduling and workload automation solution.

ActiveBatch Architecture

The ActiveBatch architecture has always been a multi-tier approach (enabling centralized job scheduling with distributed job execution) consisting of the following elements:

* ActiveBatch Job Scheduler — This Microsoft Windows-based layer consists of the ActiveBatch automation intelligence and logic to understand the requirements presented in operating a real-time, event-driven system;
* ActiveBatch Backend – This database tier is where the “job” definitions and templates are maintained along with how the “jobs” are to be triggered (i.e., date/time-based, event-based, data-based, or on-demand). This layer also determines which resources are required (e.g., servers) to run the defined jobs, and what to do upon a job’s success or failure, or based on other information. This layer uses either Microsoft SQL Server or Oracle database;
* ActiveBatch Client – This client layer is the interface in which the user, developer, or operator interacts with the ActiveBatch system. Workflow design, programmatic connections, or simply review of jobs’ status (success or failure) can be monitored or reviewed. There is a raft of possible client-side technologies, such as Microsoft Common Object Model (COM), Web Services/Simple Object Access Protocol (SOAP) for cross-platform environments, Windows-based applications, Command Line Interface (CLI), Web Server interfaces, Personal Digital Assistant (PDA) gadgets, SmartPhone devices, and wireless BlackBerry handheld devices; and
* ActiveBatch Execution Agents – This tier represents the physical or virtual hardware and software systems, which execute the “jobs,” applications, processes, etc., as directed by the abovementioned ActiveBatch Job Scheduler. Execution agents can run on a number of operating system (OS) platforms like Microsoft Windows (including Windows Vista, Windows Server 2003, Windows XP, and Windows 2000), UNIX, Linux, OpenVMS (including the Alpha and Itanium brands), and IBM z/OS (for the ActiveBatch Job Library feature that will be explored later on).

A fully operational ActiveBatch instance requires each of the basic architecture layers, i.e., Job Scheduler, Database, Client/User Interface (UI), and a minimum of one ActiveBatch Execution Agent. Most ActiveBatch shops have Windows systems. But even some like, for example, LiveWire Mobile that have over 90 Linux servers and only a few Windows systems, still strongly support ActiveBatch as a key approach to integrating applications, databases, and platforms into coherent workflows.

Panoply of Job Types and User Views

As mentioned in Part 1, ActiveBatch attempts to provide “Intelligent Automation” for its users with an approach that can minimize or eliminate scripting. Up through Release 6, the product has offered the following five types of jobs (by comparison, most of other counterpart job scheduling products only support one or two job types):

1. Process Job — lets users run user-written scripts and/or executable program files. For example, I could un the Windows Internet Explorer executable (IEXPLORE.exe) and pass TEC’s Uniform Resource Locator (URL) as a parameter to open the TEC’s home page. Worth noting here is the “Copy Script to execution machine” option for running scripts as a process, as well as the ability to allow pre- and post-job steps;
2. File Transfer Protocol (FTP) Job — can initiate a series of FTP and/or Secure FTP commands in a heterogeneous fashion, using the following secure protocols: Secure Socket Layer (SSL) v3 and v2, Private Communications Technology (PCT), Transport Layer Security (TLS), Secure Shell (SSH), or without embedded security;
3. File System Job — lets users perform operations such as Copy, Delete, Rename or Move Files, or Create New or Delete a Directory, without regard to the specific platform they are on, and what Command shell they might need to use.
4. Email Job – lets users compose e-mails, whereby email servers and/or clients that leverage Simple Mail Transfer Protocol (SMTP) can be utilized (not necessarily only Microsoft Outlook or Microsoft Exchange Server). A notable capability is the use of variables to create alerts/triggers (e.g., when a certain stock symbol reaches certain value); and
5. Script Job — where the script (rather than an executable file, e.g., a Visual Basic Script [VBS] piece of code) is placed into an ActiveBatch job so that it can be executed on any system rather than being limited to the system where the file resides. Scripts using virtually any script language can be used, and if ActiveBatch does not provide an extension the designer can simply add it to the list. However, the server running the script must be able to associate with the relevant file extension.

Various Views to Monitor Jobs

Furthermore, ActiveBatch comes with a number of different ways of viewing and monitoring ongoing enterprise jobs. To that end, the Run Book view shows operators’ job schedules in a calendar view (à la Microsoft Outlook), whereas the Daily View shows daily job executions in a detailed list. Both views can be used by operators to monitor the status of jobs that have been run, are still running, or are scheduled to run (past, present, and future). Jobs can be filtered by days or execution status (i.e., “Show me only jobs that have failed, aborted, not run, or are still executing!”).

The Gantt View can be used by job designers as well as administrators and operations staff to identify load levels (to balance loads) or quiet periods for system’s planned maintenance, etc. Finally, the Administrators View helps administrators with setting policies, defaults, etc. Part 3 will unveil the latest enhancements and options offered within Release 7.

ActiveBatch Evolution

ASCI continues with ActiveBatch’s ongoing development with a cycle of 18 months between versions. This allows the vendor to offer existing and new customers the ability to take advantage of new features and approaches in technology by applying them for improved performance and usability.

In the ActiveBatch V4 product release, the ActiveBatch Backend layer was changed from a proprietary database to the much more standard Microsoft SQL Server and Oracle. This has enabled the vendor to take advantage of the database programming power that the “stored procedure” capabilities could deliver. Also, these two database systems were the primary databases used by the ASCI’s target marketplace as part of their IT infrastructure, thereby reducing the learning and training costs for users.

Moreover, ActiveBatch V4 added support for additional OS platforms such as IBM AIX, HP-UX, and Linux to the previously supported Windows, Sun Solaris, HP Tru64 UNIX, and OpenVMS environments. The client interface was updated with a new graphical user interface (GUI) for drag-and-drop operations to simplify the design of workflows. Finally, the High Availability capability was added, remote management access was provided for Internet access, and remote management was made possible using BlackBerry devices.

In the ActiveBatch V5 release, performance became paramount as ASCI took advantage of the power of the supported databases. The vendor was able to test actual performance of up to 2,000 disparate server connections (i.e., execution agents), and over 1,300,000 jobs triggered in a 24 hour period. Moreover, ASCI says that there are no architectural limits in this regard.

As for managing workflows and all ActiveBatch objects such as Jobs, Schedules, Calendars, Users, Servers, Alerts, and more, the product was now able to put these objects into a one container called a Job Plan. Finally, while ActiveBatch had always fully exposed its Microsoft COM interface for programmatic access to its objects, methods, and properties, this release added a Web Services programmatic access for users who were not Windows-based, for true cross-platform capabilities.

ActiveBatch V6 – The Game-changing Begins?

The ActiveBatch V6 release had many major enhancements. For one, it introduced the framework for the abovementioned Job Library, containing templates to applications and key functions used by IT departments in support of the customer’s business. The goal was to reduce code scripting, so that users could simply add key information (e.g., select options in a wizard-like style), and ActiveBatch would be able to run jobs behind the scenes.

These templates include a variety of jobs, such as follows: Structural Query language (SQL) routines, Data Transformation Service (DTS) packages, SQL Server Integration Services (SSIS), Crystal Reports creation, etc. The library also caters to functions like Secure FTP, file archiving, ZIP file operations (compressions), email jobs, etc. The use of ready-made job libraries within ActiveBatch eliminates both errors through reusability and the hassles of creating scripts. In layman terms, complex workflows can be composed by selecting options from a library of routines rather than via pesky coding of scripts.

The V6 release also featured a much improved audit system for compliance and control with both internal policies as well as governmental regulations. In addition, there is the capability for dynamic policy auditing using the Audit Variable feature. Also, policies can be mandatory or optional, and users can also conduct policy version comparisons.

The release offered HP OpenView and Microsoft System Center Operations Manager (SCOM, formerly Microsoft Operations Manager [MOM]) to fully manage and monitor objects in the ActiveBatch system around the clock. V6 also introduced the ActiveBatch Mobile capability for Smartphones and PDA’s (beyond BlackBerry devices).

Furthermore, ActiveBatch Windows execution agents now fully support 64-bit systems as well as 32-bit ones as appropriate. Other general changes for improved IT service levels entailed the following:

* setting expected start times for event-based jobs;
* alerting for delayed and late running jobs;
* Windows PowerShell; and
* setting the maximum dispatch time.

As another major enhancement, ActiveBatch 6 introduced the concept of Virtual Root to allow for its job scheduler to be made available as a multi-tenant utility within or outside of the enterprise. Each organization’s unit will see its “Job Plans” populated with its ActiveBatch objects, but, if so required, will not be able to see or access other users’ plans and objects. In other words, each user/tenant is isolated, secured, and “blind” or transparent to the other. Each unit’s plans are published as directory references for secure access.

Last but not least, event management capabilities were enhanced for non-Windows-based systems. The options range from file triggers, centralized logging (log files can be made directly to the UI/client regardless of platform type), and silent (push) installations. The system also features integration of jobs to be executed on a mainframe system, or for a mainframe job to trigger other workflows on Windows, Linux, UNIX or OpenVMS systems.

Part 3, the final installment of this series, will analyze the latest ActiveBatch V7 release, as well as the product’s market opportunity. Your views, comments, opinions, etc. about enterprise this job scheduling solutions, and abut the software category per se are welcome in the meantime.

We would also be interested in hearing about your experiences with these software solutions (if you are an existing user) or your general interest to evaluate these solutions as prospective customers.

13 Things a Customer Can Do to Avoid an ERP Implementation Failure

Have you ever wondered why every time you hear a story about an enterprise resource planning (ERP) implementation failure, the vendor gets the blame? The customers did everything they could to avoid it, but the vendors either provided inappropriate training and support, or simply a poor quality product.

Frankly, I do not think that an ERP implementation failure can possibly happen without at least some contribution from the customer. As a customer, no matter what the vendor does to influence you during the selection process, the final decision is yours and you have to make sure you make the right one.

Here’s a list of things a customer should consider before selecting an ERP—both during the implementation and even long after. I have selected 13, because ERP selection and implementation has nothing to do with luck.

1. References. Always ask for references and do not rely exclusively on word-of-mouth and the Internet. Ask your vendor to provide contact information for some of their customers—and call them. They will probably not say bad things about the vendor and the system, but if you ask the right questions, you will have an idea about some of the challenges you might face when dealing with that vendor implementing the software.

2. Decision Support System (DSS). No matter what the size of your company is or how much you’re ready to spend on ERP, you should always use a decision support system, a tool that supports decision making activities. TEC’s ebestmatch™ is a very good example—and, if you cannot afford to buy or build a DSS, you can always try to create a non-computerized version of it, following the structure of existing systems (you can use ebestmatch free for two hours in order to get an idea how a DSS works).

3. Hardware and software compatibility. Make sure the software you’re buying is compatible with the hardware you have or intend on purchasing. For example, if the ERP you have selected uses Reporting Services, you should be aware of the fact that only some versions of Microsoft SQL Server have it.

4. Flexibility. Can the vendor give you more than it promised? Vendors can be very flexible, depending on how important you are to them. A small customer can obtain more “attention” from a vendor then a big one, if the former has the potential to bring more business to the vendor. Also, vendors can have special offers when trying to get into a new market, outrun the competition, etc.

5. Change management. People do not change their habits because you tell them to. Vendors and external consultants can help you with this, but remember that people will follow motivated leaders. If you (as a project manager or user) are skeptical about the ERP you’ve selected, then obviously something went wrong during the selection process; the vendor then will have a hard time fighting with the users’ unwillingness.

6. Legacy data. Make sure your vendor can import legacy data from your old database, Excel files, or other external data sources. Unless you are a new company, you probably will have data that needs to be imported. Before importing, try to clean it, remove duplicate or useless information—which can cause lots of problems later.

7. Real costs. How much will it really cost to implement the ERP you selected? Are there any hidden or additional costs? For instance, if you decide to install Windows Vista on all workstations, you will probably need to replace old printers, which are not compatible with Vista. Also, if you decide to print labels out of the system, you might need special software and specific printers.

8. Business processes. In theory, no one should know better than you how your company works. Still, sometimes you cannot see the forest for the trees. An ERP implementation project could be a good occasion to review and optimize your own processes and procedures. There is no reason to automate ineffective or useless processes.

9. The source code. Can you make any changes to the code? You might not need it now, but you will probably need it later. It is also important to know what happens to the source code if your vendor goes bankrupt. Usually, vendors deposit the code with a third-party agent—known as an escrow—which will release it to the customer if the vendor fails to maintain and update the software.

10. Implementation methodology. Some customers do not even look at vendors who do not have such a methodology. A vendor should be able to provide a document describing the implementation process, with objectives, milestones, resource allocation, etc. If a vendor doesn’t have it, it will probably do things on the fly.

11. Training. Does your vendor have enough qualified people to successfully train your employees? If the vendor has three trainers working on ten large customers, they might not be able to take care of you as they should. Also, if the trainer assigned to you was just hired by the vendor, he/she might not be experienced enough, which can cause a lot of problems.

12. Audit. Depending on the size of the project, simpler or more complex forms of auditing should be performed during the implementation. Ideally, you should create an auditing procedure with your vendor, but you can also involve independent consultants or project auditors.

13. Technical and customer support. Can your vendor provide the level of support you need? With a team of five people and hundreds of customers, it might take weeks to solve a problem. Make sure you understand what’s included in support. Is the vendor going to do backups of your database on a regular basis? Are you getting upgrades, and when and how does that affect you work?

If you suffer of triskaidekaphobia (fear of the number 13), you probably did not even open this article. But if you don’t and you’re somehow involved in a selection process and deployment of an ERP, you cannot afford to ignore these 13 points.

There is certainly much more to say on this subject. If I’ve missed something worth mentioning, I’d like to hear from you.

TurtleSpice ERP! (Week 1)

Welcome to TurtleSpice ERP, our new series on software selection!

We’ll follow one company’s software selection process, from beginning to end—with your help.

In fact, the fate of the company’s software selection project is in your hands.

Cast your vote at the bottom of the post, and next week I’ll move the scenario forward based on the winning answer.

Here’s the scenario:

In just six years, Westchester, California (US)-based TurtleSpice has grown from a single-kitchen weekend project to a multi-million dollar manufacturer.

The secret of its success: TurtleSpice Sauce, an innovative condiment that can be used as a dressing for everything from fish, poultry, and red meat, to pasta and pizza, to iceberg lettuce and carrot sticks.

TurtleSpice is now a major supplier of sauce packets to airlines, and during busy periods ships upwards of 5,000 orders a day in various configurations, including single-serving packets, bulk containers, and jars.

Today is a Friday like any other at TurtleSpice.

Except that today, Mike Chelonia, TurtleSpice’s comptroller, is struggling to wrap his head around the latest action item to hit his desk.

He knew it was coming, but that doesn’t make it any easier.

Mike’s CFO has mandated him to select an ERP system for TurtleSpice in order to overcome its current lack of manufacturing and reporting abilities, to enhance the overall operational efficiency of the company, and to better handle compliance issues.

In fact, compliance is becoming nearly unmanageable thanks to an expanding product line (although current product expansion is a debacle, Mike thinks, with its proposed new product—TurtleSpice Juice—being possibly one of the most disgusting beverages ever conceived).

Unfortunately, Mike has no idea where to start with the task at hand. As far as he can tell, he’s been landed with this action item for no better reason than that he’s “Mr. Efficiency,” and that he’s a good “numbers guy.”

But right now he’s not feeling so efficient. He’s heard horror stories about ERP selections, and he’s not thrilled with the prospect of being yet another.

About TurtleSpice:

• Currently, TurtleSpice’s traceability system is paper-based, with data being handwritten onto batch sheets. TurtleSpice is also using Excel for financials, and an in-house-developed order entry system that’s showing its age.
• TurtleSpice faces a number of compliance issues, including FDA regulations, facility inspections (HACCP compliance), labeling language requirements for Canada and Mexico, multi-currency billing and invoice capabilities, and occupational health and safety requirements.
• Since 2004, TurtleSpice has outsourced its distribution to a third-party logistics (3PL) provider for logistics and freight, having made the change when its delivery volume started to exceed the capacity of its single delivery truck.

Useful TurtleSpice stats:

• manufacturing, warehouse, and corporate HQ facilities all located on one site
• $50 million in revenues for FY 2007
• 120 employees, 85 system users
• budget for licenses, implementation, and maintenance: $500,000-$750,000
• seeking training, support, and yearly maintenance
• implementation time frame: 6-12 months

Back-of-napkin business requirements (in no particular order):

• automate financial processes
• tracking of compliance issues
• manage employee records and payroll
• track maintenance and repair for equipment and fixed assets
• warehouse and inventory management
• improve e-commerce capabilities
• better tracking of customer service and support
• record and track sales orders
• manufacturing management
• manage recipes for new products

Why Selecting an ERP System Is Like a 12-Step Recovery Program

So, I was looking over this article, and it suddenly occurred to me that there are uncanny similarities between AA’s 12-step program and the ERP selection process.

Is your business on the road to recovery? Find out!

*

Step 1
“We admitted we were powerless over alcohol—that our lives had become unmanageable.”

ERP selection translation: For “alcohol,” substitute “broken business processes” (by extension, for “alcoholics,” read “employees”).

Step 2
“… came to believe that a Power greater than ourselves could restore us to sanity.”

ERP selection translation: For “Power,” substitute “project team.”

Step 3
“… made a decision to turn our will and our lives over to the care of God as we understood Him.”

ERP selection translation: Creating the business case for a new ERP system. For “God,” substitute “ERP system.” [Warning: do NOT substitute “CEO” for “God.” That’s just foolishness.]

Step 4
“… made a searching and fearless moral inventory of ourselves.”

ERP selection translation: Interviewing your stakeholders.

Step 5
“… admitted to God, to ourselves, and to another human being the exact nature of our wrongs.”

ERP selection translation: Business process modelling, part 1—defining your “as is” processes.

Step 6
“… were entirely ready to have God remove all these defects of character.”

ERP selection translation: Business process modelling, part 2—defining your “to be” processes.

Step 7
“… humbly asked Him to remove our shortcomings.”

ERP selection translation: Sending your RFI to system vendors.

Step 8
“… made a list of all persons we had harmed, and became willing to make amends to them all.”

[Note: Applicable to CRM systems only]

Step 9
“… made direct amends to such people wherever possible, except when to do so would injure them or others.”

ERP selection translation: [redacted by Legal Department]

Step 10
“… continued to take personal inventory and when we were wrong promptly admitted it.”

ERP selection translation: Reducing your customization requirements.

Step 11
“… sought through prayer and meditation to improve our conscious contact with God as we understood Him, praying only for knowledge of His Will for us and the power to carry that out.”

ERP selection translation: For “prayer” and “meditation,” substitute “scripted vendor demos.”

Step 12
“… having had a spiritual awakening as the result of these steps, we tried to carry this message to alcoholics, and to practice these principles in all our affairs.”

ERP selection translation: User training.

*

Sadly, selecting an ERP system requires a number of additional steps that AA doesn’t address. Find out more. And for the record: AA’s 12 Steps.

Oh, and our sales department will kill me if I don’t insert a plug for our ERP Evaluation Center. Here. Note: It’s only as anonymous as you make it. For best results, you may wish to define your requirements explicitly and accurately.

ERP & Co.: How Process Manufacturers Use Technology to Scale New Heights

In this blog post, I’ll examine how growth-oriented organizations will build their IT infrastructure around ERP, and then integrate systems in other related areas to optimize their ERP capabilities.

In the Beginning There Was ERP

The recent TurtleSpice ERP series featured on the TEC blog features a fictionalized company within the process industry going through the decision process to determine what ERP system would best meet its needs. In the case of Turtle Spice, it was deemed that an integrated process ERP system would be the logical starting point to create a technology infrastructure—the premise being that as a growing concern, production and sales volumes are increasing, and clients are placing increased demands which cannot be met without a system by which planning and order execution can be organized.

Indeed, at each stage of the business cycle the need for timely and reliable financial information is critical, as financial performance will be the driver that permits the organization to grow and develop other markets and expand its product offerings. In addition, formulas have to be recorded in accordance with production batch sizes and for the purposes of traceability in order to satisfy compliance requirements. Furthermore, it’s essential to have the ability to track both finished goods for sales and order processing and raw materials for inventory re-order and replenishment linked to a purchasing module.

Thus, the ERP system should be the central control system by which subsequent systems can exchange information as additional applications are required. The Supporting Cast Although the TurtleSpice series does not make specific mention of other enterprise system requirements, it is not difficult to imagine that a similar organization going through growth would invest in other technologies. Some of these investments might be mandated by customers, while others could be required as a cost reduction and process improvement effort. Below are some of the systems that likely would be required.

Customer Relationship Management (CRM)

CRM is a methodology and software that assists in managing how an organization interacts with its client base in an organized approach. There are three primary activities within a CRM solution:

1. Operational CRM This consists of enabling an organization’s sales and marketing team to design a sales campaign based on research into demographical and order data.
2. Enterprise Marketing Automation (EMA) Companies can use demographical and order data to develop programs around service and warranty requirements. Telemarketing sales campaigns can also be built around the collected data from the CRM system to sell warranties and accessories.
3. Sales Force Automation (SFA) SFA automates the ability to track sales leads, schedule sales calls, coordinate responses on mailings from brochures sent by direct mail, and generate reports. Many companies have used CRM to optimize marketing efforts, resulting in greater sales and increased revenues.

Enterprise Asset Management (EAM)

EAM or computer maintenance management systems (CMMS) help organizations ensure that manufacturing equipment is maintained and serviced on a scheduled basis. This is of critical importance in an organization where breakage in process machinery could result in the inability to produce product and meet sales commitments.

There are two parts to this software: enterprise asset management and computerized maintenance management. These EAM side permits you to determine whether a part is cost prohibitive to maintain and when to purchase another. The CMMS side determines when a maintenance or a new piece of equipment is scheduled for repair.

As certain equipment repairs are unscheduled, EAM /CMMS will assist in ensuring that the correct resources (both material and labor) are in place. In a recent TEC article (Use a Computerized Maintenance Management System to Improve Predictive Maintenance Performance, by David Berger), strategies were analyzed on how these systems can benefit a firm to lower overall operating costs and store valuable information about maintenance functions within the organization.

Supply Chain Management (SCM) Systems

The discipline known as supply chain management is the essential activity responsible for the movement of products and raw materials as they flow from the vendor through the manufacturing and or distribution process to the end customer. The activities within SCM include purchasing, planning, inventory management, warehousing, transportation, customer service, and demand planning.

Within these activities you can analyze sales forecast to determine demand, plan production, negotiate pricing and ordering of raw materials, and plan and schedule manufacturing, warehousing, and transportation to the customer. To gain more insight into the complexities of SCM, read TEC analyst David Bourque’s article From Manufacturing to Distribution: the Evolution of ERP in Our New Global Economy. Below are some subsystems and activities within SCM that are useful to understand.

Advanced Planning Systems (APS)

APS systems support planning activity within SCM by means of quantitative methods. APS extends the abilities of ERP by analyzing sales forecasts, demand patterns, and economic ordering patterns

Warehouse Management Systems (WMS)

WMS is a vital part of any SCM strategy, as its primary focus is to control the movement and storage of inventory within a warehouse and to process related transactions (including shipping, receiving, putting away, picking for sales order processing, and allocation of warehouse space and bins to minimize material handling costs). WMS uses various pieces of technology, including bar code scanners, mobile computers, wireless LANS, and RFID. The fundamental reason for WMS is to increase the velocity of movement in the processing of sales orders. The system works in support of both ERP and SCM. Radio Frequency Identification (RFID)

RFID technology is used within SCM as a means to track inventory. The efficiencies and ease of use of of RFID will gradually supplant barcodes. The benefits of RFID enable companies to track assets from a distance and require less human intervention. They are useful as well for tracking obsolescent inventory and for maintaining real-time data. See the TEC article The Three Rs of RFID: Reward, Risk, and ROI for more on how retail organizations use RFID as a strategic part of managing their inventories and how it can decrease warehouse, distribution, and inventory costs, and increase profit margins.

Business Intelligence (BI)

An emerging tool no longer exclusively in the domain of large corporations, BI can provide organizations with means to manage data in a strategic way. In the case of manufacturing operations, obtaining and managing historical information—and manipulating it to make sound business decisions—can be critical. Below are some examples:

• key performance indicator development in the event of compliance-related issues

• formula adjustments

• trend analysis with respect to raw material commodity purchases

• data mining of customer order patterns

Quality Management (QM) Systems

As far as regulatory and compliance requirements are concerned, process manufacturers (such as the pharmaceutical and food and beverage industries) must track the sources of all raw materials and the dates on which products are manufactured and handled. A QM system will be able to track formula approvals, raw materials sources, lot number control inspection records, product and raw material specifications and packaging components, and product label instructions and information in the event of a product recall (or for inspection requirements from a government or regulatory agency).

Process Control Systems

As production volumes increase and as new products are developed or acquired, coordinating blending, batch manufacturing, and packaging may become difficult to handle manually. A central control room should manage a stable production environment and packaging operation linked to an ERP system, through programmable logic controllers to update manufacturing records and supply chain management.

A Final Thought

Obviously, technology alone does not guarantee the profitability of your firm. As with any IT acquisition, you must manage the process that assists in implementing change. At the end of the day, people manage change: the tools mentioned here can only benefit an organization if function, process, and people are aligned.

If you would like to obtain more information about any of these systems, please visit the TEC’s Vendor Showcase, or come to TEC’s white paper library to broaden your knowledge on these and other systems.

Ask the Experts: So, This ERP Thing… How Does It Work?

TEC reader Martin K. recently wrote in with these questions:

What kind of data is handled by ERP systems and how it is done? How does the interface work? Which departments normally use it? And who is the recommended team that should choose the ERP system?

TEC analyst Alex Hankewicz says:

To answer these questions, we need to take a step back and examine the evolution of ERP.

ERP systems were developed as an extension of materials requirements planning (MRP) systems. MRP, in turn, was originally developed (late 70s and early 80s) to integrate planning and scheduling elements to the manufacturing process. Subsequently “MRP II” was introduced to incorporate the planning elements of distribution and forecast requirements to the central manufacturing location.

ERP was introduced in the late 80s as a means to integrate other enterprise functionality. One example would be when a software system can provide at least two other functions (as is the case if an organization has the means to integrate the requirements of both a human resources module and a financial system).

In modern ERP systems, usage is not confined to manufacturing organizations. It is typically designed to integrate applications that traditionally would have been separate “stand alone” activities, such as product configuration control, bill of materials and sales, or order entry.

In current ERP systems one would expect to have the ability to manage the following applications (among others) through a single database:

* manufacturing
* supply chain
* financials
* customer relationship management
* HR
* warehouse management
* business intelligence

Determining which ERP solution best meets your needs depends to a great extent on your industry vertical space, as well as the application requirements of your organization.

If your organization lacks the resources to integrate a complete ERP system package, then only portions of the system need be implemented, with the other applications introduced gradually over a period of time. In other instances an organization may already have a very robust accounting system, with other applications in place, and may simply be looking to extend the capabilities of current systems by adding additional applications.

One example might be a retail company that has a point of sale (POS) system and a financial application from different software vendors. However, additional specialized applications such as warehouse management systems (WMS) and transportation management systems (TMS) and demand planning are not in place and are required to optimize the supply chain capabilities.

Integration to other functionality is large part a measure of the capabilities of the company’s existing legacy systems. In systems using modern relational database management systems (RDBMS), integrating other applications as a “best of breed” solution is fairly commonplace.

The alternative is to explore alternatives in light of the total cost of ownership (TCO) of supporting and maintaining the existing legacy system. In many instances it may make sense to purchase a new solution where all required applications are available as a standard part of the software solution.

As an aside, there has never been a better time for prospective ERP system buyers, as there are so many choices that can support the best practices of what ever industry vertical or business model your organization has in place.

If your organization has limited IT resources and budget constraints, one option to consider is software as a service (SaaS), whereby your organization can access a externally hosted solution with a set of pre-configured modules that can provide the functionality of a completely integrated ERP system (for a monthly fee). This can address the need to have a solution in place, without incurring the costs for support and maintenance of an ERP system.

Another alternative is to explore the growing number of open source ERP vendors, which can address many application requirements for little or no up-front costs. Other costs are applied at the back end for support and for features which may not be available within the standard open source offering.

***

David Clark says:

Alex has covered Martin’s first three questions, so I’ll just respond quickly and talk about who should be involved in choosing a new ERP system.

The short answer: everybody. I’m not trying to be flippant—I just want to emphasize the importance of achieving buy-in for your system, organization-wide. Otherwise, you risk catastrophically low rates of user adoption, which in turn can torpedo your return on investment (ROI).

I can’t think of a better illustration of this danger than my favorite joke from the Pink Panther Strikes Again:

Inspector Clouseau: Does your dog bite?
Hotel Clerk: No.
Clouseau: [bowing down to pet the dog] Nice doggie.
[Dog barks and bites Clouseau in the hand]
Clouseau: I thought you said your dog did not bite!
Hotel Clerk: That is not my dog.

The moral of the story: Your ERP system will bite you unless you ensure your entire organization takes ownership.

Of course, you’ll need to choose a project team leader to steer the selection process through the various pitfalls and minefields, as well as a project champion—usually a C-level executive who has the authority to make the difficult decisions such a project inevitably requires. Also, you should involve internal subject matter experts (i.e., employees who are extremely well versed in internal business processes for the various areas your ERP system will be impacting), and managers from the affected departments.

Remember that the stakeholders of your ERP selection project are not limited to your business users. Depending on the size of your organization, your stakeholders will also include C-level executives, IT infrastructure support staff, managers, suppliers, customers, and even investors.

6 IT Resolutions You Can’t Afford NOT to Make for 2009

Yes, we know everyone had a great New Years party. We saw the ball drop from Big Apple, watched celebrations all over the globe, and optimistically made the same old New Year resolutions again. But what about the resolution for your industry and the global economy in general? What does the dawn of 2009 have for your industry? Let’s evaluate some of the events which will mold the fortune of many organizations in 2009.

As the sun was setting for 2008, I remembered the highlights of 2008 and wondered what 2009 will bring for our economy, especially for IT. The year 2008 was the year to remember with many things that will mold the economic forecast for 2009:

* the US presidential election and hope for better change
* the financial, housing, and automotive industries’ crises which resulted in historic unemployment in US
* the fluctuation in crude oil prices
* the global economical crisis

As we know, with any challenges or threats there come opportunities, so we should consider the negative economic effect of 2008 as excellent opportunity to make the best out of it. It’s never too late to make a pledge for positive change, especially when it comes to improving your business position. Here are few important ones:

* consider mergers and acquisitions (M&A) to better leverage your long term strategies
* innovate and go beyond your domain of expertise; explore new sectors
* outsource or offshore some of your projects & negotiate existing contracts
* hire new energetic graduates with a “Can Do” attitude
* Initiate continuous quality improvement processes by adopting new development methodologies or introducing new processes
* Go for CMMI, ISO, or any related certification and make your company more marketable so you can stand tall against your competitor

Mergers & Acquisitions
Historically M&A usually increased in uncertain economies and 2009 will not be different. We have already seen some huge mergers in airline industry (Delta – NWA) and technology industry (EDS – HP). M&A bring insecurity for employees and hesitation in consumers. But when these mergers happen, they open doors to many opportunities for the IT industry, because organizations need to synchronize their business models, research and development (R&D), IT infrastructure, networks, hardware, etc. to benefit from the M&A. Technology Evaluation Centers can help organizations with these decisions through its decision support system. TEC’s structured methodology helps organization to narrow down the solutions of a complex selection project to only those that match the organization’s business model, priorities, and objectives.

Out of the Box Approaches
The other positive aspect of the troubled economy is that it allows organizations to do things more creatively. Companies should plan for the long term and strategically direct their investments in exploring new technologies (telecom, mobile technology, open source) or build software applications for different areas (health sciences, energy, marketing, sales, software as a service [SAAS]) where there are huge opportunities for growth.

All R&D projects require investment, but when on-hand working capital is minimal, organizations have to use proper tools to evaluate opportunities and risks based on firm information. Using real options rationally when managing new development projects will assist in determining the value new innovations or services may bring to the organization. A model for real options management and value helps management with the decision-making process of whether to invest in product innovation, continue with it, or to abandon it. This method helps when adapting to new situations and opportunities as they arise.

Re-evaluate outsourcing and strategic hiring
On the other hand a slightly conservative approach can also help you sail through economic hardship. Companies should also consider evaluating their internal processes and downsize for a better outcome. There are many cost cutting strategies, such as outsourcing, offshoring, partnering, etc. With the US dollar growing stronger every day offshoring may be a good option. If you already have a long term outsourcing contract, you may need to re-evaluate your need and renegotiate the contract for short term. Or if you would rather keep your intellectual asset onshore, hiring a new breed of professionals for less pay (compare to experienced professional), is not a bad option.

Quality initiatives
One of the most important areas that IT companies should focus on to stay afloat is to take advantage of low customer demand start or improve quality initiatives. Companies should take advantage of slow periods and improve the quality of their existing IT services or software. When times are good there is hardly enough time to pay attention to improving software development processes or the quality of your software. You might have had a long term goal to implement new development methodology (Agile, ITIL), automate testing (Business Technology Optimization), or acquire CMMI or ISO certification; well, this could be the best time to bring those ideas to reality.

In order to make those ideas reality, companies do not require huge financial investment. As customer demand for new development is decreasing, organizations just need to properly allocate time and resources, which should be readily available internally. Improving the quality of existing software and IT services can easily be achieved by paying attention to details and fulfilling customer’s requirements. Companies need to adopt proactive approaches to quality assurance such as

* Determining the proper development methodology which fits best for your need (Scrum, Agile, ITIL, etc.)
* Implementing performance measuring mechanisms at each phase of software development
* Gathering proper customer requirements, as poor requirements is the key contributor to software issues and bugs
* Performing formal and informal requirement reviews, code reviews, and walkthroughs
* Proper testing (regression, functional, load, etc)
* Most importantly, measuring your improvement and adjusting your processes to make them better

On a final note, organizations require an IT service management road map to stay competitive. Every organization should be looking at the best practices for aligning their IT strategy with the overall organization objectives.

How to Select an ERP System When You’re Dead

When Nietzsche declared in 1882 that “God is dead,” I’ll bet he had no idea that ERP system vendors were already queuing up to fill the gap.

He just wasn’t the practical, forward-thinking kind, that was his problem (Nietzsche, I mean, not God).

Now, in heaven, they take the long view. So when they started casting around for a replacement to their legacy system, they took the time to conduct a thorough software evaluation process.

Which meant, of course, defining their objectives first. I imagine the boardroom conversation went something like this:

“Lessee, now, we’ll be needing a strong CRM component—those help desk requests are really starting to clog up the system… and to be honest, our field reps could use some tighter linkage with head office, know what I’m sayin’?

“And as for accounting functionality, OK, now here’s the thing. Forecasting numbers are a little unreliable since the Big Unplug… plus, you should see some of the inventory management headaches we’re getting into—transubstantiation, schmansubstantiation, you ever try reconciling a holy trinity when one of ‘em’s dead, fer cryin’ out loud? And anyway we’re thinking of rebranding our bread product line. ‘Bi-weekly bread’, now that’s got more of a ring to it, don’t you think?

“Oh, and we’ll need some sort of RFID mechanism for the new soul transportation system—ha ha ha, remember that guy who smudged his bar code on the way up?”

Enough. For those of you who aren’t dead, I offer this roadmap to follow for software selection. It’s part of a best-practice software selection manual we’re publishing in the months ahead, and I invite you to share your thoughts—leave your comments below!

Phase One: Research
Define your objectives
Develop your business case
Identify your stakeholders
Interview your stakeholders
Select your project team leaders
Select your project champions
Select your subject-matter experts
Achieve consensus and develop your list of requirements
Create your long list of vendors
Disqualify unsuitable vendors and handle disputes
Send letters of continuation to selected vendors

Phase Two: Evaluation
Structure and prioritize your list of requirements
Finalize your list of requirements
Translate requirements into a decision model
Export your decision model to your RFI
Send your RFI
Create rules for extensions
Collect RFI responses
Incorporate vendor responses into decision model
Analyze, rationalize, assess, and rank the data
Validate and verify the data
Develop a working list of vendors
Create a ranked shortlist
Notify rejected vendors
Handle disputes

Phase Three: Selection
Select a shortlist of three vendors
Develop a demo script
Invite vendors to conduct demos
Invite vendors on-site to show them your environment
Perform reference checks
Issue an RFP to your shortlist
Analyze RFP responses
Conduct product demos
Perform user trials
Assess implementation proposal
Conduct a TCO analysis (pricing)
Analyze market data
Visit reference company sites
Quantify the subjective assessment
Revisit your analysis
Make your selection

Phase Four: Post-selection
Negotiate the contract
Obtain executive approval
Notify rejected vendors
Handle disputes
Notify the winning vendor
Sign the contract
Plan for implementation
Conduct installation and configuration (or migration)
Perform user testing
Develop due diligence report/audit
Go live

Pronto Xi—The ERP from “Down Under” Becomes TEC Certified

Introduction to Pronto Software
I’m pleased to say that the certification for the PRONTO-Xi enterprise resource planning (ERP) system has been completed by TEC’s analyst team. Here I’d like to share my impression and some conclusions regarding this system with you.

This past week we had the pleasure of receiving Pronto as guests at TEC’s offices. Both Terry Leister, VP North America, and Jayd Blunden, Senior Business Consultant at Pronto Software were here for the certification meeting. I really appreciate the fact that they made the long trip from Australia to Canada to meet the analysts and show us their impressive system.

Pronto Software is an integrated solution provider, known mostly in Australia (where they are based), as well as in the South Asia region. They are currently putting a lot of effort into becoming more recognized and successful in the North American market. The company has catered to the midsized ERP market for over 30 years and undoubtedly has a deep and clear understanding of their over 1,500 customers’ business needs and challenges. Pronto Software defines its major clients as manufacturing, importer distributors, integrated retailers, facilities and service companies, mining, and mining supply companies.

Product Strengths and Challenges
In order to define the solution’s features—in other words, its strong aspects as well as its weaker points—I used the information that I obtained during the demo meeting as well as the data from the request for information (RFI) that was completed by Pronto. I also used TEC’s eBestMatch™ decision support system (DSS), which can be used by anyone looking to do a similar exercise for any enterprise software selection project.

Among the functionality of the Pronto Xi ERP system, I would like to highlight the following:

* I personally liked the user interface logic that the system is based on, where the user has a variety of information readily available on the screen—in real time. In combination with online queries, screens, reports, and drill-down and screen customization capabilities, it gives users the ability to adjust and shape work spaces, concentrate on business tasks, and reduce the number of input errors. The screen customization allows you to change, modify, add, or hide screen prompts, fields, grids and buttons, and even create user-defined buttons.

* Pronto Software is a single-source supplier. This means that they provide a single code application, and no integration is required for the most typical business processes: the customer does not need to purchase and install additional third-party programs. The company offers additional partner applications—mostly for business intelligence (BI) using Panorama—and interfacing with other systems. All other modules are an inherent part of the system and can be easily turned on and off as needed.

* Another interesting aspect of Pronto’s Xi product is its scalability. The system can be successfully used by small businesses with very few workstations, as well as by relatively large corporations with thousands of users and an extended number of business processes and procedures. The system is scalable and stable enough to serve organizations with more than 2,000 users.

* Pronto Xi software can be delivered to the customer through traditional installation or through the software-as-a-service (SaaS) model. The vendor offers Pronto Hosted Services that provide multi-site hosting and management facility with data mirroring and replications.

* Pronto Xi ERP also contains a robust and powerful point-of-sale (POS) module for retailers and distributors. The rating scores for the functionalities of this module in our eBestMatch system were high; which most definitely shows that Pronto Xi has the ability to compete with the best POS systems on the market.

* Alert intelligence and task intelligence features are also provided with this system. These are tools that can be used for interactive communication with your ERP system. The system is smart enough to generate short message service (SMS) and pop-up messages, send a fax or e-mail, run a process, and launch an application based on particular events or important task milestones. It’s totally up to the user to define them. It can be used—for instance—to e-mail your customer when the order is ready to be shipped, or it can SMS the inventory manager to alert him/her that a particular item is out of stock and needs to be reordered.

* With standard auditing capability, the system allows users to track changes that have been made to any field or piece of information within the entire system. The “what,” “when,” “where,” and “by whom” types of questions can be easily answered.

In spite of all the software’s features and advantages, I found a few areas where Pronto Xi’s capabilities were not as robust as its competitors in this space.

* There are some weaknesses in the process manufacturing management module. It’s obvious that this ERP application has grown from discrete manufacturing (where I feel it is undoubtedly strong in functionality) and based on Pronto’s response to our RFI, some specific business processes particular to continuous type of process manufacturing are not supported by default, and might require customization, modification, or—in the case of by-products or co-products tracking for defined tasks—“workarounds.” In other words, the application can support these business processes, but it does not do so “natively,” i.e., some user manipulations within other sets of functionality may be required. A similar approach may be required for dynamic recipe adjustment based on the actual characteristics of ingredients, yield calculation, multiple process models for the same item, circular bill of materials (BOM). The good news for potential customers considering Pronto Xi ERP is that this hasn’t stopped other process manufacturers from using the product, and Pronto has experienced many successful system implementation examples in the pharmaceutical and chemical verticals, food processing, and other mixed-mode or process industries.

* The overall rating for the human resource (HR) module was lower due to a relatively weaker employee self-service functionality. This functionality ideally allows employees to view pay stubs and review and maintain own personal information, such as name, address, benefits related to a life event, tax filing status, number of exemptions, dependents and beneficiaries, etc. This is supposed to be offered in future releases but for now it may not be the best choice if self-service functionality is a critical priority for your company. Other than the self-service area of HR, Pronto demonstrated HR ratings that left the mixed-mode ERP average far behind.

* The company focuses mainly on the Australian, New Zealand, South-East Asia, and North American markets. As such, the system is translated into French and Spanish languages only. This might be an issue if you are planning to use your ERP system in countries where users speak other languages.

The contribution analysis graph below shows that in most business areas, Pronto’s Xi system rates higher than average by the industry benchmark. The only exceptions—as I mentioned earlier—are human resources and process manufacturing management areas—where the ratings are slightly lower than the industry benchmark.

Figure 1: contribution analysis graph [click thumbnail to enlarge]

Conclusions
Pronto Software positions its ERP product as a system for midsize to large organizations with total number of employees from 1 to 10,000 and more. Based on what I saw during the product demonstration, and on the level of support information I obtained from Pronto’s RFI, I consider this product to be well established and reliable, and in some cases can be considered a lower cost alternative to tier 1 suppliers.

Intelligent Manufacturing Systems: Beating the Odds, Mightily – Part 2

Part 1 of this blog series explained IQMS’ ebullience and growth despite a hostile and depressed environment, especially in manufacturing. IQMS attributes its continued success to its strategy of being the single source for virtually everything a target customer might need, including software development, sales and implementation services, training, and customer service and technical support.

Before delving into the flagship suite’s comprehensive functional footprint, it might be important to describe EnterpriseIQ’s [evaluate this product] technical foundation and performance, which IQMS touts as important parts of its value proposition.

EnterpriseIQ’s Architecture

The extended enterprise resource planning (ERP) product was originally written in the now almost esoteric Delphi environment (from the client-server era) on top of an Oracle Database. The suite features a two-tier architecture, with all business logic (i.e., rules and transaction processing) residing on the Oracle database server.

IQMS chose Oracle’s database technology (Internet-enabled via an Apache Web Server) for its reputed safety, security, and high performance. However, the vendor packages and abstracts the database in an embedded way (via a silent installation routine) that mitigates the traditionally high price and heavy administration downsides of Oracle.

Repeated IQMS user surveys confirm that the database is easy to administer and maintain this way, with no need for intensive Oracle programming. Following a silent installation routine, the server works like a refrigerator (or some other white appliance): all users have to worry about is the quality of what they put into the system and how to properly use its output.

The EnterpriseIQ product has meanwhile been largely rewritten in Microsoft Visual Studio.NET (VS.NET), which makes it compatible with Microsoft .NET Framework. ASP.NET is used for the client-side technology (except for Microsoft Windows CE in the warehousing module), while Oracle Database remains as the back end. This combination of Microsoft and Oracle technologies somewhat resembles IFS’ approach.

IQMS strongly believes that this unified “same DNA” suite (even if on a seemingly out-moded two-tier client-server architecture) results in online transaction processing (OLTP) that is very fast; much faster than if IQMS had adopted a service-oriented architecture (SOA) as other contemporary vendors do to stitch together disparate applications.

The OLTP and decision support systems (DSS) processing speed has reportedly been an important criterion for customers selecting IQMS. As Randy Flamm, IQMS’ president and founder, said during our recent exchanges:

“At IQMS we have always believed it is easier to develop and nurture a product rather than attempt to integrate to another company’s package. Essentially this is what SOA is about – integrating many packages for use across an enterprise. For the most part, our opinion is “SOA what!” We don’t need to build on this platform because we handle almost every function within our own database.

Is there a need for some partnering? Yes. We understand there are report writing and spreadsheet automation software packages out there (Crystal Reports and Global Software) that handle this better than an ERP system ever should or could do. We utilize these to tie into our package for extracting and presenting data, but that is where the need for SOA in our package starts and stops.”

For user friendliness and intuitive navigation (e.g., with jump-around and drill-down features), IQMS has chosen a Microsoft platform for the client side. In addition to transactional performance, other advantages of the two-tier architecture are data integrity and user interface (UI) independence. Namely, there is a whole host of UI choices: traditional graphical UI (GUI), .NET client (including the variant for mobile users), portals, and Telnet client for warehouse workers. IQMS uses Terminal Server and Citrix for wide area network (WAN) links to its UNIX or LINUX back-end servers.

My belief is that the reliance solely on Oracle’s database might, in the long term, limit IQMS’ market opportunity, especially within smaller companies that are standardizing on Microsoft SQL Server. The vendor claims that prospective customers are more focused on the solution than on the technology, and that the database system doesn’t matter.

Fine, but maybe also offering an on-demand and software as a service (SaaS) solution could help in that regard (think of Plex Systems, formerly Plexus)? At this stage, IQMS does not see the justifiable demand to take the SaaS plunge (i.e., the gut-wrenching product rewrite).

More of EntepriseIQ’s Traits

Despite being tightly woven and with an extensive footprint, EnterpriseIQ is a reasonably open system and is also modular. Users have to go for a basic core ERP package, and can decide on optional modules to extend the enterprise as business and demands grow. Therefore, of the more than 20,000 concurrent user licenses, below is the breakdown of licenses per modules:

* Over 10,000 concurrent core ERP system user licenses,
* Over 3,600 concurrent customer relationship management (CRM) user licenses,
* Over 3,300 concurrent shop floor system licenses,
* Over 3,000 concurrent wireless warehouse management system (WMS) licenses.

In addition, IQMS has also sold over 15,000 RealTime Machine Monitoring (mentioned in Part 1) licenses. While the system’s scalability comes inherently from Oracle database, after adding French language capabilities to EnterpriseIQ in late 2008, IQMS now supports the following eight languages: English, French, Spanish, German, Mandarin Chinese, Simplified Chinese, Dutch, and Swedish.

In addition to multiple languages, IQMS claims support for multiple enterprise entities/plants (on a single database instance) and multiple currencies. The double-byte character set (required to support Chinese), the ability to specify language by user in a single system, and other global requirements were also driven by customers, as even small manufacturers in this time and age need to operate as parts of a global supply chain.

Pre-empting the Dreaded “I” Word

IQMS claims that its single-source offering resonates well with the companies that are wary of any hidden and unneeded expenses, especially these days. These smaller manufacturers are particularly “allergic” to hearing about the need for any interface.

Indeed, multiple products and interfaces come with the burden of continuous management and upgrade coordination and an increase in IT support staff. Also, one has to deal with multiple software vendor maintenance contracts and worry about the financial stability of multiple software providers, each of whom will likely have different business strategies.

Moreover, when different applications require their own databases, it becomes quite problematic to write holistic reports over multiple databases. Complex SOA-based configurations also come with speed and performance issues. Last but not least, there are many ongoing support issues that come with multi-vendor solutions, starting with each vendor’s decision to provide offshore support rather than a more intimate local call center. When support and customizations come from value added resellers (VARs), whom should the customer call first in case of a problem?

But EnterpriseIQ is certainly not meant to be all things to all people. I concur with Frank Scavo’s recent post on IQMS on his Enterprise Spectator blog:

“…Now, having said that, I’m sure there are major gaps in IQMS functionality for some clients, especially once you get outside of its target niche. But that’s the beauty of a niche strategy. IQMS doesn’t have to be all things to all customers. It only needs to be all things (or most things) to a few customers…”

R&D Work Never Ends

IQMS’ management is aware of how much more capability the company needs to develop, and the idea is to particularly intensify research & development (R&D) these days. The intention is to further distance itself from (or leapfrog) competitors that seem more concerned with cost-cutting and survival tactics.

Accordingly, in mid-2008, IQMS delivered EnterpriseIQ version 7.4.1.20 with over 1,000 built-in reports and 400 enhancements to areas such as quality management, electronic data interchange (EDI), WMS, product lifecycle management (PLM), security, and forecasting. Earlier in 2008, IQMS announced its enhanced support for the process manufacturing industry with the release of the Master Batch manufacturing capability. Master Batch is aimed at companies such as compounding or formula-based manufacturers that are focused on heavy mixing and blending operations, and require the ability to handle multiple operations in a single routing.

To best support process manufacturing needs, ERP systems should give manufacturers the flexibility to enter process bills of material (BOMs) based on formulas where the components either total 100 percent or they can be added based on volume or weight quantities. Comprehensive BOM/formula functionality also has to provide co-product/by-product capability, flexible packaging alternatives, flexible batch sizes, yield/scrap calculation, grading and re-classification of products, alternative and substitute formulas (and routings), “what if” costing scenarios, and more.

On the other hand, the most recently released Assembly Manufacturing type is designed especially for manufacturers seeking consistent quality and greater traceability within assembly processes via enhanced tracking of complex routing structures. Potential benefits of this assembly structure include the ability to identify product availability and costs at each stage of production as well as the option to choose between either dispatch lists or finite scheduling.

Some companies might also benefit from the detailed lot traceability, operator certifications and training, and tool tracking functionalities. The Assembly functionality is IQMS’ response to an ongoing trend toward imposing more requirements for machine shops, metal fabricators, and process-related operations, especially in the medical device field, which has strict traceability concerns and constraints.

Offering an Entry-level Product

To attract the lower-end of the market, in 2007 IQMS delivered the EnterpriseIQ LE (Limited Edition) version to provide a lower-cost entry-point ERP solution. The product is packaged to meet the needs of single-site manufacturers and smaller supply chain environments (in terms of lower EDI volumes).

IQMS achieved the lower price benefit by packaging just the functionality most often used by manufacturers with single-plant operations. EnterpriseIQ LE version gives small manufacturers the same set of core ERP capabilities found in the full version.

Functionality such as manufacturing and inventory management, quality control, sales and distribution, and financial and accounting management are all included in a single database and at an affordable price. Certain features that are customarily used to support larger operations are not included, such as those used for multi-plant operations.

By choosing EnterpriseIQ LE, customers who operate only one plant and currently have no ERP system in place should gain an initial modular, single-source ERP solution that can be tailored to fit their business needs and designed to scale up with optional modules that work seamlessly within the core system. IQMS is also offering a migration path with this LE version for companies that might eventually grow into multiple locations.

The final part of this blog series will analyze IQMS’ recent involvement in the user experience (UX) design. The vendor joins the fray of many peer ERP vendors that have been working on injecting a breath of a fresh air into their offerings. By putting the full power of commonly used applications on one intuitive and personalized screen, these vendors hope to speed users’ productivity and drive leaner results.