Tag Archives: choosing an erp solution

ERP Implementations For Australian Subsidiaries Of Multi-National Companies

We often have requests from multi-national companies inbound into Australia that want to implement an Enterprise Resource Planning (ERP) solution as part of a global rollout.

The common challenge is that Australian subsidiaries often find themselves caught between two worlds:

a corporate head office that wants to roll out the corporate standard ERP solution and;
the requirement for local support, training and configuration of the ERP solution.

Does this sound familiar?

In this post, we are going to address some of the key challenges that Australian subsidiaries of multi-national companies face when implementing ERP software.

ERP options available for subsidiaries of inbound multi-national companies

Let’s provide background information and then look at the options available for multi-nationals.

First of all, being a multi-national does not necessarily mean that the local, Australian office is a substantial organization. Sometimes the local, Australian office, is in start-up mode or is a relatively small subsidiary of a global company.

Either way, the global head office will usually want to standardize on IT systems, including ERP.

The challenge is that the two organizations can have very different requirements.

For example, the global head office might be interested in:

standardising the array of IT Solutions used in the group;
achieving economies of scale;
centralising the support;
facilitating the global rollout through a standardized template solution;
minimising ERP implementation and support risk;
consolidating reporting;
consolidating skill sets;
building internal competencies;
reducing the cost of ownership;
getting better visibility and over-site of subsidiary offices.

Meanwhile, the local (Australian) subsidiary might benefit from:

local support;
local legal and fiscal compliance – GST / BAS etc;
local training;
the ability to influence certain elements of the local implementation;
reporting that is customized or at least configured for local requirements;

The question is – how to ensure that all parties get what they want?

Enterprise Resource Planning rollout for multi-nationals: What’s The Best Strategy?

ERP solutions differ with regards to the multi-national rollout strategy.

Some solution providers have a “multi-tier” offering – a mid-market or enterprise solution at the head office and an SME solution for smaller subsidiaries.

Examples of this include SAP. SAP S4 HANA might be used at head office as an enterprise solution, but smaller local subsidiaries might use SAP Business One.

Other ERP providers might only provide a single solution strategy – the same ERP solution at head office and subsidiary.

The choice of localized solution for your subsidiary offices will depend on the size of your subsidiary offices, the complexity of requirements and global rollout strategy.

Assuming the ERP product selection part of the equation has been answered by head office – let’s focus our attention on the methodology and structure for the local Australian subsidiary.

Winning methodologies for implementing an ERP software solution for a local subsidiary of a multi-national company

There are different methodologies for implementing Enterprise Resource Planning Software for subsidiary offices of multi-national companies:

Local office runs the entire ERP implementation

Using this ERP methodology, the local subsidiary runs the entire process with little input from the head office.

Head office might provide basic input and learnings from other global implementations but the local office sources a local implementation partner and gets the job done locally.

Advantages

Local support and local resources for the ERP implementation process;
A “fits like a glove” solution, implemented correctly;
A very happy local subsidiary.

Disadvantages

The ERP implementation will cost more as there are no or limited economies of scale;
Limited learnings from previous ERP implementations can be leveraged for better results;
The corporate structure is not followed. This makes global support and resource swapping more difficult;
Riskier implementation as the local, small office is trying to implement an ERP solution without the support and structure of the head office.

Head office runs the entire ERP implementation

In this scenario, a global partner or an internal competency centre runs the entire implementation. There is little or no involvement from local vendors or implementation partners.

Advantages

Low cost to implement;
A standardised ERP solution is rolled out;
Low risk and reduced timeline to implement the ERP software;
Corporate standards are adhered to.

Disadvantages

Local ERP support is not available;
No technical support at Australian local time for the subsidiary;
No local ERP provider to look after the Australian localization of the ERP software (GST / BAS etc.);

The local team of the subsidiary may feel as though they have not been involved in the implementation process – this can lead to a lack of buy-in for the rollout of the new system.

Hybrid ERP implementation model

This implementation methodology uses elements from both implementation structures referred to above.

What we want to achieve is a mixed model implementation where we consider the advantages and disadvantages referred to above and we look to utilize the corporate structures and experience whilst providing a level of autonomy and “localization” for the Australian subsidiary.

Using this implementation model the corporate head office looks after the core elements of system design, broad system scope, reporting, data conversion templates and core elements of system configuration.

The local, subsidiary works with a local partner to work through their specific requirements. Examples of local requirements include user support and training, legal and fiscal requirements, specific local reporting requirements and any configurations required for the subsidiary office.

Using this hybrid model, communication between the local implementation partner and the overseas head office is important as the two organizations will take a collective responsibility for the successful delivery of the ERP system.

Conclusion

Rolling out an ERP software solution can create efficiency gains and opportunities for further growth. However, when it comes to choosing and implementing the system, finding common ground between head office and local subsidiaries can seem challenging.

In summary, there are no right or wrong answers to the question of Enterprise Resource Planning implementations for small to medium sized subsidiary offices as there are different solutions and methodologies to choose from.

Choose the model that best fits your organization’s requirements, structure and culture to guarantee success.

Are you a multi-national or local Australian subsidiary looking to implement a new ERP system? Let us know your questions, challenges and goals by leaving a comment below!

The Secret Cost of Not Implementing an ERP System Revealed

Why the cost of not implementing an ERP solution should be part of your ERP ROI equation

Companies often ask, “what will my Return on Investment be when implementing an ERP solution?”

There are multiple different methods for calculating ROI including:

Increased cash flow
Staff retention
Better customer satisfaction

An often overlooked calculation and discussion is ‘what is the cost of doing nothing?’ When companies go to the market to find and implement a new ERP solution they do so for a number of reasons:

Islands of information – multiple solutions that are not integrated. This creates risk associated with separate silos of data and information. It becomes difficult to get a consolidated view of operations.
Reporting – manual or limited reporting options in legacy systems is often cited as a reason for considering a new ERP solution
Support – companies using an older ERP application have concerns associated with business continuity and support
Company growth – high growth companies outgrow their existing ERP solutions and go to the market to implement an ERP solution to cater for and assist with rapid growth.
New technology – wanting to make the most of technological advancements (mobility, cloud and big data analytics are a few examples).

Other key reasons for implementing an ERP system include things like functionality requirements, legacy systems and more.

From our experience in assisting Australian organisations chose and implement ERP solutions, we found out that:

When first entering the market for an ERP solution companies underestimate the budgetary requirements and the work required to implement ERP. This leads to organisations deciding to “do nothing”.
When companies make no decision (do nothing), they regret the decision and re-enter the market for ERP soon after making an initial decision to do nothing.

The question to be answered is “when it comes to ERP – what is the cost of doing nothing?”

The answer to this question will depend on your company’s current systems, growth patterns, geographies and plans. Consider the following scenarios:

1 – Considering ERP because of high growth and the fact that your business has outgrown your current solutions

Companies in this scenario often delay implementing an ERP solution because they are so busy growing their business that they can’t take the time to implement a new solution. This is a false economy.

As your business continues to grow your requirements for better reporting, faster decision making and a more holistic view of operations will increase exponentially. The longer you leave it, the worse the situation will become. The best-run organisations I have seen implement ERP ahead of the curve – before the business grows to a point where the business is desperate and crying out for better systems.

2 – Wanting better support for your ERP solution

Poor or limited options for your ERP support will put your business at risk. There are two elements to this – day-to-day business continuity and missing out on the advantages of a well-supported, modern solution. Business continuity is easy to quantify – not having a good support process and structure in place is like not having an insurance policy for your business.

You might not need the ERP support for many months or even years but, when something goes wrong you could put your entire business at risk. Remember that your ERP solution controls your debtors, customer relationships, suppliers, staff and more – ERP runs your entire business. Even if you do not have a major system failure that requires urgent support think of the day-to-day costs to your business of not having an ERP partner that you can trust to help streamline your operations. A good ERP support partner will be able to offer new technology enhancements, streamlining operations and financials and helping save time and money through the use of technology.

3 – Moving away from islands of information

As businesses grow so to do the number of systems that they use internally. Think of the core accounting system and multiple third-party solutions for CRM, manufacturing, estimating, reporting and more. As your business grows so to do the requirements for information to make faster, better decisions. Growing product ranges, new geographies and additional staff add to these complexities. The more your business grows the more you will want a single source of truth – one single ERP solution that consolidates information across all business units.

4 – You require better reporting for decision making

Modern ERP solutions offer integrated reporting platforms. Integrated KPI, dashboard and analytics to analyse large data volumes is only part of the picture. Modern reporting and analytics including in-memory technology allows two very important advantages –

Sorting through large data volumes to deliver instant reporting
Automated reporting – pre-written data analytics to allow users to write their own reports without the need for advanced technical knowledge or experience.

Delay implementing a modern ERP solution and you will almost certainly not have access to modern reporting platforms for instant decision making.

5 – Technology changes – take advantage of IT

Technology is advancing at a rapid pace – faster than ever before. Modern ERP solutions take advantage of these advances. Think of recent ERP developments including:

Cloud
Big data analytics
Mobility
In-memory technology

If you want to take advantage of these and other developments in technology you will need to act and implement a modern ERP solution.

6 – Missed opportunities

Modern businesses are changing the way they do business – at an ever-increasing rate of change. Marketing, sales, reporting, logistics and manufacturing are all evolving as technology advances. If you don’t implement modern platforms for the change you risk missing out on new opportunities. After all, you don’t implement an ERP solution purely for the new technology. You implement new systems for the advantages that the solution can deliver. Once again, think about:

Improved cash flow
Better customer service
Staff retention

Conclusion

While the cost of implementing an ERP solution can be scoped out, it’s the cost of NOT implementing an ERP that you should be worrying about. The reason is simple.

For growing businesses, using basic management technology may result in performance issues with clear repercussions on operations and cash flow. in addition, poor or limited support options for your outdated technology can really put your business at risk.

Consolidating your dispersed technology systems into one ERP platform can also help your business overcome information asymmetry and reporting/forecasting challenges, giving you the tools you need to gain a 360-degree view of your operations.

To find out more about how we can help your organisation leverage Enterprise Resource Planning call 1300 045 046 or email [email protected].

ERP Software Implementations – making the implementation plan work from start to finish

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When implementing ERP software we all know the importance of the ERP project plan – let’s take a more detailed look at what should be included in your ERP software project plan.

This article has been specifically written for small to medium-sized businesses looking to implement ERP software.

Template ERP Software Implementation Plan

It pays to have an individual serving as the internal / company Project Manager for the ERP software implementation.

Project managers have many responsibilities during an ERP Software implementation and one of the most important is the design and updating of the ERP project plan. The most commonly used tools for ERP project planning (for small to medium-sized companies) is MS Project or MS Excel.

An ERP Software project plan: (Click to enlarge sample)

This ERP Software implementation plan might serve as the basic guide for the project managers, ERP implementation consultants and you – the customer. Note the elements of the project plan –

– Planned start date of activity,

– A description of each activity,

– The hours allocated to each activity,

– The status (started, in progress etc.),

– The customer time allocated to each activity,

– The role of the customer in each activity,

– Who has responsibility for each activity and a general comments section.

It is important that the project plan is updated on a regular basis and those roles and responsibilities are clearly defined. It is important that completed tasks are tested and verified. It is no use ticking an item off the project plan as completed to find out later during the project that the item has not been completed to specification or to the desired outcome. This is one of the major tasks of a project manager – verify that the items marked as completed are actually ready for go live.

Conclusion

There are a number of different roles and responsibilities during an ERP Software implementation. The ERP Software implementation plan should highlight these responsibilities and “required by dates”. Let’s not forget that as the customer you have a number of key responsibilities during implementation.

Make use of a good, updated project plan to manage your ERP implementation and to ensure that all parties are aware of their roles and responsibilities.

Need help planning and implementing your ERP? Call 1300 045 046 or email [email protected] to speak to one of our consultants in Sydney, Melbourne or Brisbane.

Cloud ERP vs On-premise ERP: Solving The Great Business Debate

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Cloud ERP vs On-Premise ERP, which is the better option for my business?

As we have learned from many years of implementing such solutions, there is no single right or wrong answer to the Cloud vs On-Premise debate for Enterprise Resource Planning systems.

We have implemented Cloud, Hosted, Private Cloud and On-Premise solutions since 2005 and we want to help organisations better understand the pros and cons of each solution. Much has been written about the benefits of Cloud vs On-Premise and we want to give our own view with particular focus on ERP systems.

This blog has been written to help educate organisations on some of the questions to ask that might help you with your Cloud ERP vs On-Premise ERP dilemma.

Why Cloud is becoming the new normal

There has been very strong acceptance of Cloud-based solutions for CRM (Customer Relationship Management), Office automation (Microsoft Office 365) and mobility tools.

The acceptance of ERP solutions in the cloud has been a little slower. Why?

Because potential cloud based Enterprise Resource Planning adopters have been concerned about data, privacy and security.

There was a mindset that said “I don’t want my debtors book exposed to the internet / cloud”. Most of that anxiety has gone away over the past few years as the uptake of cloud based ERP solutions by businesses has increased.

Companies have realised that their cloud deployment is no more or less exposed to the outside world than an on premise solution (with remote connectivity).

As a result of these changes most companies evaluating ERP solutions will be considering cloud and on-premise as a deployment option.

The question that we are often asked is “which is the best option for my business? Cloud ERP or on-premise ERP?”.

The Cloud ERP vs On-Premise ERP decision comes down to this

Before deciding which is the correct option for your business ask yourself these questions:

Cash flow – Am I more comfortable with an upfront investment or monthly payments. Not having to outlay large sums of money upfront for software, hardware and infrastructure helps ease some cash flow pains. One cautionary note – paying for cloud software and services is an on-going commitment – monthly or annually for the lifetime of the software. This is an important aspect to consider when evaluating the target ERP Return on investment for your business.

Internet – Like it or not any Cloud based solution that you use will require fast, reliable internet. If you can’t get a fast, reliable internet connection then an On-premise solution is for you.

Geography – Remote offices can sometimes struggle for a decent internet connection. Multiple geographies and different office locations does however lend itself to a cloud deployment. One of the major advantages of Cloud ERP is that you can add new users, offices and sites with ease. Tell your Cloud provider you need additional users and you are immediately up and running – no server, infrastructure or hardware configuration required.

Infrastructure – An On-Premise solution requires hardware, routers, back-up solutions and infrastructure. With a Cloud based ERP solution that infrastructure is taken care of and is constantly updated.

Tax – The treatment for tax purposes of an upfront software purchase (asset) is usually quite different to the tax treatment of monthly “operating cost” invoices for Cloud. Consult your external accountants or tax advisors for more information in this regard.

Capex vs Opex – As detailed in the tax section above. As a business you will need to decide whether the Capex (asset purchase model) or the Opex (monthly pay as you go) is better suited to your business. Factors like cash flow, depreciation deductions, balance sheet review, investor perception should all be considered.

Functional requirements – Yes, even your functional requirements should be part of the Cloud ERP vs On-Premise ERP debate. Cloud lends itself to faster, easier deployment of ERP solutions. If you have extensive integration and development requirements your business might be better suited to an On-Premise ERP deployment. At the very least, if you have complex functional requirements and you are planning a true Cloud deployment of ERP, ask your ERP vendor or reseller how upgrades will work to ensure continuity of service during a generic Cloud upgrade across a highly customized solution. I am not suggesting that Cloud based ERP solutions can’t be customized – quite the opposite. True Cloud solutions tend to use the latest technology across operating system, database and mobility. As a result Cloud based ERP solutions tend to be easily customizable. The challenge is when you have extensive development and integration (see note below).

Development and integration – The nature and scope of your development and integration work should be considered. A true Cloud solution lends itself to a standard ERP implementation (the less development and integration required the better). Standardisation and repeatability are key for a true Cloud solution. The more standard the solution, the easier the role out and the less disruptive the standard solution updates and upgrades.

Users – The number of users and the pace at which you add (or deduct) users should be considered. Cloud solutions lend themselves to the ability to easily and quickly add or deduct users from the solution – the true “pay as you go” model.

3rd party solutions – If you want to add 3^rd party solutions to your Cloud deployment of ERP solutions you will need to ensure that these 3^rd party solutions are available in the Cloud and are compatible with your Cloud deployment of your chosen ERP solution.

ERP Upgrades – In a true Cloud environment the ERP Cloud provider takes care of all upgrades. The Cloud provider does a staged or full upgrade to all systems at a certain time.

Conclusion

After having implemented ERP solutions for many years we have learned that the Cloud ERP vs On-Premise ERP decision comes down to a understanding your specific business requirements and propensity to adopt two distinct technology adoption models.

On one side you have your monthly ongoing “pay as you go” model, the Cloud ERP option. Here, the reduced upfront cost and included ERP maintenance are the main advantages.

On the opposite side you have your On-Premise ERP deployment. In this instance the ERP software and infrastructure resides at your office location and you own all the related setup and ongoing maintenance tasks.

In conclusion, our key advise for choosing between Cloud ERP vs On-Premise ERP is to ask lots of questions, get the right answers and then decide which options are best for your business.

Have we missed anything? Let us know in the comments below!

The Secrets of Successful ERP Software / Business Accounting Software Selection – Part 1 of 3