LGW

LGW

LGW Limited is an ISO 9001:2008, 14001:2004 & OHSAS 18001:2007 certified company. During the last three financial years the company achieved an aggregate sale of 100 million US dollars. This directly contributed towards the company being accredited with ‘Star Trading House’ which meant that as per EXIM policy they had an average FOB value during the preceding three licensing years, amounting to over 375 crore and a FOB value amounting to more than 560 crore during the preceding licensing year.

In the yarn industry raw material costs can account for 70% of the total costs. Therefore the purchase and procurement of cotton is one of the most important decisions a cotton manufacturer has to take. A substantial increase in demand for raw cotton from countries like Bangladesh enabled a raw cotton exporter like LGW to capitalize on the opportunities and achieve significant turnovers. This also meant that the volume of LGW’s business increased very swiftly over the course of just 10-15 years.

The growth and development which LGW had achieved during the past few years made the company come face to face with fresh challenges. No longer could they depend upon a simple accounting and reporting system to fulfill all their needs. They needed much more of a holistic approach towards finding a solution which would integrate each and every aspect of Export into a system which would simultaneously be user-friendly and also efficient.

CHALLENGE

Challenges with respect to Multiple Currencies and Exchange Fluctuations

 Export is ‘the’ most important business process having a direct relationship with LGW’s growth and development. With an increased volume of export sales there is significant increase in the number of financial transactions that the company has to deal with. Now most of these financial transactions related to export are in foreign currencies and these transactions had to be handled accurately and also with due respect to trading timelines. Imagine making an error in a transaction involving thousands of US Dollars which would hurt even more when converted to domestic currencies. It could result in a catastrophic financial disaster.

The particular scenario which stood out to be a primary area of concern, with respect to dealing with foreign currencies is when Export Invoices are negotiated. Let us consider an example of LGW exporting raw cotton to Bangladesh. They receive an order of 3000 kgs of raw cotton amounting to USD 9000. After the general procedure of Export documentation like receiving a copy of the Letter of Credit and preparing the Proforma Invoice, the final Export Invoice needs to be prepared. During the preparation of this Export Invoice, the exchange rate between US dollars and Indian rupees has to be duly noted. The reason being that the Export Invoices are negotiated with banks in exchange for funds to ensure continuity in the business process. This negotiation of the Export Bill results in the existence of an Export Bill Discounting account.

Now as and when the customer transfers funds to the bank the Export Bill Discounting has to be set off. When the customer transfers the funds to the exporter’s bank it is most definitely at a date much later to than that of the Invoice date. Hence usually a gap exists between the exchange rate on the invoice date and the exchange rate on the date the money is received. This gap is called the Exchange Fluctuation and it results to a foreign exchange gain or loss on export bill discounting. The gain or loss has to be taken into account so that Financial Statements such as the Profit and Loss and Balance Sheet remain accurate.

Passing separate journal entries to account for the foreign exchange gain or loss was slowly becoming impractical and painful with the significant increase in the volume of export sales. LGW look towards finding a solution which would make the procedure less stressful for the user and at the same time account for every aspect of the mentioned scenario.

SOLUTION

The availability of several scenario specific features in EXPAND helped LGW find answers to most of their questions with respect to handling of foreign currencies and dealing with foreign exchange fluctuation.

Firstly, since LGW carried out trade with multiple International customers, they had to deal with individual currency preferences. EXPAND offers a feature whereby the preferable currency of a particular customer could be defined in the Customer master itself. Therefore any documents prepared linking that customer would automatically be in the currency which was defined from the master.

Secondly, entering the financials related to the negotiation of an Export Bill can be carried out in EXPAND through a single section. This helped in giving an organized structure to the Export Bill Discounting procedure. Under this section the user is just required to link the Export Invoice and tag the bank account as and when funds are transferred from the customer. The accounting entries related to foreign exchange gain or loss is passed automatically the moment the details of the transfer of funds are entered and saved.

Thirdly, along with the provision to enter the details of funds transfer this section also hosts a number of other fields such as the provision to enter Trade Acceptance Date, Interests and Handling Charges. The section even has the option to adjust any PCFC adjustments where user generated PCFC vouchers can be adjusted against the receipt of any fund.

Therefore LGW was able to achieve a sense of organization that they were looking for by finding solution through a unified integration of the Export negotiation procedures provided by EXPAND. Also since there was internal linkage between all the aspects, reports with respect to Negotiation pending and Swift Pending were easily customized.

Challenges with respect to Units of Measurement used in the Cotton Industry:

One of the very first areas of concern for LGW Limited was the implementation of the various units of measurement used in a cotton industry and also integrating them into an accurate inventory management system. After studying and analyzing the various scenarios presented to us by LGW, we could draw a clear picture of the problem at hand.

LGW maintained their inventory in Kilograms (kgs), which is a standard unit of measurement. However during the purchase process of raw cotton a couple of other units of measurement had to be taken into account. Firstly during the verbal negotiation phase, the rate at which the purchase price is fixed usually in units of ‘Candy’ and ‘Maund’. These are the different types of units of measurement which are local to the cotton manufacturer from whom the cotton is bought. The implication of these units of measurement is subjected only to the purchase process and did not play any role in either sales or export.

Secondly, another unit of measurement called ‘Bales’ is used primarily for the purpose of packaging both in the purchase and sales. Now weight of each ‘Bale’ is not fixed and this presented with additional hurdles establishing relationship with ‘kg’ which is used for inventory management.  For example, sometimes a single ‘Bale’ could weigh 90kgs while at other times a ‘Bale’ could weigh 170kgs.

LGW followed an ‘item Specific’ approach to inventory management. This meant that a certain number of ‘Bales’ (usually 100) is given a specific batch number and is put together as a ‘LOT’. At any given point of time a ‘LOT’ portrayed three major characteristics – the unique lot/batch number, quantity of bales present in the ‘LOT’ and the weight of the particular ‘LOT’ measured in terms of Kgs. Again, during export LGW usually sells raw cotton in Pounds (lbs). In other words, the unit of measurement which is used in all the export documents is in terms of lbs. However stock from inventory is reduced in terms of Kg. Keeping track of the individual ‘LOT’ numbers manually in terms of Bales and kgs was proving to be a painstaking process, ignoring the fact that no check existed in the consumption of quantities in terms of ‘Bales’.

SOLUTION

After a thorough analysis it was identified that ‘Bales’ was as important of a unit of measurement as kgs. Therefore through Expand, LGW started to maintain their inventory in two units of measurement. The primary unit of measurement being ‘Bales’ while the secondary unit of measurement being kgs. This was possible due to the fact that Expand has the provision of having multiple units of measurements.  While defining the product master for raw cotton two relationships between units of measurements were established, one between ‘Bales’ and kgs to facilitate the purchase process and another between ‘Bales’ and lbs to be used in the export process. Since the exact weight of 1 Bale is indefinite, a tolerance percentage was used along with an approximate conversion of one bale to both kgs and pound.

For example in the product master it was specified that 1 Bale of raw cotton = 150kgs with a tolerance of 20%. It meant that the user was given a relaxation of 30kgs per bale while preparing a document. Therefore while preparing a Purchase Order a user was required to specify the LOT number, the number of bales say for example 100 and its weight which could be anywhere between 12000kgs – 18000kgs according to the tolerance specified in the product master.

Similarly a relationship between ‘Bales’ and lbs was established using the tolerance percentage which facilitated the export process.

Since inventory was maintained in two different units of measurements, a check always remained on the stock consumption both in terms of kgs and ‘Bales’. The availability of a user configurable standard conversion from ‘Kg’ to ‘lbs’ meant that although stock was reduced from the inventory in Kgs and Bales yet it could be easily reflected in terms of lbs in the export documents.

All the reports including reports on stock listing, stock movement and stock valuation was available in both Kgs and Bales.

5 Steps to Automate Your Business Workflow

5 Steps to Automate Your Business Workflow

Every businessperson hopes to automate a business that is profitable and scalable. However, instead of focusing on creating a robust business model with long-term sustainability, most end up working in the business with a gung-ho, hands-on attitude. And scalability doesn’t happen with that approach. What entrepreneurs fundamentally require is an opportunity to leverage and a prospect to scale-up.

But it’s not just entrepreneurs but project managers and other professionals, who require a sustainable way to get smart, thereby manage the workload more effectively without losing on any time, money or energy. Automated business process management, is, undoubtedly the most efficient way to acquire consistent and accurate results, streamline tasks, boost operational effectiveness and ensure a smooth workflow. In short, business process automation is a sure way to eliminate all those unnecessary human interventions which could be erroneous, costly and time consuming. Moreover, the automation process can be implemented in any business across any industry.

Any business, no matter how big or small, should consider automation if it intends to stay and competitive, enhance operational speed, reduce errors, increase productivity, eliminate irrelevant steps, build volume, reduce waste, expand capabilities and reduce cost.

Although automated business process management could be a chance to revolutionize the way how any business works, businesses should understand the thoroughness of mapping out the project. And before implementing this process the management should perform a self evaluation in relation to business process management. Thus a business person or a project manager should first figure out the answers to critical questions, such as, ‘Is the organization ready to work smarter?’ or ‘Are the employees ready to move from the traditional working methodology of spreadsheets and files to a new system as a team?’, ‘Once automated, can the organization work with lesser manpower and still deliver products or services with same or better quality?’, etc.

After the purchase of a workflow software for the automation of complex processes across business departments, it is also critical ensure that the software is perfect for the business and not just some means to merely provide the flaws in the existing system. To help with the preparation here are 5 steps to automate any business workflow:

Ascertain the repetitive tasks:

The first step towards automating a business workflow is to ascertain all repetitive tasks. Flow charts of existing processes coupled with an excellent understanding of the workflow would be the right way to go about it.

Define business goals:

Any business can be rendered unsuccessful without SMART goals and objectives. SMART goals encompass ‘specific, measurable, attainable, relevant and timely’ objectives that could optimize resources for productive tasks, reduce cycle time, improve throughput and should definitely be aligned to the existing workflow benchmarks.

Choose the right workflow automation solution:

The third step in the automation process would be to choose the correct workflow automation solution. While there are a plethora of automation software available in the market, it is crucial to choose the ideal fit.

Ensure skill enhancement for the users:

Updating the skills of the users would be the next most significant thing in the automation processes. Neglecting it by resisting the development of the users can prove detrimental for the business.

Measure key performance indicators:

The fourth step in this process is to measure the performance of the automation. While putting the system on live, perhaps a test run would be sufficient for the users to smoothen out any kinks in the armour.

There are a number of steps that may be adopted for the successful implementation of the workflow. However, there are a few do’s and don’ts that should be kept in the mind. Instead of choosing mission critical projects that are heavily integrated with other software, managers should begin with divisions that involve lesser stakes. Thus it would be suffice to say that the automation of business processes will not only anticipate the needs of the existing workflow but also use the same to increase efficiency, provide visibility into business processes and reduces costs substantially.

How to Improve Productivity in Manufacturing Industry

How to Improve Productivity in Manufacturing Industry

As the old adage goes, time is money. The more production you can squeeze out in a period of time, the more money you make, right? As per the old saying, ‘time is money’; however, with improve productivity in manufacturing industry, it is inversely proportional to one another. The higher the production in a stipulated frame of time, the more one gets to make it and manufacturers, across the world are in a continuous process to pursue efficiency in production through consistent increase in machine output, thereby meeting newer profitability heights and maintaining competitiveness.

And productivity in manufacturing is dependent on a number of factors – it is a combination of skilled employees, competent equipment and resourceful processes. To increase throughput without the need for sacrificing quality involves a detailed scrutiny of the existing practices, making adjustments, however minor, to systems, constant skill upgradation for employees and enhancing the efficiency of equipment that are used for the generation of parts and components.

The fundamental nature of enhancing manufacturing productivity can be engaged through:

Information: the accurate capture of information through the identification of losses
Focus: the identification of priorities through the use of that information
Action: ensuring action that is deliberate, methodical and sustainable for the long-term

Blurb starts

The total productive maintenance is the most crucial element for lean manufacturing, and includes an useful efficiency metric – the overall equipment effectiveness, thereby measuring the percentage of planned production time to indicate the ratio of quality throughput, as quickly as possible, without any down-time.

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There are a number of alternatives today that could help to reorganize the way you work by reducing the struggle of improving productivity, increase incentives that could drive up numbers. These have been variously explained, below:

• Examine the existing workflow
• Update business processes
• Invest continuously into the skill upgradation of employee skills
• Establish realistic expectations
• Procure smarter equipment tools
• Ensure an organized process
• Encourage team work

A significant initiative that could ensure effective business management at the manufacturing level is the effective implementation of a robust Enterprise Resource Planning (ERP) system. Some of its operative areas include: sales, finance, e-commerce, warehouse management, purchase, HRMS, CRM and inventory management.

The implementation of ERP with the objective of improving manufacturing productivity is a vital requirement in the industry, today. To ensure the enhancement and seamless business management through advanced ERP systems are sure to provide invaluable benefits to manufacturers who seek cost reductions, growth management, enhanced efficiency and robust process that are streamlined with the objective to gain a competitive business advantage. Some of the benefits of implementing an effective ERP system that are aligned to the business goals are as follows:

• Stay ahead of competition
• Save money
• Enhance productivity
• Increase growth
• Improve people skills
• Ensure mobility
• Augment business intelligence

Despite the benefits of implementing robust ERP tools for the effective business management, the simple deployment of ay software won’t lead to the achievements of organizational goals. There are a lot of research and dedication that needs to go into ensuring right software for the business. And once the right ERP tool is integrated, the results are sure to follow.

5 reasons to implement cloud for inventory management

5 Reasons to Implement Cloud for Inventory Management

In this dynamic and mobility-adept digital environment, if the words ‘automated inventory management’ seems unfamiliar to your ears, then the future of your business maybe in jeopardy. And surprisingly you are not alone. 43% of businesses either don’t track their inventory at all or use manual processes to do so. And to avoid the hassles of over-complicated, needlessly labor intensive and unreasonable outdated spreadsheets, it’s time that you considered integrating cloud for inventory management operations.

However, if you are worried about cost implications, you shouldn’t worry at all. Cloud-base inventory management system is actually more affordable than most old-school methods. Also, the benefits far outweigh any other concerns that you may have – especially those regarding convenience, security, flexibility, among others.

Here’s a list of top 5 reasons for you to switch to a cloud-based inventory management system for your business.

Data recovery:

Imagine the nightmare if you were to lose your sales and transactions reports, customer-centric data, order statuses, or simply your inventory list, just because you risked putting everything in an excel spreadsheet that was conveniently saved on your computer’s desktop. Even if you are using software that saves your data locally, without any guarantee of a cloud back-up, you still face the threat of losing your data. And this predicament can be easily avoided with a cloud-based solution, wherein you assign your service provider with the responsibility of storing and securing your data.

Cost effective:

Cloud-based inventory management system is a cost effective solution and is definitely more advantageous over other local based systems, without the involvement of any upfront cost such as hardware. In addition, online inventory management systems have its own IT team, which typically means shorter implementation time, less money and fewer headaches.

Flexibility of access:

When professional responsibilities are required to be fulfilled while on the go, most business owners find it difficult to handle a singular, on-site inventory system with no online access. And this is why, a cloud-based inventory management system helps to take the shackles off that delimits the ease of doing business from anywhere around the world.

Another advantage of possessing access to warehouse inventory from the off-site is employee accountability. A warehouse, typically, falls prey to a myriad of employee theft scandals which could cause huge losses to any business. A cloud-based inventory management system helps to monitor transaction and quality control reports from anywhere on the planet. It is an asset, you should consider.

Automatic updation of software:

Manual software updation could lead to waste of time and money in the form of delayed sales and/or wasted payroll. All cloud-based software are integrated with the feature of automation, thereby automatically fixing bugs, updating systems with the latest features or patching any problem automatically.

Customization:

Cloud-based inventory management can be tailored as per your needs. Not only are your software updates automated, but a number of cloud-based warehouse management software could also consider your requests for features that are tailor-made for your business. And there are a myriad of options available in the market, today; some may also be willing to go the extra mile for ensuring a 100% efficiency of your warehouse management.

Whether you are a budding entrepreneur or a corporate honcho, chances are that you didn’t get here without embracing digitization. Why not choose the same for your warehouse management, as well? A cloud-based inventory management system is easy to implement, secure, scalable, and cost effective. It provides you with a hassle free process management; by freeing up your time provides you with better opportunities to shift your focus to areas which probably need more attention. Well, the era for using traditional options is over; if you want to operate hassle-free, it’s time to switch to a customized cloud-based inventory management system.

6 things you should know during ERP implementation

6 Reasons You Should Know During ERP Implementation

In today’s global mobility-adept marketplace, the integration of Enterprise Resource Planning (or ERP) with business operations is as critical as the central nervous system to a human body. And the benefits of an ERP implementation into your business processes are numerous – from accounting, compliance and human resources to reporting, supply chain, IT sales and customer management systems. In short, if executed right, ERP is the best investment for your company as it helps to better manage responses, through the coordination of the company’s resources for winning customers, fend off competitors, and moderate costs. That’s why it is wise, for an organization, to rely on its ERP systems, every day.

Here are the top 12 advantages of implementing a healthy and successful ERP system:

  • Sustains growth without incurring any additional workforce resources
  • Improves the availability of products
  • Ensures on-time delivery
  • Reduces expedited cargo expenditures
  • Curtails month-end close time
  • Augments inventory turns and diminishes variances
  • Decreases monthly shipping errors to zero
  • Restricts cost of maintenance via centrally-managed, single-point system
  • Reduces time for repair
  • Reinforces traceability for ISO compliance
  • Enhances accountability across all business levels
  • Strengthens internal, as well as, customer communications

 

However, an appalling dependency on technology without being fully aware of its repercussions and a complete lack of planning or technical know-how may lead to the complete failure of ERP implementation forcing you to deal with the expenditure, post-implementation. Also, transitioning to a new ERP system may become an expensive affair. What is supposed to be a cost-effective plan can quickly turn into a costly nightmare!

Most executives, during an ERP implementation, typically ignore crucial steps that involve assessment of risks, cash flows, benefit analysis, and performance goals. Instead, they choose to focus on decreasing implementation costs, hoping that the ERP system is a magical medium for transforming the efficiency and operations of the business. Eventually, when faced with unexpected set-backs, owing to unrealized benefits post-implementation, most corporate regret the decision of empowering the ERP system.

As the adage goes, “technology should be controlled by humans, and not the other way, around.” So before you decide to take the plunge, here are the top 6 reasons to understand why ERP implementation fails:

To blame, or not to blame? There is no greener grass on the other side; the sooner you realize the better it gets. Managements that wonder the requirement of an ERP implementation often ask the wrong questions. They are more worried about the costs, which eventually, impairs their ability to assess the risks and benefits involved. And that’s exactly why most ERP implementation projects crash, even before they set off. Rather than embarking on a large, risky, and expensive ERP planning, it is imperative to assess the current situation, consider the pain-points, and check the need for fine-tuning of the existing ERP system, thereby, addressing the problem at a fraction of the cost.

Comprehensive user-training. Or the lack of it? An ERP implementation isn’t a process that should be embarked upon in haste, especially when it is about in-depth training that provides access to a great understanding of the tools which offer a comprehensive automation of most departments. Devoting the right amount of time for collecting the proper knowledge of the process of ERP implementation ensures the optimal usage of the system.

Expenditure or an investment? The implementation of a solid ERP system is a long-term investment which if carried out correctly is sure to yield profits in the extended future. So, while choosing the right vendor, for the implementation process, instead of focusing on lower costs, try to assess their capability of delivering such a project.

Managing change: An ERP implementation process may fail if you are unprepared for the impending change, after the deployment of system. Make sure that you have a plan for helping your organization adapt to the changes that will only prove to be optimal in the end.

Absence of data accuracy: In order to maintain credibility of your ERP system with the end-users, ensure the accuracy of data transfer into the new ERP system. This will help to save on time and any cost implications, eventually, resulting from a failed ERP implementation.

Neglecting technical glitches: Another critical thing that could lead to the failure of ERP implementation are hardware snags, interfacing issues with the management process, or any other technical glitches. Make sure that your IT integration team is efficient for handling such situations.

There can be a number of reasons apart from those discussed here that could lead to the failure of an ERP implementation. And it is a long-term process: if dealt with incorrectly could end up with an undesired experience for you that may involve greater cost implications and severe technical difficulties. Entrusting an expert to drive the implementation process could help to deliver a relatively easier roadmap for success.

Integrating Big Data with ERP

Integrating Big Data with ERP: What the Future Has In Store for Us?

The other day I was following a discussion in a tech forum when I came across this question: what does Big Data have in store for ERP? Or how is Big Data good for ERP? Big Data, which is on everyone’s mind right now, has also seen acceptance by major players in the fray. SAP, for instance, has already started offering HANA to analyze live data to support businesses real-time. It processes transactions and analytics, simultaneously, on any data type. Oracle is also using StubHub (Customer and Partner Search tool) to handle Big Data.

ERP systems, a product of the last decade were devised to streamline business processes. Small and medium organizations benefitted largely from low-cost but effective ERP tools customized to their needs. Larger organizations, found a better way of automating business processes, with improved results and lower cost.

However, today ERP systems are finding it difficult to store the high volumes of data, coming from different sources and in varying forms. ERP systems are exposed to Big Data (big in volume, big in variety (structured; semi-structured; unstructured), and big in the speed of change) wherein the combined analysis of larger amounts of structured and unstructured data from disparate systems takes place in a short amount of time.

Today, the most consumers use mobiles and other gadgets to perform official and personal tasks. Data (which varies in form and source) is shared over emails, Social Media, and the internet of things. Quite often it has been observed that ERP systems are unable to assess online consumer behaviour or make out the difference between significant and insignificant information shared. Also, the large volume of data exchanged exceeds the storage of data in ERP systems and this, in turn, affects data processing capacity.

Now, the question is, how Big Data is helping ERP system for optimized business results?

According to a 2016 Information Week report, only 12% of collected data is analyzed by companies, missing out on major potential business insights in the data. Here, we discuss some of the benefits of integrating ERP platforms with Big Data:

Faster Information Exchange:

Big Data systems like Apache’s Hadoop are creating node-level operating transparencies that will allow enterprise managers to quickly leverage ERP Big Data capabilities, thereby enhancing information density and speeding up overall decision-making.

Better Scheduling

Big Data ensures that information is processed better and more readily available. Comprehensive ERP scheduling through Big Data allows you to get data from multiple mobile-enterprise field service units, remote manufacturing outlets, in parallel with the main plant, or even individual machine-station scheduling in accurate form and real-time.

More Precise Forecasting

ERP Big Data integrations offer a host of easily leveraged opportunities to resolve the need for ‘more data all the time,’ ultimately leading to overall forecast accuracy. You get a better predictive analysis on your sales figures before you can even lay your hands upon them.

Know your Customers Better

Big Data and ERP systems can be integrated to observe consumer behaviour in social sites, sensor networks, and mobility. It would also allow online retailers to understand customer preferences better, and alter their positioning strategies accordingly. The legacy systems are incapable of handling the huge amount of data exchanged in the social media platforms through chatbots or live messengers.

While most people are busy talking about using Big Data, as a product or tool, very few have recognized the need for integration.  Also, organizations need to focus on the predictive capabilities of ERP systems, to analyze current data and historical facts in order to identify potential risks and opportunities for any organization.

ERP systems should be integrated with Big Data for the technologically more advanced platform and better and wider in-scope best practices. The impact of integration on the organization will be profound as they will be able to have a faster and higher quality implementation.

5 Important Criteria for ERP Selection

5 Important Criteria for ERP Selection

Selecting the right ERP solution for your organization is a crucial task. It requires the right team with the right knowledge of your business requirements and enterprise value. Only then you will be able to select the right ERP vendor to provide you the right ERP solution to increase productivity, improve efficiency, and cut operational costs.Having strong knowledge about the business and its specific needs is an absolute necessity before shortlisting vendors or listing ERP application.

The market is flooded with solutions and almost all vendors are yelling for attention. It is difficult to make the right selection. Having a clearly defined selection criteria is the most important thing before ERP implementation.
Here, we discuss five most important selection criteria for ERP selection. 

1.  Assess Your Business Needs:

Make a precise assessment of the business needs of your organization before you opt for an ERP package. Sit with your technology and resource management teams to garner facts on the company’s growth goals, efficiency goals and speed-to-market goals. Growth goals may vary from company to company. While some companies may target at a quarterly growth of 40%, some others may aim at doubling their business returns by the next financial year. Certainly, the choice of ERP tool for improved business efficiency will also be different.

If you are planning to have a market-ready product by the end of next quarter, look for an ERP solution that will lend it the required competency advantage. You will need something that speeds up the processes and meets all business requirements, before your competitors grab the eye balls.

You also need to have a clear idea on what tools you need. List down all the areas that needs improvement and find out if you need reporting tools, tools for cost saving and control, and energy-efficient tools.

 
2.    Functional Software Requirements:

Assessing the functional requirements of your business is one of the most critical factors for ERP selection. To get a clear idea of the functional requirements, talk to all the stakeholders in the business. Have meetings or discussions, to understand their needs, ask for their opinion, do a survey, and come up with a business requirement plan. The plan needs to be reviewed by the core teams of the company and rectified, if required. 

If you are a first-time buyer of ERP solution, factors like ease of implementation, ease of use, legacy issues, and cost are some of the factors that will rock your boat. For an established business enterprise, growth potential, quality of documentation, support services offered by reseller, and customization are matters of concern.
 

3.    ERP Vendor Culture:

Make your entrepreneurial culture find the right cultural fit in the ERP vendor you opt for. If you are a small solicitor firm comprising of 12-14 company law advocates, go for an ERP vendor which understands your business needs and organizational culture. If are a large accounting firm with more than 5000 employees, opt for a vendor with a proven field record in customized ERP solutions for speeding up your business process, requiring minimal supervision and attention. Always remember that one-size-fits-all idea is unworkable, in most cases.

When choosing an ERP vendor, find out about the application areas they cover, subscriber base, implementation strategy, customer feedback, and support services. And if one vendor does not meet your business requirements, do not hesitate to go for another one. Never compromise on the choice of vendor. It may take a while to make the right selection, but the wait is worth it.

 

4.    Appoint a Selection Team:

Having a winning team means half the battle is won. Form a team composed of skilled resources that have a thorough understanding of the business process, end-to-end. Also involve tech savvy people and people from different organizational levels, (such as VPs, managers, and even office clerks), ask them to answer to one-on-one questionnaires and have group discussions. Only then you will get a holistic picture of your organizational needs as well as efficiency of your resource pool. To cut the long story short, now youcan assess your business abilities and, accordingly come up with a plan for improved business efficiency. Having a strong selection team for ERP implementation is beneficial both way: you get what you need (not paying extra bucks for the lure of unnecessary tools and processes) and you are able to add better business value to your product.

 

5.    Budget and Resource Constraints:

Last, but not least, expense of software implantation is one of the most important selection criteria for ERP selection. Take note of the ongoing costs as well as up front expenses, before making a choice. Make an accurate assessment of your business needs and calculate the expected ROI.

Select an ERP solution that is a fit for your business needs. Going for an expensive application package that offers lots of complex functions may be suitable for a business process with multi-tasking activities, not you. Buy an ERP solution that needs your very basic (and most important) business requirements and plan for customization later, as and when required.

After considering the above mentioned selection criteria for ERP selection, you will have clarity of what you want for business process improvement. Once you have made a resource planning, and with your vendor checklist ready, ERP implementation is nothing more than a cake walk.

Watch out this space for more updates on ERP implementation strategy.

 
 

Top 5 Tips for Implementing ERP in Startups

Top 5 Tips for Implementing ERP in Startups

A good number of startups are looking forward to ERP for the industry-ready tools and processes it promises. ERP deployment is also more cost effective for a newbie as it streamlines the business processes, making operation much simpler. Also, a startup, unlike an established company has lesser areas of implementation, which means almost zero expenses for legacy applications or change management. Your organization (which already brimming with potential) can take off in full force, powered by ERP.

However, ERP implementation requires forethought, research, and references. And when it comes to choosing ERP solutions for a startup organization, the challenges are manifold. One needs to know the common mistakes, challenges, and risks, related implementation.

Here, we discuss a few tips that would help startups in a smoother and faster ERP deployment, with minimal risks involved.

1. Well-defined Requirement Planning:

 

Requirement gathering is the first and foremost thing that you need to for effective ERP implementation. Arrange a meeting with all relevant stakeholders (including end users and IT staff) to analyze the organizational needs. Focus upon the specific business processes and system requirements, when garnering the requirements. Pay due importance to cost and maintenance, as well. It is also advisable to talk to references who have already implanted ERP, for better insight. Remember the requirements of a startup company are vastly different from a big shot. So, plan accordingly.

Once the requirement plan is ready, look for a vendor, who can provide you with standardized ERP applications, with tools and features. Make sure that you have clarity on the long-term benefits and 1. ROI, before you invest.

2. Getting a Fool-Proof Implementation Plan Ready:

One of the common mistakes of ERP implementation is incorrect approach to planning. Traditionally, most companies follow a waterfall model, which focus on the end result, forgetting the small developments happening on the way. While this may work at times in larger organizations where a huge amount of capital and resources are invested, small and medium enterprises run the risk of incurring a major setback. If you are a start-up owner then the agile model would be best for you. While preparing the implementation plan, you have the liberty of reviewing changes at regular intervals and modifying accordingly. Make use of the agile methodology in creating a flawless implementation plan that involves end-users at every step to determine the requirements, perform critical tests to find gaps in the plan and get them corrected, till fully implemented.

3. Understanding Change Management for Good:

When you are implementing ERP in your organization, pay due importance to effective change management. This is more important for a start-up because it prepares your employees for a change, and more importantly, streamlined process. This would also ensure higher productivity and business success. In short, it makes the organization more business ready. The business transformation through ERP needs to be communicated to the executives, managers and employees, at all levels, well in advance. Necessary planning, technological preparedness, organized training schedules need to be planned for seamless change management across people, process and technology, simultaneously.

4. Having a Well-Defined Maintenance Plan:

Most companies overlook maintenance plan and in the process they also forget about loopholes in the business process or outdated ERP applications. This, in turn affects employee productivity and lowers down business value for the organization, a strict no-no for any start up.

With a well-thought out maintenance strategy in place, your employees are aligned with the maintenance process and regular updates. While making maintenance plan, also make sure that your organization is well equipped for planned and unplanned system outages. Having a diligent maintenance plan enhances business value by ensuring that the ERP system (customized to your organization needs) with the latest applications running smoothly.

5. To be clear about Customization needs:

One of the primary requirements behind ERP implementation was the streamlining of business processes through standard applications that anybody can make use of, such as generating invoices, collecting business revenue, and procuring supplies. Most of these business processes are standardized, tested for efficiency, and professional. You may of course, go for turnkey solutions with customized features for your organization. But remember it is not just the initial cost of implementation that matters, customized solutions require long-term maintenance and regular upgrades. Nevertheless to say, it becomes a recurring expense for your organization. Being a startup, it is advisable that you stick to the more standardized ERP applications for business operations, for lesser cost and higher business efficiency. With more customer success, you can switch to customized applications. By then, your organizational needs will also be more refined, helping you decide better.

Migrating to ERP has become a sure shot success formula for most startups today, because of the cost-effective cloud-based tools it offers. They can also make their presence felt across multiple platforms, mobile, web or other hand-held smart devices. Organizations can start small and grow at their own pace, making use of benefits like easy connectivity, subscription-based payments, and remote resources.

Log on to Expand Erp for more insightful discussions on industry best practices in ERP implementation, success and disaster stories, artificial intelligence for ERP, and on getting higher business returns. Watch this space next week for more news.

Top 5 Challenges in ERP Implementation

Planning for an ERP implantation in near future? Worried about rising costs? Not sure about what is right for you? ERP implementation surely comes with a lot of challenges, even though its benefits are manifold. In the next few years, your business value will reach new heights and touch new shores of expansion, with successful ERP integration. With a prior knowledge of the challenges and bottlenecks, you may be better prepared. Here, we discuss some of the common challenges of ERP implementation.

Incorrect Requirement Analysis

ERP implementations in most cases fail because of incorrect requirement analysis. One needs to know the difference when an ERP application is integrated with an e-commerce site and a POS software. 

You need to know whether the ERP app needs to be integrated with CRM as well. However, in most companies requirement analysis is done by people with limited knowledge of ERP. Primary emphasis is laid upon the cost and faster execution. But unfortunately, the project fails in most cases as the requirement is not fully understood in the hurry of haggling about the payments. To have more clarity on ERP implementation, case to case differences, actual time and money to be invested, involve people with good knowledge on ERP.  They would advise you, guide you in better decision making, and thereby drive better results. Make sure the requirement analysis checklist is reviewed by a techie team, before signing on the dotted lines.

Lack of Proper Training

Following closely on the lines of the previous challenge discussed, lack of knowledge continues to rock the boat of ERP implementation. When your company is preparing for a major data transfer from the legacy system to a new ERP reality, it is necessary to have a basic understanding of the changes that are taking place, the new interface, and risks or losses involved in the process. You may arrange for a brief knowledge transfer session for all employees or anybody who would be part of the new system, before the actual change takes place. Not an elaborate training program followed by a test, but a simple 45-minute session by the knowledgeable resources, for all to attend. Training videos of the same may also be circulated.

Inefficient Project Management

Larry Ellison, the founder of Oracle Corporation once said that taking care of one’s customers is important, but taking care of one’s employees is more important. This implies that you should have the right resources in your team for customer success. You need to understand their worth and utilize their full knowledge and potential for an efficient project management. Trust them, mentor them, train them and let them come up with a killer project management plan that will not only ensure a successful ERP implementation but a better future for your business. Only with a meticulous project management, you can achieve that, no amount of cost-cutting or package deals help.

Customization

ERP is often misunderstood as a wholesale package solution for a company. But unfortunately, it is not. ERP applications are actually a framework with which a customized solution is built. This means, your requirements have to be defined well in advance and accordingly a customized ERP solution will be created. For that, you need to define the workflows and do a capability analysis, beforehand. You might have to make a few minor adjustments in the application solution to meet all your enterprise needs. These adjustments or modifications differ from suite to suite and might be required at the beginning or sometime in the middle of implementation. If you are prepared for a capacity planning, delays in implementation and time loss because of system outage may be kept at bay. 

Rising Operational Expenses

Overhead cost is one of the biggest challenges of ERP implementation. The initial cost of implementation is high, but the customization and maintenance costs are even higher. The more customization needs are, the higher are operation costs. Maintenance costs are of course, a necessary evil, which cannot be brushed aside. However, with an efficient requirement analysis and resource planning, much of this cost may be brought under control. Sit with the best brains in the organization to find out what you really for enhancing business value. Ask for only what you actually need. Do not go by the attractive fringe benefits or “added features” which the application promises. You might not need them at all. Ask for features that will add value to your product or service, attract more business, and position you better as an entrepreneur. That way, you will get the true value for your made-to-order features, without costing a bomb.

Now that you are aware of the technological challenges, your organization is well-equipped for integration. With a smart planning, you can get your best consultants onboard to address the potential issues, discuss organization-specific needs, and perform a due diligence for a hassle-free ERP implantation. With their business insight, you can plan for implementation monitoring and low-maintenance solution. Embrace ERP implementation with an open mind and ready infrastructure.

Log on to Expand ERP for more insight on industry best practices and changing technology trends.

Top Technology Trends to Look for in 2018

The technology landscape today is fast changing and the pace is faster than you think. Changes occur before you can apprehend, your needs are answered before you realize the potential solutions, and all our manual chores are completed in much smarter way. Yes, we are talking about Augmented Reality, Artificial Intelligence, IoT, automation, and machine learning, which will continue to rock the world in 2018. Here, we discuss some of the hot trends that inspire us for a better life with lesser manual operations.

Artificial intelligence

Artificial intelligence or AI, as it is commonly known as is the latest technology trend. It encompasses a whole lot of things (like writing Google algorithm or driving a car). Driven by automated robots with human-like characteristics, AI aims at performing regular manual tasks as well as coming up with suggestive instructions for a specific problem. While the first one is an example of narrow AI, the latter is an example of general AI or strong AI. IBM Watson which comes up with ready legal advice or solutions on entering an issue or problem is another example of strong AI. In the coming days, AI will become more refined in robot integration to perform more complicated tasks such as welding, automated transportation or climate change.

IoT

IoT or Internet of Things is another hot technology trend. Operating everything by Internet or wireless technology to reduce human efforts and make our lives easier, is the need of the day. Smart Homes or Smart Cars, the most common example of IoT, makes use of Zigbee, Z-Wave, Bluetooth or Wi-Fi.

Smart Homes, readily make use of Canary or Piper, as home security solution. Canary is a remarkable combination of video, audio, motion detection, night vision, a siren, and air quality, temperature, and humidity sensors put into a single device. It can be operated from mobile and runs on Internet. Piper, a similar device, has all of these features, plus, a home monitoring system and a speaker that lets you keep a watch on home when you are away or speak to someone staying at home, over wireless. Future applications of IoT include Smart Cities and Connected Cars.

Automation
Automation, an older player in the technology sphere, operates by chatbots to perform human-exclusive tasks. The primary purpose of automation was to simplify everyday tasks without human intervention. Everyday tasks like coffee maker, air conditioner, ice makers or Amazon Alexa. Automated air conditioners sense room temperature and make adjustments accordingly. Amazon Alexa allows to save a pre-defined grocery list and make minor adjustments to it, every time, you need to add or remove a few items from the list and order online. You do not need to remember the list of necessary items. You can simply place your order and chill.

High end applications of automation include automated journalism or editing. You get systematic reporting of events like football tournaments or quarterly earnings results.

Machine Learning

Machine Learning, also known as ML, is populating suggestions for performing an activity or predict a situation, based on previous observations. Some of the most common applications of ML traffic predictions, ridesharing, school and office applications. How nice would it be to get an accurate prediction of the traffic status, using your mobile location info, before you are stepping out for work? Share rides like Uber have pop-up suggestions when you are booking a cab. You are asked if you want to book a sedan if a micro or mini cab is not available. Your location may also be saved as favorite, based on your nubile phone location, which means you do not have to choose a location, every time, you are booking a cab.

Virtual Reality

The term “Virtual Reality” implies viewing the virtual space as augmented reality. Technology makes use of computer-generated sensors to interact with another computer. The biggest advantage of virtual reality is ensuring near-life experiences and reduced computer expenses. What started as an alternative to 3D vision and working with a virtual computer for better storage and efficiency, has come a long way and ensures such things as 3D scene reconstruction, 3D mapping, accurate gesture tracking, and advanced telepresence.

Google Cardboard, Oculus Rift, Samsung GearVR and Epson Movario are some of the major players in the Virtual Reality space. Among the new entrants, Meta, Avegant Glyph, Daqri and Magic Leap are fast gaining popularity with new levels of usability.

As we get ready for another change, let us make use of what is already available. This also means that the services that we require will be available on an on-demand basis. This will not redefine our quality of living, but also help us re-think our needs. We will concern ourselves with more critical needs, relating to innovative thinking in medical research, mass welfare, education, and international security.

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