Thursday, December 3, 2015

Selecting an Enterprise Resource Planning system (ERP)?

The ERP evaluation and selection process is  quite lengthy and time consuming.   We'll discuss the pitfalls and how to avoid them.

In order to select a solution, your company typically creates a selection team or committee with people from relevant corporate groups, such as accounting, projects, procurement, business development, safety and IT.  This committee's mandate includes creation of a requirements list.

System Requirements Analysis

Requirements identification is a typical and logical first step.  It’s logical to think about what the system is to be used for, and to make a list of these requirements.   Each committee member includes his/her individual department requirements based on his/her experience.  Requirements and needs that fall outside this area are neglected, omitted or in some way diminished in importance. 
For example, we can all agree that collecting actual timesheet data is a hard requirement for an ERP HR module.  HR and Payroll require time worked by each employee so that each may be paid.  However, time data is also input by Billing (accounts receivable) to invoice clients.  Time data is also input by Project Controls, to track project, program and portfolio progress.  Time data is also input to equipment, to track maintenance, which helps determine the cost of running that equipment asset.  So, time data is required for many purposes.  This makes determining the single point of entry (SPOE) of time data of utmost importance.  By using an SPOE we ensure data consistency across all functions.  Many ERPs promise the benefits of an integrated system, but experience has shown that they are incapable to deliver, because they have not established this SPOE concept.  This leads companies to implement 'bolt-on' systems in order to address these gaps.
A similar discussion can be had for materials management as it relates to schedule and earned value.
These gaps are sometimes discovered in the requirements phase, however, due to ERP system constraints, they are added to a 're-configuration list' and remain unaddressed due to schedule and cost constraints.
In the meantime, users are forced to use spreadsheets to complete the basic requirements of their daily job functions and to work around the constraints that the ERP imposes.
It is imperative that the ERP Committee ensures, up front, that the selected solution is capable of being adapted to new and evolving requirements.  During implementation and as  each department comes on stream with the new ERP, additional requirements that were missed by the company ERP Committee are identified and additional changes to the system is required.
Experience over 20 years has shown that ERP systems require you to use their template, rather than being adaptable to your business process and requirements, and make it onerous and costly if you wish to deviate from this template.
To ensure that you get the best solution and the team to support it, we suggest asking the following questions:
  • Does the vendor team have a self-documenting system for responding to newly identified requirements?
  • How quickly do they develop the work scope for a change?
  • Do they collaborate well with end-users? How?
  • Do they keep key stakeholders engaged? How?
  • Is the system designed to effect quick responses to changes in direction?
  • How costly is it to make a change?
A sustainable approach is for the company to tap into the knowledge and experience of its people to influence the evolution of a system, which may include a mix of ERP and “fit for purpose” solutions as opposed to having a template  imposed by a vendor’s widely-used, rigid, ERP system.  A huge benefit of this approach is that the “change” impact to your current business is minimized.  Your star associates and team members are motivated and recognized for the value of their input, – as opposed to chafing under a rigid externally imposed ERP – that often encourages them to seek other opportunities and ultimately leave the organization.

Optimal Mix of ERP and 'Fit for Purpose' Solutions

Your company will invest millions in an ERP intending to standardize and streamline all work processes, gain efficiency and worker productivity.  However, after implementation and years of use, many companies are left  wondering whether the Return was worth the Investment.  For example, job functions were changed to meet the needs of the ERP, at the expense of the business's needs. Also, spreadsheet use increased as users scrambled to meet the daily, changing needs of their work environment.
So, in an environment of constant change and unpredictability, it makes sense to employ systems that are nimble, flexible and adaptable without losing the integrity of your core functions and business processes.  For these reasons, we suggest that ERP and 'Fit for Purpose' solutions can coexist synergistically.  Identifying those business aspects that are best served by an ERP or those that would be better served by a 'Fit for Purpose' solution is important.  For example, your company may determine that the requirements of your accounting system is better served by an ERP because it is part of a company global strategy however, the projects, maintenance, timekeeping, estimating, planning functions are best served by a 'Fit for Purpose' solution because each project or site location has specific requirements and processes.

Why TeamWork Solutions?

TeamWork Solutions is a grassroots system is based on the awareness that the real -world system must easily reflect changing customer requirements.  
Project, Turnaround and Maintenance Management, each involves many different functions such as: work identification, estimating, budgeting, planning, scheduling, cost reporting, timekeeping, materials tracking, materials receiving, etc. These functions are performed by people in the team that are assigned a specific position or role, such as: Planner, Cost Analyst, Project Manager, Estimator, Purchasing Agent, Expeditor, Warehouseman, Contract Administrator, etc. TeamWork Solutions' apps are configured to make it easy for a person in a supported role to follow your company's business rules. Correct data is saved in a central place that means that it does not need re-entry or to be imported into Excel for further analysis.  
Owner and contractor companies can each use TeamWork Solutions and this provides for deeper integration and further reduces data re-entry. System and data security is maintained while Contractor companies and owner companies work is integrated in TeamWork Solutions. For example, rates and timesheet data entered in the contractor's system can be instantly reflected in their client's (i.e. owner's) system with no additional data entry needed.
TeamWork Solutions’ open ended design ensures that, as requirements are identified or changed, the solution can be adapted easily and painlessly.  In fact, the pricing model for TeamWork Solutions includes support for these ad hoc changes that we have seen occur with every customer.
TeamWork Group, in essence, becomes your partner by ensuring that your continued project and corporate success is driven off a consistent, available and adaptable data-driven solution set.

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