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Over the past decade Enterprise Systems or commonly known as ERP have become ubiquitous in most large companies. Such as been the rapid growth of ERP since the late nineties that some of the companies which develop and sell these Enterprise Application packages also happen to be among the largest software companies based on annual revenue and they seem to be continually growing. Today Enterprise Systems not only include software which enables your organization to perform business operations but the packages also incorporate a large amount of industry specific business functionalities which will ensure that you do not have to do too many customizations to make the package suitable to your business operations. This verticalisation helps organizations adopt the system faster and too a large extent help provide growing organizations by provide a framework of processes for their business.

One of the distinct advantage of using an Enterprise System is that provides an integrated solution for the entire business. Typically organizations which adopted to Information technology early in the cycle would have taken the best of breed solutions for specific business needs like accounting or inventory management which although addresses the needs of the particular processes cannot communicate with systems working on some other process in the same organization. Thus the organization is saddled with multiple and disparate systems. Larger organizations who adopted to information technology initially had complex blocks of software built for their own specific needs, this was with an understanding that the process would not change so build a software to suit the process. Not only have these custom-built applications become difficult to manage but they also pose unique challenges in terms of upgrade or adaptation to the latest technology standards. A ERP on the other hand not only provides a full integrated solution for all aspects of business it also comes with its framework of upgrades to changing technology. These upgrade paths are usually defined by the Enterprise Systems vendor.

The other distinct advantage of an ERP package is that most of the standard business functionalities and operating processes are built into the software code, thus reducing the time required to understand process related issues of software implementation and also providing the organization with a standard framework of processes to use which enable the organization to adopt industry best practices faster. But this advantage of ERP is where some of the problems of the ERP initiatives also begin.

It is important for the organization leadership to understand that the ERP package is not just about automating business functions, but it is also going to force its own logic on the business. This could have consequences ranging from resistance by functional managers who have carefully developed a particular process over a few years now being asked to change it to disastrous results of the organization not being able to use the implemented Enterprise System because of its inability to change its process or adopt to the process built into the software. Since the system offers a standardize process for doing business and most organizations in the same industry and in the similar product usually use the same Enterprise system, how do you maintain your strategic differentiation. What will happen to all the carefully built processes which were nurtured and secretly guarded to give your company a competitive advantage one the Enterprise System is implemented.

From the perspective of the organizations leadership it has to be understood that ERP implementation is not a technology initiative but a strategic initiative which will change the way the organization does its business. As a corollary it is also important that the ERP implementation initiative has Executive Sponsorship at the Senior Management level and has the involvement of the business unit heads, it should not be an initiative to be undertaken by the IT Team of the company.

The few important questions that immediately come up are:

What are the senior management folks or the business unit heads expected to contribute in the ERP implementation initiative?

Are Executives required to only sponsor budgets and review progress or is there a more useful utilization of Executive time to ensure the success of the ERP intiative?

What specific decisions or processes help in the ensuring the right decisions are taken for the success of the intiative?

The rest of the article discusses areas which the Executive sponsor need to be involved in to ensure that the ERP initiative is on the right track

ERP Readiness Assessment:

The ERP readiness assessment process is aimed understanding the readiness of the organization to undertake an ERP implementation initiative. As stressed earlier this is not a technical evaluation of the organizations readiness although some aspects are assessed. This assessment approaches ERP as a strategic initiative.

The initial ERP readiness assessment has to use both qualitative information about the organisation on overall dimensions which affect all sections of the organisation and its stakeholders. The qualitative information pertaining helps evaluate the readiness of an organisation to go in for a full fledged ERP implementation and understand the various gaps which need to be fixed before the organisation embarks on the ERP initiative. Some of the dimensions which need to be taken into account are:

1. Organisational Vision
2. Structure,Hierachy and Work Culture
3. Current Business Processes and Process maturity
4. Goals and objectives of using IT
5. Current state of IT Infrastructure

This initial assessment need not touch upon any of the specific functional areas like Finance & Accounting or Sales & Receivables as the objective is not to get information on how the specific process is managed and it need not specifically look which type of technology or Package has to be used for ERP implementation. This kind of assessment, conducted internally or through an external consultant, is useful for mid-market growing organisations that need to assess their internal readiness for a successful ERP implementation and want to analyse the gaps in their approach towards an ERP initiative as against the present condition of their organisation. The recommendation could be looking for specific criteria in the ERP implementation or could also be a decision to hold the ERP implementation till some organisational initiatives are implemented.

The Go-Ahead decision on the ERP initiative

Once you have assessed the readiness of your organization to accept an full fledged ERP initiative it is time to make the crucial decision on going ahead with an ERP initiative. In mid-sized organizations since the ownership patterns are typically different as compared to large global corporations, the decisions can be expected to be much quicker. The decision of the Executive Team to Go-Ahead with the ERP implementation should include the following criterion.

Spend on ERP & IT Initiatives

The ERP implementation will be the critical part of the all IT initiatives in your organization. Typically for mid-sized businesses an IT spend of anything above 1% of annual revenues would be considered progressive. For the financial year you are implementing the ERP pacakage you may have budget a higher amount of upto 3% of your annual revenue. This is a crucial decision and the involvement of the CFO/Head of Finance therefore becomes important.

Processes which will be included in the ERP Initiative

This requires a critical evaluation of what is core to the business and inter-dependencies of the processes. Whether the processes are already covered by another legacy application is a consideration. Understanding which processes will be covered by the ERP initiative also help in the package and vendor evaluation which we will discuss in the next stage.

Change Impact

Whether you are using an IT application currently or not it is a fact that the ERP implementation is going to change the way the business is being done. The most critical impact will be on the processes being covered by the ERP. A typical way of communicating the change impact and getting buy in for the change processes is to involve the managers handling the key business process. But in many cases managers themselves may not be the actual users of the system and therefore the involvement of key users of the system post-implementation is critical. The other aspect of the change impact will be the implications of de-staffing or redeployment of staff in key processes.

Organising the Internal Team for the initiative

It is normal for the ERP implementation to be sponsored by an executive member at the CxO level of the organization and be lead by the senior IT manager. But in addition to the sponsor and the project lead, a large team needs to be constituted to ensure the implementation covers every aspect of the organizations business. Key members of this team would be the Senior Accountants who would bring in their perspective not only costs but also of how various processes and any changes in them impact the financials of the company and the HR Manager who needs to be in the know of the required organizational changes and re-structuring, motivating key managers and staff to be a part of ERP implementation either full time or as an additional responsibility is another reason.

Managers handling key functional areas or business processes are essential members of the team. One of the issues faced will be that the managers in particular functional area are not often the people using the system and can therefore contribute little to the initiative. It is advisable to hand-pick key staff who have a very good understanding of the processes and have suitable adaptability to technology to be a part of the full time team, they would often look at the inclusion in the team as a reward.

ROI Assessment

ROI of ERP is a very tricky task which most IT managers and ERP vendors tend to skirt. In some of the larger organization the view that is gaining ground today is that ERP is an essential part of the organization infrastructure cost and therefore there is no reason for assessing ROI, just like you do not assess ROI of the building and facilities used by your company. The reason why ROI is tricky and difficult , are because a large number of intangible benefits gained through streamlined processes , better availability of information and competitive advantages are hard to assess, the data required would take months to gather. The Costs which need to be considered in the ROI assessment are not just the license costs and implementation costs for the system, but also cost of training, opportunity cost of internal team and costs in support. The revenue advantages gained could be directly quantifiable based on reduction in cost or improvement in productivity, like reduction in staff or elimination of paper work which is easily measured or could be seen in terms of improved opportunities for future accrual, like better time to market for products or improvement in manufacturing practices.

Risks:

It needs to be understood that the ERP is going to change the way of doing business and therefore the risks are not technology risks but business risks. They could disrupt the operations and cost considerable dollars in loss of time and opportunity. The executive team has to have before them the assessment of risks along with the planned risk mitigation strategies. This could cover organizational issues like re-training of staff for the new system, re-structuring the organization due the anticipated changes in process or ensure availability and uptime of mission critical systems.

Package Evaluation and Selection:

The success of the ERP implementation in the short term and for the future depends largely on the selection of the Enterprise Systems packages to be used. While it is always an attractive proposition to go in for the best brand names in the Enterprise Systems space ,the decision has to be made based on the suitability of the package for your business and your strategic objectives.

Some of the questions which need to be answered are

Does the financial strength and long term goals of the Enterprise Systems Vendor match your companys expectation?

This is important from the perspective of the vendor being around for some time in the future to support the package implemented and also the problems in upgrade and migration it would cause if the ERP vendor were not in position to support the system or worse still sell off to another Enterprise Systems company.

How easy is the system to use?

This has an impact on the acceptance of the system by employees and the cost of training.

What are the functionalities and features the product has to offer?

This is where you need to do a detailed analysis of what the product offers against what you need for your organization.

Ease of customization?

One size does not fit all and same is true for processes. So although standard processes can be used, to achieve distinct advantage it is necessary for these processes to be customized for the business, the software package should provide the ability to customize and tweak the package to suit your business.

What is the cost of acquisition, implementation, support and upgrade?

What are the past implementations of this technology?

What space of technology do they work in?

Do they use the latest standards in technology like Web Services, SOAP etc

If you are beginning from a scratch, the package evaluation process is not only critical to the entire implementation but also the foundation for the rest of the ERP implementation initiative. It requires not only careful planning and research but may need extensive professional help from outside consultants specializing in this area. Depending on the size of the organization and the nature of the final deliverable ranging from just documentation of evaluation criteria to actually selecting and buying the right Enterprise System, the process could take anywhere between 6 weeks to 6 months.

Implementation Partner selection process:

The selection of the vendor could be performed in tandem or later than the package selection process. It could be recommended by the package vendor or be based on your own independent evaluation. In certain case the implementation partner can be selected first based on their expertise and breadth of knowledge in Enterprise Systems and be involved in the process of package selection.

Some of the important aspects which need to be considered in addition to their cost and the experience in implementing Enterprise Systems are:

What is their experience in your vertical or line of business, will they have the ability to understand your business issues?

What are the profiles of consultants, analysts or technical specialists who they are ready to offer for your implementation?

What are the range of services and nature of the services offered by the implementation partner?

What has been their past track record in project delivery?

What kind of warranties, risk mitigation plans and business continuity assurances do they offer?

Going through a proper readiness assessment, having taken the right decision and having selected the Enterprise System and the implementation partner. The organization is now on the right track to start the ERP implementation. Time and patience are required to make the right decisions and the Executive time should be willing to expend both if the ERP implementation has to be successful.

Vijay V Bhat works with one of India’s leading technology consulting companies. He also has experience in the managerial sphere of manufacturing organisations in India. Writing is a hobby and a passion. He has also taught Engineering and Management subjects in India intermittently in different phases of his career.

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Whether you are seeking capital for your company or are optimizing your business strategy, the most important element - particularly for outside investors - may be your written business plan. You can tune-up and supercharge your plan using this 19-step checklist. When your written plan firmly answers yes to each of these 19 questions, your market/product strategy is in terrific shape plus you increase the odds of attracting investment capital.

If you don’t already have a written business plan - write one! Your business plan is a blueprint for your whole company. It describes in detail your goals, the financial and technical viability of your goals, and the strategy you will use (or are using) to reach those goals. And your business plan is a working tool - it is a yardstick to measure your progress and a compass to keep you on course.

Must a business plan be written?

Yes! A plan which is not written usually has not been thought through fully. And despite what you may have read, it is doubtful that any business ever attracted capital on the back of a napkin.

Use this checklist as a way to identify where your strategy, as spelled out in your business plan, needs work. Each of the questions below highlights an area considered critical to technology investors.

1. Can the key ideas behind your product or service be stated in one or two sentences? (y/n)

2. Does your company have at least one unique and compelling competitive advantage, which cannot quickly or easily be duplicated? (y/n) Examples are a special feature, a cost advantage, a technical refinement, a new delivery system or a special supplier.

3. Is your competitive advantage proprietary? (y/n) That is, can it be copyrighted, patented, trademarked or otherwise protected? Can you keep it exclusive to you?

4. Is your industry segment growing by 25% or more? (y/n) If not, can your new product dominate its segment? If the answer is no, you probably won’t be able to generate the kind of financial returns investors look for.

5. Does your product or service create a new market? (y/n) Although generally positive, this could be a trap - in a brand new market, the potential can be slow to develop. Lotus Notes created a new category but took years to create value for investors.

6. Is your market in “early momentum” - the market growth phase where market revenues have recently taken off? (y/n) Venture investors prefer markets in this stage because the time-to-create-value is shorter and the growth potential still large.

7. Is your target market segment 1) tightly defined over a population sharing common characteristics, 2) large enough to support significant profits, 3) served by communications channels to reach that market - i.e., trade or special interest publications, response mailing lists? (y/n)

8. Is your company filling a gap in the market, or do you have a “gee-whiz” product which you think is so terrific that customers will surely want to buy it? (y/n)

9. The benefit of your product or service to users is 1) significant, 2) quantifiable and 3) cost-justified? (y/n). If you provide a benefit which is important, and you can prove it - there is a much higher probability of generating sales.

10. Is there a demonstrated market for your product? (y/n) If you have an existing product, is your customer base expanding? Investors would rather fund sales and production than product development.

11. Is there wide appeal for your product or service? (y/n) Are there enough potential customers in the target market that you can earn significant profits, for a long time? Are there follow-on products to sustain revenue and profit growth?

12. Does your company have the ability to sell your product? (y/n) Particularly in companies where the founders have technical backgrounds, a question to ask is “Who is going to sell your product or service?” What about outside distributors?

13. Is there an experienced management team? (y/n) Investors would rather fund a solid team instead of one lone genius with a great idea. The team should be highly qualified in marketing, sales, finance, and the product/service area itself. Of course, a demonstrable track record helps.

14. Can you demonstrate a likely return of 5-15 times investors’ capital, over a period ranging from three to seven years? (y/n) The actual parameters used by venture investors will vary based on which stage you are in (idea, startup, development, expansion, turnaround).

15. Is there a clear exit strategy for investors? (y/n) The most common strategies for returning investors’ capital are 1) going public; 2) acquisition of your company; 3) new investors; 4) founder’s buyback or management buyout.

16. Have other investors already put money into the company, particularly the senior management team? (y/n) This reduces the apparent risk, reduces overall exposure, and shows that management “has its money where its mouth is.”

17. Have you clearly defined a structure for the investment you seeking? (y/n) The structure should include: who is involved, how much capital is needed, what minimum investment you will accept, how much equity that will buy - and, of course, the projected return on investment.

18. Are your financial projections realistic? (y/n) Have you soundly justified your projected growth rates and other financial assumptions?

19. Have you clearly examined the risks? (y/n) Investors like to know that you have considered the risks. This is key - can you turn your risks into opportunities?

Too many no’s? Remember, each “no” opens up an area for you to strengthen your business. Even if you aren’t seeking capital, each question highlights a critical success factor - which, when mastered, will increase your profits, your performance, and your future success.

In order to help you discover hidden value and opportunities in your existing business, and to make it easier to spot potential problems while you are just starting out, I’ve created the Discover Hidden Value Business Building Guide. A remarkable aid to accelerating the growth and profitability of your business, this program of insight-provoking questions and checklists enables you to rapidly diagnose, troubleshoot and optimize every part of your business, from marketing to sales, customer service to product development and finance to production.

© Paul Lemberg. All rights reserved

Paul Lemberg’s clients call him “the unreasonable business coach” because he insists they pursue goals and take actions far outside their comfort zone to make more money than they previously thought possible. To get business coaching tips, tools and strategies like these, visit http://www.paullemberg.com/Business_Coaching.html.

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In this issue, I will share my experience acquired from the conglomerate and its operating companies. For the purpose of this article, I will articulate the Managing for Innovation which is one of the Eleven Values and Concepts in Malcolm Baldrige Criteria. As before, I will use case studies to show how some of the companies implement them.

To recap, below are the Eleven Core Values and Concepts of Baldrige Criteria:-

1. Visionary Leadership
2. Customer-Driven Excellence
3. Organizational and Personal Learning
4. Valuing Employees and Partners
5. Agility
6. Focus on the Future
7. Managing for Innovation
8. Management by Fact
9. Public Responsibility and Citizenship
10. Focus on Results and Creating Value
11. Systems Perspective

I will deal with the one of the Value in bold letters in this article as below:-

Articulated Managing for Innovation:

What is Innovation in the context of Baldrige Criteria? As described in the Baldrige Criteria 2005, it means “making meaningful change to improve an organization’s products, services, processes, and operations and to create new value for the organization’s stakeholders”.

Strategically, Innovation should lead you to a new dimension of business performance. And it has to value add to the organization in terms increased in market share, capturing new customers and higher profit etc. It is not about research into new product or service which cannot be commercialized.

To be effective, organization should set direction and policy pertaining to innovation of product and service to an extent not to discourage such initiatives due to minor failure but to manage such activities to yield maximum results. Innovation should expend into supporting process to ease of doing business with customers

Case Study on Managing for Innovation

Most companies have some form of research and development into new products. To some, they are able to upgrade existing product for better or different applications. The level of focus on Innovation into new products is very much driven by the market or customer requirements. It is seldom in the case where it is done strategically to position ahead of competitors. Perhaps, it is a risk factor to be considered where “Total New” is certainly requires strong courage and good foresights. To play safe, some prefers to be a follower.

On Managing for Innovation, some adopted the “Trial and Error” approach in which innovation is performed based on pass experiences, feedback but existing skill and testing facilities. Investment into new or modern equipment and facilities often an hindrance to advance research and development of new products.

The implication to this approach results in loss of product cycle time thus new product launches is delayed. New product has numerous quality problems. Another aspect of Managing for Innovation is the support services to materialize the new product production. Production process is often taken for granted it can cope with new features of the new product innovated.

So far, innovation is confined to product and services at operation level. Innovation for new business model or business process are not focus point perhaps it has a higher risk to make changes.

Opportunity for Improvement

Organization need to fully understand the needs of the market and customer and predict their future requirement. Use such information to manage innovation for excellent performance. Key indicator to measure such initiatives should be established to monitor the progress and quality of innovations. Value-added measures should be included to measure Return of Investment for new product or services.

Company policies should be set up to encourage innovation. Though failure in innovation should be discourage, it should not have any penalty element in it. Such penalty element in the policy whether written or otherwise would damage innovation.

In summary, you may have noted the way I articulated Managing for Innovation. It merely describe its objectives towards business sense as this is the scope of my article. Having understood the Managing for Innovation in Values and Concepts of Malcolm Baldrige, it should be taken as a strategically for future business advantage. Leaders might benchmark their CEO of Baldrige Winners on their TQM successes in this value. My next article will articulate the next Core Values and Concepts in Managing by Fact

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Disclaimer:
All rights reserved. This article is written by the author based on his practical application experience. All definitions and interpretation of terminology are his point of view and has it has no intention to conflict with experts in similar topic. The author holds no responsibility for the use of this article in any way. Full Baldrige Criteria are available at http://www.nist.gov/quality

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Free to reprint or re-publish:
All rights reserved. You are free to reprint or re-publish this article as long as you include my resource box at the end of this article. And ensure that the URL in the resource box remained intact and it is linked to the author’s website.

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Presenters often tell me that they fear losing their train of thought. When listening to their talks I realized that for many people, the problem is not forgetting the words or main points.

Speakers freeze because they can’t get from point A to point B. They know the next point but they struggle with the transition.
And without transitions you will sound choppy and inexperienced.

So how do you create that smooth flow? First consider your points.
Let’s say your agenda items are

• background history
• current situation
• future trends

You don’t want to simply say “Background history.” You need a lead in.
Your segue can be as basic as “Let’s begin with some background history…” Now choose another transition such as “Next we’ll discuss our current situation…”
A transition can be phrased as a statement or question. “So what do we project for the future of the industry?…..”
In sales presentations it’s very effective to verbalize what the customer is thinking.

“You may be wondering how much does it cost”
“At this point you may be concerned with safety.”
“So what is our track record?”

Transitions are the thread that weaves all the ideas together in a cohesive fashion. They also help the audience to listen and comprehend the message. Transitions are road signs that signal you are making a new point.
Here are a few transitions to bridge to your speaking points:

“That brings me to me next point which is…”

“Now that we’ve discussed advertising, let’s take a look at direct mail…”

“So far we’ve covered compensation and benefits, the next agenda item is training..”

“In addition to cost containment, there is another area I’d like to discuss…”

“Now let’s consider..”

“To begin with let’s take a look at…”

“The next important factor is…”

“I’d like to view the issue from three aspects…”

“Finally, let’s consider…”

Remember to use transitions in all your presentations. You will have more attentive listeners, better retention and they’ll think you’re a real smooth talker!

Diane DiResta, President of DiResta Communications, Inc. is an International speaker, coach, and author of Knockout Presentations: How to Deliver Your Message with Power, Punch, and Pizzazz. To subscribe to Impact Player, a free online newsletter visit http://www.diresta.com.

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“When you arrive at a fork in the road take it.” Yogi Berra, major league baseball Hall of Fame player and coach

Many paths lead to higher performance. The high performance route is individual and unique for every person, team, and organization. There is no one or best way. What works for me, or anyone else, may not work for you. We can’t follow someone else’s path. We need to blaze our own trail.

While no route is exactly the same, successful organization change and improvement efforts cover similar territory. Highly successful organizations have passed most of these change checkpoints and improvement milestones as they move toward ever-higher performance levels:

__ Clear and compelling reasons for changing and improving

__ Balanced focus on people, management, and technology

__ Strong ethic of self-determination

__ Comprehensive and balanced improvement model

__ Clear and compelling picture of our preferred future

__ Three or four core values

__ Definitive statement of purpose, business we’re in, or why we exist

__ Rich and continuous customer/partner performance gap data

__ Intense exploring and searching for new markets and customers

__ High levels of experimentation, pilots, and clumsy tries

__ Robust process for disseminating team and organization learning

__ Three to four strategic imperatives for each annual improvement cycle

__ Direct links between all improvement activities and strategic imperatives

__ Comprehensive and balanced improvement plan

__ Improvement planning structure, process, and discipline

__ Well designed, proven approach to process management

__ Clarity on the preferred types and focus of all teams

__ Well trained team leaders and members

__ Intense levels of technical, management, and leadership skill development

__ Simple customer/partner, innovation, capabilities, improvement, and financial measurements

__ Active feedback loops that foster learning and improvement

__ Flat, decentralized, and team-based organization structure

__ Systems that serve and support customers and partners

__ Extensive and continuous education programs

__ Effective communication strategies, systems, and practices

__ Partner-designed reward and recognition programs within a vibrant appreciation culture

__ Strong development of change champions

__ Support for local initiatives

__ Annual progress reviews and improvement assessments

__ Frequent celebrations of major breakthroughs and small wins

__ Annual refocus and planning for the next year’s improvement cycle

Management teams can use this list in a variety of ways. It could be a simple checklist for the development of improvement strategies and plan. They might have everyone on the team rate how well the organization and/or team is doing in each area now. Or they might have everyone rate the improvement urgency of each of these 31 areas. Another possibility is to have everyone do both rating exercises to provide performance gap data.

Jim Clemmer is a bestselling author and internationally acclaimed keynote speaker, workshop/retreat leader, and management team developer on leadership, change, customer focus, culture, teams, and personal growth. During the last 25 years he has delivered over two thousand customized keynote presentations, workshops, and retreats. Jim’s five international bestselling books include The VIP Strategy, Firing on All Cylinders, Pathways to Performance, Growing the Distance, and The Leader’s Digest. His web site is http://www.clemmer.net/articles.

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