Maximising value from your ERP system

Proprietary or open source? Ulrika Hedquist talks to users of both in her investigation into how to make the most of ERP systems

“It provides numerous sophisticated application modules that seamlessly work together in one package.”

Ravensdown’s purpose is to optimise soil fertility and farm profitability in a sustainable way for farmers who need to improve their productivity and environmental footprint. The organisation provides fertilisers, as well as a range of key farming inputs and technical advice.

Ravensdown has been using JDE since 1999 and is currently running the XE 7.333 version. An upgrade to the latest version, 9.x, is now under consideration, says McAtamney.

The original implementation, managed by Deloitte, presented some post-go live challenges, he says. This was largely around inventory management functionality not working as specified, but it was resolved relatively quickly, he says. A further upgrade in 2002 was a very seamless exercise, he adds.

McAtamney sums up the top benefits of the solution as being a “one-stop-shop for a broad number of functions within the business”.

“All parties are seeing the same information; system integration points of failure are minimised; and support and user skills sets are minimised with reduced numbers of disparate systems,” he says.

There have been some challenges around the integration with other essential enterprise systems, but in the latest releases, standards like web services have resolved these issues.

In order to extract the most value out of the ERP system, Ravensdown has introduced IT functional steering committees.

“These quarterly meetings document and prioritise the changing needs of all significant business functional groups,” says McAtamney.

The first consideration for a solution is always ERP and significant resistance is put up against the introduction of additional third party solutions, he says. Also, strong support skills in-house ensure qualified and timely support, he adds.

“With the right focused planning and effort upfront the ongoing support requirements of ERP can be surprisingly low and ROI high,” says McAtamney. “Ensure to make use of the huge breath of out-of-the box functionality before looking elsewhere for solutions.”

In the future, ERP at Ravensdown will be enhanced with more intuitive user interfaces, simplified integration methods and ease of application distribution via web and mobile devices.

The accessibility, breadth and depth of the system will be even more widely spread across staff and business partners, he says.

“We expect to ‘cull’ further third party applications and tools and take advantage of the single technology stack to simplify support and usability and lower IT operational cost.”

Port Nelson

Port Nelson’s ERP system has eliminated wastage and duplication within the company. “We are trying to streamline our processes and the first step is having the data to report on, to enable you to plan where you are going and measure how you are tracking,” says financial accountant Mason Robinson.

The organisation is using Microsoft Dynamics NAV. Previously, information was kept in spreadsheets and disjointed applications – “not very timely,” Robinson says. While the organisation is not “real-time” yet, it is getting closer. “We now have the ability to run reports that are already summarised to allow speedy reports and add insight into the numbers.”

Port Nelson is a relatively small business, so the big, expensive ERP systems were out of the question when the organisation went to market for a solution, says Robinson. Dynamics NAV, implemented by Intergen, came out on top because of the time and effort Intergen spent on understanding Port Nelson’s business, he says.

Timeliness of information, integrity of data, and “one version of the truth” are the top advantages of the solution, according to Robinson. Part of the journey towards a more streamlined organisation is educating staff to rely on the data.

“There have been doubt in the past, where things have been wrong. The hardest part is change management – breaking people’s habits of checking and double-checking, as well as duplication.”

The organisation is about to roll out SharePoint, which is expected to help gain more from the ERP system – staff will be able to more easily access the timely data they need.

When Howard joined Intouch the IT systems were disjointed and the existing ERP system was only providing part of the solution the organisation needed, he says. The business was run though a call centre, but it took around three months to train up a healthcare consultant to be able to take orders from customers. This was because of different manual processes and systems that weren’t talking to each other. In addition, business rules needed to be coded twice, once in the ERP system and once in the company’s online shop.

“Every time we needed something done, it was double the work,” Howard says. “And of course, every time we needed a new release of the software, all customisations needed to be redone.”

Intouch runs a number of government contracts and there is often a requirement for customisation around these government programmes.

“One of the downsides of doing that with commercial vendors is you end up paying for customisation over and over again as you go for new releases. So I was looking for a different way to do it.”

In addition to that, government programme funding was given out once a year and would cause quite a spike on workloads in the call centre. Temporary staff would be hired to cope with the workload and three were software licensing issues around that, he says. This combination of challenges led Howard to look for a different sort of solution and he started investigating open source ERP solutions.

“As I dug down it seemed like quite a nice fit for the sort of business we were running,” he says.

However, with an open source solution you need to either be prepared to do it yourself, which is very risky, or you need to engage people who know the software but be ready to pay for upfront evaluation, he says.

Howard ended up selecting the Adaxa Suite – the core of it is ADempiere, an open source ERP and CRM tool which is available under the GPL/GPL2 license. Adaxa is an Auckland- and Melbourne-based company with four staff in New Zealand, eight in Australia and 20 in the US.

The strongest benefit of the system was the flexibility around configuration, says Howard. ADempiere is more like a tool kit than a straight ERP system.

“It can be changed and extended, and you can do so without coding. But sometimes there is a need to go a bit further and have code developed.”

The architecture also allows for the insertion of code the user has developed. “That seemed to be easily maintainable, rolling forward with versions.”

Overall, the open source system ended up costing roughly about half of what a proprietary system would have cost, Howard says. While many of the costs are the same whether you are choosing open source or commercial software – establishing the project; going through evaluating processes; tweaks; customisation and training – you will save on ongoing licensing and maintenance cost if you choose open source, he says.

To get the most of the system, Intouch spent a lot of time getting all the business rules and the recording of information correct, says Howard. But among the lessons learnt was the cardinal importance of reporting.

“After implementation we struggled, in some cases, with some of the reporting requirements. If I [were] to do it again I would probably put some more emphasis on the reporting,” he says.

If you are going for an open source ERP system, don’t try to do it yourself, Howard says. “There is a huge learning curve and you really do need to engage external expertise.”

With open source, though, there is a lot of leverage with the vendor. If you don’t like the particular vendor it’s pretty simple for you to pick it up and take it somewhere else, he says.

If you are getting some extra software developed, make sure it gets back out to the community to review and evaluate, he says. “That could be a benefit for you further down the track.

FW McDowall

FW McDowall in the Browns area of Southland has picked a Sage ERP system. The organisation has two arms – rural transport company McDowall Transport, and McDowall Freight, a nationwide express freight operator. Previously, the company was using a DOS-based accounting system with separate accounts payable, accounts receivable and general ledgers, and no CRM system, says Jamie Cross, formerly the CFO of the organisation and now working as a contractor. FW McDowall moved to Sage ERP Accpac in 2002.

This was “to ensure that the group had a robust ERP solution that would be flexible enough to meet its business needs immediately, and also have the knowledge that it had a strong development programme for the future,” he says.

“Not only did the future development plan of Accpac play a key role in the decision to choose Sage, but the pool of resources that were available from [reseller] Endeavour Solutions in Christchurch has also been instrumental in the continued development of various solutions,” says Cross.

The greatest benefit of Sage Accpac is its flexibility in the way that it allows integration of other “non-Sage” products into the overall solution to maximise the benefit from applications, he says.

The Accpac system sits in the middle of the overall IT structure with the freight management system, ICOS, performing the dispatching and tracking of freight consignments, he says. Sage CRM is also used for both customer and supplier dissemination of information for both the sales team and branch manager teams around the country. The company also uses Flow Software to automate the import and export of customer and supplier data, “in an effort to reduce the human involvement where possible”.

“Placing your ERP solution at the centre of your entire organisation will ensure that you will always get the most value out of your system,” Cross says.

Planning the install is important, but even more significant is that, once the software is installed, your organisation keeps an open mind to what additional functionality can be added to the ERP system, says Cross. External applications can help to extract additional benefits from all systems.

Ravensdown

For farmers-owned cooperative Ravensdown, the ERP system ensures one version of the truth for all aspects of the business.

“It ensures that appropriately authorised staff have the visibility they require, [in] real time, across the parent company and its subsidiaries,” says Mark McAtamney, CIO of Ravensdown.

“It provides numerous sophisticated application modules that seamlessly work together in one package.”

Ravensdown’s purpose is to optimise soil fertility and farm profitability in a sustainable way for farmers who need to improve their productivity and environmental footprint. The organisation provides fertilisers, as well as a range of key farming inputs and technical advice.

Ravensdown has been using JDE since 1999 and is currently running the XE 7.333 version. An upgrade to the latest version, 9.x, is now under consideration, says McAtamney.

The original implementation, managed by Deloitte, presented some post-go live challenges, he says. This was largely around inventory management functionality not working as specified, but it was resolved relatively quickly, he says. A further upgrade in 2002 was a very seamless exercise, he adds.

McAtamney sums up the top benefits of the solution as being a “one-stop-shop for a broad number of functions within the business”.

“All parties are seeing the same information; system integration points of failure are minimised; and support and user skills sets are minimised with reduced numbers of disparate systems,” he says.

There have been some challenges around the integration with other essential enterprise systems, but in the latest releases, standards like web services have resolved these issues.

In order to extract the most value out of the ERP system, Ravensdown has introduced IT functional steering committees.

“These quarterly meetings document and prioritise the changing needs of all significant business functional groups,” says McAtamney.

The first consideration for a solution is always ERP and significant resistance is put up against the introduction of additional third party solutions, he says. Also, strong support skills in-house ensure qualified and timely support, he adds.

“With the right focused planning and effort upfront the ongoing support requirements of ERP can be surprisingly low and ROI high,” says McAtamney. “Ensure to make use of the huge breath of out-of-the box functionality before looking elsewhere for solutions.”

In the future, ERP at Ravensdown will be enhanced with more intuitive user interfaces, simplified integration methods and ease of application distribution via web and mobile devices.

The accessibility, breadth and depth of the system will be even more widely spread across staff and business partners, he says.

“We expect to ‘cull’ further third party applications and tools and take advantage of the single technology stack to simplify support and usability and lower IT operational cost.”

Port Nelson

Port Nelson’s ERP system has eliminated wastage and duplication within the company. “We are trying to streamline our processes and the first step is having the data to report on, to enable you to plan where you are going and measure how you are tracking,” says financial accountant Mason Robinson.

The organisation is using Microsoft Dynamics NAV. Previously, information was kept in spreadsheets and disjointed applications – “not very timely,” Robinson says. While the organisation is not “real-time” yet, it is getting closer. “We now have the ability to run reports that are already summarised to allow speedy reports and add insight into the numbers.”

Port Nelson is a relatively small business, so the big, expensive ERP systems were out of the question when the organisation went to market for a solution, says Robinson. Dynamics NAV, implemented by Intergen, came out on top because of the time and effort Intergen spent on understanding Port Nelson’s business, he says.

Timeliness of information, integrity of data, and “one version of the truth” are the top advantages of the solution, according to Robinson. Part of the journey towards a more streamlined organisation is educating staff to rely on the data.

“There have been doubt in the past, where things have been wrong. The hardest part is change management – breaking people’s habits of checking and double-checking, as well as duplication.”

The organisation is about to roll out SharePoint, which is expected to help gain more from the ERP system – staff will be able to more easily access the timely data they need.

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