The Business Solution
- Dispelling the misconceptions about ERP
- The Buzzz… Your face is your password
- Winning the technology race
- EFT – Electronic Funds transfer
- Customer Portal
- Product Tours/White Papers
Dispelling the misconceptions about ERP
The April 2008 issue of Manufacturing Automation has a really interesting article entitled: “There are so many misconceptions about ERP, it’s a wonder that the acronym has not been replaced. Are you guilty of harbouring one of those misconceptions?”
Industry expert Michael Burns has the answer.
There are so many misconceptions about ERP that it’s a wonder that the acronym has not been replaced. Here, we take a look at those misconceptions to help understand the role of ERP in your manufacturing organization.
Misconception #1: ERP is only for Fortune 500 companies
Many people believe ERP was designed only for the Fortune 500. This misconception is partly based on not knowing what ERP does.
ERP stands for enterprise resource planning, which does not offer a clue as to what it really does. In the past, many organizations would optimize a business process for a particular department at the expense of other departments and the business as a whole. ERP is supposed to automate business processes across an organization and thus eliminate inefficiency caused by silo thinking.
Misconception #2: Implementing ERP is expensive and time-consuming
A second misconception is that all or most implementations will be expensive and take years to finish. This may have been true in the early years of ERP, but it is not generally the case now. The reasons for the change include ERP being implemented in smaller companies, more reliable systems in which the problems have been ironed out, less customization and improved project management.
Misconception #3: You can't trust ERP vendors
Too many people believe that ERP vendors are not to be trusted. The reality is that just about every one of the vendors wants to become the trusted advisor of its clients, and that won’t happen if it is dishonest. These companies make their big money on the annual maintenance fees, which are like a perpetual annuity. And their clients don’t want to go through another ERP implementation unless absolutely necessary.
Vendors, however, need to be honest from the get-go. They know your decision is largely based on trust and that if they misrepresent themselves, you won’t trust them. The only caveat is that you must be precise in what you ask of a vendor.
Misconception #4: Customizing your ERP means you can’t upgrade
The fourth misconception is that customization will force a company not to upgrade to a newer release. This used to be true, but many of today’s ERP systems allow some customization to occur outside source code, thus allowing for an easy upgrade process.
Misconception #5: Implementing ERP will lead to layoffs
Much like many employees fear that automating a process will lead to job loss, many still believe ERP will lead to mass layoffs. But the truth is that most companies retain their employees and give them more value-add jobs to do after implementing an ERP system. Often these companies will be able to grow substantially without adding new people.
Michael Burns is president of 180 Systems, which provides independent consulting services including business process design/re-engineering, system selection and risk management.
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Your face is your password
Silently, Lenovo (formerly IBM's Personal Computer Division) has introduced a revolutionary new feature on many of their notebook computers called Veriface! Veriface is face recognition software, which is actually a re-emergence of an old idea. IBM had facial recognition capabilities a long time ago. The first introduction was with a ThinkPad T23 with an external camera mounted on the system’s UltraPort. It didn’t work well at all, most likely because the cameras of that era were terrible. I think they were 0.3 megapixels, but may not have even been that much.
Now that many Lenovo systems include integrated cameras with much better quality (1.3MP), facial recognition has become viable and available for day to day use in securing these computers. The included software lets you log onto your Windows account simply by sitting in front of your system. Your face is your password. What is much cooler is that it is very user friendly for multiple user accounts. For example, let’s say you have three Windows accounts – Mom, Dad, and Sis. If you have associated their faces with their respective user accounts, the system determines which person is in front of the computer when Windows boots and automatically logs them onto the right account. In practice this works very well and is extremely fast at recognition.
Soon we won’t need to remember our password to get into our computers. One can just hope that this type of technology will expand into other applications.
Winning the technology race
Thirty years ago, the role of IT systems within most businesses was very limited. Since then, though, this relationship has reversed. Today, many companies feel it is their business that is holding back their IT systems.
In the 1970s and ‘80s, information technology was focused on specific departmental requirements. Companies like IBS, which had developed a sales order processing system, delivered solutions for specific functional requirements. This led to “islands” of technology where departments developed and maintained their own systems in isolation from the rest of the organization.
The 1980s were the glory years for hardware platforms. The personal computer put real processing power onto the desktops of many workers. By the end of the decade, mini-computers like the Series I had become a viable alternative to mainframes. As we moved into the 1990s, the increased capabilities of the hardware gave rise to more advanced software capabilities, particularly in the areas of business planning and inventory optimization. This created a general shift towards company-wide IT systems and the birth of Enterprise Resource Planning, or ERP.
Better business planning
“More advanced computers meant more advanced number crunching,” says Mark Cockings, senior vice president, sales and marketing, for IBS. “They could handle much more complex algorithms and calculations, leading to more accurate business planning. This had a huge effect on businesses because they could look in much more detail at lead-times, stock holdings, life-cycle management and many other key supply chain issues. ERP systems helped this planning run right through an organization, from marketing all the way to production and delivery.”
During the ‘90s, the tide of advancing hardware, followed by greater software functionality, led to business making more demands on technology. This came mainly in the shape of electronic trading. “With systems being relied on to manage whole businesses, the need for more interaction between systems became very important,” Cockings says. “Software was being developed to be more open and integrated with other applications, not only within organizations, but also with external companies’ systems, such as EDI. This led to a host of benefits, including increased information integrity through reduced data entry and significantly faster and more accurate flow of data through disparate systems.”
The sky’s the limit
By the mid-1990s, IT was firmly established as the key component in the efficient running of almost any business. The market was ready for something new that would take IT to the next level, pushing companies into a more global environment with virtually no limitations. The Internet delivered this dream and effectively moved IT from company-wide systems to a truly global supply chain environment.
“The Internet gave business the opportunity to move to new and larger marketplaces with a relatively low level of investment,” Cockings says. “Previously, companies wanting to expand their markets had to put more salespeople on the road. Thanks to the Internet, this was no longer the case. Now the Internet drives almost everything that everybody does in their business and even personal life. Information is always available to anybody, anywhere, anytime. It would now be possible for an entire multinational organization to be run by a single person from a laptop while sunbathing in the Maldives.”
Cockings points to the last 30 years as a time of massive shifts in the constraints on businesses. “Companies are no longer constrained by the inadequacy of technology,” he says. “At some point during the ‘90s we reached equilibrium between business demands and technology provision. Now we are in a position where technology is ahead of business, and this puts employees in a very strong position. Now it is all about imagination and belief, and it is the forward-thinking companies that will continue to evolve, with the technology working itself around their dreams and ambitions.”
EFT – Electronic Funds transfer
There are three really good things about using Electronic Funds Transfer to pay your vendors instead of printing and mailing cheques (or checks, as the case may be):
- You save the time and effort of handling cheque stationery, having them signed and stuffing envelopes.
- You save money on the cost of the cheques, toner, envelopes and postage.
- Your vendors’ payment can no longer get lost in the mail.
Oh, well, two out of three ain’t bad.
Most banks offer the ability to receive an electronic file containing payment instructions, and process those payment instructions against your bank account, transferring the specified amounts to the specified vendors’ accounts. Each bank uses its own file format and method of transmitting the file. And yes, there are usually charges for this service, but if you compare to the actual cost of manual payment processing, in most cases there is a direct saving using EFT. (The main exception would be where the number of payments per month is small.)
So as long as your accounting / ERP software is capable of generating the necessary files for your bank, EFT is an option worth at least investigating. If it works for you, the entire task of paying, say, 100 vendors can take just a few minutes. Manual payment of 100 vendors would likely take over 2 hours in total time commitment.
For Blue Link users, an optional EFT add-on component is available. If this is something you’d like to pursue, we’d recommend contacting your bank for information on their EFT offering, and then contacting Blue Link for further information.
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