…Demand better ERP answers from vendors.
Many companies still get addicted to or trapped in a ’need-spend’ cycle where they install an ERP system, face an unexpected change in their business, and need to invest substantial time and money to adjust the system. Every time something changes, they go through it all again. Many of the larger ERP vendors offer infinite flexibility PRIOR to implementation, but once they are implemented, businesses are stuck – ideal for the vendors, but certainly not for you!
More often than not, by the time an organization discovers its business software is hampering progress, there’s usually no time or budget to make the necessary changes on the spot. To prevent this from happening, Agresso has put together a checklist with crucial cost-of-change related questions that most purchasers nowadays forget to ask – the missing link of software purchasing. This list is based on feedback from fast-changing organizations across several industries and covers the most common drivers for change in today's business environment.
The list also forms the basis of key questions you need to start asking your ERP vendor, how they would cope, and the likely costs to be incurred, with the following:
Total cost-of-change checklist
- click links below to view or view all for print here
| Reorganization & restructuring |
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Our organization is likely to change in structure in the future to accommodate market demands/drivers. What effort is required to change the existing management structure; for instance, by office (London, Paris etc); by job type (geotechnics, steel, seismic etc) or by vertical markets (banking, insurance etc)?
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How much effort does it generally take to implement a reorganization whereby one department splits into two departments - with different responsibilities, different management structures and different service delivery processes?
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What level of effort is required to review organizational changes within the Finance system – such as comparing results historically of the existing structure compared with the potential structure?
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How much effort is required to allow project managers to track debtors, creditors, commitments, budgets, actual, forecast and margins by individual projects in a situation when it is decided to outsource part of the service delivery to sub-contractors?
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How much effort is required to track a project (from start to finish) in a situation whereby the organizational structure changes, thereby changing ownership of the different phases of the project?
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What effort is required to change your approval flow of elements such as invoice, time or expense-related workflow processes to reflect either changes in organizational structure or changes in staff?
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| Organizational evolution |
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How much effort does it take to provide people evolving in their job (growing responsibilities, changing roles in the company, changing divisions, etc.) with the right reports and level of access to information (less or more)?
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What level of effort is required to support the business when rolling out new products or services, or when changing the service delivery methodology (e.g. fixed price to hourly rate)?
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What effort is required to add a new metric by which to slice and dice results or performance?
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How much effort is required to start analyzing pay costs to a lower level of detail than just overtime?
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How quickly is it possible to change from a multi-site implementation to a shared services implementation without disrupting the business?
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| Mergers & acquisitions |
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How much effort is required to migrate the merged/acquired organization(s) together on the corporate business system, thereby ensuring one version of the truth?
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What effort is required to enable employees from the newly acquired organization to operate cross division/project to leverage synergies skills and cost wise?
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What effort is required to introduce a common reporting structure across multiple legal entities and regions while continuing to meet local reporting requirements?
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What level of effort is required to move to operating one Credit Control department for the entire group?
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| Government reform & compliancy |
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A new regulation (such as IFRS) is introduced by the government. What effort is required to comply?
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How much effort is required to ensure new and old reporting standards compare?
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What level of effort is required to report financial data alongside non-financial data (e.g. related to corporate social responsibility), potentially for a retrospective period of time?
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Summary
Any business that encounters regular change can use this checklist before making a purchasing decision and check whether potential vendors, or even current vendors, are able to provide satisfactory answers to the criteria specified, particularly for mission-critical systems such as ERP. Every requirement that is not met means a direct and tangible risk to an organization’s ability to achieve its mid- and long-term objectives, and a potential drain on resources. Organizations that find their software is too inflexible should start evaluating alternative options. Only then will they be able to cope with business changes, such as those listed above, to a satisfactory conclusion.
Investing in rigid ERP systems that are unable to cope with such changes can be counter-productive and is not necessary. Take our health-check, discover more about how your ERP strategy is working, and learn that there ARE alternatives...
