News & Views

October 2011 from CAmagazine and written by Michael Burns – “In December 2010, we launched our first-ever business process benchmarking survey. The idea was to give organizations a chance to compare their performance with that of other organizations to expose possible problems and targets for improvement.  Given the lack of benchmarking data in Canada, we were sure we could all benefit.

Unfortunately, the survey did not draw enough respondents to provide statistical reliability. But we learned a lot in the process, and have made improvements that we hope will encourage you to participate, if you have not already done so…”

October 13, 2011 from Supply Chain Management Review – “To create a business case for an ERP investment and select the right ERP option, organizations should follow a 7-step process:

1. Describe the business challenge
2. Assess the potential benefits of the ERP investment
3. Assess the potential costs of each ERP option
4. Assess risks and issues that might arise during the implementation
5. Recommend the preferred solution
6. Describe the implementation approach
7. Measure potential and actual ROI…”

180 View – The article gives examples of challenges, benefits, costs and risks associated with ERP.  However anyone following the advice given is likely to fail making a business case to any CA or CPA. Accountants have been trained as auditors to not believe anything unless there is credible support for the numbers. So don’t throw numbers around without stating your assumptions and backing it up with credible support. As well accountants recognize the time value of money so you want to do a cash flow over at least 5 years and base ROI on Net Present Value. Finally most business cases have a negative ROI – look for intangible benefits that are linked to Critical Success Factors – what an organization must do well in order to be successful.

September 26, 2011 from ganntead,com – “..It’s therefore slightly surprising to me just how bad some RFP responses are. When I see a response that so dramatically misses the mark of what is asked for, it doesn’t just exclude the vendor from consideration for that contract, it raises doubts about the quality of their work in general…”

180 View – We send out a lot of RFPs and most of the time, the responses are done well. Today I was involved in a lengthy discussion with one vendor about their response to the requirements. We use a sliding scale – the higher the number, the better the fit. For example “7” means out-of-the box functionality or the requirement is fully addressed in the standard system. The vendor’s perspective was that if the tools they used allow for configuring the system to meet requirements without writing code, then it’s out-of-the-box. We had some challenging requirements that I knew were more complicated than just adding a few fields. I told the vendor I did not believe them but was prepared to let them do a demonstration to show their solution. I also told them it would not be pretty if they failed to demonstrate the so-called out-of-the-box functionality. The vendor in question is one for which I have respect and therefore I must be objective.

2011 from evaluation centre – “One of the most important, yet overlooked, activities in the ERP software selection process is the choice of implementation partner. In fact, the ultimate success of your project depends on the ability of the implementation team to work with you to configure the software to meet your needs. This means your choice of implementation partner should be a key consideration in the whole process…

Some areas to assess during the implementation partner selection process include:

1. Vendor experience.
2. Company longevity.
3. Proposed consultant CVs.
4. Methodology.
5. Billing rates.
6. Expected implementation timeline…”

180 View – We agree with the article on the importance of the implementation partner. We would also recommend interviewing the key people on the implementation team to make sure they are a good fit based on their experience as well as their personalities in adapting to the corporate culture.

November 13, 2011 from Toolbox.com – “I have seen many changes in the ERP industry over the past 25 years, and SaaS (cloud computing) is here and here to stay (and happening faster than many CIOs believe or want to believe)…”

180 View – The article includes a link to another article entitled “35 Questions Every CFO Needs to ask about ERP Software in the Cloud” – that’s worth a read. Take a look at the chart on Current and Projected Cloud Usage, which was based on a Harvard Business Review survey. The chart shows extensive cloud usage at 16% now but growing to 52% in 3 years.

October 31, 2011 from KPMG – “Transform your business with the cloud. This drumbeat has punctuated just about every technology and business conversation over the past few years. Fueled by hype, oversimplification and promotion, cloud provocateurs can carry on at length about what cloud is and how it can transform your business. Few can tell you what companies are actually doing to benefit from the cloud or how to create and deploy a cloud strategy that is truly transformative…”

180 View – It seems that everyone has jumped on the cloud bandwagon. KPMG has done a good job in clearing the cloud hype in this article.

August 23, 2011 from Business Finance – “The first thing the management team needs to accept is that no traditional budget can withstand a 40 to 50 percent change in a material assumption. In today’s volatile and uncertain world, the situation the management team faced is no longer a rare occurrence. Nearly every organization has to deal with unexpected material changes to key budget assumptions as a result of rapid changes in key input prices or the impact of material external events whether it’s a natural disaster, such as the earthquake in Japan, or the downgrading of U.S. government debt.

In the face of such uncertainty, executives are looking for tools that can help them plan with greater confidence. The result is a very different process than the traditional annual approach to budgeting, quarterly forecasting and monthly reporting. Today, in an era when the constant is change, four attributes should be part of the process:

1. The expectation that assumptions will be wrong
2. An early warning system
3. Real-time analytics capabilities
4. Ability to act with speed and confidence…

Traditional budgets often contain far too much detail under the mistaken assumption that the more detailed the budget, the more accurate it will be. When there is great uncertainty around certain aspects of the budget, sacrificing detail for flexibility by developing alternate scenarios that map out how resources and performance will change under different sets of assumptions is key…

180 View – Great advice and worth reading if you’re involved in budgeting and forecasting.

October 18, 2011 from CIO – “…Among the threats is the exodus of baby boomers and the emergence of a younger generation that’s been less loyal to corporate employers and are more likely to move to another job…

Starting this year, an average of 10,000 baby boomers will be eligible to retire every day for the next 19 years in North America, “and a lot of them are IT people,” said Cappuccio, people who are taking corporate knowledge with them…”

180 View – I believe that we have just started to see a major acquisition binge by companies that have no choice but to invest in an ERP system as their legacy system will soon no longer be supported by the baby boomers.

180 View – You will enjoy this video once Larry Ellison starts to rant.

180 View – Thanks to Lawrence Young for passing this on.