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Archive for category ERP

Power7 Announcements and Low Pricing for Entry level Machines

Feb 13

Posted by dshirey in ERP, PRMS, System i | Comments off

I generally don’t talk about hardware.  To be honest, I find it kind of boring.  And I have trouble remembering all the model numbers and how they relate to each other.  But this piqued my interest.  Again, not because I thought it was interesting (please reread first two sentences of paragraph) but because of what I see out there especially in the PRMS world.

So many people seem to be switching from PRMS to either Oracle or SAP.  And they all seem to be doing it the same way, by leaving the i and going to servers.  The thing that jumps out at me in all these cases is that while the i was always up, once you switch to servers you get a constant stream of ‘environment down for maintenance’ emails going out to the entire corporation.  And seeing the time for your MPS/MRP run double because of server limitations.

It really amazes me that more i people don’t realize that the i, even if it is an i running AIX, is more than a viable option to run  their new ERP.  Is it because we just don’t think of it, that we are so tunneled into thinking of the i and iOS being paired?  Is it because, as I have heard, IBM pushes people toward servers rather than the i?  Or is it a sinister plan on the part of an alien race that is slowly invading Earth and supplanting the human race?  I’m not sure.

What does this have to do with the recent Power7 announcements?  I guess it just reminded me how the i is always advancing in terms of speed and size.  And the pricing on the entry level 710 and 720 machines is so low that I am reminded that it is affordable as well, especially with the title of lowest overall cost of ownership.   We are privileged to work on one of the greatest machines ever developed.  We should think twice before we let it go.

 

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Business Myths 1 – The Importance of Your ERP System – Part 2

Dec 11

Posted by dshirey in ERP | Comments off

 

Ok, it’s not like everyone has been asking for this, but I feel the need to provide some additional clarification to what I said in my last post.  Unless you read it very carefully, it’s possible that you were left with the opinion that I don’t think  the ERP system is very important to your business success.  In fact, nothing (or at least not too much) could be further from the truth.

If your business has reached a certain size (not too small but not too big), you need some sort of business system, and for most types (not all, but most) types of businesses, an MPS/MRP style business system is a good fit.   And the better your ERP system, the better it is for you.

At the same time, many companies today are laboring under the assumption that if they purchase an immensely expensive system that is practically impossible to implement successfully and then spend the first year (or two) after implementation desperately trying to explain to their customer base that everything was / is / will be fine in just a week / month / decade, then everything will be OK.  You will have every feature you ever wanted and, get this, no matter how your business changes, this system will adapt and still be perfect.

If that seems reasonable to you, then you are in line with what many of the top managment in companies across the country are thinking.  If, on the other hand, you think that sounds ridiculous, then you are in agreement with me.   And if you think that sounds ridiculous, then you are normal.  Congratulations.

All I was trying to say was that there is no perfect ERP system that you can purchase.  And the more effort you put into installing an ERP system then the less effort you will have available for servicing your customers today.  I know that companies love to say that they can do what ever needs to be done, no matter how many things are going on simultaneously.  We’ll just do it.  But  some of us believe that’s not how the physical world works.

Want to have an above average ERP system; one that lets you up the level of service you are providing?  Then start with a good ERP system, one that is easy to modify without having to tear it apart.   Then carefully make modifications to that system so that it matches the way you do business.  And when I say carefully, I mean carefully, thoughtfully, flexibly.  It’s too bad that over the years modifications and enhancements have gotten such a bad rap.  Mostly, of course, it’s because they are usually done clumsily, causing more problems than they solve, but it doesn’t have to be that way if it is done properly.

Anyway, bottom line – having the most expensive ERP system is not the goal.  It’s having the ERP system that is easiest to change because your business will do that, and the one that is most closely attuned to how you actually do business.   That’s all.

 

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Myths of Business 1 – The Importance of the ERP System

Nov 29

Posted by dshirey in ERP | Comments off

 

There are a lot of myths out there.  Things that we in the business (and technical) world believe to be true but which just aren’t.  But we cling to those myths and make business decisions with them, and generally ignore what happens when we do.

And one of the foremost of those myths is putting too much weight on the importance of your ERP system.

Please note that I am not saying that a good ERP system is not important.   Your  business system is one of the main assets your company has, and a solid ERP system is critical.  But you would be amazed what you can do with a crummy ERP system.

I was talking to an old client the other day.  Their corporate entity, located in another country, forced them off of PRMS 9.3 about 18 months ago and onto a hybrid consisting of two PC systems with a bridge in between them.  I will gloss over the fact that they still have the i and are still running some functions on it (wave goodbye to any financial savings).   And how are things going?  The bottom line is that everyone has to do way more manual work to get things done than they ever did with PRMS.  And sometimes they can’t ship because the two systems do not agree and they can’t produce the shipping documents required.  But are they going out of business?  No, they are still going along, getting things out to the customers and generally doing what they need to do.

And the reason they can do this is their people.  No matter how bad your ERP system is, if you have good people, who are willing to work very hard, and do a lot of things that should be taken care of by the system, you can stay in business and even thrive.  In the end, the real benefit of a good ERP system is that it makes things easier for the people, not that it makes certain things possible.  You get what I’m saying here?  Just as in Jurassic Park where ‘nature will find a way’, so will people.  They will get the task done no matter what obstacles the system puts in their way.

And what is the point?  The point is, all of the companies who are searching for the perfect ERP system and are willing to pay whatever to get it, might want to relax.  Certainly there is a minimum level for what your ERP system should do, but in reaching for the moon we are ignoring what is really important, what really makes the difference for us.  Technology is not always the only solution, sometimes it is just a tool to help people create the solution.

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Big System Fever

Oct 5

Posted by dshirey in ERP | Comments off

I was talking to someone the other day.  Someone who is very smart.  Someone who I respect a great deal.  Someone who is an upper level executive in her field (finance).

We were talking about systems.  You know, ERP systems.  And she was talking about the problems associated with ERP systems in a multinational corporation that has disparate divisions and products.  (No, it’s not the mob.  Come on, people.  Almost though.)

And the solution that really made sense to her was a single, world-wide system.  I’ll let you guess which of the two it was.

Yes, she agreed, the installation cost is large, but it’s a one-time charge.  Once you peel off the bandage you are done with it.

And yes, it doesn’t accommodate differences in the way different sites do business and it may require more effort from employees who are used to a localized ERP that was tuned for their convenience.

But it allows companies the fantasy of thinking that they have the most advanced and far-reaching ERP package available.  And it does generally give a common GL system with which to do financial analysis.  And common vendor data to facilitate bulk purchasing.  And stuff like that.

I smiled a little because I know that the roots of this advanced system and most of its internals are older than she is.  And because I know there are many ways in which to get a common GL or vendor data base or any number of other things.  But mostly I smiled because there is no way to explain that to someone who has not been through a system install, and when I say through it, I mean ‘up to their neck in getting it done’ through it.

Big systems are the rage today with their big price tag and their promise of almost unlimited flexibility.  My perspective, after having participated in the switch for three of my customers, is much different.  It’s going to take significantly longer to do the install than you imagine.  It’s going to cost significantly more to do it than you thought.  It’s going to be harder for the users to do their jobs because the screens are not optimized for the way you do business.  And you are either going to have to give up functionality or go through the arduous process of modifying the package to do what you want.  And when you are done, you are probably done, because it will be too expensive, time consuming, and dangerous to try to put in an upgrade.

But if you say those things out loud, everyone looks at you like you are crazy, out of touch with the times, unable to see the benefits.  And they are right.  I can’t see the benefits.  The jury’s still out on the other two.

 

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The Future of ERP

Oct 28

Posted by dshirey in ERP | Comments off

I’ve seen a few articles, and I’ve been doing some wondering on my own, about what the future of ERP will be.  Maintenance costs keep rising (22% now for Oracle and SAP), the time it takes to install is being measured in years, not months, and once you get fully installed you’re too broke or exhausted to ever upgrade. 

 

I think the problem is there are two contradictory forces at work here.  First, ERP systems are now very functionally rich.  And that richness is built on a very robust and complex infrastructure which makes setting up that infrastructure a very time consuming and user intensive task – the main reason why it takes so long to bring a new ERP up. 

 

Second, even though these ERP packages are very functionally rich, they are not quite rich enough.  In fact they could never be rich enough to deal with the imaginations of our nation’s business leaders, and despite what we may wish, you can’t always (or hardly ever) just say ‘we are not going to do it this way anymore because our ERP system doesn’t support it’.  Many times there are very solid reasons, reasons that mean a lot to the customer base, why companies do the bizarre things they do.  And so for most ERP packages the customization phase starts almost before the first item master is created and goes on forever.  That’s what makes it so hard to upgrade. 

 

So, there you go.  We need a complex system to handle the complex business conditions we have but it will never get complex enough in just the right ways to make everyone happy without customization.  In addition, 80% of the complexity in the package is not something you need and it will just get in the way, and the 20% that is applicable doesn’t go quite far enough.   A slow creeping quiet fills the room and from the back a small, sad voice says simply, “We’re doomed.” 

 

To be honest, I haven’t a clue how this will all turn out.  Maybe we will get to the point where we just accept the fact that installing the ERP system will go on indefinitely.  Or maybe the ERP vendors will take things into their own hands and make their packages simpler?  All together now, let’s hold our breath.    

 

But I do know what should be done.  (If this has been suggested before, accept my apologies, I have not seen it.)  We need a simple, underlying, black box ERP engine that everything else could be built around.  No, wait, hear me out on this.  This would not be a full ERP system as we understand that term today, with every bell and whistle we can dream up.  It would be a bare bones MRPII model designed to store the company data base in a flexible format, perform the standard MRP calculations, provide the necessary feedback loops that distinguish MRPII from MRP, and track the heck out of the financial side.    

 

This package would not try to supply every user desire.  There are some areas it wouldn’t bother with at all.  It would be much smaller, much simpler, but it would do the heavy lifting an ERP system is supposed to do.  Even the files would be fairly simple and the emphasis would be to make an MRP Kernel that would be simple to install and which could not be modified even if you wanted to. 

 

But it would have something very important.  Much of what goes on in an ERP system is internal.  You feed demand in, you look at inventory, you calculate your requirements.  Internal.  I don’t care about no stinkin’ outside world.  But there’s other stuff that an ERP system does which depends very heavily on  external connections.  Where does your demand come from?  How did your inventory get entered into the system?  And at each point in the ERP kernel, where outside information is needed, there would be not an application but an interface point, a standard, simple to use, common interface to the outside world. 

 

Meanwhile, all around the kernel, independent software suppliers could build their applications that would bolt onto this kernel.  The interface would be standardized and you could pick and choose the particular applications you needed.  Now I know that sounds like chaos but I don’t think it would be.  Most of the major ISV’s would develop a general suite of applications and if your needs were not too bizarre you could just buy that suite and interface it in.  You don’t have to go to 15 vendors to buy 25 separate packages.  But if you did have a real specialty need, you could buy that app from that one vendor and interface it in too, because there would be a common interface and everything would fit in just like everything else. 

 

Because of the common interface, there would be a great deal of pressure on ISV’s to tailor the files in their package that are part of this interface to match those of the ERP kernel.  There would also be a great deal of pressure on these ISV’s to make their implementation as simple as possible because now that becomes a parameter by which you judge and separate the different contenders.   

 

You would start with a common kernel and then custom buy or build those special areas that make your business unique. 

 

Some people might say that with a simple file structure underlying the whole thing you could never build the complexity into it that the interfaced packages need.  I don’t agree.  I think that is a myth, the myth that we need to build every possible contingency into the base files.  I don’t think you need to.  Maybe once we did, back when we were scrimping and saving on every bit of disk space we used, or writing weird routines to shave milliseconds off the cycle time.  But today, I don’t think it matters.  I think it is possible to define a data base that is simple and which does not preclude the use of add on ‘complexity files’ in the interfaced applications to support special capabilities for those customers who need it.    

 

Now, I know what you’re thinking.  You’re thinking that maybe this is a good idea but it would never work because no one has enough leverage to make this happen, to build the Kernel and shove the standard interface down everyone’s throat.  And I almost think you’re right.  Almost.  Because I think there is one company that still has enough clout and enough breadth to do this – IBM. 

 

Yes, they may not be the IBM of the 70’s anymore but they are still very strong and a powerful force in the industry.  If IBM would build a very moderately priced ERP engine (think almost giving it away), with a standardized interface, maybe even simple interface apps for those who don’t need too much, and embed that into DB2 via one of the 10,000 versions of SQL, I think they would have enough leverage to make people think twice. 

 

Like I said before, I don’t know what will happen.  I know for sure that it won’t be what I have described above.  It just makes too much sense, and my experience has shown me it’s always the least logical ideas that see the light of day. 

 

But it is interesting to think about.        

 

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Impact of the Recession

Oct 14

Posted by dshirey in ERP | Comments off

In a recent LinkedIn post from the Supply Chain Managers Group, the question was asked – How has the recession changed your business?    

 

There is no single answer to that question of course, but my shot at it is how the role and strength of the finance group has changed.  Historically, operations, sales, and finance have formed a triumvirate that ruled the business world.  Each had their own interests and point of view and the three groups were able to keep each other more or less under control.  Over the last decade Finance has been slowly growing stronger but that growth has really accelerated over the past 18 months because during that time the most important thing that businesses have looked at is – cash. 

 

Yes, cash is king today and we are focused on it in a way we never have been before; namely preserving it rather than using it.  On one hand, that’s not a bad thing, if you are in business it’s a good idea to keep an eye on the cash box.  The problem is, business people, like normal people, find it hard to focus on more than one thing at a time.  Over and over again we have seen one idea come to dominate the business world view, and that one idea reigns supreme for a few years and all other concepts are subordinated to it.  And then the backlash begins.  The one new idea didn’t solve all of our problems and so we turn against it.  We’ll see if that happens here. 

 

Anyway, as the recession has focused our attention on money, we have come to view all business questions from a financial point of view.  And again, that’s not all bad.  But for many companies that means looking at any spending that doesn’t yield an immediate return as bad, and this leads us to look at things almost exclusively from a short term point of view.  In the extreme you end up hunched over the steering wheel, your left foot poised expectantly over the brake peal while nervously scanning the road ahead that is only faintly illuminated by the glare of your parking lights.  We’re not going to take a chance, we’re not going to get caught short, caution becomes not just a word but a way of doing business. 

 

Almost without thinking about it, the balance of power has shifted to finance and the natural system of checks and balances that used to keep things in order are gone.  We have gone from worrying about sales, market share, and growth, to being obsessed with how much cash we have stored up, and that emphasis on cash and being cautions could hamper efforts to come out of the doldrums and be ready to meet what comes next. 

 

What we should have learned from the recession is that what’s important is to keep our balance and be able to quickly react to changes.  It’s focusing on cash in terms of how we can best use it to position ourselves for further growth.  It’s realizing that it’s the innovators and the agile who will emerge from this downturn stronger and better positioned.      

 

There is definitely a place for caution in the business world, but neither can you fold on every hand.   The key is being balanced, listening to different voices, and then pursuing a course that is more focused on what could go right, then on what could go wrong. 

 

Am I right?  Or losing it?  Comment below.   Â