The Attivo Blog

There are a few distinct groups that a company can fall into when it comes to a new ERP software implementation. Two of those three groups will almost always result in a less than desired ROI, and typically, the software will be blamed for that.  Unfortunately, in most cases, it’s the people in charge of the project that are its own worst enemy. Before we talk about what it takes for a successful ERP implementation, it is important to identify the three different types of groups. 

The first group knows that something isn’t working, but haven’t really taken the time to fully analyze their business processes and instead select software based on a familiarity that a key employee might have with a certain ERP software platform.  This is more common than you might think.  A CFO or COO may have worked with a certain program, and because of that comfort, the general idea is that training on the new software will be a smoother transition.  The problem is that most ERP solutions are so customizable that what one employee saw at another job might look completely different.  Furthermore, because the decision was based on familiarity, there is no guarantee that the functionality of the program is the best fit for your organization.

The second group has taken the time to fully analyze what they need their software to do, what they want their software to do, and what is already working just fine. This group does a much better job of selecting software.  The problem with this group is that they haven’t taken the time to anticipate the changes to their processes that a new ERP platform will dictate, and adjusting to those changes can be a lot lengthier than anticipated, cutting into ROI.  In a worst case scenario, adjusting to those changes may be downright impossible if everyone in the organization isn’t on board.

The third group, which typically enjoys the best ROI, has not only take the time to systematically understand what they need their software to do for them, but has also conducted a thorough business process assessment involving all key employees.  This allows them to not only fully understand the current processes, but to also map out what the new processes will be once the software implementation is complete.  And by involving all of the key employees, it helps to ensure a united front when the inevitable process changes occur.

In each case a company has done a certain degree of due diligence.  But an ERP implementation is a wholesale change to the way your company is run.  Without doing a wholesale analysis of your current processes as well as devising a road map for how things are going to be, you are likely going to wind up disappointed in your ROI.

If your business takes credit card payments for goods or services and you don’t know what the PCI DSS act is, you could be in for a rude awakening in the form of fines and penalties. Short for Payment Card Industry Data Security Standard, the PCI act is designed with one goal in mind — the keep the credit card information of customers safe and secure.

While the act itself is laden with over 200 different requirements to be fully compliant, the PCI compliance really comes down to a few core principles.

• Have firewall protection to protect cardholder data
• Do not use default password settings for vendor supplied software
• Encrypt transmission of cardholder data
• Regularly update anti-virus software on all business systems
• Restrict employee access to cardholder data
• Assign a unique ID to any employee with access to cardholder data
• Track and monitor all access to networks used to store cardholder data
• Run regular tests of your security systems

Failure to meet these basic requirements can result in fines ranging anywhere from $5,000-$100,000 per month that you fail to be compliant. For small and midsized businesses, these fines can be catastrophic.

PCI has come under fire from several different retail and service oriented business groups, whose universal complaint is that with over 200 sub-requirements, achieving and maintaining compliance can be extremely confusing for business owners.

As a result, many businesses are turning towards various merchant services organizations who go above and beyond PCI compliance, to process their credit card transactions. Organizations like Century Business Solutions will even guarantee PCI compliance, completely mitigating any risk of fines. And their solution can also integrate directly with your existing ERP software.  

Whether you only process 5 credit card transactions a day or 5,000, the PCI DSS is unavoidable. The only difference between the mom and pop business and the Amazon’s and WalMart’s of the world is the size of the fine you’ll have to pay if you aren’t compliant.

Too many businesses these days tend to focus on defensive tactics, which is a shame given the business intelligence tools at their disposal like ERP software. A company will have protocols in place to deal with unhappy customers, but aren’t proactive about how to head off customer complaints before they happen.  Or they will try to trim every penny off of the prices their vendors charge them, rather than working to make the supply chain more efficient.

ERP software solutions like Macola ES and Sage 100 are geared specifically for growing small to midsized businesses, who often times find themselves stuck in a rut.  Their systems work, but they could be working smarter, which prevents them from enjoying the types of profits that are available for the taking.

Just like nobody likes a grind it out 6-3 football game dominated by defense, nobody likes battling a balance sheet either.

ERP Changes the Game of Customer Service

The beauty of ERP software is that it integrates multiple departments of your business under one program. The warehouse speaks to the job floor, which speaks to sales, which makes customer relationships much better.

For example, let’s say a vital raw material is low on stock.  As a result, a large order that is placed will have to wait until more of that product is ordered. Unfortunately, because inventory doesn’t talk with sales, the sales team promises a lead time that is based on normal inventory counts.  When that delivery time isn’t met, you have a customer service nightmare on your hands.

This happens a lot.  But with an integrated solution in place, inventory counts are kept in real time.  So not only will your sales team know that materials aren’t available to fulfill the order, allowing them to provide a more accurate promised delivery date to your customers, but an integrated system will provide real time inventory control numbers, helping you to keep optimal stock levels on hand, potentially preventing these sorts of problems in the first place.

In addition, many modern day ERP solutions provide customer portals, allowing your customers to track support requests and orders on their own, cutting down on confusion and anger that can stem from them feeling left in the dark.

Offensive Strategies Lead to Profit Improvement

These sorts of integrated solutions support growth and profits by helping to reduce lead times and maximize inventory levels. They also help make your team more efficient, allowing them to switch focus away from revenue draining activities like logging customer support or doing physical inventory counts, and focus on revenue generating activities instead.

All in all, it is easy to understand why so many businesses feel as though they are in a consistent defensive struggle between revenues and expenses. However, if more companies were willing to invest the resources necessary to switch to a more offensive mindset, they would find that those same battles would become a lot more one sided in their favor.  

Updatephobia is a very real epidemic that has been affecting manufacturers and distributors for years.  Many suffer in silence in fear that the remedies for the affliction do more damage than good. There are two very distinct suffers of updatephobia that we’d like to cover in this blog.

The Legacy System Users

This group of people is currently using a custom builtERP system. It worked fine for years but as time went on, technology passed it by.  Unfortunately, because it is a custom solution, updating the software is all but impossible to do.  But because it is a custom system it is difficult to know where to begin when looking for a new ERP solution, let alone find one that has the same functionality as your current custom system. And switching to a completely new software solution will require you to retrain your entire staff, causing major productivity loss during the transition.

The Procrastinators

These companies are using a software package that is readily available on the market, but haven’t updated in years for various reasons.  Whether it be because they have multiple custom modules that they don’t want to lose, or they simply didn’t want to invest in training staff to learn an up to date system, they have put off upgrading for years.  The problem is that support for the older versions is getting harder and harder to come by, and eventually, as server technology continues to advance, their old software simply won’t be able to run on newer machines.

The Solution — Cloud Computing

One of the biggest headaches to updating an ERP software system is the inevitable wrinkles and speed bumps that crop up when converting data.  It causes a drop in production, both during the upgrade as well as afterwards when staff needs to be trained.

Let’s say you are using a product like Macola ES. PuttingMacola in the cloud is a great way to eliminate lost production.

One advantage of dedicated cloud services is that you are using servers in a remote data center. Any hosting partner will be able to copy your current data and begin building your upgrade in a remote "test" environment. While this is happening, your day to day operations continue uninterrupted.

Once the upgraded system is ready, you can familiarize yourself with it using a copy of your data in a test environment, as well as do training on the newer software. This again allows day to day operations to continue uninterrupted.

Once you are comfortable with the new system, yourimplementation partner simply takes the most up to date copy of your data and copies it into your cloud hosted software, and you go live with your new system.

Because your ERP system is now hosted in the cloud, all future upgrades to both the software and the hardware is done in the same way, allowing you to more easily stay up to date.

Not updating your software is an extremely dangerous game to play.  Like death and taxes, it is only a matter of time before old hardware fails.  And when it does, there is always a risk that new IT infrastructure simply won’t support the current software systems that you are running. With cloud computing, it takes a lot of the hassle out of staying up to date.

It has been an inevitability for some time, but the Marketplace Fairness act is one step closer to reality, and will have an effect on every single business with an e-commerce platform in America. Like a runaway train barreling down the tracks, the act passed a Senate vote by an overwhelming 69-27 vote, gaining bipartisan support that has been hard to come by for quite some time. It isn’t expected to meet much resistance in the House either.

For those not in the know, the Marketplace Fairness Act will require any company that sells goods via e-commerce to pay sales tax in the states that they ship to. Naturally there are minimum sales requirement that a company must reach before they are required to file a sales tax return in a given state. Those thresholds could vary, and when you throw in local jurisdictions as well, complying with the act will become overwhelming for most every e-commerce company not named Amazon.

With over 9,000 different tax jurisdictions in the United States, needless to say, companies are going to need help navigating a new law that could go into effect as soon as 2014. And there will be no avoiding compliance as the IRS will be coming down hard on online retailers with costly audits.

Thankfully there is Avalara which is designed specifically to navigate the overly complex sales tax jurisdictions breakdowns across the country. Designed to integrate with a number of e-commerce platforms and ERP software packages, Avalara is constantly updated to automatically calculate and file sales tax requirements in every state for you. 

Collecting sales tax doesn’t drive any revenue to your company.  It only cost money to invest the resources necessary to do so properly. And failing to do so will only cost you more money in fines, because it isn’t a matter of IF the IRS will audit you — it’s a matter of when. Avalara helps you not only avoid fines, but saves you time and money by automating the process.