ERP project management – a guide

ERP project management tasks: a roadmap for new managers

Experience shows that an experienced employee takes over the management of an Enterprise Resource Planning (ERP) project. This has a number of advantages. They have good technical knowledge and are very familiar with the internal processes of the department – and with the tasks of a project manager. They can also assess their colleagues and make valuable recommendations about the composition of the project team. But as is often the case, where there is light, there is shadow. When it comes to project management, leadership is clearly at the forefront. In many companies, it has become an everyday occurrence: an employee is suddenly expected to lead a team and take responsibility for a complex ERP project – even though he or she is not normally exposed to project management tasks. What is not considered: The demands placed on a project manager are not the same as those placed on, say, a technical employee.

This is naturally a difficult situation where role conflicts are inevitable. The problem arises when the individual’s skills do not match the role profile of a typical manager – or when there is simply a lack of professional experience. Of course, there is nothing wrong with taking on new challenges. However, this confrontation often results in excessive demands, which can easily lead to poor decisions and conflicts. Especially in an ERP project, where a lot of time and other resources are invested, this is of course counterproductive. This article summarizes some useful tips to help you get started as a newcomer to project management.

Before the project starts – a structured approach to new tasks

But before you change your mind – with good preparation and a good team, you can look forward to your tasks as a project manager with confidence. The first important things you can do before the project starts. There are basically three areas that will influence your success as a project manager without a direct line manager function.

The factual, organizational management level
The human, personal level of your colleagues
Your own understanding of your role

The management level

The implementation of an ERP project is always a temporary double burden for the individual team members. Everyone should be aware of this if they want to be involved in the project implementation. Nevertheless, the temporary extra work is often the source of conflict. The reason is easy to find.

An example

Let’s say you didn’t sit down with your key user’s manager to discuss the project before it started – simply because you didn’t know it was important. The project begins, and you as the project manager and the manager continue to demand the employee’s attention. You delegate tasks to them, they continue to report to their regular manager, and they still have to manage the normal day-to-day business. Your key user is finding it increasingly difficult to juggle the project and day-to-day responsibilities. He now has two options: Either he communicates in time that he is overwhelmed and needs help, or he allows the situation to continue as before. Either one side falls by the wayside completely, or both sides are dealt with half-heartedly. In the end, it is the key users who have to deal with the backlash from the department and their project partners – as well as a lot of overtime. The result is usually overworked, frustrated project members who are not likely to be available in the future.

Involve your key users’ managers

Fortunately, this is a situation you can easily avoid. As is often the case, the key to success is communication. If a key user is not being adequately supported, it is your responsibility to sit down with the appropriate manager. It is best to talk to the manager before the project begins and work together to find a solution. This is an important step to take, because you as the project manager have different goals than the department head. In this way, you can clarify different interests, policies, and controversial points without putting them on the backs of your employees. To successfully complete the project and keep the business running, everyone needs to be on the same page-even if that means taking on a task for a colleague or working an extra hour. Make it clear to everyone that this is a temporary change that will ultimately benefit the entire company.

“ERP project management takes care of itself”

The same is true for you as a project manager. This may sound like an exaggeration, but managing a project is a full-time job. An ERP project requires constant attention and coordination: you are in constant contact and exchange with management, key users, department heads and the customer.

The colleague level

Get to Know Your Project Team Early

In order to perform your duties as a project manager well and conscientiously, you should get to know the members of your team. If you have the opportunity, try to participate in the composition of the team. It is part of leadership to observe the strengths and weaknesses of individual employees and offer them room for development. Only when you know your team well can you assign tasks and coordinate the team. Questions to ask yourself

What are my key users’ strengths and weaknesses?
What are the relationships between key users and their peers?
What are their special skills?

A kick-off meeting is especially useful if you are working with colleagues with whom you might not otherwise have much contact. It allows you to sit down and get to know each other before the project starts.

Understanding your role

The role conflict mentioned above is probably the most difficult challenge you will face as a project manager. There are countless ways to lead a team. What are they and how do you find the right one? Basically, someone in your position already exudes a certain basic authority and competence. You can either explain everything in detail and justify every decision – or you can simply present your team with a fait accompli. You can approach your colleagues on an equal footing, act as a coach, or simply issue blunt instructions. One thing to keep in mind: In everyday life, you work together as equals, possibly performing the same or similar tasks. In your role as project manager, you automatically move up a level on the hierarchical ladder, even if only temporarily. You become a kind of superior. If you take advantage of this situation and simply give orders, you will not win any points with your colleagues – and your acceptance will certainly be diminished.

Project success vs. colleague relationships

Of course, every project manager wants to see teamwork between employees in order to complete the project quickly. However, you cannot and should not rely on this. When in doubt, you need to be able to take action to get the project and people back on track. Ultimately, you are responsible for the outcome and success of the project. Success is measured by whether you achieved the project goals on time and on budget. How people feel about you or your methods is ultimately irrelevant. However, there is life after the project – and you will no doubt want to maintain a good relationship with your colleagues. What is the best way to handle the situation?

Finding a good balance

You are probably in an unfamiliar situation and may find it difficult to give orders. Try to find a compromise that everyone is happy with. Make it clear that you want to do your job well – and that delegating tasks to others is part of the job. Remain authentic and lead by example. Try to get your team excited about the project and create a good atmosphere. Think of yourself as a facilitator who is responsible for the results. One rule that really always applies: no matter how stressed you are, treat everyone with respect – no exceptions.

Important areas and basics

You should also familiarize yourself with these defined areas before starting the project:

Process planning and scheduling
Cost planning
Risk management
Project controlling
Project organization and documentation

The implementation phase – what else should you consider?

Set clear goals

You can only get there if you make decisions and know where you want to go. Discuss the customer’s requirements for the project in as much detail as possible. This is particularly difficult with very technology-oriented projects such as an ERP implementation: the customer often has little idea of the technical possibilities. A good way to present these in an understandable way is to hold a workshop. However, you should not only discuss project goals and milestones with the customer, but also with the team in advance. What needs to be done by when? What are the intermediate goals? Don’t start without a plan, but work out a clear assignment with clear goals, workflows, and deadlines. Read about how to set specific goals and other success factors.

Delegate tasks as a project manager

As a project manager, you often feel like you have to do everything yourself. However, project work should always be a team effort. If you take on too much and cannot relinquish control, you quickly run the risk of becoming overwhelmed. As mentioned above, as the project manager, you should know the strengths and weaknesses of each team member. You can then assign tasks accordingly. Make sure they are completed on time, efficiently, and completely. Be clear about the task and the expected outcome. It is not your job to get involved after the fact, or even to complete the task yourself. Of course, this does not mean that you should not listen to problems. Delegating work has several benefits. It helps take the pressure off you and keeps you from getting stressed. You can focus on your own tasks and give others a chance to learn. You cannot be an expert in everything. Use the expertise of the whole group so that everyone can do what they do best.

Communicate successes and problems

Poorly organized projects can result in work being done twice or not done at all – or you don’t know exactly who is responsible for what. This is not very efficient. Especially when you have a limited time frame. There is a simple solution. Make a list that everyone can see. Your list could include the following items

Who is involved in the project?

What is their role in the project?
How can they be reached? How do they generally communicate with each other?
Who is the contact person for questions and problems?
Who has what tasks and when do they need to be done?

When do meetings take place?

What will be discussed at the meeting?
Who documents what is discussed?
Does everyone have to attend the meeting?

When tasks are visually assigned and clearly documented for all to see, people tend to complete them promptly and conscientiously. No one wants to be the person everyone has to chase and can’t count on.

After the project is before the project

Project participants eagerly await the deadline. You might think that once all the phases have been successfully completed, the project is done. However, as the project manager, you still have some work to do. For example, you should document whether the effort has been worthwhile from a business perspective and record any important results.

Conclusion: ERP project management

As you can see, there are several things you can do before the project starts. Even if you have the role of project manager, you do not have to do all the work yourself. The relationship between you and management is especially important. They need to be behind the project and support you when problems arise. Without their support, it will be difficult for you to develop authority over the team. However, do not try to run the ERP project strictly according to management’s instructions. This is very likely to cause problems and resistance from the workforce. Still unsure? Then you could attend training courses or seminars to learn the most important basics before you take over the project management.

Want to learn more about ERP project management or the full range of TimeLine ERP features? Send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We look forward to hearing from you and will be happy to advise you!

22. April 2024

ERP software with integrated financial accounting

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Regardless of whether you run a small business or a large corporation: Financial accounting is a particularly important topic for every company. If only because it is heavily regulated by law. Manage all relevant data, receipts and supporting documents properly. This will help you avoid problems with tax authorities or other institutions. There are various methods for this. In this article you will learn

– what methods are available

– what exactly finance and accounting means

– what benefits ERP software with financial accounting offers you

What does finance and accounting actually mean?

Sometimes you stumble across certain topics or terms in everyday life: You know roughly what they mean, but don’t quite understand them or can’t explain them. For some people, this certainly includes finance and accounting. The first thing you should know is that finance and accounting should be considered separately.

Finance

Finance encompasses all economic areas that deal with finance in any form. It is made up of five sub-areas:

Finance (procurement of equity and debt capital)
Accounting (recording and monitoring all cash and service flows)
Liquidity management (securing sufficient funds)
Treasury (building up collateral to minimise financial risks in the event of a crisis)
Controlling (planning, management and control of all areas of the company)

A distinction is also made between public and private finance.

Public finance

The public sector (federal government, federal states and municipalities) requires financial resources to fulfil public tasks. The public finance system regulates how these funds are raised, managed and utilised by the public sector.

Private finance

As the name suggests, private finance deals with the finances of private individuals. In addition to investments, shares, the stock market and banking transactions, this also includes taxes and insurance.

Accounting

Accounting is a sub-area of finance. It consists of the areas of financial accounting (external accounting), controlling (internal accounting), statistics and planning. All business operations, including all cash and service flows, are recorded and controlled in accounting. Both processes that are directed outwards and those that take place within the company. Data that you need for planning and control can also be documented in accounting. Accounting is divided into two categories:

External accounting

External accounting deals with all transactions relating to the past. Legislation requires a company to disclose certain internal data – primarily in order to be able to assess the company’s financial situation. This is why every company is obliged to prepare annual financial statements, including a balance sheet, once a year. For this purpose, all incoming and outgoing payments, values of financial investments and loans are recorded objectively and chronologically. The resulting information on the company’s assets and earnings situation is then passed on to the public – including the tax office, investors, banks and suppliers.

Internal accounting

Internal accounting, on the other hand, calculates all future costs and services. This allows you to plan and control company processes. All information relating to the company’s processes, services and profits is recorded, documented and processed. Internal company decisions are then made on the basis of this data, with the aim of maximising the company’s success. This is an important area, as it allows the company’s profitability to be assessed. High costs or, on the other hand, particularly profitable areas of the enterprise.

Financial accounting and software

Are you looking for a suitable solution for digital financial accounting? Is your first thought the use of an ERP system? Probably not. Initially, you probably associate it more with the planning and control of resources and their optimization. Nowadays, however, ERP systems can do much more. Finance and accounting, for example, are now standard functions of many modern ERP solutions. However, many decision-makers do not pay too much attention to this function during the selection process – a mistake, as many SMEs are still wasting great potential in this area. There are various ways to manage financial accounting. Which one is best to use? That depends entirely on what your goal is: whether you just want to handle the purely mandatory part or whether you want to utilise the information – and thus have a better overview of the entire company.

ERP system without accounting

Small companies often use an ERP system mainly for materials management and sales. Invoices and receipts are passed on to the tax consultant, as there is often a lack of time and qualified personnel. The disadvantage here is that a tax consultant is quite cost-intensive. In addition, there is often no overview of the company’s key figures.

ERP system with interface to accounting

This method is often used by companies whose ERP system either does not offer an additional module for financial accounting – or who already work with accounting software and do not want to part with it. Every single movement from purchases and sales is transferred from the ERP system via the interface to the accounting software. However, this method also has its disadvantages. You need trained accounting staff. Data is often exchanged at the interface with a time delay. This can mean that the data is not always up to date. In addition, the use of multiple systems always harbours a risk. Errors can easily occur when transferring or entering data. This naturally distorts the results, which is a particular problem in accounting.

ERP system with integrated financial accounting

With this method, you first need to set up a few items, customers and suppliers. Only then can you post all expenses and revenues correctly. The movements from purchases and sales are then automatically reflected in the accounting. All other expenses that do not result from purchases or sales are recorded through debit and credit entries – such as rent, electricity and telephone. You can create official reports directly in the programme.

Benefits of integrated financial accounting

Integrated financial accounting software offers you a number of advantages. For example, this method enables more in-depth analyses, as all data is stored in a central location.

Centralised database

An ERP system brings together all the important data from a wide range of business areas. Accounting, on the other hand, spends a lot of time collecting information and managing documents. Both areas are dependent on high-quality and standardised data. The great benefit of an ERP system with integrated financial accounting is that there is only one central data pool that you have to maintain. Of course, accounting also benefits from this function. As part of the ERP infrastructure, digital financial accounting is connected to other areas of the company. Much of the information that accounting needs is often already part of the data pool of an ERP system.

Data exchange with other departments

Once you have recorded data, you can simply transfer it and use, supplement and analyse it in other areas. Integrated time recording allows the HR department, for example, to see which employee has worked when. The accounting department can access this data and make payroll processing much more efficient. The use of a single platform eliminates duplicate entries and significantly reduces maintenance. The absence of an interface also eliminates a risk factor. The accounting department therefore has less work and at the same time the company’s ability to provide information is improved.

High quality of the database

There are several functions that help to ensure the high quality of the database. Duplicate entries are automatically corrected and entered data is checked for logical connections and plausibility. The data is also updated in real time, so the bookings are always up to date.

Automated processes

Another advantage is that an ERP system can carry out a large proportion of the necessary work steps independently. It is important for accounting that payment flows from purchases and sales are correctly allocated. If accounting is handled via an ERP system, customer and supplier data can be obtained automatically. Incoming and outgoing invoices are then automatically created, allocated to the correct accounts and posted. In addition, the information stored in the accounting system is also available to users from other areas of the company.

Standardised interface

Users of the ERP system have a standardised user interface. This means that they only need one password to work in different areas. This not only simplifies day-to-day work, but is also particularly useful for backing up data.

Conclusion

Every company is different and there is no one-size-fits-all solution that can be recommended for everyone. However, the requirements for transparency, up-to-dateness and quality of business data are constantly increasing. From a certain company size, the use of an ERP system with integrated financial accounting makes perfect sense – especially if you want to use the data for more than just tax reasons. Or if you want to know and analyse your business and its key figures in detail. However, you should not forget that this always requires trained accounting staff.

Would you like to find out more about integrated financial accounting or the full range of TimeLine ERP functions? Send us a message using the contact form, or contact our sales team on +49 212 230 35 200. We will be happy to help you and look forward to hearing from you!

22. April 2024

Homeoffice trend accelerated by Covid-19 – and how ERP can help

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Empty streets, closed stores and canceled events – things that were previously part of our everyday lives have been put on hold for the time being. The measures taken are tough but absolutely necessary to slow down the spread of Covid-19. The economy has not been spared either and is being put to the test. Small and medium-sized companies in particular are facing major challenges and are uncertain about the future. Nobody knows exactly what to do, as there has never been a comparable situation before. Many companies are therefore currently undergoing a rethink. What was unthinkable for a long time is now becoming the norm – working models such as mobile working and working from home are no longer an abstract idea but are increasingly being implemented so that tasks don’t fall through the cracks. Many companies are not prepared for this change. In this article, we would like to give you some useful tips to help you remain productive in homeoffice and counteract economic downturns.

Homeoffice – working from home in times of corona

In order to contain the spread of Covid-19, most of us are forced to move our work and leisure time to our own four walls from now on. Familiar work processes are no longer possible and many of us have to restructure our everyday lives. Anyone who has a traditional office job can theoretically work from home. This option is currently being taken up more and more, with many employees working from home. Especially for parents who are affected by daycare and school closures, this is an opportunity to continue working and look after their children at the same time. Chains of infection are interrupted, work does not have to be stopped and productivity is maintained despite everything – a solution that benefits everyone.

German companies are far behind

Topics such as flexible working hours and homeoffice have often been discussed in the past, but this rather novel working model has yet to really catch on. German companies and institutions are far behind their international competitors. In many places, doubters have slowed down the progress of digitalization in recent years. According to a study by the Institute for Employment Research, only around a quarter of employees in Germany have the option of working from home – but 80% of employees in large companies and around 60% of employees in small companies would expressly like this option. The result: many companies are not prepared for the current situation. Technical requirements are lacking and isolated solutions do not allow employees to work outside the company walls.

Staying productive while working from home – what you should bear in mind

Working from home is currently more in focus than ever. For some it is easy, but for many employees it is also a big change. Familiar structures and work processes are completely eliminated and those who are used to working regularly according to a set rhythm are probably overwhelmed by the freedom of working from home and find it difficult to develop a work routine. However, homeoffice also has some advantages and it is quite possible to be productive and focused if you keep a few things in mind. What is needed now is a new approach, which above all requires discipline, focus and clear boundaries.

What is needed for a homeoffice workplace?

Basically, you don’t need much to be able to work from home. Digitalization has long made location-independent working possible. The IT department should provide you with the necessary technical hardware such as a laptop or desktop PC, if not already available. You also need a fast and stable internet connection. You also need to ensure that you have all the necessary access authorizations. You can dial into the company network via VPN (Virtual Private Network) – and you’re ready to go!

Create a productive environment

If the layout of your home allows it, set up a separate area in the house that is only intended for work. Ideally, you should have a separate room for this purpose. You should not be in this area outside of working hours. It is best to place your desk by a window so that you are surrounded by natural light.

Clearly separate work and leisure time

Probably the biggest challenge when working from home is the many distractions. Quickly doing something around the house, doing the shopping and if you can’t resist the temptations you find in the house, you’ll quickly find yourself on the couch. It is important to keep work and private life strictly separate, otherwise the two will increasingly mix. You are responsible for organizing yourself and having the necessary discipline. Remove distractions from your field of vision, put your cell phone in another room if you don’t need it for work and make it clear to your family that you are at your desk at work and are only available in urgent cases – because after every involuntary break you need about 25 minutes to get back into your usual working rhythm.

Time management in the homeoffice

Working from home naturally lacks the feeling of coming home and finishing work, which is why many people feel unproductive. To counteract this, you can write down your to-do’s for the next working day the evening before, for example. You will get more done and feel much more productive at the end of the day if you can cross a few items off your list and see what you have achieved. Also set a clear start and end point for the working day. This will make it easier for you to develop a working rhythm and it will be easier to mentally separate yourself from the work if you finish it at a fixed point.

Without a clear boundary, you don’t have a real end to work and being permanently on call only leads to mental stress. Also make sure you take active breaks. But don’t make the mistake of spending them on the couch, for example. Otherwise, 30 minutes can quickly turn into three hours. Use the time when you are most productive and prioritize your tasks according to importance. It also helps many people to start with a task that is the most difficult or takes up the most time. Once you have successfully mastered this task, the others will also be easier.

Also go to work mentally

For many people, the working day begins with the journey to the office, which is of course not necessary when working from home. Even if you are at home, get up early and get ready as if you were going to the office. Sweatpants may be comfortable, but they don’t create a working atmosphere. Instead, choose an outfit that you would also wear to the office. This will also make it easier for you to communicate with your colleagues and customers at eye level.

Use communication opportunities

The emotional connection to the team should not be lost. Digitalization makes it possible to stay in contact with colleagues and customers. So, try to actively maintain contact, even if it’s not the same as the usual coffee break with your colleagues.

Slack and Teamviewer are among the beneficiaries of the crisis

In most crises, there are many losers but also a few winners. The latter often include those who respond to society’s problems with a solution. Given the current situation, it can be assumed that more and more employees are taking advantage of the opportunity to work from home. As a result, the demand for co-working tools is also steadily increasing, as collaboration can still be maintained despite the lack of personal contact. Companies such as Slack, Teamviewer and Zoom are currently experiencing an upswing on the stock market and are clearly among the beneficiaries of the crisis. Microsoft, for example, has seen a six-fold increase in the use of its “Teams” tool. However, despite this success, profit is not the main focus for many companies. To make working during this time a little more pleasant for everyone, some are lowering the prices of their products or offering functions for free for a certain period of time.

Advantages of cloud-based systems

If you use a cloud-based system, you benefit from a number of advantages. It is therefore not surprising that demand is currently growing by leaps and bounds. A standardized database ensures that everyone can work in real time and with the most up-to-date data. In addition, there is no need for high initial investments and you can work from any location. Find out more about the various cloud models and their benefits here.

Conclusion

In the long term, crises always have social consequences. Current developments also point to a fundamental change in society. In recent years, digitalization has often been viewed critically. Data protection officers raised objections and productivity was called into question. A mistake that many companies are now feeling the effects of. The economy is being ejected into the digital future – those who can’t or don’t want to keep up are going under. The current situation could give a lasting boost to the topics of homeoffice and mobile working in Germany. Even if the current situation is forcing companies to push ahead with digitalization, the development of modern, digital strategies should also be given a higher priority regardless of the current situation.

Corona permanently changed the world of work

The most important thing now, however, should be to look positively to the future. An optimally equipped workplace is all well and good, but it’s no use if you don’t approach things with the right attitude. If everyone sticks together during this time and shows the necessary self-discipline, we are convinced that we will also overcome this situation. Despite all the bad news we are currently hearing on a daily basis, initial measures to contain the novel virus have also started to have a positive impact: Air pollution in China, for example, has decreased significantly. Satellite images published by the space agency NASA show that nitrogen dioxide pollution has fallen significantly.

TimeLine employees are also working from home. Nevertheless, we are there for you as usual! Sales, project management, accounting and customer service – neither productivity nor our customers suffer from this situation. If you would like to find out more about working from home or the full range of TimeLine ERP functions, please send us a message using the contact form, write to [email protected] or contact our sales team on +49 212 230 35 200. We look forward to hearing from you and stay healthy!

22. April 2024

Pros and cons of the most popular Enterprise Resource Planning models

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Implementing Enterprise Resource Planning (ERP) software usually requires a lot of resources and time, which is nothing new. This is not surprising, however, when you consider how closely the system is intertwined with your own processes. Organizing the project well in advance makes everyone’s job easier and helps avoid costly adjustments later on. This includes deciding on a process for integrating the new software. Even before the actual project begins, the customer and the ERP provider must ask themselves which approach will make the implementation the quickest and most efficient. There are two very contrasting Enterprise Resource Planning models that continue to enjoy great popularity – the waterfall method and the agile approach.

In the spirit of “old brooms sweep better”, most companies rely on the classic and proven waterfall method. Although more and more customers are interested in agile development methods, only a few are confident enough to implement the new ERP system using this concept. Many managers are still skeptical and unwilling to give up some of their control. This may raise some questions: What is the difference between these two approaches? Which one is better suited to my organization’s needs? This article will give you an overview of the two methods, their pros and cons, and hopefully make your decision a little easier.

The classic approach – the waterfall method

The waterfall approach is the typical Enterprise Resource Planning model. It has long been the standard, especially in the software industry. The first formal description of this model is attributed to Winston W. Royce. In his article “Managing the Development of large Software Systems”, published in 1970, he did not use the term “waterfall”, but made it clear even then that this method could be extended and was not suitable for every project. The waterfall method is characterized by a strictly linear project process. At the beginning, the course is defined by dividing the project into several phases. These phases are then consistently worked through in a predetermined order. Once a phase has been completed, the customer and vendor review and approve the results. Each completed phase initiates a new phase and is considered unchangeable; subsequent changes are generally not contemplated. Decisions cannot and should not be reversed.

There are several variations, but the basic waterfall ERP model consists of the following six steps:

Requirements Analysis: definition of intended functionality
Design: development of the software architecture
Implementation: development and integration of the software
Integration testing: finding and fixing bugs
Rollout: putting the system into operation
Support: making sure the customer has no problems with the product

The customer’s business objectives and requirements for the ERP system are set out in a requirement specification that defines how they will be implemented. The actual implementation varies from vendor to vendor.

Strengths of the waterfall method

The waterfall method is still very popular. Not without reason, as it provides clear and orderly structures, which is very important for some entrepreneurs. The implementation of ERP software is a major change, and planning and structure provide a little more security during this time and are therefore welcome. By the end of the preparation phase at the latest, everyone involved in the project will have a clear idea of what steps need to be taken before the actual launch, what stage of implementation you are at, and what lies ahead. Planning and calculating the budget and time required, especially for very large projects, is of course very precise.

Weaknesses of the waterfall model

However, the waterfall method also carries some risks that should not be underestimated, especially in the case of tricky and confusing ERP implementations. Ironically, the strictly linear approach often leads to a loss of control. The design effort for this method is usually very high, as each step must be planned in great detail. Since the phases are strictly separated from each other, you are tied to the predefined processes. This makes it very rigid and inflexible, making parallel work almost impossible.

The biggest weakness here is that mistakes or misunderstandings that occur at the beginning of the design phase only become apparent at the end of the implementation or, even worse, during functional testing. It is also possible that a use case is completely forgotten during the design phase. In this case, the ERP system will not take it into account. In both cases, this results in unplanned and costly additional work. On the other hand, due to a lack of communication, the vendor may implement unnecessary modules or functions that are never used in practice. In general, the limited communication in this method is often a reason for misunderstandings, as the customer and the ERP provider have different interpretations of the concept. The result: the customer is dissatisfied because the system does not meet his expectations. Obviously, this is a situation that should be avoided at all costs.

Agile development methods

Agile approaches were developed in response to the weaknesses of the waterfall method. One of the first variations of this method was Scrum. Scrum is a process model for project and product management, especially for agile software technology. The origin of this approach goes back to the article “The New New Product Development Game” in the Harvard Business Review in 1986. Among other things, Takeuchi and Nonaka emphasize the importance of self-organized teams in the entire development process. Today, this relatively new approach is mainly used in software development, but is also applied in many other fields.

According to this method, tasks are not implemented according to a linear plan, but in short implementation cycles called sprints. Goals are set at the beginning of each sprint. As the project progresses, the project team fully implements a work package, usually a functional requirement, in each cycle. This is then tested to produce an executable, presentable subsystem at the end of each cycle. This allows the customer to provide feedback at any time. Ideally, a cycle lasts two to four weeks. With each subsequent cycle, the project team and the user try to improve the requirements and gradually approach an optimal solution. This approach allows plenty of room for interaction, adjustments, and updates. This is especially helpful if the customer’s requirements for the software change during the implementation, or if other challenges arise.

The agile approach is as follows:

Sprint 1 (design, implementation, testing, documentation, evaluation)
Sprint 2 (design, implementation, testing, documentation, evaluation)
Sprint 3 (design, implementation, testing, documentation, evaluation)

Strengths of the agile approach

A key advantage of the agile approach is that it is flexible and practical in its implementation, with a clear focus on communication and customer satisfaction. The project team and the customer or future users of the system work closely together from the beginning. The users are involved in each cycle and see individual areas of the system in action at an early stage, as a working subsystem is created after each cycle. This means that the software can be put through its paces during the implementation phase.

Errors in the design are quickly detected, and the customer can quickly see whether the software meets his real expectations and requirements. It is also much easier to avoid misunderstandings. The project team can directly implement feedback from the customer and use the new knowledge to adapt the process if necessary. Above all, the agile approach prevents the project from ending in an expensive customization marathon. It also increases user acceptance because employees can influence the project through continuous involvement and thus identify more strongly with the system.

Weaknesses of the agile approach

Even though this method has more advantages than disadvantages, it is not suitable for every company. In order to implement an ERP system in an agile manner, management must give up some control, as the agile approach is not based on fixed project plans and schedules. In addition, some planning certainty is always lost, as it is never possible to say in advance exactly when which function will be ready and operational and what the expected outcome will be.

Agile vs. waterfall: key differences in ERP models

Both approaches have the same goal, but follow different procedures. Here are the main differences:

Waterfall method

Classic approach, long the standard in the ERP industry
Linear approach
The project is divided into phases, which are worked through one after the other
Project results are presented at the end
The process and concept of the project are defined at the beginning and are generally not changed
Once phases are completed, they are not changed
The deliverables are known and the scope is clearly defined
The customer has clear requirements that change little or not at all
The project has a relatively short duration
The customer wants to be minimally involved in the process

Advantages

High planning reliability
Budget, current status and next steps up to actual launch are known at all times
Planned timeframe is easier to meet due to clear and organized structures

Disadvantages

Relatively rigid and inflexible to change
Costly adjustments are often necessary because errors made during the design phase are not discovered until the end
High design effort
Each step must be planned in great detail

Agile approach

Alternative to Waterfall
Linear processes are replaced by cycles (called sprints).
In each cycle, a work package, usually a functional requirement, is fully implemented and tested to create an executable subsystem.
The project process is flexible.
Planning and design are not rigid, but evolve as the project progresses.
Partial results are adapted based on user feedback
The scope is rather unknown, the scope is variable
The project has a relatively long duration
Requirements are unclear and many adjustments are expected
Customer wants to be heavily involved in the process

Advantages

Flexible and very practical
Focus on communication and customer satisfaction
Joint learning process
Close collaboration between customer and ERP vendor
Fewer delays and rework
Faster detection of design flaws through testing after each cycle
Increased user acceptance because employees are constantly involved in the project and can influence the processes

Disadvantages

Managers have to give up some control
Some planning reliability is lost because it is never completely clear when which feature will be ready

Which Enterprise Resource Planning model is best for my needs?

Which method is best for you and your organization depends on many factors and cannot be answered per se. Unfortunately, there is no universal solution that works equally well for all organizations. The waterfall method is more often used in companies with hierarchical structures, where planning security, control and orderly structures are a priority. Customers who like to have an overview of the company’s workflows and processes are more likely to choose this method. These are often projects with constant requirements. Projects with many unpredictable factors that require flexible adjustments tend to be unsuitable for this method.

The following questions can help you decide which approach is right for you:

Can the goals be clearly defined in advance?
Does the customer have clear expectations?
Does the project team need a clear leadership structure?
Is there a deadline or clearly defined milestones?
Is the budget clearly defined?
Are no major changes expected during the course of the project?

If you answered “yes” to most of these questions, the waterfall method is probably better for you. Agile development methods, on the other hand, can be an approach if the customer does not yet have a precise idea of what exactly they want. This method is particularly interesting for companies where the project is likely to last a long time and where conditions, wishes or priorities are likely to change over time. Organizations often choose a combination of the two Enterprise Resource Planning models. These hybrid approaches combine elements of both. For example, you might want to create a long-term plan based on the waterfall approach, but without strictly separating the phases – a mix of planning certainty and flexibility.

In any case, it is worth taking a closer look at both methods, as they both have their pros and cons. It is best to spend some time researching and working with your ERP vendor to determine which model best suits your needs.

If you would like to learn more about the the different Enterprise Resource Planning models for your ERP implementation, or the full range of TimeLine ERP features, please send us a message using the contact form, write to [email protected], or contact our sales team at +49 212 230 35 200. We look forward to hearing from you and will be happy to advise you!

22. April 2024

Properly calculate and reduce ERP system costs

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How ERP software costs are broken down – and how you can save

More than ever, digitalization is forcing companies to restructure their processes and connect departments. A good solution for this is an Enterprise Resource Planning (ERP) system. Naturally, companies wonder how much ERP systems cost. The good news is that not all the costs of an ERP implementation are set in stone. There is a variable portion of ERP software costs that you can control. In this article, you will learn how ERP costs are made up, how to identify cost drivers, and tips for saving money during an ERP implementation.

What exactly does the cost of an ERP system consist of?

First of all, we should clarify how the cost of an ERP implementation is made up. If you know this and are aware of the factors that can have a negative impact on the cost of an ERP system, you will have more opportunities to influence its development. Depending on the scope of the processes to be covered, the price of the ERP system is made up of different factors. For example, which modules or how many workstations you need are taken into account. However, because pricing models vary from company to company, it is difficult to make general statements about the actual cost of an ERP system. In general, however, it can be said that the costs are made up of two areas:

ERP software license costs: Software license costs account for about 50 percent of the total ERP system cost. Unfortunately, these costs cannot be reduced and should always be budgeted in full.
ERP services costs: The other 50 percent of ERP costs are services. These are variable and therefore controllable. Services include customization, consulting and services, and training for key users and end users.

What are the ERP system costs for services?

How much of your budget is spent on customizing, consulting and training depends on how closely you work with the standard. Whether it is an ERP workshop, conceptual design, coordination meetings, programming, data transfer, reporting, or training, as a customer you have an impact on all services. Of course, you should not do without these services. Consulting, training, and technical customization are undoubtedly important to adapt the ERP system to your company’s needs and processes, and to familiarize your employees with the system.

How can you reduce ERP system costs?

With good preparation, you can significantly reduce the cost of ERP systems in the service sector. Your help is needed! Unfortunately, it is not always possible to completely avoid unwanted costs. Sometimes, even with an ERP workshop and specifications, certain items are difficult to estimate. These become apparent only in the course of the project. However, there are also cost drivers that can be avoided with good preparation.

5 Tips for lower ERP system costs

Tip 1: Have clear goals and specific requirements

When you decide to implement an ERP system, you probably have a rough idea of how it will improve your processes. However, many companies are very vague about their goals. They often want to implement everything that is possible, in the spirit of “every feature will come in handy someday”. The problem with this approach is that it is difficult to calculate the cost of ERP software.

If requirements are vaguely defined and problems are only scratched on the surface without questioning possible causes, the project is on shaky ground from the start. The result becomes apparent at the latest when the specifications are written. Then you have no choice but to work with what people want – and that can lead to delays and complications.

Therefore, you should formulate clear objectives and specific requirements at the outset, so that an ERP system is created that meets your needs – and your budget. This will enable the vendor to select the right ERP system, ensure a successful ERP implementation and avoid unnecessary additional costs.

Tip 2: Balance project management and departments

Another factor in high ERP software costs can be the behavior of individual departments combined with weak project management. Often, individual employees or departments have more freedom than others. They are used to pushing through their plans and making few compromises. Then every idea, no matter how small, has to be implemented – be it an evaluation, a list, or a request.

Add to this a project manager who just gives in and approves all requests, and you, as the decision maker, will soon find yourself with a long list of requests, needs and ideas from your employees – and a correspondingly high ERP system cost. To keep costs in check, you need strong project management that can sometimes reject employee suggestions.

Of course, suggestions from employees should be taken seriously, as they are in the best position to judge which features are beneficial. A good way to do this is to keep a list of all the customization requests that employees make, and continue to use the standard queries for the time being. After some time in the field, it will become clear whether further customization makes sense or whether the desired items have become superfluous.

Learn how to build a strong project team here:

Tip 3: Prepare data accurately

The database is the foundation of an ERP system. The first step in any ERP implementation is to determine what data will be transferred to the new system. This is usually master data. However, everyone has a different definition of master data, so you should determine in advance what data will be transferred – and verify that it is current. That way, you start with fresh data and can get the most out of the software without having to worry about making adjustments later. This can significantly reduce the cost of your ERP system.

Learn how to prepare data well here:

How to Define Data Maintenance Criteria

Tip 4: Train users properly

You need to budget part of the cost of the ERP system for training the relevant users. How much these costs will be depends on two factors. First, which and how many modules will be used, and second, how many people will need to be trained and how often. Obviously, the greater the number of modules, the more time-consuming the training will be. Experience has shown that a younger age structure requires less training than an older one. Young, PC-savvy people often only need to be trained once, while older people need to be trained more often.

For more useful information on training, click here:

Why ERP Training Makes Sense

Tip 5: Prioritize your ERP project

Many companies think that implementing an ERP system is a project that runs parallel to the day-to-day business and does not require many resources. You should let go of this idea. The project is not a service that you hire your ERP vendor to provide and then get out of its way. It is about your processes and your people.

If you do not give the project the attention it deserves, it will be delayed – and this will most likely be reflected in high ERP system costs. Every additional meeting, every postponed appointment, and every trip by the ERP consultant will increase the cost of the ERP software. Your cooperation is required to ensure that the implementation goes as smoothly as possible and that your costs do not increase unnecessarily.

Customer projects often take precedence over ERP projects. The project team consists of inexperienced people because the experienced people are needed elsewhere. From your point of view, this may make sense – after all, the customer brings revenue to your company, while the ERP project costs you resources. However, this approach usually leads to additional costs because inexperienced employees often make mistakes that can be avoided. The principle is simple: the more priority you give to the project, the faster you can implement the ERP software – and the lower the ERP implementation costs will be in the end.

Conclusion: how to reduce ERP system costs

Implementing an ERP system comes with a high initial cost. The software comes with many standard features, but no system can be perfectly tailored to your needs from the start. Customization is important to ensure that your processes are fully supported and covered. However, only half of the cost of an ERP system is fixed, and you should take advantage of that.

If you keep these points in mind, nothing stands in the way of a successful – and affordable – ERP project:

Good preparation and cooperation – with a detailed requirements analysis you can avoid later adjustments. Be as specific as possible about what you want the system to do.
Strong project management helps keep implementation costs in check. Appoint a person to keep an eye on costs and keep a firm line with the staff.
Carefully prepared data reduces the need for rework and improves performance.
Training costs can be reduced by choosing users and modules wisely.
The more attention you pay to the project, the lower the costs will be in the end.

If you would like to learn more about ERP system costs and your options for reducing them, please send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We will be happy to advise you!

22. April 2024

The specification book in the ERP project – implementation of customer requirements

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The creation of a specification book – a requirements and functional specification – is usually one of the mandatory tasks before an ERP implementation. Admittedly, creating these two documents is not one of the most popular tasks in an ERP project. They take up a lot of time and resources that are usually needed elsewhere. Time pressure or capacity constraints are often reasons for not creating them at all, or for creating them only very briefly and superficially. The consequences of this approach often become apparent later in the project. Especially for demanding ERP projects, you should not do without a functional specification. It will help you plan the implementation in the best possible way and minimize risks in the project – to name just a few of the benefits. In this article, you will learn why it makes sense to create a specification book, what it should contain, and what else you should be aware of.

Definition – what is a specification book?

The specification book is a document created by the contractor. In the case of an ERP project, this is always the ERP vendor. It is based on the specifications formulated by the client, in this case the customer or interested party, in the requirements specification. In a specification book, the vendor describes, usually in very detailed form, how it intends to implement the customer’s requirements. It contains a concrete description of the solution as well as a detailed work concept and clearly defined target states that have been agreed upon in advance. This document also defines the technical capabilities, functions and configurations of the ERP system that will enable these target states to be realized. In short, the “how” and “with what” is a particular focus when creating a functional specification. It is the “roadmap” for a smooth implementation and provides a framework for the entire course of the project.

In addition, the content of the specification book serves as a contractual basis for the collaboration between the customer and the ERP provider and has a legally binding status. It also serves as an acceptance criterion for the implemented ERP solution at the end of the project. As you can see, the specification book has a right to exist. The terms requirements specification and specification book are often used interchangeably, which often leads to misunderstandings and confusion. In fact, from a purely legal point of view, it is very important in which of the two documents something is recorded. If one of the two parties does not adhere to the previously agreed content, the customer and the ERP provider can always rely on the written agreements in the specification book. In this context, it is important to know that all previously discussed agreements between the customer and the ERP provider lose their validity as a result of the requirements specification, unless otherwise noted in it.

You may also be interested in:

The specification book – a guide for the customer
Why is a requirements analysis important?
Cost drivers of an ERP implementation

What are the benefits of a specification book?

A spec sheet is really used whenever there is a client and a contractor. It is especially helpful for very large projects. In addition to the legal security it offers both parties, it has three other major advantages:

Planning certainty for the customer and the ERP provider

Thanks to the very precise documentation of the target statuses and the necessary work steps, both the customer and the ERP provider know exactly how the project is progressing at all times. This ensures that deadlines are met as closely as possible. In addition, both parties know when the project is expected to be completed and can plan accordingly. But that’s not all – it also helps to keep an eye on the budget. Every adjustment has an impact on the cost, and this prevents it from getting out of hand. The client knows exactly what he is getting for his money and the contractor can calculate his expenses with certainty.

Transparent processes

The detailed written formulation of the solution approaches makes the entire path to go-live transparent. Everyone involved knows where they are in the implementation and what steps are needed to complete the project.

Fewer renegotiations

First and foremost, a well-developed specification eliminates the need for nerve-wracking renegotiations and discussions. As mentioned earlier, both the customer and the ERP vendor can rely on the agreed-upon items in the document at all times – anything that is not in the specification book is not included in the scope of delivery. A follow-up request is created for all subsequent change requests. Subsequent deliveries, changes, and scope creep – the uncontrolled growth of project requirements during implementation – are easily avoided.

You might also be interested in:

3 signs it’s time for an ERP change
Implementation with waterfall or agile ERP model?
Why does an ERP project fail?

Process – from specification book to functional specification

Typically, the customer or prospective customer writes the requirements specification, and the customer and potential ERP vendor discuss which items can be implemented and how in an ERP workshop. The prospect and the vendor go through the items together and the vendor determines whether they are included in the standard system or whether they need to be customized. The ERP vendor often provides advice on the requirements listed in the specifications. If a requirement does not appear to make sense, or if an additional feature or service would be more appropriate in this context, the vendor will usually make a counter-proposal. The specification book is usually written after the selection of the EPP and at the beginning of the implementation phase. At TimeLine, the specifications are sometimes created during the workshop or shortly after. The points discussed with the interested party are documented and summarized.

Typically, the project manager needs one day for each workshop day for follow-up work. The specification book ultimately determines the cost, i.e. how expensive the ERP project will be in the end. Although it is the basis for the offer, it does not mean that the order will be placed. At this point, other vendors may still be in the game. The prospect can then decide whether the competition may have made an offer that has more features or is simply a better fit for the company. Before the prospect makes a selection, changes can still be made to the specifications. Once the prospect selects an ERP vendor, the specifications become part of the purchase contract and cannot be changed. The prospect orders based on the specifications, and you enter into what is called a letter of intent.

What if the customer wants to make changes?

Especially in large projects, unplanned changes often occur during implementation. But if the customer wants to change something after the fact, the purchase contract changes as well. Each time a change is requested, the ERP vendor decides whether or not the item is still in the budget. If it is not, a second quotation or follow-up order is created. Anything that goes beyond the specifications is a follow-on order. Although the hourly rate remains the same, the customer is in a better position to negotiate if they order more services from the beginning and do not order additional features later.

How do you measure a successful implementation?

Licenses are reviewed with the customer after installation. As far as customizations are concerned, they are not reviewed once at the end of the project, as one might assume. It is more of a process that is done and reviewed on an ongoing and continuous basis, such as weekly or monthly. This is also feedback for both sides as to whether you are still on schedule.

You might also be interested in this:

What is an ERP workshop?
Why online presentations pay off
On-site ERP training – is it worth it?

Structure and content – what should be included in a specification book?

A specification book is used in a wide variety of areas, so standardization is simply not possible. There is no regulation or legal standard that describes what a functional specification should contain, what structures should be followed, or what a functional specification should look like in general. There are, however, various approaches – the following structure has proven effective in software development:

Introduction

It is always advisable to summarize the most important key data for an ERP project. Make sure that all parties involved are explicitly named and that the project is briefly described. Communication channels should also be listed.

Who is involved in the project?

Contractor and customer
Stakeholders
Project team
Contact person for questions or issues

Are communication channels listed?

What is the project about?

What is the end result?

Description of milestones
framework conditions
Definition of deadlines (completion, acceptance, deployment)

Any special features of the project

Project goals and non-goals

It should be clear that the goal of the project should be listed. However, there are often items in an ERP implementation that are somehow “docked” to the edge of the project. Therefore, it can be helpful to define the non-goals in addition to the project goals. By explicitly defining which areas are part of the project and which are not, discussions can easily be avoided. By formulating non-goals, the boundaries of the project become clearer and the “gray area” becomes smaller. In this way, you quickly gain clarity about what is “in scope” and what is “out of scope” in a project.

What will the project address?
What will the project explicitly not address?
What problems will the project solve?

Application and product environment

The future use and environment of the product should also be specified in the specifications. This includes the target audience, application areas, business processes that will be affected, and operating conditions.

Features

Make sure that all functions and use cases are described in detail.

How and under what conditions does the function work?
What is the impact on other business processes?

Services

The services describe the requirements you have for a particular function. For example, the execution time or the accuracy of a calculation. Make sure all services are listed.

Quality requirements

The quality requirements should also be summarized:

What are your quality requirements?
What does quality assurance, quality control, and quality acceptance look like?

To be more precise, it is useful to assign a quality level to certain characteristics, for example

Changeability = not relevant
Efficiency = good

User Interface

Basic requirements for the type of layout, dialog structure, or access rights should be listed here.

Other and special requirements

Dazu gehören zum Beispiel die Dokumentation, Buchführung oder Sicherheitsanforderungen wie der Passwortschutz.

Technical requirements

The technical equipment required for the implementation should be listed here. It is useful to list the software and hardware systems that need to be installed for the application. This is important, for example, to ensure the availability of the network connection.

What equipment do you need for what task?

Interfaces

All existing systems, products and interfaces should be listed here. This is important to be able to connect the product to all other applications. Are there already project-related systems and/or products that do not need to be implemented by the contractor?

Problem analysis

The most important problems and perhaps also those that are to be expected should be summarized here. A solution approach should be available for the most likely problems.

Project development

This item should describe as precisely as possible what steps are planned at what time and how the entire project is organized.

Testing and acceptance

Tests check the product for functions, features and quality before it is completed. If the product runs without errors, it can be declared complete.

What conditions must be met?

This is just an example of what a specification book can look like. Some criteria are essential, others are important but not critical. Still others are desirable but can be left out. Which features are “must haves” or “nice to haves” will vary from company to company. Just make sure they are clearly identified as such. The level of detail can vary, but the technical requirements should be described in great detail. Ultimately, it is important that the requirements from the specifications are consistent with the statements in the specification book and that there is no room for interpretation. The requirements specification should be well described and documented, leave little room for interpretation, be specific, and include a necessary cost estimate. As a rule of thumb, it should leave no questions unanswered and an outsider should understand what is meant.

What else should you be aware of?

From the customer’s point of view, you should first take some time to look at the specifications carefully and not just wave them through unread. Pay particular attention to the interpretation of your requirements and check that they have been implemented according to your wishes – simple, but it can save you a lot of trouble later on. In addition, there is always the risk that you will ignore the current situation in the company when writing the specifications. This means that you miss the opportunity to take advantage of the potential for improvement offered by the new system. Use the ERP project as an opportunity to take a critical look at your workflows and business processes – this will help you realize the potential.

From the ERP vendor’s point of view, it makes sense to invest some time in development, to coordinate in detail with the customer, and to leave nothing unresolved. If questions remain unanswered, if you are looking for an answer, and if there are bottlenecks, clarify this with the customer immediately. It is important to be as accurate and detailed as possible when writing the report. It is also a good idea to use plain language and avoid using technical terms. Many different people will read the specifications – not all of them will have a deep technical understanding. Graphical representations are also a good way to communicate complex content in an understandable way. Use diagrams, tables, or mind maps to visualize the customer’s requirements and make them as easy to understand as possible.

Conclusion

Creating a specification book is a necessary step in minimizing the risks of an ERP project. On the one hand, it serves to fulfill the requirements listed in the specifications and to plan the implementation in the best possible way so that there are no nasty surprises at the end. On the other hand, it helps to validate the implemented solution at the end of the project and to protect both parties. It is particularly important to know the difference between specifications and requirements. Legally, it makes a big difference which of the two documents defines something.

If you would like to find out more about requirements analysis, specifications and functional specifications or the full range of TimeLine ERP features, please send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We look forward to hearing from you and will be happy to advise you!

22. April 2024

These tips will help you with your ERP selection

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Today, a well-functioning, customized Enterprise Resource Planning ERP system is essential. Used correctly, it can be the hub of your business – a central place where all your business processes converge and can be coordinated by you. But getting there is not always easy. The task of finding the right system for your business can present you with one or two challenges – choosing the right ERP vendor is one of them. The complexity of the market is often underestimated. It can be very confusing, with a number of ERP vendors offering systems for different use cases. Each software has its own strengths and weaknesses. Is it any wonder that many decision-makers are already overwhelmed at this early stage of the project? To make the ERP selection process a little easier, we have compiled the most important information about the selection process for you.

ERP selection made easy – getting there step by step

The entire ERP selection process usually involves a great deal of organizational effort and requires careful preparation. The process is divided into several stages. The search for a suitable ERP provider always begins with a requirements analysis. The results are usually recorded in a requirement specification. The creation of a longlist and a shortlist is also crucial for a structured process. The first step is a broad search to identify all potential ERP vendors. In each subsequent step, the number of candidates is reduced according to an elimination process until only a handful remain.

This approach means that you are not immediately overwhelmed by the flood of ERP vendors, but have the opportunity to filter by certain characteristics and then make a decision. This may sound like a long and unnecessarily time-consuming process. Keep in mind, however, that you will get to know each of the remaining candidates personally during an ERP workshop before the actual ERP selection. It is therefore in your best interest to start with a short – but high quality – shortlist. So far so good – but how does it all work?

You may also be interested in this:

Why is requirements analysis important?
The requirements specification – a guide for the customer
The requirements specification in the ERP project – implementing the customer’s wishes

Starting with a longlist

Now you have read the term ‘longlist’. But what exactly is a longlist? The name gives it away a bit. A longlist is a popular and efficient tool for ERP selection. Basically, the goal is to reduce the large and confusing range of products on offer to a manageable level so that you not only find it easier to make a decision, but also to make the right choice for you in the end. The first step is to get a general idea of the ERP vendors and options that are generally available, and to eliminate those that do not meet your key selection criteria.

Where do you find potential ERP vendors?

There are several approaches to finding potential ERP vendors. The most common method is probably a simple and targeted Internet search. A vendor’s website will give you an initial overview and provide you with information that you can use to create your longlist. However, the downside is that most websites only list the most important functions and features, and you may not be able to tell if the provider can meet your specific needs. In addition to researching on the Internet, you can also find information in trade magazines or by attending trade shows and events. The latter has the great advantage that you can get to know the provider personally and form a first impression. You should never ignore the interpersonal level when choosing an ERP.

The World Wide Web as a first stop

More and more vendors are offering live webinars to give prospective customers a first look. Similar to a trade show, this makes it easier for you to assess whether you should consider working with the ERP vendor. Comparison sites can also be a valuable tool in your search. They allow you to filter a large number of ERP vendors based on specific criteria, giving you an initial overview. However, it is important to ensure that the platform is independent and neutral. Regardless of how you search for potential candidates, you should always keep in mind your ultimate goal of finding an ERP system that is right for you. The following questions can help you determine whether or not a candidate should be on your long list:

Does the ERP system meet your most important requirements?
Which of your non-functional requirements does it meet?
Does the ERP vendor specialize in a particular industry, perhaps even tailored for you?
Are there any criteria that rule out the vendor?

The point of this step is not to analyze every ERP vendor in detail. A cursory review is sufficient at this stage. If an ERP vendor meets the most important requirements, you can add it to your collection. The result of your research is a list of potential ERP vendors, called the longlist.

You may also find this interesting:

ERP implementation cost drivers
Implementation with waterfall or agile ERP model?
Why does an ERP project fail?

Reducing and filtering – how the shortlist is created

The first part is done. You now have a list of ERP vendors that are generally of interest to you – but you have not investigated them further. The next step is to separate the wheat from the chaff and take a closer look at the candidates. But how do you do that? What criteria should you look for? This is where your specifications come in. Send them to all the ERP vendors on your long list. Briefly describe your requirements and ask for an initial assessment. Of course, the primary focus should now be on whether the ERP vendor and its software are a good fit for you and can implement your requirements. But don’t just pay attention to the technical content of the answers; the soft factors in particular will give you valuable information about your potential partner. The following questions will help you in your evaluation:

How long do you have to wait for a response from the ERP vendor?
Do you get a standard response or does the vendor respond to you personally?
Is the communication at eye level?
Does the feedback provide value to you, or does it feel like a sales pitch?

Don’t underestimate interpersonal relationships

The interpersonal relationship is often underestimated, but it is essential for successful collaboration. If you do not get along with the provider on a personal level for some reason, conflicts are often inevitable. You can now use the reactions of each vendor as a reference point to eliminate further entries from the list. Your list should now contain only ERP vendors that meet your required priorities and also score high on the soft factors. In a best-case scenario, you will be down to two to four ERP vendors.

If your shortlist is still significantly longer at this point, you should filter a little more ruthlessly. As mentioned above, the last step before the actual ERP selection is a multi-day workshop in which you take a closer look at each of the remaining vendors. These take up an enormous amount of resources, and the project team in particular is tied up during this time and not available for day-to-day business. So try to thin the list as much as possible and move on to the next phase with the shortest possible shortlist. After all, every provider you eliminate in advance will make the next step much shorter.

You might also find this interesting:

What is an ERP workshop?
How do I build a good project team?
What qualities should a project manager have?

These tips will help you with your ERP selection

Narrowing down the vast array of products out there sounds easier than it is. After all, all vendors put their best foot forward, and you really need to do your homework to determine who is the best fit for your business. The following tips can help you find your way through the ERP jungle:

It all rises and falls on precise requirements

Many companies see an ERP system as the solution to everything that goes wrong in their business. However, this approach is misguided and not based on reality. At least not completely. Even if you are aware of the problem, very few people think about what a concrete solution to this problem might look like. Of course, an ERP system can significantly improve processes, but first and foremost, it is and will remain a tool that will only benefit you if it is used correctly. So try to define your requirements and goals as specifically as possible. Maybe you already have a solution?

Limit yourself to the most important functions

Let’s get one thing straight – you probably won’t find the perfect ERP system for your needs. Each has its pros and cons. What is an important feature for one company may be out of place for you. However, many companies hope that the solution will solve all their problems, offer many features, streamline processes, and do so with as little effort as possible. If you don’t prioritize, ERP selection can become an endless search. You may even miss the best solution for you. To avoid a long list of requirements, declare the most important items on your list as “must-haves” and consider whether the rest are essential.

ERP selection with an eye on the future

What is wrong now should be fixed, or at least that is the motto in many places. This approach is understandable. But don’t forget that a business is constantly evolving. In most cases, an ERP system will be with you for many years, so it is not wrong to consider future developments. What challenges might you face in the near future? Think about your needs today and in the years to come.

Seek a personal meeting

It is often difficult to evaluate an ERP vendor based solely on its website. You will soon realize that this is much more informative and will help you to classify your counterpart. Remember that you are not only buying the software, but also services such as training or consulting. This is why soft indicators also play an important role in ERP selection.

Ease of use is an important consideration

No matter how great the system is, if it is difficult to use on a day-to-day basis, it will only harm motivation and reduce productivity. That’s why there are features that don’t interfere with processes, but make the daily work of software users much easier. These include easy-to-find controls, intuitive user interfaces, and customizable views. Many vendors show screenshots of the user interface on their websites. While this can give you a good idea of what to expect, the usability of an ERP system is more than just how it looks. Keep this in mind as you consider your options.

Be open to solutions

At its core, ERP selection is about finding a concrete solution to existing problems. So try to focus on what you want to achieve, not what you have to do to get there. Be open to different approaches and formulate your requirements in a neutral and process-oriented way. Limit yourself to describing the problem and formulating your desired goal. How this is ultimately implemented is best left to the ERP vendor.

You might also be interested in this:

Corporate ERP training – is it worth it?
How can I, as a user, recognize a good ERP system?
Why online presentations pay off

Conclusion

The choice of ERP should be carefully considered. After all, it is a complex piece of software that interferes with your business processes. Many companies cannot say exactly what they want from an ERP system and therefore find it very difficult to make a decision. Of course, it is not easy to find your way around the wide range of vendors and features, but it would not be wise to just pick one without thinking about it. It is always worth comparing. Try to set clear priorities and focus on both the current situation and the challenges you expect to face. Then nothing will stand in the way of a successful selection process.

To get a first impression of our software, we offer free webinars on a regular basis as well as various events. If you would like to learn more about ERP selection or the full range of TimeLine ERP functionality, please send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We look forward to hearing from you and will be happy to advise you!

22. April 2024

What characteristics should a project manager have?

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Once you’ve selected an ERP system, it’s time for the implementation phase. To assemble the project team, you first need a project manager and key users. Project management plays a central role in the implementation of an ERP system. Therefore, you should not make a half-hearted decision about who will take on this role. A person who has all the essential qualities will have a positive effect on the progress and general mood of the team. This is essential for the success of the project. If, on the other hand, the choice falls on a person who is not well suited to the role, conflict is inevitable. The project drags on and costs can rise dramatically. But how do you find the right person for the job? Today’s article is about how you, as an entrepreneur, can make the right decision and what qualities a good project manager should have.

Project management and key users – who is responsible for what?

Have you ever planned or implemented an ERP project? Then you know that such a project can resemble a large construction site. No one knows exactly what the other person is doing and who is responsible for what. That’s why it’s a good idea to clearly define the two role profiles first – especially since the tasks overlap in some areas.

The project manager, with the following characteristics, oversees the project as a whole: he or she coordinates tasks and processes within the team, monitors the progress of the project, and regularly reports the current status to management. The project manager also makes technical decisions about implementation. Key users are responsible for a specific area, which is why large companies may have several key users. In small companies, however, there is usually only one person. Key users are the first point of contact for questions and act as a link between employees, management, and the ERP vendor. They also plan and execute the technical training of employees on the system after a successful implementation. Read more on how to recruit key users for your project.

What is the difference between a project manager and a key user?

The roles and characteristics of a project manager and a key user are very different, but there are similarities. Both try to increase the acceptance of the project by highlighting the positive aspects and trying to allay fears. The skills required are empathy and understanding. After all, whether the project is successful or not depends largely on the employees. If they reject the system and cooperation, it will fail sooner or later. The big difference between project management and key users lies in managing people. This is often underestimated because the project manager has to take on management responsibilities as well. For the duration of the project, the project manager is the supervisor of the key users. Compared to the key users, the project manager’s role is often perceived as more of a management task.

What characteristics does a good project manager need?

A project manager’s job is to lead the project and make it effective and successful. Of course, this comes with a lot of responsibility, and not everyone is cut out for the job. Finding the right manager who is up to the task can be quite difficult. Many business owners already feel overwhelmed and take what seems to be the easiest and quickest route – appointing a project manager based on their expertise or position in the company. Read on to find out why this is not always the best solution and what abilities and qualities to look for in a project manager.

Expertise

The requirements for a project manager have changed dramatically from the past. A few decades ago, project managers were seen as purely technical experts who solved technical problems. Expertise is certainly important, as a project manager should also be able to understand and evaluate technical issues. However, it is often overlooked that a project manager needs more qualities and skills than just technical know-how. Today, they have responsibility in all areas. They face many challenges: They not only manage, but also negotiate, coordinate, console, resolve conflicts, and constantly motivate their team.

Keeping an eye on the big picture

In times of stress, a project manager should be able to take a structured step back and look at the situation from the outside. Keeping an overview and not losing sight of the essentials is very important when implementing an ERP system. Many people are very good at certain things or are very detailed. These people may be indispensable to your business. But when it comes to coordinating the management of an ERP project, they are out of place. An employee from the IT department, for example, is not the right person for the job. It is often difficult for them to separate themselves from the technical level and to empathize with the necessary perspectives of other employees. But the rule here is that the exception proves the rule.

Leadership skills

The ability to manage people well is one of the most important qualities of a project manager. Managing people is a complex and responsible task. You can certainly read up on some useful tips to improve your own management style. But above all, you need the right personality – and this is not something that can be easily acquired or changed. It’s about earning the trust of your people by being honest and authentic.

What makes a good leader?

A project manager is the hub where all the important decisions, information and characters come together. Strong communication and social skills are therefore essential in a management position – at all levels. Above all, you need sensitivity and the right antennae to perceive and interpret your surroundings. For example, you need to be a good listener and be able to sense negative moods in the team, even if no one else is expressing them.

Soft skills – assertiveness vs. empathy

It often makes sense to leave project management to a member of the executive team, because that person has a lot of experience. In the past, however, this has often led to problems during implementation. The reason is simple: especially in larger companies, a manager is too far removed from day-to-day operations. Often, they don’t even interact with the ERP system – so how can they properly assess which functions make sense and are actually used on a daily basis?

A good feel for the day-to-day

Oft liegt es nahe, die Projektleitung einem Mitglied der Geschäftsführung zu überlassen, schließlich bringt diese Person viel Erfahrung mit. In der Umsetzung hat dies in der Vergangenheit allerdings häufig zu Problemen geführt. Der Grund hierfür ist recht einfach, gerade in größeren Unternehmen ist eine Führungskraft zu weit vom operativen Tagesgeschäft entfernt. Oft kommt diese gar nicht erst mit dem ERP-System in Berührung – wie sollte diese daher richtig einschätzen können, welche Funktionen Sinn ergeben und im Alltag tatsächlich genutzt werden?

ERP projects take time

Implementing an ERP project takes a lot of time. It is probably difficult for someone in a managerial position to find resources on top of their day-to-day responsibilities. But again, this is not set in stone and does not apply equally to all companies. In smaller companies, for example, this approach would be easier to implement. The characteristics that a good project manager should have are not directly related to their position in the company. Younger colleagues can also be an asset to the team. They often approach new tasks with a lot of energy, vision and enthusiasm, which in turn has a positive effect on the atmosphere in the team. The downside is that young people usually have little or no experience in leading a team. But again, no master has fallen from the sky. You grow with your responsibilities. And some things you learn only after you’ve fallen on your face a few times.

Conclusion

No project is ideal, and it is not always easy to find a person who has all the important qualities. Maintaining a balance between assertiveness and tactfulness is also a challenge. On the one hand, the project manager must be able to inspire, allay fears, and get people on board. On the other hand, they must be able to take action, pursue goals, and bring the project to a quick conclusion – even if that means not accommodating every individual request. In a project with many individuals, you can never satisfy everyone equally. Each of your team members has his or her own ideas, views, desires, and needs. However, if you cannot find a suitable colleague, it makes sense to divide the tasks among several people – for example, by separating technical and organizational tasks or by bringing in an external participant.

Would you like to learn more about project management and ERP implementation in your company or about the full range of TimeLine ERP functions? Send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We will be happy to advise you!

22. April 2024

Achieve the highest level of customer loyalty with CRM

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Depending on the industry, the number of returning customers can quickly reach 80 percent or more – provided you use the support of a good CRM system. With increased transparency, price-driven customers are quick to place single orders. But with a good CRM system, you can call them back at the right time, improve interaction and communication – and build a strong and loyal relationship. In this article, we will show you how you can effectively increase customer loyalty with TimeLine ERP.

All the information you need at your fingertips

As soon as a call comes in, TimeLine ERP compares the phone number with existing contacts for all business partners. A pop-up window immediately opens, allowing you to jump to the business partner’s information. In addition to the open items, you can view all related call histories and documents for customers, prospects and suppliers to help you communicate.

Eine neue Aktivität in der CRM-Software erfassen

Berichtet der Geschäftspartner etwas Neues, zum Beispiel wann welches Produkt wieder interessant für ihn oder sie wird? Oder erwähnt der Ansprechpartner vielleicht, dass er demnächst auf der Messe ist, die ihr bereits seit Monaten plant? All diese Informationen sind wertvoll und sollten als Aktivitäten eingetragen werden. Bei jeder Aktivität können Dokumente hinterlegt werden, sowie ein Bearbeiter, ein Ansprechpartner und ein Wiedervorlagedatum. Zeitgleich kann ein Geschäftspartner einem Verteiler zugeordnet werden, dessen Definition euch selbst überlassen ist.

Create a new activity in the CRM software

Does the business partner report something new, such as when a product will be of interest again? Or perhaps they mention that they will soon be attending the trade show you have been planning for months? Information is key, so every lead should be tracked as an activity. For each activity, you can store documents, an editor, a contact person, and a follow-up date. At the same time, a business partner can be assigned to a distribution list that you define.

Automatic Reminder

Activities that involve resubmission appear in your existing calendar. This means that no follow-up is forgotten and the customer, prospect or supplier receives a reminder – or perhaps even an offer – in time. The telephone link from the business partner information can be used again for this purpose. Just double-click on the contact’s phone number to initiate a call. At the same time, quotes or even orders can be created directly from the module. In the cockpit you will find all follow-ups, calendar entries and to-dos in a single module. This is clearly displayed as a list and you can react to actions at any time.

Mail merge in CRM

Once customers have been assigned to appropriate distribution lists, a serial mailing could be a good strategy. Especially for industry-specific mailings or personalized company newsletters, it makes perfect sense for customer loyalty and can be easily accomplished with a CRM. Use integrated campaigns that can be limited to a specific postal code, business partner or mailing list, to strengthen customer retention in a targeted manner.

Location-independent and mobile

Access to customer data is essential for management, field service, and sales, regardless of location. In most cases, however, not only the most important sales figures are required, but also internal documents, drawings or emails. This is where the integrated document management system comes to the aid of the CRM – and also makes all documents available in our iPad and iPhone apps. This data can also be managed completely offline. To do this, the desired customer data only needs to be made available offline once in advance. Any changes made to the customer, supplier or prospect can then be synchronized back at any time. This makes it possible to work at locations without Internet access!

Want to maximize customer loyalty with CRM?

Would you like more integration options, ways to increase customer retention, or are you missing features? Let us know by leaving a comment! All features have been developed in cooperation with our customers, from the field, for the field. For better customer satisfaction – and better success for your business.

Want to learn more about CRM or the full range of TimeLine ERP features? Send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We look forward to hearing from you!

22. April 2024

ERP Systems: Meaning and Functionality

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The somewhat different attempt to explain an ERP system

It is said that a good professor can explain the basics of theoretical physics on a beer mat. We look at a similar example, but replace the physics with an ERP system and the beer mat with a supermarket store. This blog post plays the role of the professor. We will take you on a journey through the vastness of the supermarket shelves and begin a slightly different kind of explanation.

At the beginning of any attempt at explanation is a curious person. If you are a die-hard connoisseur of ERP software, an ERP sommelier so to speak, you can skip this blog post and move on to the next entry – or you can stay and get your daily dose of confirmation. This blog post is for those for whom ERP is (still) a green field.

Stepping Through the Sliding Glass Door

Getting started with an ERP program should be as easy as going to the supermarket, but you shouldn’t rush into it. In our example, this can be easily explained with the equation

The decision for or against should therefore be well considered and not rushed, otherwise it will crash. To help you decide, we don’t send out food or fragrance samples, but we do offer a free demo download.

The Sales Floor

Imagine your company as a sales floor in a supermarket with many products. The ERP system represents the shelves and allows you to store your products in a traceable and organized way. Is there not enough jam on the shelf? Is the rigatoni out of stock again? The ERP system provides you with information at an early stage and allows you to plan the organization of your articles. Whether with serial or batch numbers, First In – First Out (FiFo) or Last In – First Out (LiFo), the ERP system is not only a genius but also a master of chaos. For the particularly curious, here is a short additional detour on inventory management.

At the meat counter

Cordon Bleu is on your shopping list. As you know, it is French and means “blue ribbon”. Sounds impressive, but what about its ingredients? This is where we build the bridge to the production planning processes within an ERP system.

Goods are processed, refined and, if necessary, assembled from different components. This is also the case with our cordon bleu. To continue our metaphor, the ERP system provides the platform for managing and controlling all production processes. It shows me the ratio of ham, cheese and schnitzel, and gives me the breading directly in the bill of materials. Thanks to production planning, it is possible to transparently control and track what (Cordon Bleu) is, has been or has to be produced, where (at meat counter 2) and by whom (butcher Smith). Still have questions about the digital meat counter? Read more about production planning and ist applications.

Behind the scenes

Supermarkets generally operate on a “FeFo” (First Expired – First Out) basis, meaning that products are sorted by perishability. ERP systems offer the possibility to organize the storage according to personal taste – including the inventory of the storage contents.

The procurement of new items is constantly monitored so that you are not left out in the cold. Whether jam or rigatoni, material requirements planning (MRP) makes it easy to determine purchasing and/or production requirements for minimum inventory levels, customer orders, and batch sizes agreed upon with suppliers in the ERP system. This means that the warehouse is only filled with what is actually needed.

Back to the meat counter. Butcher Smith wants to take a vacation during the European Championship. To ensure that he does not have to stand at an unmanned counter, the ERP system has a personnel planning function (PEP). Holidays, illness, shift work – PEP ensures that everything runs smoothly. So that barbecuing with friends is saved.

Final spurt at the checkout

The cash register represents sales within an ERP system. Quotations, orders, delivery notes, invoices or credit notes – an ERP system provides comprehensive support for the daily sales processes. Open items and their settlement by the customer’s payment can be accessed at any time.

Did you know that the receipt is both an invoice and a delivery note? This is called direct invoicing. This saves time and money, but it does not prevent you from regularly fishing your predecessor’s receipt out of your shopping cart. To make sure you don’t lose track of your own receipts, you could use a budget book at home. The digital document management system (DMS) in the ERP system ist he solution. A quick scan and you have all relevant documents at your fingertips – ordering can be that easy.

Want to know more about ERP systems, their meaning or special features?

The purchase is paid for, your head is full, and you slowly realize that this blog post would hardly have fit on a beer mat. The exit comes just in time! If all went well, you are no longer standing on a greenfield site and know everything about ERP systems, their meaning and functionality.

If you would like to learn more about ERP or the full range of TimeLine ERP functions and how implementing different modules can improve the efficiency of your business, please send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We look forward to hearing from you and will be happy to advise you!

22. April 2024