You get what you pay for


The mere thought of installing a business application, such as an enterprise resource planning (ERP) system, is enough to set any financial or IT manager?s heart racing.

The prospect of the time and money spent in planning, installing and taking a new system live is a complex process filled with risks if not done properly and by people with the right skills.

Once installed correctly, however, business applications deliver significant benefits to companies, helping them to streamline and run their operations according to global best practices, hence their popularity.

Steve Hobbs, managing director of Blue Pencil Consulting, says that "Failing to do your own research into your own requirements as well as what?s available is a recipe for disaster.'

The days of a SAP installation being long and fraught with complexities are long gone. The company has gone to great lengths to provide the tools and processes to streamline installations, as long as the consultants involved make use of them.

Hobbs says that the tools available include SAP Solution Manager, which when combined with certified end-user training and the supply of knowledgeable and skilled resources and consulting can ensure the solution delivers according to the user?s requirements.

The trick is to find a service provider that understands these issues and has a track record of delivery in all of them.

"Another important aspect of getting the most out of a SAP implementation is to ensure your service provider believes in a continuous cycle of improvement,' adds Hobbs. "Business continually changes, software is always updated, legislation is passed and customer demands evolve as their markets change.

Adapting to these changes requires continued tweaks and improvements to the ERP installation to ensure your users are always able to deliver optimal productivity available from their application.'

Consider TCO and ROI from the beginning The total cost of ownership (TCO) is one of the factors often overlooked in a SAP system. Most companies look at the cost of the software, hardware and the installation and assume that is the total bill for the system.

"Another overlooked factor is the return on investment (ROI) the system will deliver,' notes Hobbs. "Examining what you want to get out of the system after a certain period of time also informs the decision of what to buy.' When these two factors are considered at the start of the project, they influence the decision-making process as well as the implementation and roll out of the system to users.

If you want users to process transactions faster and with fewer errors, which leads to a lower cost per transaction for the company, for example, one of the factors to consider and budget for is regular training.

While training may be accused of increasing the TCO of the project, people don?t consider the long-term costs of lower productivity, errors and poor employee morale due to their being unable to do their jobs effectively.

There is also the hidden cost of users helping each other, which often leads to some people spending more time lending a hand than doing what they are paid to do. Making the right decision as to the implementation methodology, tools and service provider will also have significant cost and time implications.

Using SAP?s toolset, for example, can assist in the rapid installation of the application, shortening the go-live date to as little as eight weeks in some instances. "While an ERP installation is complex, the crucial stage is the planning phase where decisions that will have a long-term impact are made,' states Hobbs.

"Once again, proper research will allow managers to make the right decisions, choose the right partner that is able to deliver throughout the project and resulting in the optimal deliverables for the life of the software.'