Panorama Consulting Group Launches New Online ROI Calculator for ERP Software Investments

Panorama Consulting Group, an independent ERP consulting firm, today announced the release of an online ROI calculator. The ROI calculator will assist website visitors in reviewing the potential return on investment and benefits received from ERP software purchases.

The new ROI calculator was created with the data collected from various internal and external research sources. It is designed to be a high-level estimate of potential ROI based on user estimates of tangible costs such as inventory, SG&A, and labor and intangible costs such as average on-time delivers, average financial close time, and order fill rates. The ROI calculator will use these cost estimates and an employee count to calculate ERP software users and ERP investment costs which include ERP license costs, project management, and ERP implementation costs. The final calculation provides both a return on investment calculation and a payback period in number of years.

“In today’s volatile economy, companies need to know that their ERP software investments are delivering measurable value,” said Eric Kimberling, president of Panorama Consulting Group. “Panorama helps clients select and implement software in such a way, so we wanted to provide the ERP community with a high-level summary of what we do for clients on a daily basis.”

The ERP ROI calculator is available at: http://panorama-consulting.com/resource-center/erp-roi-calculator/.

Panorama Consulting Group Issues Call for Participants in 2010 ERP Benchmark Survey

Panorama Consulting Group, an independent ERP consulting firm, today announced its sixth annual ERP benchmark survey to collect qualitative and quantitative data regarding actual results from across the globe.

The survey is designed to collect information relative to project scope, ERP implementation cost and duration, as well as the ERP vendors considered and ultimately selected. Survey questions cover traditional ERP software packages, software as a service (SaaS) ERP solutions, and open source providers. This year’s study includes a number of new areas of focus compared to previous studies including more detail about scope and modules implemented, cost, and hosting solutions.

“Our research has proven to be the industry’s leading independent source for companies looking to select and implement new ERP software,” says Eric Kimberling, president of Panorama Consulting Group. “This year’s study will take our research to a whole new level in terms of detail and statistical analysis.”

In exchange for participation, each submission will be given a complimentary copy of the new report. In addition, one company will be selected as the recipient of an Enterprise Systems and Processes Audit Program to be performed by Panorama Consulting Group and valued at $16,000. The winning company will receive a complimentary, two-week business systems and processes review. This evaluation is designed to measure the potential for realizing additional business benefits and increasing cost savings with the organization’s current ERP software package or legacy systems. The winning company will be notified by December 31, 2010.

The survey is available at http://Panorama-Consulting.com/resource-center/erp-diagnostics/. Prior survey results and analyses are available in Panorama’s online resource center at http://Panorama-Consulting.com/resource-center/.

Panorama Consulting Group Launches Online ERP Database to Assist in ERP Selection Projects

Panorama Consulting Group, an independent ERP consulting firm, today announced the release of an online ERP database. This newly released ERP directory assists website visitors in reviewing potential ERP vendors and helps internal project teams make educated decisions at the conclusion of their ERP selection projects.

The new ERP database provides information on the enterprise software industry and lists over 140 software vendors with groupings for the various tier I, II, and III segments. Each ERP vendor has a detailed profile that includes a list of their product offering, an overview of their target market and industry experience, contact information, and recent news or press releases. In addition to the basic profile information, the vendor listings provide an opportunity for website visitors and ERP users to rate their existing software supplier based on a variety of criteria such as presales activity, technical support, functionality, and obtainment of ROI.

“We feel this ERP database and the vendor scorecard is imperative for educating our website visitors and for providing them with an unbiased and unaltered view of ERP vendors and their software offering,” said Eric Kimberling, president of Panorama Consulting Group. “The large poll of ERP vendors and list of ERP software packages can appear overwhelming to even the most astute of ERP selection teams. We are attempting to help alleviate potential confusion and help companies make better decisions, regardless of whether or not our trained ERP consultants assist in the ERP selection process.”

The ERP database launch is a phased deployment and the Panorama team is working hard at rolling out the next phase of this information portal. Phase two will provide ERP vendors an opportunity to review and augment their respective profiles by providing updates, as well as information on their social media communities, literature, white papers, and any images or supplemental content that will help provide the most informative profile possible.

The ERP database is available for review: http://panorama-consulting.com/resource-center/erp-database/

2010 Organizational Change Management Report Released

Panorama Consulting Group, an independent ERP consulting firm, today released the next installment of the firm’s 2010 ERP Report. This report focuses on the sensitive issues that arise during ERP implementations and the organization’s ability to leverage the effects of organizational change management.

Organizational change management is a broad topic that encompasses employee buy-in, organizational design, communications and training. It also includes, but is not limited to, cultural assessments, organizational assessments, and executive alignment. The report reviews the seven key areas of a comprehensive ERP organizational change management plan and provides metrics for each area.

“The report highlights some interesting data concerning organizational change and how it relates to ERP implementations,” said Eric Kimberling, president of Panorama Consulting Group. “One key data point within the report is the average organization’s drivers for changing their existing business processes. The report findings show that 41% of respondents changed business processes to accommodate ERP functionality, while just 27% changed or customized ERP functionality to accommodate current business processes. Clearly some companies are allowing their ERP software to determine their future business processes,” which highlights the need for an effective organizational change management strategy.

To offer further analysis of the study results, Kimberling will present the free webinar, Thursday, on June 3 at 10:00 a.m. MDT.

The full report is available for download at: http://panorama-consulting.com/resource-center/2010-organizational-change-management-report/.

Panorama Consulting Group 2010 ERP Report

The 2010 ERP Report was conducted by Panorama Consulting Group via online polling and was supplemented with qualitative data gathered from focus group interviews with a sample of survey respondents. Information was collected from December 2005 to December 2009. The 1,600 participants represent global organizations that have implemented ERP within the last four years.

Panorama Consulting Group Issues 2010 ERP Vendor Analysis

Panorama Consulting Group, an independent ERP consulting firm, today released the 2010 ERP Vendor Analysis Report. The 2010 ERP Vendor Analysis Report provides findings on detailed project factors such as implementation costs, durations, and payback periods summarized by vendor.

Though nearly three out of four companies (72%) indicate that they are least “fairly satisfied” with their enterprise resource planning software, the majority fail to realize even half of the business benefits expected after ERP implementation. The findings were relatively consistent across vendor tiers, with a total of 55% of companies reporting realization of just 30% or less of expected benefits. Tier III ERP software clients realized the least amount of benefits (72% reported less than 50% realization) with Tier I ERP clients close behind (69.8% reported less than 50% realization). Over half of Tier II ERP clients (53.3%) reported less than 50% realization but nearly half (46.7%) reported more than 50% realization.

“The fact that most companies are initially satisfied with their ERP selection but then fail to realize more than half of the expected benefits indicates widespread underutilization of the capabilities of these packages,” said Eric Kimberling, president of Panorama Consulting Group. “No matter how robust the enterprise software is, it must be fortified with change management and end-user training to ensure it is being used to its full potential.”

The report confirmed previous findings that each vendor tier has its own set of strengths and weaknesses. Tier I ERP vendors had a strong showing, with SAP as the most commonly short-listed vendor (20.4%), Oracle eBusiness the most frequently selected ERP solution (54.2%), and Microsoft Dynamics has the shortest “payback” period of all the major solutions (2.6 years). However, Tier I ERP implementations are more likely to take longer than expected (30%) as opposed to Tier II (18%) or Tier III (5%). Tier I ERP solutions are much more likely to require heavy customization (25%, on average) than their Tier II and Tier III counterparts (6% and 12%, respectively). In addition, Tier I ERP systems take an average of three years to “payback” their cost, while Tier II ERP packages take 2.2 years, and Tier III ERP packages take only 1.7 years. Conversely, with 70% of clients rating themselves “fairly satisfied” or better, Tier III ERP solutions have the lowest satisfaction levels of all the vendor tiers.

“Companies must weigh so many factors during an ERP evaluation – and put out so many fires during a software implementation – that it’s no wonder many of them fail to realize the full scope of possible benefits,” said Kimberling. “Third-party consultants can provide ERP selection advice, implementation supervision, and organizational change management services to help companies more effectively harness the power of their ERP software.”

To offer further analysis of the study results, Kimberling will present the free webcast, Understanding the Differences Between Leading ERP Software Solutions, on April 1 at 10:00 a.m. MDT. Register for the seminar at: http://panorama-consulting.com/resource-center/erp-webinars/.

Panorama Consulting Group 2010 ERP Report

The 2010 ERP Report was conducted by Panorama Consulting Group via online polling and was supplemented with qualitative data gathered from focus group interviews with a sample of survey respondents. Information was collected from December 2005 to December 2009. The 1,600 participants represent global organizations that have implemented ERP within the last four years. The full report can be accessed at: http://panorama-consulting.com/resource-center/2010-erp-vendor-analysis/.

Panorama Consulting Group

Founded in 2005, Panorama Consulting Group is a niche consulting firm specializing in the enterprise resource planning (ERP) market for mid-sized companies in North America and Europe. Independent of affiliation, Panorama helps firms evaluate and select ERP software, manages the implementation of the software, and facilitates all related organizational change management to assure that each of its clients realize the full business benefits of their ERP implementation. More information can be found on its web site, www.panorama-consulting.com.

Panorama Consulting Group Releases 2010 ERP Report

Panorama Consulting Group, an independent ERP consulting firm, today released the 2010 ERP Report. The Report includes data on a wide variety of traditional and SaaS ERP software solutions.

While the average cost of an ERP implementation has decreased from $8.5 million in 2008 to $6.2 million in 2010, companies are realizing significantly less business benefits from the technology, according to the 2010 ERP Report issued today by Panorama Consulting Group, an independent ERP consulting firm in Denver. The report reveals that two out of five (41%) of participants failed to achieve at least half of the business benefits they expected. This figure is nearly double the finding in the 2008 ERP Report (21%).

“While it is promising to see the costs of ERP implementations decrease, we are concerned that it is at the expense of organizational change management and other key activities required to make enterprise software initiatives successful,” said Eric Kimberling, President of Panorama Consulting Group. “Companies that cut costs in these areas suffer lower levels of satisfaction, user buy-in, and return on investment.”

The 2010 Report provides further data on the importance of balancing a company’s high expectations of ERP systems with comprehensive organizational change management initiatives. While 69% of companies expect that a new system will improve business performance and 39% expect it will make employees’ jobs easier, more than half (53%) of respondents assess their company’s ability to deal with change as fairly poor or very poor. Nearly half (47%) indicate communication between management and employees is poor. In addition, more than two out of five (41%) of respondents have experienced significant changes to their business (e.g., a new CEO, new locations, mergers and acquisitions, and layoffs) during the implementation process.

“Turbulence in business operations is magnified by the stress of an ERP implementation,” said Kimberling. “Management must allocate proper time and realistic spending to ensure that employees are aware of the benefits of the process and ready to accept and work through the challenges of a system changeover. In addition to hiring third-party consultants to help with software selection and implementation, smart companies are looking for outside assistanceto manage the user-side processes that are so critical to project success.”

To offer further analysis of the study results, Kimberling will present the free webcast “Overview of Panorama’s 2010 ERP Report,” on Wednesday, February 17, 2010. Register for the webinar at http://www.panorama-consulting.com/erp-webinars/.

About the 2010 ERP Report
The 2010 ERP Report is based on research by Panorama Consulting Group via online polling and was supplemented with qualitative data gathered from focus group interviews with a sample of survey respondents. Information was collected from December 2005 to December 2009. The 1,600 participants represent global organizations that have implemented ERP within the last four years. The 2010 ERP Report can be accessed at: http://panorama-consulting.com/resource-center/2010-erp-report/.

About Panorama Consulting Group
Founded in 2005, Panorama Consulting Group is a niche consulting firm specializing in the enterprise resource planning (ERP) software market for mid-sized companies across the globe. Independent of affiliation, Panorama helps firms evaluate and select ERP software, manages the implementation of the software, and facilitates all related organizational changes to assure that each of its clients realize the full business benefits of their ERP implementation. More information can be found on its web site, www.panorama-consulting.com.

Panorama Consulting Group Announces Record Growth in 2009

Panorama Consulting Group, an independent ERP consulting firm, today announced record growth for the year ended December 31, 2009.

Panorama’s service revenue increased 68% in 2009 from the previous year ended December 31, 2008. This revenue spike supported a corresponding increase in profits of 233%. In addition to the record revenue and profits, Panorama was able to increase overall headcount by over 100%.

“Our strong 2009 results are attributed to particular growth and strength in our ERP implementation and organizational change management practice areas. While we grew across many sectors and industries, collaborations with mid-size clients contributed to most of our growth,” states Eric Kimberling, Founder and President of Panorama. “Strong growth in a weak economy is a testament to the value and objectivity we bring to our clients. More than ever, clients are turning to us to help them manage business risk, control costs, and optimize business benefits of their investments in ERP and enterprise software. In many cases, companies with challenged ERP implementations are turning to Panorama to get their initiatives back on track. ”

Panorama’s growth was facilitated by the addition of a number of new clients. These new client engagements included Champion Window, Maxon Lift Corporation, dpiX, Bioness, and Penworthy for ERP software selection and Nufarm and Focus on the Family for ERP implementation. In addition to the ERP selection and implementation projects, Panorama also led Focus on the Family through an organizational change management project and Alliance Laundry Systems through an organizational readiness assessment.

Panorama’s sales pipeline is strong, and Kimberling expects growth to continue throughout the 2010 fiscal year. It is estimated that 2010 will bring an additional year-to-year growth of 135%, and there is the potential for this figure to increase even further.

Panorama Consulting Group’s service offering includes independent ERP software selection, ERP implementation and execution, and organizational change management consulting.

For additional information on Panorama’s ERP selection services, please visit Panorama’s website at http://panorama-consulting.com.

Panorama Consulting Group Helps Maxon Select a New ERP Software System With Their PERFECT Fit Software Selection Methodology

Denver, Colorado – Panorama Consulting Group, an independent ERP consulting firm, today announced the successful completion of an ERP selection project for Maxon Lift Corporation, a leading manufacturer of lift gates, headquartered in Santa Fe Springs, California.

Maxon Lift Corporation engages in the research, development, design, manufacture, and sale of lift gates for trailer, truck, pick up, and bus and van applications. The company’s products include Tuk-A-Way, Railifts, COLUMNLIFT, slider, conventional, light duty, wheelchair lift, and special purpose lift gates. It also provides parts and technical services. The company offers its products through its distributor network, including leasing companies, private fleets, OEMs, and distributors in the Americas.

“Maxon had had very poor experiences with consultants in the past. I believe that Panorama went a long way to improving the image of consultants everywhere. The big difference that I saw was the usefulness of the team’s deliverables. The Board saw that the deliverables were actionable, which is something they were missing from other consultants,” states Bill Moore, Vice President of Enterprise Improvement at Maxon Lift Corporation. “I appreciate the integrity that Panorama showed. Panorama stayed impartial throughout the process and made sure we were looking at the right data and in the right way.”

Khalid Morris, Senior ERP Consultant at Panorama Consulting Group led Maxon’s ERP selection project. Mr. Morris is a senior member of Panorama’s software selection team and has expertise in a variety of ERP software packages. The ERP selection project was executed using Panorama’s proprietary, multi-step ERP software selection process, which helps each companies find the ERP solution that best fits their budget, timeframe, industry, technological infrastructure and operational needs.

Panorama Consulting Group’s service offering includes independent ERP software selection, ERP implementation and execution, and organizational change management consulting.
For additional information on Panorama’s ERP selection services, please visit Panorama’s website at http://panorama-consulting.com/services/erp-software-selection/.

About Panorama Consulting Group

Founded in 2005, Panorama Consulting Group is a niche-consulting firm specializing in enterprise resource planning solutions for mid-market companies globally. Independent of affiliation, Panorama helps companies in ERP software selection, ERP implementation, and organizational change management to assure that each of its clients realize the full business benefits of their newly purchased ERP system. More information is available at http://www.panorama-consulting.com.

Panorama Releases a 2009 ERP Report Focused on the Use of ERP Software Within the Aerospace and Airline Industry

Denver, Colorado – Panorama Consulting Group, an independent ERP consulting firm, today released a new ERP report focused on ERP software usage within the aerospace and airline industry.

This portion of Panorama’s 2009 ERP Report outlines the use of ERP software at companies within the aerospace and airline industry and also includes a comparison of ERP results to other industries. This study includes metrics on ERP implementations and reviews data for average project budget, implementation timeframes, and actual project costs. The 2009 ERP Report also covers implementation variables such as the level of software customization and ERP modules deployed.

The report reveals that Oracle is the leading ERP software vendor within the airline and aerospace sector. Oracle holds 35% market share and is followed by SAP with 30%. The remaining market share is divided among various Tier II ERP vendors.

“This latest report demonstrates the breadth of enterprise software options available to companies in the aerospace industry,” states Eric Kimberling, President and Founder of Panorama Consulting Group. “Our experience in this industry vertical shows that the available ERP solutions are just as diverse as the needs of our clients in the space.”

In addition to ERP market share, the study reviewed ERP implementations and ERP project variables such as implementation timeframes, cost, and module usage. “The average implementation time for aerospace and airline companies is 28 months, which is significantly greater than the average ERP implementation timeframe of 19.8 months. This extended implementation helps support the report’s data that showed the aerospace and airline industry is much more likely to exceed other industries in overall ERP spending. Our survey data shows the average cost of ERP implementations in this segment is $31.5M, which compares to $8.5M in other industries. This variance is attributed to the fact that this is a complex industry. In order to satisfy quality and regulatory needs, aerospace and airline companies need to have well-defined and tightly integrated business processes, which tends to increase implementation duration and cost,” states Kimberling.

Panorama Consulting Group offers independent ERP software selection and implementation expertise, as well as tools that help aerospace and airline companies reduce their total cost of ownership and optimize measurable business results.

For additional information on Panorama’s ERP service offering or to download the entire report, please visit Panorama’s website at http://www.panorama-consulting.com/resource-center/.

About Panorama Consulting Group

Founded in 2005, Panorama Consulting Group is a niche consulting firm specializing in enterprise resource planning solutions for mid-market companies globally. Independent of affiliation, Panorama helps companies in ERP software selection, ERP implementation, and organizational change management to assure that each of its clients realize the full business benefits of their newly purchased ERP system. More information is available at http://www.panorama-consulting.com.

Panorama Consulting Group Issues Call for Participants in 2009 ERP Benchmark Survey

Denver, Colorado -Panorama Consulting Group, an independent enterprise resource planning (ERP) consulting firm in Denver, has announced a new survey to collect qualitative and quantitative data regarding corporate experiences with ERP implementation. Survey questions address the scope, cost, project structure, project duration and overall satisfaction of ERP implementations using Tier I, Tier II, software as a service (SaaS) and open source providers.

“Our 2008 survey showed that corporations often rated ERP implementations with Tier I and Tier II software unsatisfactory for reasons such as extended time-frames, budget overages and problems with organizational changes,” says Eric Kimberling, president of Panorama Consulting Group. “Over the past year, however, the market has shifted. Not only are companies looking for better results for less money and with less staff but SaaS and open source software are being heavily promoted as cost-effective alternatives to traditional ERP packages. As third-party consultants who help companies evaluate the risks and rewards of various ERP options, we are very interested to see if this new climate and these new offerings actually bring about a higher percentage of successful ERP implementations.”

Participants will receive a free copy of the study’s results and analysis when it is released in early 2010. The 2008 survey results and analysis are available at http://panorama-consulting.com/resource-center/.

About Panorama Consulting Group

Founded in 2005, Panorama Consulting Group is a niche consulting firm specializing in the enterprise resource planning (ERP) market for mid-sized companies in North America and Europe. Independent of affiliation, Panorama helps firms evaluate and select ERP software, manages the implementation of the software, and facilitates all related organizational changes to assure that each of its clients realize the full business benefits of their ERP implementation. More information can be found on its website at www.panorama-consulting.com.

Do Small Businesses Need ERP?

Ever since the early 1990s, Fortune 500 companies across the world have been on the ERP bandwagon. With millions of dollars required to implement and well-publicized coverage of ERP failures, many wonder if ERP is worth the cost and risk to small businesses.

The topic of small businesses and ERP has been of interest to me, especially lately. Approximately 75% of our new clients and prospects interested in having us conduct an ERP assessment and vendor selection are companies with annual revenues under $100 million. In fact, one of our recent contract signings for this type of work is for a company with annual revenue of $15 million. Ten years ago, this type of small business interest in ERP was very uncommon.

The key things driving small businesses to ERP seems to be 1) growth of the small business sector, and 2) more focus on the small business market from ERP software vendors. Most of our small business clients are considering or implementing ERP because of their rapid growth and the corresponding strain it puts on their legacy systems. In addition, large ERP vendors that typically focused solely on the Fortune 500 market are now developing lower-cost solutions with more appropriate functionality for smaller businesses.

A third and final possible reason is because many niche ERP players have entered the marketplace to provide functional solutions for specific industries. Open technologies such as .net have reduced barriers to entry into the ERP market, so many smaller, industry-specific niche players are able to fill the voids left by the big ERP companies at a lower cost.

Although this increasing focus on small business is good for companies with limited capital budgets, it also poses additional risks. Now, there are more choices than ever, and some vendors' products are much more proven than others. So small businesses should be especially thorough when evaluating and selecting an ERP software package. They should engage in a vendor selection process that ensures they choose a solid software package that provides a strong ROI to the company.

Aligning ERP & IT with Your Overall Business Strategy

One of our recent blog entries discussed how to define to-be processes as part of a successful IT implementation. Based on this entry, one reader questioned whether or not this is feasible if the IT project is not aligned with overall business strategy.

This reader is absolutely right: aligning an ERP implementation with a company's overall business strategy is a difficult and often overlooked component of a successful project. I think the main thing needed is to take a top-down approach to defining business processes and then ultimately arriving at an ERP solution that fits the overall business.

In other words, before you can configure a system to enable your desired to-be processes, you need to define what these to-be processes look like. In order to understand your to-be processes, you need to know your operational strategy. And before defining your operational strategy, you need to define your overall corporate strategy and objectives.

So this is why the appropriate approach to ensure a successful ERP project that is aligned with the overall corporate and operational strategy is to:

1) Define your corporate strategy and objectives. I typically look at a 3-5 year horizon when helping clients through the process. I also challenge them to answer the question: "where do you want the company to be in 5 years?" Also, "what operational strategy is required to enable this higher-level corporate strategy?"

2) Once you have clearly articulated the company strategy, then you need to
define your "to-be" business processes that will enable this corporate and
operational strategy.

3) Then, establish the performance measures at the corporate, operational, and
business process levels. These measures should help you identify how
successful you have been in executing against your defined strategy. They
should also align with reports that come out of your ERP system.

4) Finally, you can begin designing, configuring, and testing the system to ensure that it is aligned with #1-3.

The unfortunate thing is that most companies start with #4 and skip steps 1-3.
By following all four, however, companies can be better prepared to ensure ERP
alignment with overall company strategy.

Does It Matter Which ERP Vendor You Choose?

If you've been following the ERP market lately, you have probably seen SAP's assertion that companies that run SAP are 32% more profitable than those that don't. On the other hand, another recent study from The Hackett Group found that there is no correlation between performance and world-class performance.

So what's the real story? In my opinion, these conflicting statistics suggest two things. First, the ERP market is competitive and cutthroat. Second, it raises the question of whether it is the ERP technology itself or other factors that increases performance.

Based on my experience, the specific ERP tool is just one piece of the business performance puzzle. How you design your business processes, how well you establish KPIs and measure performance, how you design your organization and employee roles, and how well you train employees to use the new system are just a few aspects that can have a huge impact on the success of your ERP implementation.

In addition, I question the validity of both studies mentioned above. For example, the SAP study compared SAP companies to non-SAP companies, not to companies running competing ERP systems. So perhaps a majority of the comparison companies weren't running any type of ERP package, so it would be expected that the SAP companies would perform higher. But could it be that Oracle or Microsoft customers were 40% or 50% more profitable than the others? Or, could it be that companies that are more profitable choose SAP because they have the resources available to invest in such a large project?

As for the Hackett Group study, I'm not sure what they mean by "world-class performance." It sounds great, but what does it mean? In addition, their study was focused on the performance of finance organizations within the companies studied rather than the performance of all the functional departments.

However, all of this is not to say that the ERP software itself is not important. Obviously, you want to select software that best fits your business requirements and operational model. But the key is that ERP is simply an enabler, and not the sole reason, of increased business performance.

The main conclusion here is that ERP selection is an important activity. However, it is just one component of successful ERP projects and should be combined with an ERP Business Benefits Realization program to ensure business value and ROI are achieved from the implementation.

Organizational Change Management in a Global Environment

Whether trying to standardize global business operations or implementing Enterprise Resource Planning (ERP) software in multiple countries, corporate executives face the issue of managing organizational change in an international environment. For any large change initiative, organizational change management is a challenging and difficult issue to address; however, with the addition of additional variables such as differing cultures, values, and languages in the international arena, the difficulty substantially increases.

When introducing organizational changes at an international level, there are several factors to consider:

• Language Barriers. While most managerial types in countries outside the US speak English of some sort, not all front-line employees speak English or speak it well. Therefore, getting key messages across regarding organizational or process changes is a delicate and complex issue. It often involves translating messages into their native languages and reiterating the same message via different channels depending on the culture of the audience (e.g. email, phone conferences, meetings, etc.) .
• Culture and Values. Not all people in the world value or are motivated by the same things as Americans. Many western European countries value history, tradition, and work-life balance, while many developing Asian countries value hard work, entrepreneurship, and teamwork. Managing change in these very different environments requires differing approaches and messages.
• Propensity for Change. More established and developed countries have business operations that have worked well for a long time, while many developing countries have less mature operational models. Therefore, it is often common to see more resistance to change in developed countries versus those that are still emerging. For example, a small company in India that is struggling to keep up with new demand with a very limited staff and manual processes may be more welcoming of an operational improvement than a large office in the UK that has refined its operational model and implemented automated processes over a long period of time. On the other hand, the small office in India may be much less available to assist with a change effort due to a lack of employee bandwidth.
• Consideration of Local Requirements. Global changes that are pushed to the local level by corporate headquarters often do not adequately consider local needs and requirements. Each country has its own regulatory, resource, and employee constraints, so it is important to plan accordingly when implementing the changes. Obviously, completely localizing a global initiative defeats the purpose of having a single global change, but no solution is going to work for 100% of the world, no matter how well-designed it may be.
• Varying Degrees of Understanding of Best Practices. Employees in different countries have different levels of understanding of business and technical best practices and methodologies, which may affect the amount of change management required to "sell" the ideas to affected employees. Employees in eastern Europe are often less likely than Americans to understand the value and benefits of Six Sigma or business process management methodologies, which increases change management effort.
• Buy-in Is Important. This is true for even domestic change, but it is even more true for global initiatives. Involving affected employees across the globe early in the process will help identify and address some of the issues mentioned above. It also helps overcome potential pockets of resistance by ensuring that employees across the globe are involved in the decision-making and planning surrounding the particular change.

By incorporating these aspects into an overall project and organizational change management plan, executives are much more likely to ensure that their respective change initiatives are embraced across the globe. This ultimately leads to increased business performance on a global scale.

ERP Vendor Selection : Choosing Software that is Right for your Company

ERP vendor selection can be a daunting task, and one that is often not given the appropriate attention. CIOs or other executives in charge of making such major decisions often make decisions based on perception or faulty information. For example, the business media often highlights companies that experience failure implementing a specific package. However, information such as this does not necessarily reflect what is appropriate or inappropriate for your specific company.

In choosing an ERP or IT software package, executives need to make decisions based on objective and unbiased information rather than gut feel or limited information. In particular, companies should consider the following:

• Why Do you Want to Implement ERP? Unfortunately, this question is the toughest to ask once you're already on the ERP bandwagon. Many times, ERP is not going to solve your business problems. If your business strategies or key business processes are flawed, even the most advanced IT system is not going to help. Before making a decision as large as implementing a system that will cost millions and affect your entire company, it's important to have a clear understanding of what you want to accomplish by taking on this challenge. There may be more cost-effective and lower-risk options such as improving processes, redesigning your organizational structure, consolidating your global supply chain, or implementing a performance management system.
• What are your Business Requirements? Once you have decided that ERP is the route you need to take, it is important to begin by looking at your desired operational model and using that as a starting point in determining which software to implement. Executives should define and document key business requirements for any package they may select. This includes not only nice-to-haves, but also requirements that are "deal-breakers" if the software is unable to accommodate. And executives should also use ERP business requirements as an opportunity to improve current operations, efficiency, and effectiveness. The last thing a company should do is implement software to automate the same flawed business processes.
• What is your Business Case? This is where many companies fall flat. Even if you complete the first two items discussed above, it is important to understand and document what your costs will be, as well as your anticipated business benefits. This is important in gaining approval from other executives or your Board of Directors, and it is also helps ensure that you realize the potential benefits of implementing the software. All costs, including hidden costs such as internal project resources, data conversion, and lost productivity immediately following go-live, should be included in the business case and ROI calculation. And benefits should be reasonable and not overly aggressive. Ultimately, your business case should be a tool to manage business costs and benefits going forward, not just as a sales tool to justify a decision that's already been made. And if the resulting ROI does not make sense or meet minimum investment criteria for your company, then it's probably not a good idea to undertake the project.
• Who will Be Your Implementation Partner? Have you thoroughly assessed all of your options in evaluating potential external implementation teams? Software companies aren't always the best at implementing their software. You can often find third-party vendors and consultants that can implement ERP more successfully or at a lower cost.
• Do You Have Enough Resources to Commit to the Project? Even if ERP is perfect for your company and you have chosen the perfect software, things will head south very quickly if you don't have enough money or employees to dedicate to the project. It doesn't matter if you have assembled the best team of consultants and implementation partners; it's your employees that will ultimately make the project succeed.
• What's the Contingency Plan? No matter how well-run your project is, you should be prepared for failure. We've all read of the technical glitches that shut down shipping at Fortune 500 companies for weeks at a time, so it's best to acknowledge that something bad could happen. If the project does fail or if the software is not implemented correctly, what is the backup plan? Will users be able to access legacy systems? Will certain processes be performed manually until the system is up? Dramatic failures are not common, but they do happen on occasion, so companies should be prepared for the "what-ifs."

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