Denver, Colorado – Panorama Consulting Group, an independent ERP consulting firm, today released a new ERP report focused on ERP software usage within the hospitality and entertainment industry.
This portion of Panorama’s 2009 ERP Report outlines the use of ERP software at companies within the hospitality and entertainment industry, including a comparison of ERP results to other industries. This study includes metrics on ERP implementations and includes 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 SAP is the leading ERP vendor for hospitality management and entertainment software usage. Oracle and Microsoft follow SAP, with the remaining market share divided among Tier II ERP vendors. These Tier II ERP software vendors retain a 24% market share, which is fairly comparable to Tier II ERP usage within other industries.
“As with past ERP studies, the 2009 ERP Report reveals that large Tier I ERP solutions are not the only viable software options,” says Eric Kimberling, President and Founder of Panorama Consulting Group. “There are plenty of Tier II and industry-focused ERP vendors that can meet the complex requirements of companies within the hospitality and entertainment industry.”
In addition to market share, the study also reviewed ERP implementations and ERP project variables such as implementation time-frames, cost, and module usage. “The average implementation time for hospitality and entertainment companies is two months greater than ERP implementation time-frames in other industries. This extended implementation helps support the report’s data that showed the hospitality and entertainment industry is much more likely to exceed budget estimates. Our survey data stated 67% of ERP implementations in this segment went over budget, which is 10 percentage points higher than in other industries,” says Kimberling.
“In today’s evolving business environment, the hospitality and entertainment industry is very concerned with maximizing profits and minimizing expenses. Their aggressiveness with reducing waste and controlling costs needs to transfer over to their ERP projects so they can truly obtain a rapid return on investment. If the right ERP solution is selected and implemented with experienced ERP consultants, the ERP solution will translate into more efficient and optimized day-to-day operations,” says Kimberling.
Companies such as Panorama Consulting Group offer independent ERP software selection and implementation expertise, as well as tools that help hospitality and entertainment companies reduce their total cost of ownership and optimize measurable business results.
For additional information on Panorama’s service offering or to download the entire report, please 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.
Showing posts with label SAP. Show all posts
Showing posts with label SAP. Show all posts
11.09.2009
4.03.2006
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.
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.
12.07.2005
How To Ensure ERP Success
The world of technology and business consulting is tainted by horror stories of ERP projects gone wrong. Companies such as Hershey's have had widely publicized lawsuits against ERP software vendors because of their failed implementations. In some extreme cases, these companies sue because they couldn't ship product or their entire business shut down because the software did not work correctly.
So how does one ensure ERP success? Many assume success or failure is the fault of the software you purchase, but in reality, 95% of a project's success or failure is in the hands of the company implementing the software, not the software vendor.
So how does one ensure ERP success? Many assume success or failure is the fault of the software you purchase, but in reality, 95% of a project's success or failure is in the hands of the company implementing the software, not the software vendor.
Here are just a few ERP implementation critical success factors that we have seen:
- Focus on business processes and requirements first. Too often, companies get tied up in the technical capabilities or platforms that a particular software supports. None of this really matters. What really matters is how you want your business operations to run and what your key business requirements are. Once you have this defined, you can more effectively choose the software that fits your unique business needs.
- Focus on achieving a healthy Return on Investment, including post-implementation. This requires doing more than just developing a high-level business case to get approval from upper management or your board of directors. It also entails establishing key performance measures, setting baselines and targets for those measures, and tracking performance after go-live. This is the only way to truly realize the benefit potential of ERP.
- Strong project management and resource commitment. At the end of the day, your company owns the success or failure of a large ERP project, so you should manage it accordingly. This includes ensuring you have a strong project manager and your "A-players" from the business to support and participate in the project.
- Commitment from company executives. Any project without support from it's top-management will fail. Support from a CIO or IT Director is fine, but it's not enough. No matter how well-run a project is, problems arise (such as conflicting business needs), so the CEO and your entire C-level staff needs to be on board to drive some of these
- Take time to plan up front. An ERP vendor's motive is to close a deal as soon as possible. Yours should be to make sure it gets done right. Too often, companies jump right in to a project without validating the software vendor's understanding of business requirements or their project plan. The more time you spend ensuring these things are done right at the beginning of the project, the less time you'll spend fixing problems later on.
- Ensure adequate training and change management. ERP systems involve big change for people, and the system will not do you any good if people do not understand how to use it effectively. Therefore, spending time on money on training, change management, job design, etc. is crucial to any ERP project.
- Make sure you understand why you're implementing ERP. This is probably the most important one. It's easy to see that many big companies are running SAP or Oracle and maybe you should too, but it's harder to consider that maybe you don't need an ERP software at all. Perhaps process improvement, organizational redesign, or targeted best-of-breed technology will meet your business objectives at a lower cost. By clearly understanding your business objectives and what you're trying to accomplish with an ERP system, you will be able to make a more appropriate decision on which route to take, which may or may not involve ERP.
11.29.2005
Everything Changes - Organizational Change Management in IT / ERP Implementations
Organizational change management is one of the most overlooked areas of large IT or ERP implementations. Several published studies cite this oversight as one of the most common causes of IT project failures.
So what does a large IT or business improvement project need to do from an organizational change perspective? Many of the more successful projects will focus on spending more on training, while others may focus more on communicating business changes through a formal communications plan.
A better way to think of organizational change management is as a comprehensive benefits realization program. Instead of thinking of change management in the traditional sense, such as focusing on formalizing communications, training, or organizational design, an alternate approach is to think of it as one of several mechanisms that can be used to drive tangible business value and optimize the potential benefits of the IT or business change you are implementing.
This shift away from using organizational change as a means to an end accomplishes several things. First, and probably most importantly, it focuses your project and business resources on activities that will improve the business from a quantifiable Return on Investment (ROI) perspective. For example, a large consumer products company implementing SAP determined that it was going to achieve most of its tangible business value from three major areas in the business: Finance, Global Purchasing, and IT. So rather than reorganize the entire company's job and work roles as a result of the SAP project, it focused on those three areas where it had identified 80% of the ROI in its business case.
In addition to the tighter focus on ROI, a comprehensive benefits realization approach also focuses on activities that will drive true business value, regardless of whether or not those activities are related to change management. For example, it allows you to discover business processes that are inefficient by measuring process results. By measuring processes against benchmarks and identifying areas with the most room for improvement, a benefits realization approach allows managers to continuously improve results after the IT or business implementation. It focuses attention on measurable continuous improvement rather than conducting change management just for the sake of it.
In other words, it is helpful to treat organizational change as one of many possible enablers of business change rather than a final solution. Focusing on ROI and business value allows you to implement organizational change activities that add tangible value and minimize time and money spent on those that do not.
So what does a large IT or business improvement project need to do from an organizational change perspective? Many of the more successful projects will focus on spending more on training, while others may focus more on communicating business changes through a formal communications plan.
A better way to think of organizational change management is as a comprehensive benefits realization program. Instead of thinking of change management in the traditional sense, such as focusing on formalizing communications, training, or organizational design, an alternate approach is to think of it as one of several mechanisms that can be used to drive tangible business value and optimize the potential benefits of the IT or business change you are implementing.
This shift away from using organizational change as a means to an end accomplishes several things. First, and probably most importantly, it focuses your project and business resources on activities that will improve the business from a quantifiable Return on Investment (ROI) perspective. For example, a large consumer products company implementing SAP determined that it was going to achieve most of its tangible business value from three major areas in the business: Finance, Global Purchasing, and IT. So rather than reorganize the entire company's job and work roles as a result of the SAP project, it focused on those three areas where it had identified 80% of the ROI in its business case.
In addition to the tighter focus on ROI, a comprehensive benefits realization approach also focuses on activities that will drive true business value, regardless of whether or not those activities are related to change management. For example, it allows you to discover business processes that are inefficient by measuring process results. By measuring processes against benchmarks and identifying areas with the most room for improvement, a benefits realization approach allows managers to continuously improve results after the IT or business implementation. It focuses attention on measurable continuous improvement rather than conducting change management just for the sake of it.
In other words, it is helpful to treat organizational change as one of many possible enablers of business change rather than a final solution. Focusing on ROI and business value allows you to implement organizational change activities that add tangible value and minimize time and money spent on those that do not.
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