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Recall.

For consumers it can mean illness and, in some cases, death from ingesting tainted products. For producers a recall, however modest, can mean lost business and, often, bankruptcy.

The bottom line: Recalls are not good for anyone. 

For food and beverage producers surviving a recall hinges on several factors, not the least of which is the ability to trace up and down their supply chain from supplier to retailer.  There are many ways to implement lot trace in an enterprise, some good and some not so good. 

Today’s podcast explores the importance of lot trace to a food and beverage enterprise, the differences between single and multi-level lot trace, and what to look for when evaluating an ERP system to automate your manufacturing processes.

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Ok, I’ll concede that achieving yield perfection is pretty difficult, but that doesn’t me you don’t do your best to get as close as possible. After all, any variance on yield - high or low - costs the company cash.  If you find yourself on the low end - getting out less than planned - you can add customer satisfaction to the debit column, also.

Today’s podcast is a discussion of the importance of yield managment, how variances - positive and negative - impact the enterprise, and what you can do to improve your results.

Enjoy.

(Readers of the Enterprise Technology Blog know we’ve spent a fair amount of time on the subjects of SAP Business ByDesign and SaaS. Use the category list to access previous posts and podcasts.)

Since it announced a delay in the general release of SAP Business ByDesign, the software leader has been bombarded by questions about its ability to succeed in the world of SaaS and to penetrate the SME market space. I’ve read several blogs that have used the occasion of SAP’s announcement to declare its initiative null and void and that any further efforts to expand into the SME space will be met with a similar fate. What many don’t understand, and what SAP has had difficulty communicating, is that the majority of their customers are SME customers.

To understand SAP’s SME strategy you need to understand the role played by each of its three midmarket - SAP Business One, SAP Business All-in-One and SAP Business ByDesign.

I’ve seen a few summaries, but none as good as this by Simon Jacobson of AMR Research. In it, Simon explores SAP’s three product approach to the SME space and places each of the three into their proper perspective. Simon salutes the “partner ecosystem” SAP has developed (an area we explored in earlier podcasts) as a means of bringing its products to market and rightly states that it needs to continue to play an important role if SAP is to continue its midmarket expansion.

In the end, Simon came to two clear conclusions:

1. Business One and Business All-in-One continue to perform well, and we [AMR] expect them to continue to gain market share.
2. Business ByDesign will eventually sort its kinks out and will gain volume.

Creating an enterprise-wide on-demand software suite is a daunting and gutsy project. One in which successes and set-backs will be many.  Few software publishers have the resources to succeed, but SAP must be placed among the few.

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Controlling costs through controlling inventory is Manufacturing 101. But for small batch manufacturers of food and  beverage products, indeed any perishable goods, the simple becomes complex.

Unlike big batch enterprises, where one line will produce the same product day after day, week after week, small batchers may run several products on one line, making tear down and set up a frequent occurrence.

Today’s podcast is for you, the small batch manufacturer.  In it we discuss what you want to look for in an ERP system when considering inventory.

WARNING: I’m departing from the normal tone of this blog by inviting you to watch a video case study.  Fischer & Wieser is a small batch manufacturer that produces more than 70 products on one production line.  Inventory variance was a major pain in their operation. The video illustrates how the right ERP system can make a major difference.

If you’re going to ASUG and/or SAPPHIRE in Orlando in May, you’ll want to check out the presentation by SoftBrands own Diane Palmquist, VP of SAP Products:

Subject: 3 Reasons You Can’t Afford to Ignore Software-as-a-Service. 

When: May 5, 2008 at 2:15 - 3:15

Where: Content Area: Small & Medium Enterprise. Orange County Convention Center.

If you want to familiarize yourself with Diane and her take on the move toward SaaS, give a listen to the series of podcasts published previously.

Part 1, Part 2, Part 3, Part 4

Diane talks about SAP Business ByDesign, the SaaS product introduced in October 2007, and how SaaS is causing a fundamental change in the way software is delivered, how publishers are mesured and how partners are impacted.

It’s a hot topic, but it’s not the “topic-of-the-day”.  Software-as-a-Service is one issue, concept, subject that will only continue to grow in importance and reach.

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Chuck Sacco concludes the BPM equation by adding the final variables for success: skills & tools.

You may have a great implementation plan, but without the right skills in place and tools at hand your chances of are limited. 

Listen to the final episode and you’ll find out what tools are available, what skill sets to look for, and where to look if you don’t have them internally.

Business Process Management part I: A history

Business Process Management part II: Implementation best practices

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Business Process Management isn’t brain surgery, but, as with most things, if you fail to execute you lose.  You lose time and money that can never be recovered. Failure also mean you stand a good chance of losing ground against the competition.

Simply put: Execution is everything, and that is what Business Process Management part II is about. Continuing the discussion with Chuck Sacco, we talk about best practices when executing a BPM initiative in your enterprise. 

It begins with rethinking the structure of your company, understanding how functional areas are interrelated, and the  impact of horizontal processes.   It concludes with streamlined processes that align your people, processes and systems with your strategic goals.

Business Process Managment part I: A history

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Ever heard of Business Process Management, aka BPM?

 I’m joking.

Whenever a topic finds its way into the headlines of almost every e-newsletter I subscribe to, I ask if the subject is really that important, or if it’s simply a case of editors not wanting to be left out of the conversation. BPM has been a hot topic for quite a while.  So much so that’s it seems to have taken on a “flavor of the day” aura. 

When we launched Enterprise Technology Blog in January, I knew BPM was a topic that would have to be covered, but I wanted to do it in a different way.   I wanted to put it into an historical context; to understand its roots. I wanted to put in into the larger context business improvement; to discuss in in relation to TQM, Lean, Six Sigma, and other continuous improvement initiatives. Most of all, I wanted to give the listeners practical, actionable advice on how to begin a BPM initiative of their own.

The first of this three part series is dedicated to the history of Business Process Management.  You’ll hear about it’s roots in Business Process Engineering and get a better idea of how it fits in the grand scheme of continuous improvement.

Parts two and three will cover implementing a BPM initiative and the tools and skill sets you’ll need to be successful.

The subject-matter expert for the series on BPM is Chuck Sacco.  Chuck is a consultant and BPM practitioner.  He has several BPM implementations to his credit and continues to bring its benefits to customers across the world.

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In second part of my conversation with SAP’s Ralf Menhert-Meland we switch tracks.  Moving away from SAP specific topics, he and I discuss the fast-growing market of on-demand software. 

SAP entered the market with the unveiling of SAP Business ByDesign in October of last year and, while it isn’t the first SaaS product to be introduced, its debut on the scene changed the landscape of the SaaS marketplace.

Ralf believes the demand for SaaS solutions will accelerate over time and that most enterprises will intimately rely on a hybrid of on-premise and on-demand solutions to manage their businesses. 

With that said, Ralf acknowledges several variables that could impact the adoption of such solutions, but is firm in his belief that those variables will not stop the inevitable from happening.

Part one of our conversation can be found here.  In it Ralf and I discussed SAP Business One and SAP Business ByDesign, and how SAP relies on its global network of partners, including SoftBrands, to reach its SME goals.

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SAP has been very public about its goal to reach 100,000 customers by 2010 and, to be successful, SAP will have to rely on their global network of partners . To better understand the critical role partners will play, I was fortunate to have an opportunity to speak with Ralf Mehnert-Meland a global senior director of software solutions partners for SAP.  

Ralf and I discussed the roles of the Channel and Solution Partners (formerly known as ISVs) and how SAP is supporting the efforts of both in the selling of SAP solutions as well as developing add-on solutions to work with SAP’s own. We focused our talk on the SME marketplace, SAP Business One, and SAP Business ByDesign.

The podcast, available here, is part one of a two part conversation. 

In part two, Ralf shares his thoughts on the market potential for Software as a Service, the dramatic change it brings to those who sell and support software, and how it will change the enterprise software landscape.

This review was originally published in January, but SearchSAP.com’s look back at SAP and its 2007 progress in the midmarket, SME, SMB, or whatever your pleasure, is worth a reread.

SAP’s midmarket strength has been a cornerstone of its global success , but with the unveiling of SAP Business ByDesign in October, the software giant not only entered the realm of SaaS, it solidified its place as the world’s dominant enterprise software developer.  By adding SAP Business ByDesign to Business One and A1, SAP has complete coverage of the midmarket, regardless of your definition. 

Free registration is required to access the recap.

Following up on a previous post: Why do people buy?.

I asked the question because the similarities between various enterprise systems have created a perception that the market has become commoditized.  Perhaps it has, but that doesn’t mean there is no differentiation. In their search for the right system to automate their businesses, too many evaluation teams overlook one variable that can’t be found in the software code…people. 

From sales, to demos, to implementation and support, people are the most important variable you will encounter. This may seem obvious, but you’d be amazed at how myopic management teams can get when they are considering spending hundreds of thousands of dollars on software. The people you encounter during your evaluation will play a variety of roles.  I’ve listed a few of the most important roles below along with some things to consider about each.

Sales  Sales is a like a coin, on one side is listening and the other is talking. A good sales rep will ask questions and really listen to the answers. Styles will vary, but the good ones will ask very technical, very specific questions about your processes. If you come across someone who begins by asking questions that apply to any environment and never moves off that line, it’s probably time for you to move on to the next vendor.

The flip side of the coin is the rep’s ability and willingness to answer your questions. Your company has specific needs and if you’re looking at vendor who won’t speak directly to those needs there’s no reason for you to speak to the vendor. There will always be a question or two that may not be immediately answered, but as the list grows so should your concern.

Every coin has an edge and in this case the edge is industry knowledge. What a sales rep knows about your industry will become obvious from the questions they ask you, as well as how they answer your questions.  While it is unrealistic to expect the same level of expertise you and the evaluation team have, it is reasonable to expect them to be able to carry on a credible conversation about your industry.

Presales Engineer  A good demo can make or break a sales cycle, but what constitutes a good demo depends on what side of the table you are sitting on.  As a member of the evaluation team, you need to focus on the presales engineer and how well they manage the demo. 

Does he/she show how their system will meet your requirements?  Do they acknowledge where out of the box won’t suffice - where customized code or work-arounds are needed? 

When it comes to the demo portion of the evaluation, you want to see the software function as it will in your environment.  Make it as true to your daily operation as possible.  Anything less may leave you with a false impression about what the system is capable of. 

This is your chance to ask very technical, very specific questions about how the software will work in your enterprise.  Make the most of it. Ask the hard questions and watch and listen to the presales engineer and judge their credibility. Ask yourself how well they understand your industry. Do they get it, or are they faking? Do they give you answers or do their responses remind you of a tap dance?

If they don’t instill confidence, move on.

Project Manager  Several variables can impact the success of your software implementation and a good project manager can make sure those variables impact your’s positively.  When appropriate, usually later in the evaluation process, ask to meet the PM that will be assigned to your implementation. Treat this part of the process as a job interview.

Ask to see the Project Manager’s resume - not the one in their personnel file. Conduct an interview with the individual and ask all the necessary questions about experience - general and industry - management style, strategies for dealing with problems.

Remember, the implementation project is a cooperative effort of the internal team you deploy and the team the vendor brings in.  We’re not talking best friends, but you have to be confident the two teams can work together. After all, they will be spending a lot of time together and the opportunities for frayed nerves and conflicts will be many. When the pressure is on, you want to know that professionalism will carry the day.

Support  Customer support is an area few evaluation teams consider before making a software decision, but once their new system goes live the relationship is just beginning. If possible, visit the support center an meet with the customer service representatives (CSRs). Interview the customer support manager(s). 

The system users will contact the CSRs when they have problems and you want to know that they will be taken care of quickly and efficiently.  But human support is only part of the picture.

Find out what level of self-support they offer.  Do they have a knowledge base that will answers questions without having to engage with a CSR?

There’s a thread of consistency here: comfort.  You and your team need to be comfortable with the people you’re dealing with.  From sales to support, you must have confidence in their knowledge, integrity and ability to deliver what they promise. 

Your level of comfort will vary - that’s human - but if you feel uncomfortable with any one of the role players, think hard before saying “yes”. In some cases you may want to request a different player be assigned to your project.

As I stated early in this post, much of this may seem obvious, but under the pressure of an evaluation one can become so focused on functionality that the people factor is pushed off the radar.  Don’t let it be, because if it is you may wake up during the implementation to find you picked a system that’s right for you, but the people are all wrong.

 This may seem an odd topic for this blog, but hang in there and you’ll see the connection.

I got into a discussion the other day about why people buy. The conversation came around to the world of enterpise software - where I live - and that’s when it got interesting.

The ERP market is by most measures mature. There are few if any new entrants and consolidation has been ongoing for some time. These two factors have lead market of highly commoditized product offerings.  There are differences among competing products to be sure, but are those differences dramatic enough to drive a potential customer into the arms of the competition?

Based on customer interviews I’ve conducted, the answer is a resounding, “No.”  

When the team is making a decision that will impact the company for years into the future, there is more than a little risk involved. So what criteria does an evaluation team use when deciding between competing systems?

I have some ideas - based on those same interviews - and will share them with you in a future post. For now, though, I would like to hear from you. In your experience as either a buyer or a vendor, what drives the decision-making process when competing products are perceived as being nearly identical?

I’ll compile your answers and report back to you next week.

Here’s a story you don’t see every day.

In the SME space it’s not unusual for a growing company to change its ERP system.  The same does not hold true for larger enterprises, however. Among large enterprises, its most often easier to live with the incumbent system than to deal with the pain of replacing it. In the case of large enterprises, the decision to change comes after months of research, analysis and deliberation.    

The case of Hobby Lobby is interesting on its own, but is it representative of the market?  Would other companies, faced with similar circumstances choose the same path? Each company has a different threshold of pain, but each has a point at which the pain of extraction and implementation is more appealing than maintaining the status quo.

Next week we’ll explore what some of those circumstances may be and what an executive looks for during the research, analysis and deliberation phases to guide them to making the best decision for their enterprise.