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If ERP is plumbing for the Enterprise; How do we unplug it and keep it from making a huge mess?
David Dickson

If ERP is plumbing for the Enterprise; How do we unplug it and keep it from making a huge mess?

I have been working with ERP in various roles for over 30 years, directly involved in over a hundred implementations, while my company has been involved with over 300 more. Of course, in many ways the systems we use today are completely different from what we used in the ‘80s – back then it was green screens, simple transaction entry forms, and cumbersome updates (at best) to link what one department did with all the other areas that needed access to that information. Then there were those planning programs that took all the information along with various parameters the users needed to set and told us what to do.

The More Things Change, the More They Stay the Same

What has surely changed is how we use these systems. Back when I started we used them because we could process more transactions more accurately and faster with a computer, than with the otherwise necessary roomful of clerks. Those clerks, schedulers, and various other clerical employees were the first generation of jobs computers rendered obsolete. Strangely, I do not remember anyone bemoaning those lost jobs. I will let others speculate on the reasons for that.

Individual companies could and did debate the decision about how much they automated. Yes, in retrospect, it is pretty clear that choosing not to automate was to accept a long, slow death for the business, but it is not that long ago when there were still lots of manufacturing managers and business owners who did not use, or like, computers.

Competition Changes Everything

Vintage ShipToday a business system is just another piece of necessary infrastructure like an office, a phone, a lawyer, a bank account and an accountant. The system remains the transaction processing backbone for the organization, but the way in which we use the information that flows from those transactions has changed drastically in this interconnected world. Back in the heady days when ERP was new, the focus was all internal, inside the four walls. Today that seems quaint – the Internet connects all systems and much of the unique incremental benefits (or competitive advantage, if you prefer) come from two deceptively simple concepts – how you connect with the rest of the world from your business systems, and how you monitor your business’s performance in real time and adapt to what you learn.

I still remember a kickoff meeting twenty years ago for what was then a pretty large ERP implementation at an automotive supplier. Two comments struck me – the first was public. “I like to think of our business as a boat, and we have been steering it by looking out the back. This project will at least let us see out the sides.” The other was in a private meeting when we were discussing change management, and how they would deal with the resistance that would surely come. This same manager said simply, “I guess we will have to fire someone for it, and then the rest will get religion.”

Not terribly ambitious goals, but I give him credit for honesty.

Things have certainly changed a lot in terms of our expectations for the systems, and our approach to implementation, but despite these systems having become an integral and necessary part of the infrastructure of every business, they remain infuriatingly complex and the benefits we expect are often difficult to achieve.

Illusive Benefits = Bad Form

That should not be the case. So my goal in this series of posts will be nothing less than to be your guide as I share my insights and other good ideas, found across the web, as to how to make business system selection easier and how to get the most benefit from those systems. Because in spite of all the marketing folderol to the contrary, it seems pretty clear that your friendly software vendor and expert implementation consultants are not going to do that for you. Not because they are stupid or evil people, of course, quite the contrary. They just cannot and will not make the decisions for us that need to be made.

Since I have a letter C in front of my title, you can expect this to be a high level discourse, and not a detailed list of project management tips. High level concepts are important at every level of the organization and should be kept in mind whether your role involves a ‘C’ in the title, the lead purchasing agent, or otherwise doing a hard day’s work.

Systems should work for us. Choosing and implementing a system should not be a high risk proposition for a business, or the individuals doing the work.

The common elements made simple, efficient, and effortless with returns.

My entire career has been dedicated to those goals.

I trust that gives you a flavor of what is to come. What do you consider yourself to be?

  • internal expert?
  • someone beginning the search and implementation process?
  • an executive looking for competitive advantage?
  • an industry insider?
  • or someone who finds this amusing for some reason?

All of the above? I would like to engage in a dialogue along with my discourse. There is a better way to choose and use software and as someone who could fit into any and all of the categories listed (yes, I really do find business software entertaining in some weird way), I have some ideas I’d love to share with you.

About the author:
David Dickson is an itinerant generalist; his path to partner and CFO of Crossroads RMC has had its twists and turns. His first twist occurred when an employer needed a business system and picked him because he had three semesters of computer programming in engineering school -- an “expert” born. Somewhere along the line he helped to build and sell a company, which he bought back a couple of years later. Add in another acquisition, a merger, and about 30 years in manufacturing systems in various roles, and you might get a sense from where his real expertise might arise.

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Tips:  LX | BPCS | M3

TECHNOLOGY: Facility Security Ranges

Previously, a user could complete the Cost Transfer (CST920) process for any range of facilities regardless of their security settings established in SYS600. This enhancement verifies the user security settings set up in SYS600 before processing cost transfers for a range of facilities in CST920. If the user has authority for a facility range, but there are facilities within that range that are not authorized, the program skips those facilities and completes the cost transfer process.

FINANCE: Expiration Date for Quotes and RMAs

A Cancel-by-Date has been added to the Quote Header and RMA Header panels. This optional field can limit how long a quote or authorization to return items for credit is valid.  

For quotes, this enhancement provides an optional end date for the quote. For RMAs, it provides an optional date by which the customer must return the items to receive the credit listed on the RMA.

The Cancel-By-Date prints on the Order Acknowledgement and RMA Acknowledgement to inform the customer of this important limitation to the quote or return authorization. 

An Order Entry user cannot copy the quote to create a new order if the Cancel By Date has caused the quote to expire.

OPERATIONS: Default Split Salesperson to Customer Orders

Sales commissions are based on combinations of the Primary, Split, and Line-Level salesperson and the commission codes defined for the customer and item. You can now define the Split Salesperson in the same master files as the Primary Salesperson. While the Primary Salesperson is mandatory, the Split Salesperson is optional. It defaults during Order Create using the identical hierarchy as Primary Salesperson. Using Split Salesperson provides more flexibility in the calculation of sales commissions. The ability to define a default Split Salesperson improves the accuracy of sales commission qualification and calculation and reduces maintenance and adjustments necessitated by corrections.

Previously, a user could complete the Cost Transfer (CST920) process for any range of facilities regardless of their security settings established in SYS600. This enhancement verifies the user security settings set up in SYS600 before processing cost transfers for a range of facilities in CST920. If the user has authority for a facility range, but there are facilities within that range that are not authorized, the program skips those facilities and completes the cost transfer process.

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Tips: LN | Baan

Currency differences can make the financial analysis and reconciliation more complex. These types of currency differences can occur:

  • Currency differences
    Currency result caused by fluctuations in the exchange rate, for example, if the rate differs between the invoice date and the payment date.

  • Exchange gain and loss
    Currency result caused by the use of different exchange rate types, for example, the Sales rate type and the Internal rate type, or if using the rate determiner you have changed the exchange rate for a transaction during the order handling procedure.

  • Translation gain and loss
    Currency result caused by the use of different currencies during the order handling procedure, for example, if the order currency or the payment currency differs from the invoice currency.

  • Destination gain and loss
    Currency result caused by different results when the transaction currency is converted to the various home currencies. Destination gain and loss can only occur in an independent currency system.

To support good reconciliation possibilities, currency differences and exchange gain and loss are posted to these accounts:

When the originating order or order line of an outbound order line is canceled or changed, this affects the outbound order line and may affect the related outbound advice, shipments, or shipment lines.

For most order origins, warehousing order-type parameters determine whether these actions are allowed:

  • Update the outbound order line if the originating order is changed.
  • Cancel the originating order line and the outbound order line.
  • Delete the canceled outbound order line.

If updating is allowed...

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