Considering Enterprise Resource Planning? Consider Your Documents First
What came first: The ERP or the document? Before implementing an ERP solution, companies need to look at the impact on their business-critical documents and plan output printing strategies in order to achieve cost-effective ERP.
As we approach the turn of a new century, businesses face numerous challenges, many of which revolve around working and communicating more closely with customers, while simultaneously operating more efficiently and productively - and doing so while continuing to turn out superior products and services. The overall goal: Staying competitive in today’s fast-paced networked, global business environment.
Among some of today’s specific business challenges are:
- the ramifications of computer systems rolling over to Year 2000 (Y2K);
- the technological and structural changes associated with migrating to client/server network environments; and,
- the growth of the Internet and World Wide Web, which presents the tremendous profit and expansion opportunities of electronic commerce, along with the challenges of doing business in new ways.
To cope, a growing number of companies are turning to Enterprise Resource Planning - commonly known as ERP -- solutions. They are embracing ERP with an enthusiasm comparable perhaps only to the way they’re embracing the Internet. The ERP market represents an estimated $30 billion business, including both software and associated consulting services.
One important reason for the trend toward ERP solutions is the need to bring computing systems into compliance with Y2K requirements. Faced with huge costs to bring mainframes with billions of lines of antiquated code into compliance by re-programming, many companies instead are opting for ERP and its client/server architecture, which is already Y2K-compliant.
Many ERP client/server application suites are available, including the SAP R/3 System, and solutions from other leading vendors such as Baan, JDEdwards, Oracle and PeopleSoft. The SAP solution is already installed in an estimated 12,000 enterprises in 85 countries, and as a result, has gained a reputation within the information technology industry as having an impact second only to Microsoft solutions.
But, before considering and implementing a specific ERP solution, savvy companies will want to consider the impact on their business-critical documents, and plan appropriate output - printing - strategies. By doing so, they will ultimately achieve not only more cost-effective, productive ERP implementations, but also a stronger bottom line.
What Are ERP Solutions and What Do They Do?
Briefly defined, ERP solutions are open, enterprise-wide client/server application suites that integrate business processes and organizational areas. They allow businesses to link, consolidate, and manage their business processes and associated functional areas in order to operate more efficiently and effectively, particularly in interacting with external customers.
Such solutions manage essential operations such as financial, manufacturing, sales, distribution, and human resources in ways that improve workflow, remove redundancies and increase efficiencies. They help an enterprise run more smoothly and productively by integrating and re-engineering the discrete processes that were previously dictated by proprietary, mainframe-based, "un-linked" computing solutions.
By integrating the functional areas within business organizations, ERP solutions allow an enterprise to establish one database and one system for managing all of its information, which means information can be deployed more quickly and efficiently.
Often, companies believe a goal of ERP solutions is to eliminate printing of hard copy documents, and move business processes exclusively to viewing systems. This is not the case! In fact, a well-planned document output strategy is vital to achieving the business objectives of ERP initiatives.
Moreover, while output strategies will vary depending on each company’s specific business processes and objectives - with some internal-use only applications shifting to viewing – companies’ external customers typically will continue to require hard copies for a variety of reasons, from financial to legal to taxes.
Impact on Business Documents
In understanding the impact of ERP solutions on documents, it’s important for a company to first understand that data and documents are not the same thing. Data is meaningless unless it is contained in and conveyed through documents that transform it into information people can use, that is - knowledge.
As the conduits for information within an enterprise, documents are vital links within and between key business tasks and processes and the people who perform them. As the currency of an enterprise, documents are vital links between an enterprise and its customers, providing opportunities to showcase a company’s image and expertise. In fact, research has shown that documents may be second in importance only to payroll for many companies, with document-related costs representing as much as 15 percent of annual revenues.
Because ERP implementation is carried out across an entire enterprise, it affects the information of virtually every aspect of an organization, including products, materials, customers and vendors. That’s why ERP implementation affects the documents throughout an enterprise, and why document output needs should be considered before ERP implementation. In addition to presenting additional challenges, this opens exciting avenues for boosting productivity, revenues and competitiveness, in addition to any improvements anticipated through ERP initiatives.
Yet, today’s ERP solution vendors are not primarily concerned with documents. Instead, because they are focused on data, they tend to treat data and documents as the same thing, in contrast with vendors who focus on documents themselves and the requirements for their output - printing.
The Importance of Document Output Strategies
Because documents play a central role in supporting business tasks, processes and in communicating with customers, companies need to plan their document output strategies before implementing ERP. The reasons for this are to save costs, improve productivity and add value to business-critical documents.
Consider some of the unwanted costs and inefficiencies that can occur when companies implement ERP solutions without first planning a document output strategy:
- Realizing - after the fact - that additional forms are needed. Developing such forms requires changes to the application software, for which specialized programmers must be hired to link the required forms to legacy or third-party database programs. This is quite costly, regardless of the ERP solution involved.
If the company had planned a document output strategy before implementing ERP, they could simply send data down to a printer with the built-in intelligence and enablers to process raw ASCII data, for example, and any forms changes could be made at the printer rather than within the application program.
- Relying on numerous, distributed, low-end printers in conjunction with ERP implementation in the belief that this approach will improve productivity and reduce costs. Instead, because volumes become higher than anticipated, and print windows become even tighter, the costs for maintenance and supplies for all those small printers run very high, while deadlines are missed because of printer downtime.
A pre-planned document output strategy would have shown in advance that it would have been more cost-effective and productive to invest in production printers with the capabilities to easily handle the volume and time frame requirements with maximum up-time and flexibility.
For example, postage can represent as much as 65 percent of the costs associated with documents such as billings, invoices, statements, and direct mailings. A company trying to minimize operations costs needs to consider how to cost-efficiently produce such documents for mailing, with a plan for taking advantage of U.S. Postal Service discounts. This is not feasible when using numerous smaller printers.
End-to-end production printing solutions, incorporating a variety of pre- and post-processing devices, can produce finished, pre-sorted mail pieces, ready for handling by the Postal Service’s automated systems - to receive the maximum postage discounts.
- In an effort to maintain the look and feel of legacy document applications during ERP implementation, a company pays ERP expert programmers to convert existing legacy document formats to the ERP world. This takes the experts away from their primary area of expertise, which is implementing ERP client/server application software, and adds unwanted costs and delays to the implementation.
A pre-planned document output strategy would have shown that the more cost-effective, productive approach would be to collaborate with a document-focused vendor to convert and/or re-design the legacy document applications apart from the ERP implementation. Such a vendor could cost-effectively provide the necessary consulting and software services for the conversion, while also maximizing these documents’ value for the emerging ERP environment.
Planning A Document Output Strategy
Companies turning to ERP solutions typically want to reduce business process cycle times; improve control of business processes; increase efficiency, as well as effectiveness, in interacting with both internal and external audiences; meet changing international requirements; and, replace outdated systems.
In planning a document output strategy, companies need to think of those five ERP
objectives in terms of their business-critical documents:
1. Think of reduced business cycle times in terms of generating and sending documents faster. When documents are distributed more quickly, customers can respond more quickly, which means businesses get their billings paid faster or receive orders and other customer responses faster, which translates into stronger revenue streams.
2. Think of improved control of business processes in terms of enhancing the information contained in documents, so that both internal process work flows and communication with external customers become more effective. When customers as well as workers are presented with all the information they need, in an appealing, easy-to-read and understandable manner, they are more likely to make the appropriate decisions or take the desired actions, which streamlines business processes and strengthens performance.
3. Think of improved efficiency in terms of ensuring that documents contain information that is right for each recipient, which increases the value of documents, both within and outside the enterprise.
For example, marketing messages specific to an external customer’s buying habits can be incorporated in documents ranging from bills, invoices, and statements to correspondence and direct mail pieces. Tailoring such documents to the specific interests, needs, and preferences of each customer allows a more effective, targeted approach, increasing efficiency by eliminating unnecessary or inappropriate information, while improving the number and speed of responses. Targeting information in internal-use document translates into similar benefits relative to an organization’s people.
4. Think of meeting changing international requirements in terms of documents that can be tailored to the specific languages and currencies of various countries worldwide.
For example, when the new Euro currency is introduced in 11 of the 15 European Union member countries January 1, 1999, it will mean document changes for U.S. companies - even those who may not have operations in Europe, but who simply do business there. Just a few examples of documents where the Euro symbol will be needed are billings, invoices, statements, sales orders, pricing lists, etc.
A well-planned document output strategy would incorporate appropriate production printing technologies with the flexibility to adapt to such changing requirements.
5. Think of replacing outdated systems in terms of making provisions to run business-critical legacy document application systems in parallel with new systems during the transition to ERP solutions.
This will ensure that documents such as bills, checks, credits, invoices, statements, etc., that drive important business processes and revenue streams will continue to be generated and sent out on time. This is particularly important because today’s ERP solutions rely primarily on pre-formatted document "types" that are not typically compatible with legacy document application formats. Companies spend a lot of time developing such documents, so, during ERP implementation they’ll want to make sure their customers continue to receive these familiar documents, while internal changes are made gradually.
Printing Technologies That Support ERP Objectives
Output strategies must incorporate printing technologies that can deliver documents in ways that support those objectives. Characteristics of such technologies include:
- Output speeds, volume-handling and reliability to match print windows and volume requirements associated with business-critical documents, and the company’s expectations for customer responses. Production printers on today's market include cut-sheet devices ranging in speed from 50 up to 180 pages per minute, and continuous feed devices ranging in speed from 300 up to 1300 pages per minute.
- Scalability in order to accommodate periodic upswings in print volume requirements, as well as growth over time, and to meet legacy application document output needs as well as those of new document output needs.
- Capabilities that add value to business-critical documents. These include highlight color, high-quality print resolutions, standard two-sided printing, MICR check printing, and in-line finishing, among others. Highlight color can help customers focus immediately on critical information within business documents, which has been proven to generate 400 percent higher response rates, invoices that are paid 15 percent faster, and more goods and services sold.
- Flexibility in creating and producing business documents, for example, through built-in intelligence that can dynamically construct documents - incorporating both static and variable information - in one step, as documents are printed.
The ability to store formats, fonts, graphics, logos, signatures, and photos on the printer, then intelligently merge these with recipient-specific information at print time provides maximum document output flexibility. That includes flexibility to make last-minute changes, incorporate one-to-one marketing messages, and ensure that documents are always accurate, in the right format, and delivered at the right time for each recipient.
- Capabilities to match all the printing requirements across an enterprise - from reliable centralized production to distributed printing at the desktop, where print, scan, and fax capabilities are needed. Printing capabilities should meet the time and volume requirements of legacy document applications, as well as those of new document applications resulting from ERP implementation, many of which will need to be printed close to workers who interact closely with customers.
- Capabilities to fit seamlessly within any enterprise, regardless of computing systems or application data streams.
- Ability to leverage all printer resources for maximum efficiency and effectiveness across the enterprise.
Companies should start planning document output strategies as soon as they begin to consider ERP solutions. In doing so, they should partner with an output vendor who:
- understands both data and documents, in both digital and hard copy formats;
- partners with other vendors to provide integrated document output strategies incorporating digital production printers, document archival and retrieval services, overall output management services, and print enablement software - all within the company’s chosen ERP implementation;
- offers document management consulting services to help with document workflow as it relates to business task and process workflow, and to apply document solutions technologies to add value to business-critical documents, while helping reduce costs, improve productivity and strengthen competitive advantage;
- offers software to streamline document output within ERP implementations, supporting production printing across client/server networks.
By collaborating with such a vendor to plan document output strategies before implementing ERP solutions, companies can avoid unwanted and unnecessary printer and programming costs, while maximizing the cost-saving, productivity, revenue and competitive advantages they seek to achieve through their ERP initiatives.
ABOUT THE AUTHOR:
Kevin McPherson is a Marketing Manager with the Printing Systems Organization of Xerox Corporation (El Segundo, Calif.) specifically focused on delivering ERP solutions to companies delivering one-to-one personalized communications. He can be reached via e-mail at Kevin.McPherson@usa.xerox.com.
|The ERP Solution|
The strength of ERP solutions such as SAP R/3 is in their ability to integrate complex business functions and move information quickly through the enterprise. Many of these business processes have documents as their product - invoices, order confirmations and packing lists, for example.
Further enhancing the value of ERP solutions such as SAP R/3, Xerox and companies such as JetForm Corp. have formed strategic alliances to provide companies considering ERP implementations with complete solutions addressing key business applications.
All businesses implementing ERP systems must address issues relating to documents, and the documents must all work together - from orders to invoices. After all, it is the documents that provide the customers’ only view of a company's business processes.
By thinking through all the tiers of documentation - from picking slips to invoices - with a well-planned document output strategy that works in conjunction with its ERP initiative, a company can improve its bottom line. That’s because customers are more likely to expedite payment when they can easily confirm that what they're paying for is what they actually received.
The streamlined processes of ERP implementation are important, but they mean nothing to a customer if he or she cannot figure out the bill. It would be hard to overestimate the importance of documents like invoices, since they are often the only real interface a company has with its customers. Documents are not just information - they are information carefully structured for human comprehension. If a document such as an invoice is designed to invoke action - perhaps through use of highlight color - it gets paid faster.
Well-defined, streamlined business processes achieved through ERP implementation can make corporate life easier, but if the customer's invoice doesn’t match the packing slip and order confirmation, nobody’s going to be impressed by streamlined processes. Customers tend to judge how good a business is by the quality of its documents.