7 symptoms forecasting illness“According to a recent Business Finance survey, two out of three finance executives expected their 2009 budget targets to be obsolete within the first six months of the year.”

In a 2010 white paper from IBM the authors, Steve Player and Steve Morlidge, blame antiquated processes and tools combined with misconceptions about forecasting accuracy for the “illness” of most forecasting systems in business today.  In their paper Seven Symptoms of Forecasting Illness (© IBM 2010) they point to 7 symptoms of potential forecasting trouble, which we’ll highlight below.

  1. Semantic Confusion: Does your firm find it uncomfortable to cope with unexpected or unwelcomed forecasts? Like the manager who is asked for a “best estimate” and then is held accountable for it, or criticized for “making changes” in a forecast update, or one which management doesn’t like.  The bottom line is the blurring between “forecasts” and “targets” (or goals).  Resolution involves more honest, open and direct communication from the top down.


  1. Visual Impairment: Are you obsessed with the year-end forecast number to the exclusion of everything else? Or surprised by early-year unexpected developments?  The root cause here tends to be inflexibility or lack of adaptability to changing conditions, and is best resolved via use of a rolling (i.e., cumulative/adjusted monthly or quarterly) type of forecast.


  1. Delusions of Accuracy: Are you obsessed with accuracy, pouring too much quality managerial time and talent agonizing over a forecast’s development, trying to hit it on the nose? The price paid for error here may include bonuses, promotional expense, or losing sight of what’s possible “as internal views obscure external learning.”  Here again, forecasting more periodically and being quickly adaptive to outside changes will help.


  1. Systemic Overload: Are forecasts too detailed?  Is there too much pressure to provide greater detail and analysis?  These cause the system to become bloated and unwieldy in a downward spiral of frustration.  The fallacy is in believing that more data is always better.  Instead, the authors opine, limit your forecasting to a few key critical drivers that truly affect company performance.  Use the 80/20 rule, and emphasize analysis over data gathering in extremis.


  1. Prosperity Syndrome: Do your forecasts tend to trend up over-optimistically regardless of industry or conditions? Are they too biased toward growth?  Ignoring the reality of industry or economic cycles exposes any firm to strategic missteps.  Don’t mistake a happy event for a trend.  And above all, don’t neglect your key customer-satisfying strategic differentiators.  Instead, recognizes your biases, focus on current, key market and economic realities, and competitive realities.


  1. Lack of Coordination: Are forecasting views internally characterized by chaos and conflict? Do different departments see the future differently?  Are managers’ biases reflected in their (conflicting) forecasts?  Lack of integration by management of key forecasting projections is at the root.  A system is required company-wide that users can believe and have faith in – one that does not discourage differing views, and inspires collaboration.


  1. Asocial Behavior: Does the firm routinely manipulate or distort forecasts even when not in the company’s long-term best interests? Is knowledge withheld or manipulated?  You could end up rewarding sand-baggers and masking problems (or opportunities) in the marketplace and obscure the firm’s true potential.  If so, take a look at bonuses, comp and reward systems for undesirable links between forecasting and performance, or incentives not well aligned with overall company goals.  Reward employees for the value they create rather than the targets they negotiate.


The full IBM White Paper can be found at the website of proformative.com.  You should be able to find the link here.

What Is Jet Reports?

jet reportsAs a Microsoft Dynamics NAV reseller, our team deals almost daily with the reporting needs of our clients, and the tool we recommend to help them is one of a family of products collectively known as Jet Reports.

So today we thought it might be a good idea to define for our NAV  readers and users just what this Jet Reports family is all about.  Here’s a quick-shot, high-level view of what, in reality, are three different levels of reporting and BI (Business Intelligence) solutions.

At its core, the family of Jet products (Jet is headquartered in Portland, OR) are powerful tools for integrating Microsoft Excel with Microsoft Dynamics.  In short, if you run NAV and you need reporting, then you need Jet.  If you know Excel, then you’ll love Jet!

Jet users can be “designers” (they have the rights and ability to create reports) or “viewers” (those who can view or review, but not create, reports.)  Jet will even create PDF or XLS reports that you can push downstream to other users in your organization who are not even Dynamics NAV users!

At the basic level, there’s Jet Express.  It’s free, so the price is certainly right.  With Jet Express [quoting from the folks at Jet] “you can select the fields you want from any of the tables or views in your database and build reports quickly using a simple interface inside Excel. Take advantage of Excel’s tremendous capabilities to add charts, Pivot Tables, and custom formatting to build stunning reports.”  You can download dozens of pre-built Excel reports and in at least some cases, refresh your data with the click of a button.

Jet Express is your point of entry for Jet/Excel reporting.  Most companies will quickly tire of some its limitations (like limited report formats, lack of sub-groupings and very little ability to edit or “tweak” a table report and then re-save it).  Still, what do you want?… it’s free.  Those needing to take the next step up will likely move up to the next level of Jet…

Jet Essentials sells for about five grand and opens up Jet to greater reporting capabilities.  It permits more advanced reporting and group collaboration.  You can connect to all your business systems from inside Excel.  You can automatically pull in data to create the reports you need. You can refresh report data – in real time — at the click of a button.  You can also schedule reports for automatic distribution and use “proactive alerts” to push critical information out to others.  Jet Essentials also features improved drill-downs to underlying documents.  In short, it provides the reporting backbone, through Excel, for your entire organization, and greatly expands the convenience and capabilities of reporting with Jet.

Finally, at the top end of the Jet food chain, and priced around ten grand, is the full-blown BI (Business Intelligence) and reporting tool called Jet Enterprise.  It allows you to quickly analyze issues from different perspectives within your business to discover underlying trends.  Once again, you’re using the familiar tool of Microsoft Excel.  It features a drag-and-drop data manager for adding tables and fields to the cubes to access the data warehouse.  You can learn to manipulate data to see the information you want.  You can implement Jet Enterprise and begin to gain insights into your business pretty quickly.  And it’s a business collaboration tool – without the need for highly skilled technical resources.

We’ve found that most businesses will happily start with Jet Express.  When they’re tired of bumping into its limitations, they’ll make the investment of about $5K to step up to Jet Essentials – and often that’s where most will stay.  True data-mavens and larger organizations (with the supporting budgets) may feel compelled to move up to Jet Enterprise, but for most we’ve found that the mid-level  Jet Essentials hits the ‘sweet spot.’




cindy jutrasIn a recent white paper, Cindy Jutras (pictured, left), founder of Mint Jutras LLC, a tech firm “specializing in analyzing and communicating the business value enterprise applications bring to the enterprise” collected over 900 responses to a survey of companies’ enterprise solutions.  Today we’ll reprise just two major conclusions from their report entitled “New Realities of Replacing Your Accounting System.”

First, they asked the question: Why Might Companies Replace [Their Current] Solution?  Here’s what survey responses revealed were the driving forces:

  • Seeking more functionality was cited by 49% of all respondents
  • Outdated technology: 46%
  • Cost advantage (seeking to lower TCO): 44%

Those were by far the three main drivers for system replacement.  Other factors cited included:

  • “Our business is changing” by 26% of all respondents
  • Integration issues: 24%
  • A (new) consolidation strategy: 21%
  • Current system cannot scale with our growth: 20%

Given these incentives to change, when asked to define their selection criteria, survey respondents chose the following [on a scale from 0 (“not a consideration”) to 4 (“must have/most important”) ]:

  • Fit and functionality: 3.51
  • Ease of use: 3.49
  • Flexibility to address changing business needs: 3.41
  • TCO (Total Cost of Ownership): 3.28
  • Quality & availability of vendor support services: 3.25
  • Integration technologies and capabilities: 3.21
  • Ease & speed of implementation: 3.12
  • Ability to tailor functionality without programming: 3.10 (*)

(*) Note that the survey respondents specifically excluded manufacturers – for whom customization and tailored functionality tend to be key, critical factors in selection.

The report’s author noted the ongoing importance of fit and functionality (always the top priority of selection committees) along with the increased importance today of ease of use.  Fitting future needs was deemed more important than ever, logical today given the changing face and pace of the business environment.

Finally, two items were notable for not ranking high on the list:

  • Deployment options (2.26), and
  • Mobile access (2.19)

Despite “mobility” and “cloud” (or SaaS) being hot topics today, most surveyed SMB companies showed minimal concern for these two characteristics.  Industry pundits continue to opine that ‘it’s only a matter of time’ before these opinions change, but so far, that’s what companies are saying today.

The Mint Jutras white paper can be found at the proformative.com website here.

nav2015Word is that Microsoft plans to release the next upgraded version of Microsoft Dynamics NAV late in 2014.  More information is expected to be forthcoming at the NAV Directions Conference in San Diego in September.  The product (formerly code-named “Crete”) will simply be named Microsoft Dynamics NAV 2015.

[Several PSSI staff will be attending the Directions conference, Sept. 9 -13, and we’ll have more news to report in a future post.  In fact, we’ll be back by the time this post is published, so stay tuned for further announcements.]

Among the tidbits of information already announced this summer by Microsoft:

  • Easier upgrades! (The sound you hear is the cheering of both customers and resellers.) The improved upgrade capabilities will include “new tools to upgrade and manage data more easily” according to Microsoft GM Erik Tiden.
  • Better integration with Microsoft products like Office 365, and more Power BI integration built directly into the product.
  • New mobile device support, including a tablet interface for Windows, iPad and Android, for a more consistent “app experience across devices”.
  • A new role-tailored NAV home page that includes “expressive tiles,” colored squares that indicate not just standard metrics but any business information that can be derived from NAV. Color coding logic can be defined for each tile.
  • “Significantly improved” browser performance.
  • And from what we’ve heard more recently, the ability to use Microsoft Word to design report formats. This is an exciting development for all users and developers alike, we believe.
  • Also hinted at: Improved cash management functionality and “simplification.”

When our team returns from the September Directions Conference we’ll undoubtedly have more to share with you.  Stay tuned…


cloud_money_imageThe website technologyevaluation.com recently wrote about why, despite all the chatter these days (good and bad) about The Cloud, manufacturers are not rushing into SaaS (Software as a Service) based enterprise resource planning (ERP) products.  Their points are worth noting, which we’ll do today in brief, adding our own commentary where appropriate.

  1. Multiple modification requirements. Manufacturing is complex, often including high volumes of unique transactions.  ERP systems for manufacturers almost always must include consideration for unique customizations.  While some cloud ERP products can accommodate low-level changes, the SaaS model in general is the antithesis of a customizable solution.  While software publishers may hope you buy in – so they can host and serve the same software once across many paying customers – the model is not such a good fit for most manufacturers.  A system with ‘standard’ functionality will usually not meet the demanding requirements of today’s manufacturer.
  2. Data ownership and overall increased dependency on a third party. From temporary outages to “the theoretical possibility that a provider might file for bankruptcy” (in the words of com), along with the simple logistical concerns about the availability of one’s data, cloud solutions pose a distinct risk to manufacturers.  You’re putting your company data in the hands of an entity you do not control.  On the other hand, you may already be sharing lots of your company data with your bank, creditors, suppliers or others, and thus already sharing to some degree.
  3. Strict compliance requirements. Cloud ERP providers may or may not be able to accommodate any unique compliance regulation relevant to your particular niche.  Your requirements may simply not match up well with a provider’s infrastructure, deployment method or, for example, a requirement to use separate servers for separate functionalities.
  4. Security concerns. Cloud providers will increasingly be heard boasting about security that’s even higher than on-premise solutions, and increasingly those boasts will ring true.  However, it’s always been the case with security that the weakest link is not in the data center – whether that be on-premise or off-premise – but rather, with the user.  On-premise systems can in some cases provide high–levels of field or record level data security; some cloud providers may offer this with their Service Level Agreements, but not all do, and it can be expensive.
  5. Leasing vs. Purchasing. Although leasing a la cloud offerings seems cost-effective in the short run (and it is), it’s often just the reverse in the long-run, that is, when taking a total cost of ownership (TCO) view.  Think of it this way: Are you the kind of auto buyer who likes a steady ongoing lease payment that never ends, or are you more inclined to buy on payment terms, content in the knowledge after a few years that ‘now I own it’ and the payments have ended?
  6. Integration with other corporate applications. ERP systems frequently need to integrate, usually in some data reach-out or back-door manner, with other internal systems.  Your ERP system will likely need to integrate with other cloud and on-premise systems.  This is almost always true in manufacturing firms.  The total cost of doing so will often be higher in the cloud deployment model than might be the case in a strictly on-premise environment.

While some or all of these considerations can be mitigated by cloud solutions, the real question is the cost and complexity of doing so.  In all cases, special due diligence is highly recommended.

As the old saying goes: You know who the pioneers are, right?  They’re the ones up front with the arrows in their backs.  Proceed accordingly.


erp pricingThis is the last post of a 4-part series on ERP pricing, and the why companies first need to complete a Business Process Analysis before acquiring a new software system.  It reflects the cumulative lessons gained from 25 years’ experience implementing ERP and MRP systems.  The first post is found here.



MRP II pioneer Ollie Wight used to say that “People are the A item.”  Data is B, and the computer is C.  Today, we’d insert “Process” between A and B.  Consistent processes, known and understood by your people, are the key.

So what do you end up with from the BPA?

The BPA produces deliverable benefits, namely: Your company learns about itself, and how things really work – and that knowledge is then documented.  With a Business Process Analysis:

  • Management – and key staff – are engaged
  • Key processes are documented, at least at a high level
  • A roadmap for your implementation is outlined

And as a result you end up with:

  • A well-defined list of project goals often based on KPIs (Key Performance Indicators)
  • A clear sense of required functionality, by phase
  • A prioritized project task list
  • A general sense of the size and scope (and roughly, cost) of your project
  • A fact-based foundation for a subsequent software & services estimate
  • The ability, finally, to make an intelligent decision about what you want to do next

That last point is important.  Without the BPA, you don’t know whether your project will cost $X, or $3X or $5X.  Since you know in your heart that most of the work of a BPA must be done at some point in your project, doesn’t it make sense to separate out that piece of the engagement?  You can spend a little money upfront to learn the scope of your real needs before you spend a lot more money. Wouldn’t you want to know the answer to that question before you put down money on a new system?

It’s done on a modest, fixed-fee basis (at least at our firm).  And you get to know the caliber of your potential implementation team long before you make any larger financial commitment to them – almost like a test drive!

What do you lose if you don’t do the BPA?

We built an entire case study [ask us for a copy] around a client who hired us only after they first did it the other way – without the BPA.  The bottom line was this: What they thought was going to be a $125,000 project was nearly twice that by the time they called us in.  Numerous modifications and more change orders than they could count later, the project was headed toward 300% of budget, and they still weren’t live.

It’s not that the high cost wasn’t valid.  But don’t you think the owner would like to have known that before he started the project?  He made it clear to us he did.  With a BPA, he could have – indeed would have – made a better-timed, more intelligent decision.  A modest investment upfront would have yielded a clearer picture of the project’s true costs.

In the end, the old cliché once again proved true: It doesn’t cost, it pays.

You’re not just paying for a quote.  You’re buying insurance.  And saving money in the long run.  Call it peace of mind.  For a modest fixed price at that.


erp pricingThis is Part 3 of a 4-part series on ERP pricing, and the why companies first need to complete a Business Process Analysis before acquiring a new software system.  It reflects the cumulative lessons gained from 25 years’ experience implementing ERP and MRP systems.  The first post is found here.


The Analysis Process

Clients who really think through their needs eventually come to the conclusion that some kind of workflow and process analysis is necessary in order to begin to solve their problems, increase efficiency, reduce costs, improve inventory, lean out processes, eliminate redundancies, and ultimately keep them competitive, support their growth and boost their bottom line.

That’s why at our firm we do the BPA as a separate engagement.  Clients are under no further obligation to us after that.  If you determine you don’t want to go with our recommendations or services, you can still use the BPA as a project roadmap to select other software.  We do this deliberately for two reasons:

  1. It protects you the customer by having you commit to a tiny part of the overall project, before you make a costly commitment to any specific software.
  2. Over the past 4 years, we have not done an ERP project without first doing a BPA. We can honestly say that every client expressed satisfaction with the results of the BPA.  They learned about themselves, their processes, their gaps and their opportunities.  They were engaged.

We start by reviewing a client’s process and workflows.  This typically requires two or three of our most experienced consultants, on-site for two or three days, meeting individually with up to a dozen key members of the client’s team – including the CEO and CFO.  We delve into the arcane details of every key department and process, gaining knowledge about how each functions, the obstacles they face, the challenges they see.  We talk about what they like and don’t like about their current system.  We review their answers to questionnaires provided in advance of our first BPA visit.

We will later map those processes through flowcharts, often comparing ‘current’ and ‘future’ states.  We’ll identify technology touch-points that will make them more efficient, remove redundant data entry, eliminate steps and roadblocks and integrate disparate areas, reports or software.  We’ll try to strip away the superfluous and redundant, and plan for software and very experienced consultants to help move them, carefully, to a leaner state.

The end result is a written ‘Summary of Recommendations,’ typically of about 30 pages that will map everything we’ve learned, suggests key priorities, breaks efforts down into prioritized phases wherever possible, and yield a final report that we’ll discuss in person, usually before any decision has been made about which system is right for you.

And yes, there is a cost associated with this effort.  The good news is that it’s a lot less than you might think.  But it still isn’t cheap.  BPAs run from $10,000 to $15,000.  But the good news is that they can (1) save you many times their cost, and (2) let you know in advance if what you thought was an $X dollars project is more likely a $2X (or $3X) dollars project.  With the BPA designed as a separate engagement, its small investment can save you a lot of money, or make you a much more informed buyer when you become one.

When all our hours are added up, it’s really a loss-leader from our perspective.  The hours charged rarely match the effort rendered.  It’s simply our way of ‘putting a little skin in the game.’   We put a substantial effort into mapping your processes, and then charge a fraction of what we should to (1) show you good faith and (2) prove our competency.

In our final post, we’ll look at Results.  Stay tuned…


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