Category: SME/SMME


By Christophe Letellier, CEO of Sage ERP X3

Christophe Letellier

Christophe Letellier

Choosing an ERP system is one of the most strategic decisions for mid-market companies and their CEOs face a significant dilemma. Should I choose a system for today, or for how my company may look in five to ten years? Should I go for a full system or start small with a limited number of functions? Should I try to cover 100-percent of my needs or only aim for a fraction of them? Do I have to cover all my requirements with one single ERP system? Should I go for a comprehensive, full function system requiring a 12-18 month implementation, or for a simpler system with fewer functions that could be implemented in weeks? What balance will get me the best return on my investment?

I could go on and on with questions that are all relevant, but instead I would suggest reversing the thought process.  Rather than trying to solve all your outstanding issues with a new system, which will usually replace something that you are currently using, I would suggest thinking about how to improve what you already have. All of us would like to aim for the best in terms of ERP software, but in doing so we often ignore the ‘better’ solution.

The value of an ERP system lies in its integration across a company and the data gathered when using it. Start with a modern solution that is well integrated and covers 80-85-percent of an organisation’s functional needs. The last mile is by far the most costly and often the one that has the most problematic ROI.

Why look for perfection when 85-percent would help you make a giant leap in efficiency?  Go with as standard a system as you can to start with. Implementation will be significantly reduced, both in terms of cost (three to five times cheaper) and duration (up to ten times faster, in a matter of weeks). A properly integrated system will immediately make your processes more fluid, improve cross-functional collaboration, reduce operating costs; and most importantly, help you understand what you really need for the next step.

I encourage you to have a look at what our customer, Omega Refrigeration, did. They chose to go standard and not only did the company’s ERP system go live in just 44 days, but it started to see benefits just a few weeks after the implementation. Very soon after deployment, Omega Refrigeration was able to plan the expansion of the system.

One of the biggest mistakes often made is attempting to replicate existing business processes within a new system. It implies significant tweaks in the ERP system through customisation. On top of making life miserable for future upgrades, it also changes the way an ERP solution behaves, severely curbing the benefit that is derived from all the best practices that has led to the development of the built-in processes. Performance can also be dramatically reduced and future evolutions will be more difficult to leverage.

Implementing a new ERP system is a great opportunity to re-think processes. We love to think we are different, and guess what, it’s true! But being different doesn’t mean we are totally unique. Step back and try to honestly define what makes you better and more competitive than your competition.  This is what counts at the end of the day, and you will probably end up with two or perhaps three processes that are really distinctive. At most five percent of your system will recognise this difference, not 50-percent.

This past April, I had the privilege of visiting the Marussia F1 Team in Banbury, England, one of Sage ERP X3’s customers.  I spoke to Kevin Lee, their Operations Manager, and he lives by an expression that I often use, ‘walk before you run’. He applies this principle to everything he does to improve the team’s competitiveness in Formula 1.

Lee enacted this principle when he implemented his new ERP system and succeeded:

  • Implementation time – Eight weeks
  • Number of specific developments to address F1 needs – Zero

Go for standard solutions and after a period of usage, say 9 to 12 months, you will be able to make informed decisions on where to channel your investment to differentiate yourself in the market.  Once that is done, make sure you have as many people as possible using your ERP system.  ERP software is not a specialist play and it is certainly not only for accountants or plant managers. Everyone, one way or another, should use the system, starting with you. This is important because your ERP system will be your decision-making tool and based on the collected data, you will run reports, analysis or even simulations.

These activities will really add value if your database truly represents your business. To get there you need to ensure everyone contributes to it – the experienced and the non-technical alike. You can even open your system to those outside of your own organisation who also contribute to your business. Your customers, your partners and your suppliers can definitely enrich your data set, which will help you make better decisions.

Integration is key.  Integration means encouraging people in different functions to work together. This will open up a new field of efficiency through collaboration. ERP software will help you organise the social nature of your business and support a better, more natural and organised way of collaborating for greater efficiency, better problem solving, but also to promote innovation.

Before running like Usain Bolt, make sure you can walk.

Five tips to choosing the right ERP system:

  1. ‘Start small’ with a standard solution across your company
  2. Progress quickly within a few weeks,
  3. Learn through experience
  4. Encourage usage across and outside your organisation
  5. Make informed decisions for additional investments that will make you more competitive.

By Anja Hartman, HR Director for Softline VIP, part of the Sage Group Plc.

Anja Hartman-Weitz

Anja Hartman-Weitz

People are at the top of the agenda in many a company with the war for talent intensifying in many business sectors.  It is therefore crucial for the Human Resources (HR) department to recognise the value that it brings in terms of helping the business to compete in finding the right talent.

The future of HR however depends on its business presence.  You need to have the mindset of a business role-player first and then an HR professional to understand the contribution that HR can make to the bigger picture.  It boils down to how well you really know your business and who your clients are, may it be employees, line managers, Exco members, external clients or even investors.  Ask yourself the following questions, to establish whether you understand your business:

  • What are the top three priorities and concerns of your business leaders?
  • Who is your biggest client and why do they use your service or product?
  • Which product/service is the most profitable, and why?
  • What emerging technology trends can influence your business?
  • What socio-economic or political trends might be disruptive to your industry?
  • What is the company’s operating margin?
  • What was the revenue and profit for the previous financial year?

If you are familiar with the needs of the business, your HR practices will reflect that knowledge. The answers to the above questions can help the HR practitioner to achieve business objectives through informed HR desicions.

There are many ways in which HR practices can support business performance.  The principles and philosophies that you implement as an HR professional affect the workplace, the value chain, the company’s value proposition as well as the technology that the company uses.  The people represent the company’s image and its ability to adequately deliver its service or product and it is ultimately your responsibility to shape that image and to align it with the business needs.

The broader HR mandate far exceeds the mere administration of HR technology and policies alone.  The focus has shifted towards the management of talent which includes recruitment, training and development, performance management, talent assessment and succession planning.  As far as the organisation is concerned, HR practices will shape the business structure, rewards, internal communication and process design.

It is crucial that the organisation’s HR strategy underscores that of the business.  HR goals need to be consistent with that of the company’s and need to be designed to make the business strategy happen.  Likewise, HR also needs buy-in from management to mobilise its strategy.

It is therefore necessary to focus on building relationships of trust.  To make an impact in the business the HR professional needs to be confident, have a commercial point of view, be able to speak candidly and influence others. A positive investment in their own personal growth will help any HR professional in this regard.

The key elements to focus on are to create a business presence, to learn the language of your business and to continue with an HR mindset. The ultimate goal is to empower your people and to focus on business results as these are lifelines that keep your business alive.

by Michael Brennan

Sage has been carefully listening to its global market for Sage ERP X3 with regards to feedback and requests on the topic of Financial Reporting and is already making progress on integrating a powerful and flexible reporting technology based on cutting edge BI technology. The Sage ERP X3 core product team in France has embarked on a strategic partnership with our team with the intention of providing a modern Excel-based financial reporting designer and tools.

We have been in the business of offering robust Excel-based business intelligence tools for 11 years and have been working on Sage ERP products since 2005. Sage France’s move to collaborate closely with our team, mainly based in South Africa, is well aligned with Sage Group’s core strategy of consolidating group assets across regions and presents an exciting roadmap of consistent product and service offerings globally.

As global market BI market trends continue to evolve we have been investing heavily in new advanced technologies to power our next generation offerings and are pleased to announce Sage ERP X3 version 7 will include fully integrated financial reporting capabilities based on its next generation In-Memory Database BI Platform codenamed ‘LIME’. This new column based database platform has been engineered from the ground up to cater the needs of tomorrow’s businesses with a core focus on high performance, flexibility and great user experience. The new platform is able to accelerate performance by pre-calculating financial logic and place the results into its in-memory BI database to dramatically improve real-time query performance.

Expectations on this new offering include report design automation to cater for novice Excel users as well as flexible drag and drop formulas for capable Excel users. This approach allows both types of users to pull financial and analytical ledger data directly out of Sage ERP X3 v7 and arrange it within Excel using their existing Excel skills and save your Excel report securely back to the Sage ERP X3 server. In addition to utilizing cutting edge technology, we are also including major usability and modernization changes to our  report designer tools as we ramp up to deliver on ever increasing market demands for simpler BI and reporting software. This is great news for users who are already using Sage Intelligence Financial Reporting for Sage ERP X3 v6 and v6.5 who can look forward to substantial business value increases when moving to the integrated report designer within Sage ERP X3 which will be available as an option to all users using version 7.

Both French and South African teams are excited about the extent of new business value planned for Sage ERP X3 version 7 as a result of their collaboration and having a dedicated BI team focus on the Excel financial reporting capabilities of Sage ERP X3 allows the French team to ship more value to market each release.

Most BI thought leadership articles these days include a fairly significant section on mobile data consumption, and how trends are heading in this direction. The predictions from analysts suggest that by 2013, as much as 33% of business intelligence functionality will be consumed via handheld devices.

This inherently sets out to challenge the thinking of traditional BI vendors in terms of how their solutions become relevant in the mobile space. It can be tempting to re-invent the wheel in an effort to lead the charge with something really cool, something that demo’s well, without carefully thinking about what device the majority of customers are likely to use, and how they will consume or interact with the data on this device, and of course, what makes practical sense to add value to their day to day operations and decision making.

Vendors need to understand their customers’ needs implicitly before investing in a mobility strategy so that the right type of information is staged for a particular device, and that the right device is used for that purpose, otherwise it just becomes another useless trend/fad that doesn’t really serve its purpose.

Another key consideration is whether to create an interactive proprietary app that is native to a specific device, or to stage static data to the cloud that can be consumed agnostically on a wide variety of mobile devices. In most cases the former provides a richer user experience, but is this practical in light of how fast the mobile device market is moving?

One could argue, at this stage of the game,  that 80% of consumer needs are satisfied by staging static data via the cloud because it is so much more than what they are accustomed to getting anyway. The reason I say this is that in my experience in providing BI solutions to SMB customers over the last decade, I have seen that sophistication sells, but very seldom does it get implemented to the same degree. Sad but true.

Sage Business Index by Softline shows local confidence in business prospects remain stable, but confidence in SA economic prospects dips

8th November 2012, Johannesburg: Softline, part of the Sage Group PLC, today released the results of The Sage Business Index – Local and International Business Insights.

The Index is a global measure of confidence across small and medium sized businesses. Nearly 11,000 small and medium sized companies in 15 countries across Europe, North America, Brazil, South Africa and Asia responded to the survey. The Index shows that whilst there is a general decline in confidence in global and local economies, businesses remain cautiously optimistic in their own growth prospects.

In South Africa, confidence in both individual business prospects and the outlook for the global economy remain largely unchanged, down slightly from March 2012 (Index scores: 64.44 to 64.19 and 44.71 to 44.54 respectively). Confidence in South Africa’s own economic prospects has fallen slightly further from 46.11 in March 2012 to 43.03 in September 2012.

South African Index Scores* September 2012 March 2012 September 2011
Global economic confidence 44.54 44.71 45.92
SA’s Country economic confidence 43.03 46.11 44.10
Own business confidence SA 64.19 64.44 62.58

(Below 50 is decline/less confident above 50 is improvement/more confident, 50 is no different)*

The research, which included 1 879 South African small to medium size businesses, was carried out by Populus, a UK based opinion and research consultancy firm.

Economic confidence – local concerns in line with macro-economic trends

All countries, with the exception of Brazil, registered an index score below 50 showing that respondents generally feel that the global economy is continuing to decline. Unsurprisingly, the Eurozone countries feel the most negative, with fears of a “double dip” recession having risen sharply.

In South Africa, businesses surveyed are feeling less confident about the prospects for the local economy, with the index declining from 46.11 to 43.03 over the past 6 months. This, however, is in sharp contrast with how they feel about their own business prospects which scored positively at 64.19.

Commenting at the official results presentation in Johannesburg today, Ivan Epstein, CEO (and co-founder) of Softline and Sage AAMEA (Asia, Australia, Middle East and Africa) said, “Looking at the results against an international backdrop, South Africa scored the second highest index rating of all the countries polled in terms of individual business confidence. Entrepreneurial spirit and business culture is identified by businesses as one of the most important aspects for doing business successfully in South Africa. This endorses my strong belief that South Africa is a fertile environment for successful entrepreneurs and small businesses.”

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Business performance and challenges – revenues maintained, cost challenges

There are some positive signs in the global survey with 63 percent of respondents saying that over the past 6 months revenue has either increased or held steady whilst 82 percent have either increased or maintained employee numbers.

South Africa achieved a similar score with 65 percent of businesses polled showing either steady or increasing revenue and 84 percent of businesses either increasing or maintaining employee numbers.

Rob Wilkie, CFO of Softline and Sage AAMEA commented that “72 percent of South African businesses said that they have adapted to the challenges of the current economic climate. The agility and resilience of businesses in South Africa is testament to a strong entrepreneurial business culture and strength of South Africa as a place to do business”.

Increasing costs are the number one concern of businesses surveyed in South Africa. Wilkie commented that “this was expected given that CPI is on an upward trend with the main drivers being food prices, fuel and electricity. In addition, an inevitable consequence of the recent high wage increases seen in the mining and transport sectors is going to be higher inflation, particularly when decoupled from increased productivity”.

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Government – businesses call on government to do more

All countries participating in the global survey feel that their governments don’t provide sufficient support for business, with the exception of Singapore where 54% of respondents indicated that their Government provides adequate support.

In South Africa businesses are calling for skills development and education (46%), the reduction of bureaucracy and legislation (40%), a reduction in business tax (34%) and currency stability (28%).  Wilkie commented, “in order to enhance its competitiveness, government must address the quality of primary education, particularly in view of a very high unemployment rate. Over-regulation and red tape is a further obstacle, specifically firing and hiring practices, wage determination, public sector tender procedures and enforcement of contracts”.

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Investment for growth – future prospects

In considering the year ahead, 29 percent of South African businesses surveyed said they were looking to diversify into new markets, 28 percent would invest further in marketing and sales within their existing markets and 27 percent would invest in skills development and training.

According to Epstein, “economic and political reforms in Africa have resulted in an improved business environment and offer an attractive opportunity for South African businesses to diversify and expand across their border.”

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In conclusion Epstein said, “ We’ve seen evidence in this research report and others, that small and medium sized business in South Africa require more focused attention from our leaders. The future of the South African economy, and most importantly, the ability to create employment in this country will be dependent the stimulation of more businesses that are sustainable over the long term. Private business and Government have a pivotal role to play in the economic growth and development of small business in South Africa.”

To view the full article, please visit http://businessindex.sage.com/

For more, please follow Softline on Twitter http://twitter.com/SageGroupZA

Softline Pastel, South Africa’s leading developer of business and accounting software, today launched a portal for its range of online applications. The platform, known as Sage Pastel Online, provides the entrepreneur on-the-go one central location to access the company’s bouquet of cloud-based business tools, making running a small business a little easier.

Pastel Accounting launched South Africa’s first online accounting program, My Business Online, in May 2009 and since then has brought several online innovations to the local SME market.

“Times have changed,” says Steven Cohen, managing director of Pastel Accounting. “We have entered an age where technology is pervasive, allowing us more mobility than ever – and business has to be part of the revolution to remain competitive.”

The portal can be found at www.sagepastelonline.com and offers online accounting, payroll and marketing services – allowing business owners the freedom to run their businesses at any time from anywhere. Additionally, Pastel’s BEE one-stop-information-hub, BEE123 and brand new free-to-all-users personal finance applications are also available in the same location.

Pastel My Business Online is a full-function accounting program, designed specifically for the small business owner. All accounting lingo has been changed to simple English, so even the layman can manage the business’s books. It’s a multi-user system with dashboards, graphs and drill-downs to source transactions that provide a bird’s eye view of the business. The system allows users to manage customers, suppliers and inventory items and keeps track of sales and purchases. It comes with a comprehensive list of reports so that month-end management packs are quick and easy to create.

Pastel My Payroll Online is a simple payroll solution that allows SME owners to pay their employees anywhere, anytime.  It’s a SARS compliant system aligned to even the most complex legislation, including PAYE and UIF. Users can also process leave online with leave types already defined according to the BCEA requirements. Like, My Business, My Payroll contains no confusing jargon.

Did you know 70% of SMEs don’t have a website, or at least one with limited marketing capabilities or integration with smartphones and social media. Pastel My Webspace is an online marketing engine for SMEs with an HTML5 website builder designed for optimal marketing and e-commerce capabilities. In addition My Brand will manage users’ search engine optimisation, and mobile and social media integration. My Brand effectively integrates everything for the user and provides an all-in-one e-marketing service with analytics, social media insights, and creating and mailing a fully dynamic newsletter with marketing feedback.

“Moving your business applications online is a must for anyone who wants to ensure that they remain at the cutting edge of service delivery,” said Cohen at the launch event that celebrated the mobile business of the future.

As part of Pastel’s drive for business mobility, it has also formed a relationship with Samsung Enterprise Mobility. Selected Samsung devices will now come preloaded with the My Business Online Android app and Pastel is a reseller of Samsung’s SIII, Note and Tablet devices; all preloaded with a year’s free access to Pastel My Business Online. The devices will be available for purchase via the Pastel Webstore.

By Keith Fenner
Senior Vice President of Sales for Africa at Softline Accpac, part of the Sage Group plc.

Keith Fenner

Keith Fenner

Supply Chain Management (SCM) involves the supply of goods or services required by a customer.  The process involves many connected parties that are involved in the goods or services reaching their final destination. APICS defines it as the design, planning, execution, control and monitoring of supply chain activities.

The supply chain management cycle in Africa is vital for our customers to remain competitive with the ability to measure and monitor performance globally.  Planning and visibility is the key requirement in any successful SCM module from a logistical point of view and pre-costing from a financial point of view.  This visibility must extend to your suppliers and all the connected parties in that process in order to land goods at the right time and the right cost.  The visibility will lead to a lower stock holding which in turn will free up working capital to use elsewhere in the business.

How does SCM fit into Enterprise Resource Planning (ERP)?

Many ERP solutions only cater for a product once landed and costed but this is the first time the costs are known and stock is visible which does limit planning and cash-flow.  Typically goods can end up in stock and then additional costs are apportioned afterwards from a financial costing perspective based on weight, volume or value.  This is a very basic option and can lead to discrepancies when reviewing the gross profit on item level as these additional costs typically alloy across many stock items in a container.  A true SCM solution has a dedicated module where shipping routes, tariff codes, manage rules such as FOB and additional cost categories can be created and used to manage the true costing of goods in detail.  A module like this allows businesses to plan the costings and apply provisionally to stock before the additional cost invoices arrive, as often the stock has already been sold which causes further discrepancies. Once the final costs are known, the module will reverse the provision and add the correct apportioned costs to stock.  Moreover, in a modern web based ERP with SCM, you can simply give access to parts of the module to your suppliers to complete data relevant for shipping again improving collaboration.

When does is the right time to consider an SCM system?

Typically when importing starts to become a major problem in costing is the time to consider this solution.  When the frequency and volumes increase as well as the costs of warehousing, this is the time to review a proper integrated SCM and ERP.  It will massively reduce costs and deliver a better experience and service to their customers.

Advice

The best advice we can give is that SCM is not simple.  A distinction needs to be made between apportioning costs to landed stock which is the most basic requirement for a small business and what an importer looks for in order to better manage costs, improve service and delivery collaboration across the supply chain.  The key to the latter topic is a fully integrated SCM with ERP that has touch points across purchasing, suppliers, stock, warehousing, customers, customer service and costing that also talks directly to the supplier and customer with web based portals.  Luckily Sage ERP solutions have a scalable set of solutions for all sizes of businesses.

 

Companies have until 15 January 2013 to compile and electronically submit their annual employment equity returns to the Department of Labour. The deadline for manual reports has already passed.

The easiest and most efficient way for companies to complete the forms is to visit the Department of Labour’s website (www.labour.gov.za) and make use of the Online Services to capture EE reports.

Philip Meyer, technology director at payroll and HR specialist Pastel Payroll, part of the Softline Group and Sage Group plc, says companies should be aware that once submitted, the forms may not be changed or amended in any way. “However guidance on how to correctly complete the forms is available from the Department of Labour’s website.”

Meyer adds that companies need to have a formal employment equity plan in place which provides the base for any EE report and consultation should take place with all relevant stakeholders before the forms are completed. The prescribed reporting forms are the EEA2 and the EEA4. Large employers are obliged to report every 12 months and small employers every second year. Chief executives are required to approve and authorise the EE reports before they are submitted.

“Companies should also note that the EEA2 and EEA4 forms must always be submitted together or the submission will be rejected and returned. Copies of these forms should be retained for the company records and to present to Department of Labour inspectors who may visit the company.”

The report also requires tables relating to numerical goals and targets, which essentially provide the workforce profile that the employer aims to achieve by the end of the next reporting period.

By Rob Wilkie, CFO Softline and Sage AAMEA

Rob Wilkie

The 3 weeks long strike in the transport sector has come to an end, but at an enormous cost to business.  The Road Freight Employers Association has estimated a cost of R1.2 billion per week.

With supplier deliveries late and transportation of their goods delayed, small businesses are fighting for their survival. A disruption to their trade means lower turnover, less cash generation and unpaid expenses.  Unfortunately job losses are a casualty.

My concern is that strikes will spread to other sectors. They are becoming part of a broader social movement taking the form of ill-disciplined and often violent protests.  The common underlying thread in all these demonstrations is poor service delivery, poor living conditions and growing inequality.

Without fast and effective government intervention to strike action, small businesses will have to be more agile and flexible than ever if they are to sustain themselves in this existing climate. Moreover, small businesses need to plan for a trade disruption so as not to be caught flat footed. A plan should consider the following:

  • What can you depend on from your banker during this time – borrowing capacity?
  • What monthly overhead expenses are unavoidable to stay in business?
  • What is your estimated monthly cash income?
  • Can you cancel or place orders on hold if supplies cannot be received?
  • Could you negotiate a payment plan with your major creditors?
  • What is the minimum inventory level necessary?
  • Do you have a communication plan to keep suppliers and customers fully informed?
  • Are you able to use sub-contractors if necessary?
  • Do you have access to replacement workers?

We live in very volatile times making planning difficult yet critical in survival of the fittest.