FAQ

An ERP Advisor is an individual or an advisory firm that helps organizations in selecting and implementing ERP software. An ERP advisor works closely with the client to identify their business needs and ensure those requirements are mapped into the ERP software.

The most common components that are found in ERP include:

• Customer Relationship Management (CRM)

• Inventory Management (IM)

• Supply Chain Management (SCM)

• Human Resources Management (HRM)

• Accounting /Financial Management (FM)

The most common functions that are found in ERP include:

• Customer Relationship Management (CRM)
• Inventory Management (IM)
• Supply Chain Management (SCM)
• Human Resources Management (HRM)
• Accounting /Financial Management (FM)

The benefits of implementing an ERP system include:

1. Cost cutting and significant cost savings
2. Increasing efficiency
3. Removing duplication and redundant processes
4. Automating business processes
5. Making employees can be more productive and business operations leaner and more efficient
6. A business with a successful ERP implementation can be more agile and grow as needed to seize and respond to business opportunities as they come
7. Faster decision-making
8. Reducing out-of-stock opportunity loss
9. Creating a better customer experience (because there are no out-of-stock issues)
10. Reducing overstocking problems
11. Increasing employee productivity – allowing them to focus on critical activities because the system takes care of routine tasks
12. Helping an organization’s compliance with regulations.

First, you need to create a comprehensive and customized RFI covering your business requirements which is then sent out to solution providers. Based on the responses to the RFI from the solution providers and the Proof of Concept (POC) Demos conducted, you will be able to shortlist the best-fit ERP solution.

The key challenges in implementing an ERP system are:

1. Weak business requirement definitions and a lack of proper project scope
2. Delays and lack of flexibility by the team and not being able to align the requirements with the solution provider due to day-to-day tasks
3. The team’s lack of experience in handling such implementations
4. Unsuitable and non-futuristic technology adoptions
5. Vague, untimely, and ineffective project initiation
6. The lack of proper quality reviews and checks in place
7. Weak project governance strategies
8. Lack of clarity in roles and responsibilities
9. Misalignment of the skills, capabilities, and costs required at the outset of the project

These challenges can be overcomed by bringing an Independent ERP Advisor or  IT Project advisor on board who can provide you with highly customized, scalable, and cost-effective project management options to assist you at any stage of your project lifecycle.

The success of an ERP implementation can be measured by:

1. Less or no errors in processing transactions
2. Employees being in sync with the new system implemented
3. Timely reporting
4. Increased efficiency of business processes and employees 
5. Achieving KPIs
6. Increased productivity leading to better sales performance and better profits

The most common mistakes include:

1. Not appointing a team with key people from all the departments for the implementation project
2. The IT team is bombarded with the implementation task when they do not have all the required skills for completing it
3. Implementing a software that worked for competitors or choosing the solution provider with the best salesman without doing their own due diligence
4. Underestimating the time and resources required and not having a proper plan
5. Lack of communication
6. Not investing in a IT Project Manager/Independent ERP Advisor
7. No proper training for employees and stakeholders
8. No testing performed so see if the results are accurate.

The most common challenges include:

1. Identifying and documenting your business requirements
2. Preparing a Request for Proposal (RFP) or Request for Information (RFI) or Business Solution Mapping Document
3. Evaluating service providers
4. Selecting the most suitable vendor for your project
5. Vetting contracts and negotiating with the service providers
6. Planning your project
7. Organizing and evaluating solutions and design recommendations
8. IT Project Management
9. Obtaining support services after an IT Project completion

Hiring an Independent ERP Advisor or an IT Project Advisor can support organizations by guiding them at each stage of an IT project from initiation to closure.

Any project risks can be managed by:

1. Identifying them
2. Assessing them 
3. Creating a plan to mitigate the identified risks 
4. Implementing the plan to mitigate the risks
5. Monitoring the results

Best practices for IT project management include:

1. Beginning with a kick off meeting
2. Developing the project scope, objectives, goals, deliverables, performance standards and limitations
3. Creating a detailed work plan
4. Establishing an effective communication plan
5. Requesting timely feedback from your team
6. Readying contingency plans for project risks
7. Accommodating for instances of scope creep
8. Maintaining proper documentation/ project log
9. Establishing quality assurance standards/KPIs at every phase of the project life cycle
10. Hiring an Independent ERP Advisor/IT Project advisor for your IT project

The three major types of internal audits are:

• Operational Audit: An operational audit covers the assessment of control weaknesses existing in an entity’s operational functions like Sales, Purchases, Inventory & Warehouse Management, Manufacturing etc.
• Financial Audit: Focuses majorly on an entity’s accounting and financial management areas. 
• Compliance Audit: This covers an organisation’s entire spectrum of functions; however, a compliance audit is more focused on ensuring that the functions and processes adhere to a set of rules and regulations, either internally established or enforced by regulatory bodies.

Yes, an internal audit is an assurance service that ensures that all control weaknesses existing in an organization are identified and appropriate mitigation functions are implemented and working.

Internal audits can be conducted quarterly, half-yearly or annually, depending on the nature of the business, complexity and relevance of the management system, the risk factors of the department or regulatory compliance requirements from government bodies.

Benefits of outsourcing internal audit servives include:

1. A team of specialists who possess the desired knowledge, experience, and skills that help in more effective results and reporting. 
2. A cost-effective option instead of recruiting specialists and paying them full time salaries.
3. An “outsider perspective” that helps bring a fresh input to your business and also equips for unbiased reporting.

An internal audit report should ideally comprise of the below components:

1. Objective
2. Scope and procedures
3. Findings and conclusion
4. Recommendations 
5. Management response

The three major parts of a feasibility study are:

• Market Feasibility: This segment evaluates the market for the products and/or services that are offered including the market size, growth, key trends, key challenges & drivers and the competition. The objective is to assess the market viability for the product and/or service including demand-supply gap analysis.
• Technical/Operational Feasibility: As the name denotes, this assesses the operational or technical viability of the planned product and/or service. These areas are evaluated by experts from the industry and the end result would be to know whether the product or service would work given the current market, and technical and operational factors considered.
• Financial Feasibility: The financial feasibility assesses the overall financial benefit that could be derived from the project. This includes the expected Revenues, Profitability and Returns from the project. A financial feasibility assessment provides the investors/promoters with a fair idea of the initial and future investment requirements and expected returns, in order for them to decide whether the project is worth investing in.

The five key aspects of a detailed feasibility study include market, technical, economic, legal and operational.

A feasibility study addresses the viability of the project/business idea. It provides you with insights into whether or not a project/investment/business idea is worth pursuing and whether it offers sufficient return compared to its risks. 

A business plan, on the other hand, is created only when the business is already established (by way of a feasibility study). A business plan describes the way you are going to achieve your business’s goals, the strategies you plan to implement that would help you grow and sustain your business.

Some tools and techniques used as a part of the market research for a feasibility study include interviews, surveys, focus groups, social media analysis, observations, and evaluation of data that is available publicly.

The financial aspects of the feasibility study address the questions about the source of funds for the project and how the project can be financed for optimum returns. It also considers futuristic components such as projected break-even points, ROI, and payback periods.

We start with preliminary background research that covers a detailed description of your project. Following this we assess the demand for the idea, determine your competitive advantage, and identify any core risks at this early stage. If the project still seems viable, we move on to creating a detailed scope of the project, including a strengths and weaknesses assessment of your organization concerning this project. 

Next, market research is performed to gauge the demand for the project and determine the best possible approach to introduce the product/service into the market, bearing in mind aspects like market size, accessibility requirements, demand periods, etc., after which, we move on to the financial aspects of the feasibility. Risks are continuously identified and monitored throughout all these phases because they could be different at each stage of the study. Finally, the findings of the feasibility study are reviewed for accuracy, objectivity, and completeness, and presented to our clients and their relevant stakeholders.

Common pitfalls to avoid when conducting a feasibility study are:

1. Doing it yourself, ending up in a prejudiced/ biased study
2. Not having a specific scope of work or objective of the study
3. Rushing the study and overlooking many factors important to the study
4. Skipping the market research process and basing the feasibility on assumptions
5. Not using reliable and credible market data or using outdated market data
6. Optimizing product mix/service mix
7. Not forecasting the financing cash flow
8. Hiring a consultant not experienced in your industry/ service line

An SOP is mainly comprised of four parts:

• Policy scope and objective
• Procedures to be performed covering step-by-step details along with the Delegation of Authority and Approval Matrix
• Documents, forms and reports required
• Key performance indicators and monitoring mechanisms

Developing SOPs is all about systemizing business processes and documenting them clearly and concisely. A well-documented SOP defines the boundaries and the steps to every business process, identifying the controls to be exercised and giving you peace of mind in terms of responsibility and accountability for each business process.

The entity’s management, key stakeholders, and process owners of each department are responsible for developing the SOP’s.

We ensure that SOPs are followed by:

1. Providing proper theoretical and practical training to employees
2. Ensuring employees have easy access to the SOPs to refer to when required.
3. Tracking feedback and results while using the SOPs
4. Doing periodic compliance reviews, either internally or by hiring a consultant.

Best practices for developing and implementing SOPs include:

1. Communicate and collaborate with your team when developing and implementing SOPs
2. Incorporate feedback and inputs from your team
3. Assign stakeholders and hire experienced consultants for the task 
4. Align your firm’s business processes with the industry standards
5. Document you procedures properly and periodically review them
6. Appropriate internal controls and imbibe compliance reviews in your business processes
7. Systemize business processes and document them clearly and concisely
8. Define boundaries and the steps to every business process with well-documented SOPs, identifying the controls to be exercised and laying out responsibility and accountability for each business process
9. Develop practical SOPs that are feasible enough to be implemented
10. Incorporate improvements and feedback once the SOPs are implemented.
11. Use step-by step guides, hierarchical charts, flowcharts and visuals is a great addition
12. Write SOPs in a standard and professional tone
13. Create easily accessible SOPs

The effectiveness of SOPs can be measured through periodic reviews and assessment by means of  surveys, progress reports, effective and timely accomplishment of KPIs, financial improvements, and feedback from stakeholders and employees.

SOPs are to be reviewed and updated at least once a year, or as and when required. SOPs have to be reviewed regularly to check if there are any gaps and also consider feedback/ suggestions of its users/ employees/ stakeholders as well. Once approved, all suggested changes are to be documented and the updated SOP documents have to be published to the team members/ users/ stakeholders on time.

The goal of business process reengineering is to reduce costs, eliminate redundant steps, remove bottlenecks, reduce duplication of work, introduce parallel processing, segregate duties, and process ownership.

A business model defining the current state of a process (the “as is” model) is compared to a concept designed of how a process should work (the “to be” model). By evaluating the difference between the current and future business state, business process consultants can determine if the existing business processes and their associated systems, policies, and procedures are coherent, or if a complete revamp is called for. This ‘Gap Analysis’ should include a comprehensive study about how your business goals can be achieved by overcoming any existing flaws in your processes.

The time spent, the cost of resources and the quality of the output are the best measures indicating the effectiveness of process improvements.

Common challenges to business process reengineering include:

1. Challenge: Identifying the actual cause of an ineffective business process.
   Solution: Interviews of the business process owner and the other users helps in getting a clear picture of why the process is ineffective, hence helps in identifying the pain points and fixing them.
2. Challenge: Having a holistic view of the entire business process spanning multiple departments.
   Solution: Conducting a detailed process walkthrough covering all the steps spanning multiple departments.

The three main areas of corporate finance are:

• Capital & debt sourcing 
• Capital & debt restructuring
• Working capital management

Corporate finance helps organizations ensure funds are sourced, available, and managed correctly by proper structuring and/or restructuring. 

Corporate finance advisors provide investors and other companies with unprejudiced advice to create value through their financial transactions and investments. They possess deep industry knowledge and apply strategic thinking along with relevant and fresh market insights.

The optimal capital structure for your organization is determined by a specific mix of equity and debt, one that results in the lowest Weighted Average Cost of Capital (WACC). The lower the WACC, the higher the present value of the company’s future cash flows which will lead to the maximum value for your organization.

The key considerations when evaluating potential investments are:

1. Liquidity
2. Revenue growth
3. Return on investment 
4. Cash flow

Common pitfalls to avoid include:

1. Not investing in a comprehensive due diligence and ultimately overpaying for the target company
2. Lack of planning and execution of the integration process
3. Inadequate data and research
4. Culture differences between organizations
5. Lack of communication during and after the transaction.

A transaction advisor can help you navigate through your domestic and international transactions with ease and confidence. Whether you are an investor or a target company,  the transaction advisor will perform the required due diligence to give you a clear perspective of the transaction.

The acquiring company can evaluate the financial performance of a potential acquisition target by evaluating the target company’s financial statements – majorly looking at the growth in revenue, stability in expense, growth in profits and good cash flow. Unreasonably high liabilities, heavy debt load, inventory that hasn’t been sold for more than a year, and unpaid taxes/ fines/ or any other contingent liabilities also should be considered. With the help of financial ratios, the financial health of the target company can also be determined.

The most common types of transactions that require advisory services are:

1. Business valuation
2. Debt restructuring
3. Financial Due Diligence
4. Raising capital
5. Business plan and Investor Pitch Deck
6. Mergers & Acquisitions
7. Exit Planning