Matthew LaWell

Wednesday, 26 May 2010 20:00

Creating a wellness program

Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands. Imagine an office where employees snack on fruits and nuts rather than candy bars, drink water instead of another can of soda, and have managed to kick that pack-a-day habit.

Imagine an office where health and wellness are a priority.

Is this anything like your office? Perhaps it will be during the months and years to come.

There is little doubt that health and wellness are hot topics. Just turn on the television and watch reality shows about weight loss, or pick up a magazine and read the articles on wellness published recently in Time and The New York Times Sunday Magazine. Or turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.

Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise, and our poor decisions are costing not only our bodies and our minds but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.

“A wellness strategy is really a subset of a human capital strategy,” says Paul Martino, vice president, health and wellness solutions, WellPoint Inc. “I think if an employer has a long-term horizon and views human capital in a particular way — that it is valuable, that you want to retain your highly valuable and efficient people — you want to allow people to be at their job and functioning well.”

If you don’t have a program at your business, why should you bother to install one now? If you do have a program, why should you aim to improve it as we continue to move through 2010? Well, plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. And there is an impressive return on the investment, especially after a year or two.

But you have to plan and install the program first.

Take the first step

Are your employees overweight? Are they obese? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to any of those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are important and relevant questions. If the answer to any is yes, you’ll want to consider a wellness program.

The question you have to ask yourself, though, is why do you want to install a program?

There are no wrong answers, but if there is no why, the program will flounder.

“You need to determine what your budget is per person and whether you want to do executive wellness, as well,” says Dr. Steven Schnur, CEO, EliteHealth.MD LLC. “Then interview several companies and see what fits in that budget.”

And if you and your executives don’t support the program from its first breath, neither will your employees. So take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.

“Screening usually involves biometric testing, which is blood pressure and body fat analysis, screening blood work,” Schnur says. “This is what I call an M.D. review, which is where someone actually reviews the screened blood work and the biometric testing.”

HRAs, which are often free online or cost between $5 and $25 per employee if performed in person, and biometric screenings, which cost between $50 and $150 per employee, highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.

Consider your employees

Because of the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your wellness program remains in compliance.

No matter your choice, your employees do need to feel a sense of inclusion in —and perhaps even some sliver of ownership of — the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible and allow them to participate.

“You have to create the shared vision,” says Tom Carter, vice president, sales and broker relations, Kaiser Permanente California. “People have to feel inspired about it, and they have to feel like their values and ideas are also incorporated. You have to have a champion or a leader, and it doesn’t have to always be the CEO. Then you include people on the committee and in the discussion about how to deploy it to the work force. As people feel incorporated, they support it a little more easily.”

A key to increased participation is to offer incentives, especially now as we continue to recover from the recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts.

Monitor your results

The fruits of an effective wellness program will take time to develop and spread throughout your business. Give it a couple months to notice the first signs of change, a year to really see an improvement and a couple years to watch as the culture changes.

Over time, you can measure the collective pounds lost and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.

The program might also pay for itself during that first year — thanks to employees being able to work more hours and to a possible decrease in health care costs — but you’ll likely have to wait until at least the second year to see any real positive return.

“An employer who could get a wellness program, in a traditional sense, to pay for itself in the first year or two would be a pretty good result,” Martino says.

When that change starts to filter in, you’ll likely see the average wellness program will be worth about $3 for every $1 you invest. Some experts say you can expect more than that — $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.

“The thinking that got us into high costs and health care reform and lost productivity is not the same thinking that will get us back to healthier communities and healthier populations and better business outcomes,” Carter says. “You have to rethink the way you’re packaging benefits, the way your culture is set up in the workplace.

“To do nothing is just not going to work. When you take a little more charge of the work force and work site health and safety, you can improve your outcomes and really change the culture, which is good for everybody.”

Wednesday, 26 May 2010 20:00

Creating a wellness program

Imagine an office where employees walk laps during lunch, their pedometers clipped to their waistbands, clicking off each step up and down the stairs and through the halls and around the cubicles. Imagine an office where employees snack on fruits and nuts rather than candy bars, where employees drink water instead of another can of soda, and where employees have managed to kick that pack-a-day habit.

Imagine an office where health and wellness are a priority.

Is this anything like your office? It should be. Perhaps it will be during the months and years to come.

There is little doubt that health and wellness are, if nothing else, a hot topic across the nation. Just turn on the television and watch a reality show about weight loss or any of what seems like a dozen syndicated talk shows where a photogenic doctor fields questions and concerns. Or pick up a magazine and read the features on wellness recently published in Time and The New York Times Sunday Magazine. Or just turn your eyes to Washington, D.C., where President Barack Obama signed the health care reform legislation in late March.

Our parents are overweight. Our children are overweight. We are overweight. And as we work our way through the recession, our days are packed. We tend to eat poorly and not exercise or even move nearly enough. We are in the dregs of a pandemic. All of our poor decisions are costing not only our bodies and our minds but also our health care costs and our office productivity. A wellness program just might help to turn the overwhelming tide of fat and frustration.

“I always tell everybody that wellness is brain surgery,” says Chris Dobbins, executive director, health promotion services, Community Health Network. “Actually, it’s more difficult than brain surgery because there’s no clear definition of what wellness even means. Every person you talk to will give you a different answer about what wellness means to them and, of course, all those answers are correct.”

If you do not have a program up and running, pun intended, at your business, why should you bother to install one now? Or if you do have a program, why should you aim to improve it as we continue to move through 2010? Well, because plenty of research proves that healthier employees are more productive and actually cost you and your business less in total costs. Oh, and there is an impressive return on the investment, especially after a year or two.

But you have to plan and install the program first.

Take the first step

Are your employees overweight? Are they obese? Do they smoke? Not long ago, you would have been well within your rights to avoid the answers to any of those questions. If your employees worked hard and produced, who cared about their health? But after years of medical research, those are all important and relevant questions, and if the answer to any is yes, you will want to consider a wellness program.

But why do you want to install a wellness program?

There are no wrong answers, of course, but if there is no why, if there is no vision, the program will flounder.

“Do you want to build benefits and that it is the right thing to do? Or, as the management team, is your goal to affect claim costs? Is it a combination of the two?” says Sally L. Stephens, founder and president, Spectrum Health Systems. “Senior management, or whoever initiates it, needs to ask what they want to accomplish by putting a wellness program in. Too many people think it’s a solution but don’t think through clearly what their goals are.”

And if you and your executives do not support the program from its first breath, neither will your employees, so take the time to work with a private company for you and your employees to take a health risk assessment and a biometric screening.

HRAs and biometric screenings highlight symptoms and conditions that might develop into larger problems in the future, both among individuals and your employee base as a whole. If you work with an outside company, the information will also be anonymous and in compliance with the Health Insurance Portability and Accountability Act.

“Some employees hesitate to give all their personal information to the insurance company,” Stephens says. “They don’t want the insurance companies to know they smoke or any of these other things. Working with a third-party provider ensures 100 percent confidentiality. They manage all the data, they manage the security, and the employer doesn’t have to worry about the data management.”

HRAs are often free, though if performed in person rather than on the Internet, they can cost between $5 and $25 per employee, depending on the quality and depth of the analysis. Biometric screenings typically cost anywhere between $50 and $150 per employee. You might also need to offer your employees an incentive, like a gift card or cash, for them to give their time to take the tests — because anything less than 70 to 80 percent participation leaves the results skewed and of less use for your business.

That cost might seem steep, but the information that is revealed can change your business. Do you want to know the overall health risk for your employees? Their weight and body mass index? Their exercise, nutrition and smoking habits? Even their levels of stress at work and at home? All those figures are available and can help lay the groundwork for what you need to know to start a wellness program.

Consider an outside company — and your employees

When you have the results of the HRAs and screenings, you’ll want to work with your insurance company to perform an annual claims review. At that point, you’ll be able to plan for the installation of a wellness program.

But you might not want to keep that plan under your own roof.

Because of compliance regulations and the general complexity of HIPAA laws, you might be better off turning to an outside company to ensure that your burgeoning program remains legal. After all, you already work with a law firm to handle your legal matters, an accounting firm to handle your numbers and a bank to keep everything in order, so why not work with professionals when it comes to the literal health of your business?

“You should have someone from your human resources department, and I would advise you interviewing a bunch of wellness companies, which you really can access on the Web pretty well — who is out there, who does wellness — and seeing if they fulfill the needs that you’re looking for,” says Dr. Steven Schnur, CEO, EliteHealth.MD LLC. “You need to determine what your budget is per person and whether you want to do executive wellness, as well.”

No matter your choice on that matter, your employees do need to feel a sense of inclusion in —and perhaps even some sliver of ownership of — the program, so involve them as early as possible. Tell them about the program as you develop it, and if you build a wellness planning committee, make sure you bring in people from as many departments as possible. And when the program is prepared to launch, make sure you pass along that information well in advance.

The key to increased participation is to offer an incentive, especially now as we continue to recover from recession and every little bonus bears the glint of gold. Perhaps your employees would react to paid time off or reduced premium costs. Both are common incentives, according to a panel of more than two dozen industry experts. Some businesses opt for duffel bags and water bottles for their employees to take to the gym or larger incentive prizes like a raffle.

“We try and talk with the employer about giving incentives to the employee,” Schnur says. “If they do take part in the wellness exams, we will work on incentives, employer-driv en incentive programs, such as gift certificates. For the one employee who performs the best or follows the program, a gym membership. Some pay 50 percent of their health care benefits, some pay a little more, so there are different ways of incentivizing.”

Monitor results and look forward

The fruits of an effective wellness program will take some time to develop and spread throughout your business. Give it a couple of months to notice the first signs of change, a year to really see an improvement and a couple of years to watch as new habits spread from employee to employee.

Those new habits, of course, are part of the return on your investment. There are other intangible returns, too, including employee reports that they feel better and look better and now have a success story to tell their friends and family. But without hard numbers, all of those intangibles are nothing more than what one expert referred to as “warm fuzzies.”

Good thing a wellness program is far more than warm fuzzies. After a couple of months or a year or two, you can measure the collective pounds lost, the drop in body mass index, and the decrease in cholesterol and blood pressure levels. You can also measure the decreased rate of absenteeism because of injury or illness, improved productivity, and perhaps even lower figures for workers’ compensation claims and turnover rate.

“We monitor sick time off, we look at medical leaves, we try and do some through our surveys we do beforehand by repeating surveys after a year seeing if they feel less stress at work, more camaraderie, more loyalty, less loyalty,” Schnur says. “We do a lot of survey follow-ups, as well.”

And there are the dollar figures for the return on your investment. Those are as important as any number on any scale.

Similar to those first trips to the gym and those first months of the program, you should not expect to see any sort of large return during the first year or so. The program might pay for itself during that first year — thanks to employees being able to work more hours and to a possible decrease in health care costs — but you will likely have to wait until the second year, perhaps even early during the third year to see any real positive return.

When that change starts to filter in, you might be surprised at what you see. Over time, the average wellness program will be worth about $3 toward your bottom line for every $1 you invest. Some experts say you can expect more than that, $5, $6 or even $8 for every $1 you invest. But $3 is a fair figure on which most experts agree.

“At the end of the day, studies have shown that by investing in employee health, you decrease the amount of stress the employee suffers at work, you decrease the amount of sick time that the employees are out, you increase the level of loyalty to the corporation, you increase their productivity,” Schnur says. “It’s great for the morale of the staff.”

Thursday, 29 April 2010 07:09

Safety first

The easiest way to save money on your workers' compensation costs is to eliminate injuries. A comprehensive safety program that's endorsed by a company's top leadership will help you achieve your goal of an injury-free workplace.

Accident prevention will be most effective when every employee values and takes responsibility for safe job performance. To get employees to work safely and participate in safety management, safety programs must do more than require compliance. They must incorporate cultural change and stress behavior adjustment.

The payoff

A culture where all members of the organization actively manage workplace safety and health.

The results:

  • Increased economic value for the organization
  • Reduced workers' compensation costs
  • Increased safety awareness
  • Increased employee ownership for success
  • Enhanced communication and trust
  • Lasting change in the culture

On-the-job injuries and illnesses have an adverse effect on both public and employee relations. While a company's safety achievements often go unnoticed, a catastrophic accident may be remembered long after the incident.

You can strengthen employee relations by showing employees you sincerely care about them.

Employees feel better about their jobs and about themselves when they have a strong sense that the organization cares. By implementing managed approaches to accident prevention, an employer shows his or her employees that he or she does care. As a result, your work force may display improved morale, lower absenteeism and higher productivity.

Correcting unsafe conditions and complying with Occupational Safety and Health Administration regulations do not ensure success in accident prevention.

Workers must make decisions to perform their tasks safely. Those decisions are made hundreds of times daily. When the organization's work force truly believes safety is in its best interest, permanent performance improvements occur and safety becomes a core value and part of the organizational culture.

The Ohio Bureau of Workers' Compensation has a 10-step guide to safety (available at www.ohiobwc.com). Here are some key points from the guide:

Visible senior management leadership within your organization promotes safety management as an organizational value.

Senior management, including the top executive on-site, must act as role models for how all employees should work to create a safe work environment. This includes taking active leadership and doing things like:

  • Authorizing the necessary resources for accident prevention
  • Discussing safety processes and improvements regularly during staff or employee meetings
  • Ensuring management is held accountable for accident-prevention activities and for managing accident-prevention processes
  • Annually assessing the success of the safety process by using surveys, personal interviews and/or behavior sampling
  • Encouraging employees to take an active part in maintaining a safe workplace

Senior management will establish the importance of safety in all operations. Taking the safety and health lead, management helps in the campaign to reduce accident losses. The leadership, support and active commitment of the senior management team will encourage management and employees to make the safety and health system successful.

Senior management should take these actions to show active leadership in the safety and health processes:

  • Issue a written safety policy as a core value of the organization and assign roles and responsibilities
  • Establish both annual and long-term safety goals
  • Include safety as an agenda item in all regularly scheduled business meetings
  • Regularly review progress of the safety and health processes with supervisors and employees
  • Accompany supervisors, safety team members or safety committee members during periodic departmental safety surveys
  • Review and discuss all accident-investigation reports with the supervisor or foreman
  • Present safety recognition awards to deserving employees
  • Openly discuss safety issues with employees during periodic tours or meetings
  • Participate as a student in employee safety training programs
  • Participate in meetings with accident-prevention coordinators

To properly implement a safety program, you need both management and labor members on the safety team.

Labor/management safety and health teams facilitate dialogue on safety and health matters between management and nonmanagement employees. The safety involvement team handles problem solving and decision-making for safety and health issues confronting the company. Team composition includes management and direct labor employees in roughly equal numbers. Team members represent all areas of the company and participate as equals. Teams may be natural work groups, associated with a single-function area or cross-functional and represent a variety of work areas.

Objectives should include:

  • Prepare and make available records of the safety and health issues and outcomes discussed during meetings
  • Use recognized problem-solving techniques, like brainstorming, cause-and-effect diagrams, decision analysis, charting, etc., to reach effective solutions
  • Review investigations of accidents and causes of incidents resulting in injury, illness or exposure to hazardous substances, and recommend specific action plans for prevention
  • Recommend specific actions in response to employee safety suggestions
  • Conduct surveys of the safety culture every 12 to 18 months 

The team should meet regularly but not less than quarterly with the facilitator. The facilitator should be a member of the team who schedules the meeting, arranges for a meeting place and notifies members of the meeting. Rotate the facilitation role frequently and share responsibility for other team functions among team members.

Record the minutes of each meeting and distribute the minutes to all team members. Post a copy of the minutes on the company safety bulletin board.

Giving the safety team the responsibility to make decisions and the accountability for implementing solutions is important. Empower the team to be responsible for developing and implementing effective safety solutions.

Information courtesy Ohio Bureau of Workers' Compensation. Go to OhioBWC.com for the entire text of the 10-Step Business Plan for Safety.

Sunday, 25 April 2010 20:00

Opening the vault

Stop for a minute or two and think back to what you learned about the banking industry during your childhood. Your parents probably introduced you to the concepts of deposits and checks and balances. You learned how to make the numbers work. Now think about what you learned about the industry during your years on campus and in the classroom. Some professor probably lectured to you about loans and liens and interest. You learned enough to earn a good grade and get out in the business world. And what did you learn about the industry after you established yourself in that world? You probably learned that a relationship with your banker is important, that surprises are bad and that communication is the key to just about everything.

Well, good. Keep all of that information in mind because so much of it remains relevant and important today. But so much more of the information that you learned during your childhood and your education and your years in business is now better left in the past, thanks to the lingering memories and results of the financial fiasco that rocked the economy for the better part of two years.

As we climb out of the fiscal wreckage of 2008 and 2009, the banking industry is in the middle of a new landscape. After what seemed like one bank sale, merger or closure after another, there are now fewer banks across the nation. And after thousands and thousands of businesses defaulted on their loans, banks of all sizes became more prudent in their lending practices.

The financial future continues to improve, but the present might be difficult for some business owners.

“You really find out what your bank is made of when things get tough,” says Hugh Conners, senior vice president and group manager, Comerica Inc. “We try to work with our borrowers; we try to provide a solution that’s going to work for both the customer and the bank. It might not always be what the customer wants, and it might not always be what the bank wants, but you have to try and find that middle ground because that compromise is very important.”

Ask the right questions

Communication with your banker is as important today as it was 10, 20 or 50 years ago — and, of course, with smart phones and the ability to talk almost immediately with just about anyone anywhere in the world at any time, communication has never been easier, either. But sitting down with your banker in person rather than over the phone remains the best and most effective means of communication, even if it might feel like some sort of lost art.

“Customers change, the environment changes, the business changes, so the No. 1 thing I tell business owners is to take the time — if not once a quarter, at least twice a year — to go in and sit down with your banker,” says John Sotoodeh, regional president, Wells Fargo & Co. “Let them know your financial situation, let them know your business objectives, let them know what has changed. And, on the flip side, let the banker tell you what has changed with products, with services, with fees, with interest rates. There’s so much that happens in the industry that that communication is critical to our business customer’s success.”

It’s important for you to ask the right questions, too, especially if your bank merged with another bank during the recession or if it closed its doors and left you looking for a new bank.

For example, what will the bank offer you in terms of its resources? Will you work with one banker or with a team? As your business grows and changes, will the bank be able to help you meet your evolving needs? And how will the bank support you during your growth or expansion? Will the bank and your banker be proactive and visit your offices or locations in order to learn more about your company and provide trusted advice? Or will the bank offer nothing more than answers to your banking needs?

Think of that first conversation like a first date, of sorts. You want to learn as much as possible so you can determine whether to go out on a second date. If all goes well, maybe those dates will turn into a long-term relationship.

“We believe in relationships,” Conners says. “We are a relationship bank, and as in any relationship, whether it’s with a spouse or a friend or a bank, that consistent communication is important to keep it going. It goes both ways. It’s not just the customer communicating with the bank, it’s the bank communicating with the customer, as well — what our observations and thoughts are, what’s going on in the industry, in general, and in their industry, in particular.

“That means the customer should include the banker in their forward plans. Asking for early involvement is a good way to develop a strong relationship with your bank.”

Prepare for economic change

On the surface, at least, the economy has started to turn. You need to look no further than the Bureau of Labor Statistics for proof of that. The unemployment rate either held or dropped each month from October 2009 through February, down to 9.7 percent from 10.1 percent. But talk with enough bankers and the picture comes into clearer focus.

Banks are still lending money. Banks want and need to lend money. It is, after all, one of their major sources of revenue. But according to a panel of experts, the number of loans and the amount of money requested during the last 12 months dropped significantly, and among the businesses that continued to request loans, more defaulted than normal. That led to banks examining financial statements and trends more closely. It also led to the perception that banks were holding onto their money.

“The solid financial banks are really somewhat awash in liquidity because there hasn’t been a strong demand and people are holding onto their investments and their spending,” says Rick Davis, Southern California division executive, Bank of the West. “The issue with expansion is really what’s going on with a particular firm or a particular industry where they may be showing red ink or show dropping sales.

“The banks certainly have money to lend. We have done very little in our underwriting changes. We’re certainly more diligent when it comes to real estate today, and we always take a look at the business, the business plan and the business numbers. As the economy continues to pick up steam and more businesses are improving earnings, I don’t think the banks’ willingness to lend will be a problem.”

Now, with fewer banks in the marketplace, some banks can be more selective. But most are actually more open now to lending and are more forgiving. Ask around and you might find that many are breaking down the last year of financial statements for businesses seeking a loan, examining each month in search of positive trends, rather than just glazing over negative numbers from the last two or three years. Other banks are adding business bankers. Still more have recently committed billions to small and medium businesses.

The time is right to work with your bank. Just ask.

Sunday, 25 April 2010 20:00

Opening the vault

Stop for a minute or two and think back to what you learned about the banking industry during your childhood. Your parents probably introduced you to the concepts of deposits and checks and balances. You learned how to make the numbers work. Now think about what you learned about the industry during your years on campus and in the classroom. Some professor probably lectured to you about loans and liens and interest. You learned enough to earn a good grade and get out in the business world. And what did you learn about the industry after you established yourself in that world? You probably learned that a relationship with your banker is important, that surprises are bad and that communication is the key to just about everything.

Well, good. Keep all of that information in mind because so much of it remains relevant and important today. But so much more of the information that you learned during your childhood and your education and your years in business is now better left in the past, thanks to the lingering memories and results of the financial fiasco that rocked the economy for the better part of two years.

As we climb out of the fiscal wreckage of 2008 and 2009, the banking industry is in the middle of a new landscape. After what seemed like one bank sale, merger or closure after another, there are now fewer banks across the nation. And after thousands and thousands of businesses defaulted on their loans, banks of all sizes became more prudent in their lending practices.

The financial future continues to improve, but the present might be difficult for some business owners.

“It has been an interesting 12 months, and I know our customers are feeling it,” says John Sotoodeh, regional president, Wells Fargo & Co. “The reality is that many businesses have had a difficult year with revenues, with cash flow, with earnings, and have worked hard to get through the last 12 to 18 months.

“We know that the success of small businesses is critical to success of our economy and of our country. We want to be a partner to help them succeed.”

Ask the right questions

Communication with your banker is as important today as it was 10, 20 or 50 years ago — and, of course, with smart phones and the ability to talk almost immediately with just about anyone anywhere in the world at any time, communication has never been easier, either. But sitting down with your banker in person rather than over the phone remains the best and most effective means of communication, even if it might feel like some sort of lost art.

“Customers change, the environment changes, the business changes, so the No. 1 thing I tell business owners is to take the time — if not once a quarter, at least twice a year — to go in and sit down with your banker,” Sotoodeh says. “Let them know your financial situation, let them know your business objectives, let them know what has changed. And, on the flip side, let the banker tell you what has changed with products, with services, with fees, with interest rates. There’s so much that happens in the industry that that communication is critical to our business customer’s success.”

It’s important for you to ask the right questions, too, especially if your bank merged with another bank during the recession or if it closed its doors and left you looking for a new bank.

For example, what will the bank offer you in terms of its resources? Will you work with one banker or with a team? As your business grows and changes, will the bank be able to help you meet your evolving needs? And how will the bank support you during your growth or expansion? Will the bank and your banker be proactive and visit your offices or locations in order to learn more about your company and provide trusted advice? Or will the bank offer nothing more than answers to your banking needs?

Think of that first conversation like a first date, of sorts. You want to learn as much as possible so you can determine whether to go out on a second date. If all goes well, maybe those dates will turn into a long-term relationship.

“We believe in relationships,” says Hugh Conners, senior vice president and group manager, Comerica Inc. “We are a relationship bank, and as in any relationship, whether it’s with a spouse or a friend or a bank, that consistent communication is important to keep it going. It goes both ways. It’s not just the customer communicating with the bank, it’s the bank communicating with the customer, as well — what our observations and thoughts are, what’s going on in the industry, in general, and in their industry, in particular.

“That means the customer should include the banker in their forward plans. Asking for early involvement is a good way to develop a strong relationship with your bank.”

Prepare for economic change

On the surface, at least, the economy has started to turn. You need to look no further than the Bureau of Labor Statistics for proof of that. The unemployment rate either held or dropped each month from October 2009 through February, down to 9.7 percent from 10.1 percent. But talk with enough bankers and the picture comes into clearer focus.

Banks are still lending money. Banks want and need to lend money. It is, after all, one of their major sources of revenue. But according to a panel of experts, the number of loans and the amount of money requested during the last 12 months dropped significantly, and among the businesses that continued to request loans, more defaulted than normal. That led to banks examining financial statements and trends more closely. It also led to the perception that banks were holding onto their money.

“The solid financial banks are really somewhat awash in liquidity because there hasn’t been a strong demand and people are holding onto their investments and their spending,” says Rick Davis, Southern California division executive, Bank of the West. “The issue with expansion is really what’s going on with a particular firm or a particular industry where they may be showing red ink or show dropping sales.

“The banks certainly have money to lend. We have done very little in our underwriting changes; we’re certainly more diligent when it comes to real estate today, and we always take a look at the business, the business plan and the business numbers. As the economy continues to pick up steam and more businesses are improving earnings, I don’t think the banks’ willingness to lend will be a problem.”

Now, with fewer banks in the marketplace, some banks can be more selective. But most are actually more open now to lending and are more forgiving. Ask around and you might find that many are breaking down the last year of financial statements for businesses seeking a loan, examining each month in search of positive trends, rather than just glazing over negative numbers from the last two or three years. Other banks are adding business bankers. Still more have recently committed billions to small and medium businesses.

The time is right to work with your bank. Just ask.

Sunday, 25 April 2010 20:00

Opening the vault

Stop for a minute or two and think back to what you learned about the banking industry during your childhood. Your parents probably introduced you to the concepts of deposits and checks and balances. You learned how to make the numbers work. Now think about what you learned about the industry during your years on campus and in the classroom. Some professor probably lectured to you about loans and liens and interest. You learned enough to earn a good grade and get out in the business world. And what did you learn about the industry after you established yourself in that world? You probably learned that a relationship with your banker is important, that surprises are bad and that communication is the key to just about everything.

Well, good. Keep all of that information in mind because so much of it remains relevant and important today. But so much more of the information that you learned during your childhood and your education and your years in business is now better left in the past, thanks to the lingering memories and results of the financial fiasco that rocked the economy for the better part of two years.

As we climb out of the fiscal wreckage of 2008 and 2009, the banking industry is in the middle of a new landscape. After what seemed like one bank sale, merger or closure after another, there are now fewer banks across the nation. And after thousands and thousands of businesses defaulted on their loans, banks of all sizes became more prudent in their lending practices.

The financial future continues to improve, but the present might be difficult for some business owners.

“I think maybe we have gotten to the point where most people think the worst is behind us, so it does give you the feeling of a little light at the end of the tunnel,” says Tim Blankenhorn, senior vice president, Huntington National Bank. “We think that the financial statements we are going to see from customers will not be worse at the end of 2010 than they have been. We’ve come to a plateau. Certain banks have changed, I think, some for the better and some for the worse.

“On a macroeconomic level, probably not a whole lot has changed.”

Ask the right questions

Communication with your bank and your banker is as important today as it was 10, 20 or 50 years ago — and, of course, with smart phones and the ability to talk almost immediately with just about anyone anywhere in the world at any time, communication has never been easier, either. But sitting down with your banker in person rather than over the phone remains the best and most effective means of communication, even if it might feel like some sort of lost art. That goes both ways, too; you should want to meet with your banker in person, but he or she should also want to meet with you.

“It is imperative for businesses to work closely with their banks to maintain healthy and productive companies,” says Todd Barnhart, senior vice president and manager of deposits, PNC Financial Services Inc. “The better your bank knows you, the better they’ll know your business. It’s important to keep an open line of communication at all times, not just when it’s necessary to conduct your business. At the minimum, businesses should consider sitting down with their banker for an annual business review.”

It’s important for you to ask the right questions, too, especially if your bank merged with another bank during the recession or if it closed its doors and left you looking for a new bank. Take advantage of this challenging but also unique economic environment to refocus your relationships with your advisers.

For example, what will the bank offer you in terms of its resources? Will you work with one banker or with a team? As your business grows and changes, will the bank be able to help you meet your evolving needs? And how will the bank support you during your growth or expansion? Will the bank and your banker be proactive and visit your offices or locations in order to learn more about your company and provide trusted advice? Or will the bank offer nothing more than answers to your banking needs?

Think of that first conversation like a first date, of sorts. You want to learn as much as possible so you can determine whether to go out on a second date. If all goes well, maybe those dates will turn into a long-term relationship.

“If you’re going to get out of your banking relationship what you want, you have to build the relationship, you have to give them the good news and the bad news,” Blankenhorn says. “You need to have someone you can trust to give you good advice. Communication is important, yes, but communication with the right person is even more important.”

Prepare for economic change

On the surface, at least, the economy has started to turn. You need to look no further than the Bureau of Labor Statistics for proof of that. The unemployment rate either held or dropped each month from October 2009 through February, down to 9.7 percent from 10.1 percent. But talk with enough bankers and the picture comes into clearer focus.

Banks are still lending money. Banks want and need to lend money. It is, after all, one of their major sources of revenue. But according to a panel of experts, the number of loans and the amount of money requested during the last 12 months dropped significantly, and among the businesses that continued to request loans, more defaulted than normal. That led to banks examining financial statements and trends more closely. It also led to the perception that banks were holding onto their money.

“I don’t view credit as looser or tighter, but I do believe that banks have a better sense of what they need to do going forward to ensure that their clients don’t have problems and that their clients are really planning for their worst-case scenarios,” says Claude Davis, president and CEO, First Financial Bancorp. “In some cases, people may view that as tighter credit. I view it as a more rational approach to business lending in a way that is, in the long term, good for the business owner and good for the bank.

“If everyone embraces that and understands that, then we’re coming to a smarter place where both the banks and the business owners are well protected and on the same page.”

Now, with fewer banks in the marketplace, some banks can be more selective. But most are actually more open now to lending and are more forgiving. Ask around and you might find that many are breaking down the last year of financial statements for businesses seeking a loan, examining each month in search of positive trends, rather than just glazing over negative numbers from the last two or three years. Other banks are adding business bankers. Still more have recently committed billions to small and medium businesses.

The time is right to work with your bank. Just ask.

Friday, 26 March 2010 20:00

Automation domination

This is a short story about a wonderful return on investment. Everyone loves a return on investment, especially if that investment costs hundreds of thousands of dollars.

There is a small manufacturing company in Arkansas that installed and implemented an enterprise resource planning system last year. The industry in which the company works is not particularly important. Neither is its geographic location. But the fact that the company, call it Company A for the purposes of this story, decided to move forward and install an ERP system is particularly important. It will change the fortunes of Company A in rather short order.

Prior to the installation and implementation of its ERP system, Company A shipped about $200,000 in inventory per week and it stored about five weeks worth of inventory in its warehouses. But executives at Company A figured there was a more efficient way to run the warehouses and, in turn, the business of the entire company.

So after months of research and planning, after working with a top technology firm, after moving forward to install that ERP system — and, in particular, a handheld wireless scanning system to better handle its inventory management — Company A did find a more efficient way. It was able to decrease its amount of stored inventory to about three weeks worth of items. That allowed Company A to free up about $400,000 in working capital, more than the total cost of investment in the ERP system. And that allowed Company A to restructure a large swath of the way it now does business.

What is ERP? You might know, but even if you have a grip on the technology, it has certainly changed since its introduction to the business world in 1990, and it has changed even more during the last couple of years.

“The term ERP has remained pretty stable,” says Alex Attal, general manager, Sage ERP X3, within Sage North America. “It was developed more than 20 years ago, but we still use the name; it still means something. The reason, I think, is because it has filled an important need for businesses. The application is different, but the process is always the same: How do you automate complex processes?”

Plan, then plan some more

ERP is an integrated system that is used to manage the resources and automate the processes of a company. It can be used to automate and improve just about any process that deals with manufacturing, with supply chain management, with human resources, and with financials and data. It has been referred to as “the present of computing,” “the future of computing” and “an invaluable part of business” by a panel of experts and software developers and designers across the nation. There is a longer definition filled with more technical details, but if that doesn’t provide a sense of what ERP can do for your business, well, just read the simple success story of Company A one more time. Then take a long look at the processes in your own business.

“Small and medium businesses do not have processes any less complex than those of larger businesses,” Attal says. “The challenge for small and medium businesses is that their processes are still complex and there are fewer resources to fix it. You need to bring as simple a solution as possible to a complex process, because whatever the size of your business, you need to automate your processes.”

The installation and implementation of an ERP system is neither an inexpensive nor a short project. The cost can vary depending on the number of your employees and the revenue size of your business, the depth and scope of the system you want to install, and the amount of training you want during the process. A simple system for a small business might cost less than $10,000. An average system might cost somewhere between $50,000 and $100,000. A much larger system for a corporation that has thousands of users and stretches around the world might cost millions of dollars. But an average cost, especially for small and medium businesses, is somewhere between $3,000 and $5,000 per end user, including the implementation, from the day you start installation to the day you are running live in production.

Similarly, the installation time varies based on multiple factors. For smaller systems, plan for at least three months, including end training. For larger systems, plan for at least six months to one year.

And the training is important. Consider it an insurance policy, of sorts, to make certain that your employees endorse the system and want to use it. If they reject it, you have not only wasted your money but have also taken a step backward toward different departments in your business speaking different technological languages.

“A significant part of our implementation, roughly a third of the cost and a third of the time, is training,” Attal says. “There is training in the new business processes because normally an implementation drives a restructuring or a reprocessing of your processes.”

Close your doors

Perhaps your largest concern with the decision to either install or upgrade your ERP system — other than the considerable investment of money and time — is security. Your data will not likely be susceptible to external hackers, even if you opt for cloud computing and store your data on a server outside of your offices, but there is always the concern that your own employees might attempt to tamper with the system.

“If you have an on-premise solution that you keep within the walls of your business, your security concerns are more internal in terms of access for your employees,” says Prasad Akella, vice president of SME Solution Marketing, SAP. “You don’t want the guy running your supply system to be able to cross over to your HR system.”

In other words, assign each user a unique access name and password, much as you or your IT staff would for any office system of considerable size and importance, and allow each user access to only the parts of the system that he or she needs to use for his or her assignments. There are always concerns, but if you set up the security in advance, you will better protect your data and your business.

The other concern, especially after hearing the relatively sudden successes of Company A, the Arkansas manufacturing company that trimmed its stored inventory by about 40 percent and reaped a full return on its investment within a year of implementation, is when you will earn back the money you put into the system. Depending on the speed of the installation and how quickly you and your employees implement the full range of process automation, you could see a full return within two years, and perhaps even just one year. But the consensus is that ERP has evolved so much during the last couple of decades that it is a sound investment, no matter your industry, business size or needs.

“There has been a maturation process that businesses have gone through,” Akella says. “ERP is a commodity now, and businesses recognize that they need it and that they need to invest in it.”

It can, after all, help you improve the processes and efficiencies of your business. And it can change the way you do business.

Friday, 26 March 2010 20:00

Automation domination

This is a short story about a wonderful return on investment. Everyone loves a return on investment, especially if that investment costs hundreds of thousands of dollars.

There is a small manufacturing company in Arkansas that installed and implemented an enterprise resource planning system last year. The industry in which the company works is not particularly important. Neither is its geographic location. But the fact that the company, call it Company A for the purposes of this story, decided to move forward and install an ERP system is particularly important. It will change the fortunes of Company A in rather short order.

Prior to the installation and implementation of its ERP system, Company A shipped about $200,000 in inventory per week and it stored about five weeks worth of inventory in its warehouses. But executives at Company A figured there was a more efficient way to run the warehouses and, in turn, the business of the entire company.

So after months of research and planning, after working with a top technology firm, after moving forward to install that ERP system — and, in particular, a handheld wireless scanning system to better handle its inventory management — Company A did find a more efficient way. It was able to decrease its amount of stored inventory to about three weeks worth of items. That allowed Company A to free up about $400,000 in working capital, more than the total cost of investment in the ERP system. And that allowed Company A to restructure a large swath of the way it now does business.

What is ERP? You might know, but even if you have a grip on the technology, it has certainly changed since its introduction to the business world in 1990, and it has changed even more during the last couple of years.

“The term ERP has remained pretty stable,” says Alex Attal, general manager, Sage ERP X3, within Sage North America. “It was developed more than 20 years ago, but we still use the name; it still means something. The reason, I think, is because it has filled an important need for businesses. The application is different, but the process is always the same: How do you automate complex processes?”

Plan, then plan some more

ERP is an integrated system that is used to manage the resources and automate the processes of a company. It can be used to automate and improve just about any process that deals with manufacturing, with supply chain management, with human resources, and with financials and data. It has been referred to as “the present of computing,” “the future of computing” and “an invaluable part of business” by a panel of experts and software developers and designers across the nation. There is a longer definition filled with more technical details, but if that doesn’t provide a sense of what ERP can do for your business, well, just read the simple success story of Company A one more time. Then take a long look at the processes in your own business.

“Small and medium businesses do not have processes any less complex than those of larger businesses,” Attal says. “The challenge for them is that their processes are still complex and there are fewer resources to fix it. You need to bring as simple a solution as possible to a complex process, because whatever the size of your business, you need to automate your processes.”

The installation and implementation of an ERP system is neither an inexpensive nor a short project. The cost can vary depending on the number of your employees and the revenue size of your business, the depth and scope of the system you want to install, and the amount of training you want during the process. A simple system for a small business might cost less than $10,000. An average system might cost somewhere between $50,000 and $100,000. A much larger system for a corporation that has thousands of users and stretches around the world might cost millions. But an average cost, especially for small and medium businesses, is somewhere between $3,000 and $5,000 per end user, including the implementation, from the day you start installation to the day you are running live in production.

Similarly, the installation time varies based on multiple factors. For smaller systems, plan for at least three months, including end training. For larger systems, plan for at least six months to one year.

And the training is important. Consider it an insurance policy, of sorts, to make certain that your employees endorse the system and want to use it. If they reject it, you have not only wasted your money but have also taken a step backward toward different departments in your business speaking different technological languages.

“The training could take a few hours, a few days, a few weeks,” says Erica Burles, president and founder, Equation Technologies. “It really depends on the size of the organization and which ERP functions they are implementing, but it is important.”

Close your doors

Perhaps your largest concern with the decision to either install or upgrade your ERP system — other than the considerable investment of money and time — is security. Your data will not likely be susceptible to external hackers, even if you opt for cloud computing and store your data on a server outside of your offices, but there is always the concern that your own employees might attempt to tamper with the system.

“ERP is monitoring access to every aspect of company,” Attal says. “If you connect to my Web site to buy something, I want to give you the best customer service and the best access to as many processes as possible, but that’s all I want you to see. There are a lot of security tools embedded in the software to manage the access for each user and for each function.”

In other words, assign each user a unique access name and password, much as you or your IT staff would for any office system of considerable size and importance, and allow each user access to only the parts of the system he or she needs to use for his or her assignments. There are always concerns, but if you set up the security in advance, you will better protect your data and your business.

The other concern, especially after hearing the relatively sudden successes of Company A, is when you will earn back the money you put into the system. Depending on the speed of the installation and how quickly you and your employees implement the full range of process automation, you could see a full return within two years, and perhaps even just one year. But the consensus is that ERP has evolved so much during the last couple of decades that it is a sound investment, no matter your industry, business size or needs.

“When I meet with people, they sometimes come in with a bias,” Burles says. “They don’t know what ERP is, but if they just spend money, they will get some benefit. They know they have problems, but they don’t really know how to solve them. In the end, there is so much software and technology available, and you just need to figure out what areas of your organization are holding you back.”

ERP can, after all, help you improve the processes and efficiencies of your business, and it can change the way you do business. But you need to make the first move.

Friday, 26 March 2010 20:00

Automation domination

This is a short story about a wonderful return on investment. Everyone loves a return on investment, especially if that investment costs hundreds of thousands of dollars.

There is a small manufacturing company in Arkansas that installed and implemented an enterprise resource planning system last year. The industry in which the company works is not particularly important. Neither is its geographic location. But the fact that the company, call it Company A for the purposes of this story, decided to move forward and install an ERP system is particularly important. It will change the fortunes of Company A in rather short order.

Prior to the installation and implementation of its ERP system, Company A shipped about $200,000 in inventory per week and it stored about five weeks worth of inventory in its warehouses. But executives at Company A figured there was a more efficient way to run the warehouses and, in turn, the business of the entire company.

So after months of research and planning, after working with a top technology firm, after moving forward to install that ERP system — and, in particular, a handheld wireless scanning system to better handle its inventory management — Company A did find a more efficient way. It was able to decrease its amount of stored inventory to about three weeks worth of items. That allowed Company A to free up about $400,000 in working capital, more than the total cost of investment in the ERP system. And that allowed Company A to restructure a large swath of the way it now does business.

What is ERP? You might know, but even if you have a grip on the technology, it has certainly changed since its introduction to the business world in 1990, and it has changed even more during the last couple of years.

“Other business systems out there are systems that report expenses, that are tracking machine failures, that offer computer-aided design,” says Jeff Dixon, president, DKM Inc. “These are all systems that businesses would use, but the difference between them and ERP is that they are all stand-alone. What makes ERP unique is that it integrates everything — accounting, distribution, manufacturing — and all the items in it are designed to be the same.”

Plan, then plan some more

ERP is an integrated system that is used to manage the resources and automate the processes of a company. It can be used to automate and improve just about any process that deals with manufacturing, with supply chain management, with human resources, and with financials and data. It has been referred to as “the present of computing,” “the future of computing” and “an invaluable part of business” by a panel of experts and software developers and designers across the nation. There is a longer definition filled with more technical details, but if that doesn’t provide a sense of what ERP can do for your business, well, just read the simple success story of Company A one more time. Then take a long look at the processes in your own business.

“We’re seeing that there are a lot of people in an organization that would benefit from having access to an ERP system,” says Steve Chapman, solutions consultant, Rose Business Solutions Inc. “You might have, say, salespeople who don’t need to know anything about accounts payable and they really don’t need to know that much about the sale, but they want to know particular information about their customers. We can deliver that information to them. Employees can do reporting on that in a secure way. And more and more of the reporting tools are user-based.”

The installation and implementation of an ERP system is neither an inexpensive nor a short project. The cost can vary depending on the number of your employees and the revenue size of your business, the depth and scope of the system you want to install, and the amount of training you want during the process. A simple system for a small business might cost less than $10,000. An average system might cost somewhere between $50,000 and $100,000. A much larger system for a corporation that has thousands of users and stretches around the world might cost millions of dollars. But an average cost, especially for small and medium businesses, is somewhere between $3,000 and $5,000 per end user, including the implementation, from the day you start installation to the day you are running live in production.

Similarly, the installation time varies based on multiple factors. For smaller systems, plan for at least three months, including end training. For larger systems, plan for at least six months to one year.

And the training is important. Consider it an insurance policy, of sorts, to make certain that your employees endorse the system and want to use it. If they reject it, you have not only wasted your money but have also taken a step backward toward different departments in your business speaking different technological languages.

“We think training is extremely important because the systems are pretty sophisticated.” Chapman says. “If people are well-trained, they won’t be frustrated, they’ll get a lot more value out of it, and they’ll take it further than the original implementations.”

Close your doors

Perhaps your largest concern with the decision to either install or upgrade your ERP system — other than the considerable investment of money and time — is security. Your data will not likely be susceptible to external hackers, even if you opt for cloud computing and store your data on a server outside of your offices, but there is always the concern that your own employees might attempt to tamper with the system.

“The biggest concern for business owners is having employees not be able to see sensitive information, whether that’s payroll information, whether that’s how much it actually costs to make a product,” Dixon says. “Only the CFO and the owners should likely have access to everything.”

In other words, assign each user a unique access name and password, much as you or your IT staff would for any office system of considerable size and importance, and allow each user access to only the parts of the system he or she needs to use for his or her assignments. There are always concerns, but if you set up the security in advance, you will better protect your data and your business.

The other concern, especially after hearing the relatively sudden successes of Company A, is when you will earn back the money you put into the system. Depending on the speed of the installation and how quickly you and your employees implement the full range of process automation, you could see a full return within two years, and perhaps even just one year. But the consensus is that ERP has evolved so much during the last couple of decades that it is a sound investment.

“It’s a great time to buy an ERP solution,” Dixon says. “The industry has matured significantly. These systems are accessible to a lot of businesses these days, whereas 20 years ago, only the bigger companies could take advantage of these things. And now they really are readily available to most businesses if people are willing to put in the work.”

ERP can, after all, help you improve the processes and efficiencies of your business. And it can change the way you do business.

Friday, 26 March 2010 20:00

Automation domination

This is a short story about a wonderful return on investment. Everyone loves a return on investment, especially if that investment costs hundreds of thousands of dollars.

There is a small manufacturing company in Arkansas that installed and implemented an enterprise resource planning system last year. The industry in which the company works is not particularly important. Neither is its geographic location. But the fact that the company, call it Company A for the purposes of this story, decided to move forward and install an ERP system is particularly important. It will change the fortunes of Company A in rather short order.

Prior to the installation and implementation of its ERP system, Company A shipped about $200,000 in inventory per week and it stored about five weeks worth of inventory in its warehouses. But executives at Company A figured there was a more efficient way to run the warehouses and, in turn, the business of the entire company.

So after months of research and planning, after working with a top technology firm, after moving forward to install that ERP system — and, in particular, a handheld wireless scanning system to better handle its inventory management — Company A did find a more efficient way. It was able to decrease its amount of stored inventory to about three weeks worth of items. That allowed Company A to free up about $400,000 in working capital, more than the total cost of investment in the ERP system. And that allowed Company A to restructure a large swath of the way it now does business.

What is ERP? You might know, but even if you have a grip on the technology, it has certainly changed since its introduction to the business world in 1990, and it has changed even more during the last couple of years.

“ERP systems give an integrated solution that allows your business to have immediate access to pertinent information so that you can make more well-informed decisions,” says James Barber, partner and CEO, ERP Professionals. “The latest releases of the ERP systems now integrate much better across all aspects of the business. It allows you to make a more well-informed decision, as opposed to taking an educated guess and seeing negative results later on.”

Plan, then plan some more

ERP is an integrated system that is used to manage the resources and automate the processes of a company. It can be used to automate and improve just about any process that deals with manufacturing, with supply chain management, with human resources, and financials and data. It has been referred to as “the present of computing,” “the future of computing” and “an invaluable part of business” by a panel of experts and software developers and designers across the nation. There is a longer definition filled with more technical details, but if that doesn’t provide a sense of what ERP can do for your business, well, just read the simple success story of Company A one more time. Then take a long look at the processes in your own business.

“Compared to other systems, ERP systems give you the power and the flexibility to grow your organization,” says James McKee, president and CEO, M9 Solutions. “But it really does all depend on how good of a job you do upfront to understand your requirements and configuring the system to address those. People don’t invest in these systems to implement them, stand them up and then just leave them alone.”

The installation and implementation of an ERP system is neither an inexpensive nor a short project. The cost can vary depending on the number of your employees and the revenue size of your business, the depth and scope of the system you want to install, and the amount of training you want during the process. A simple system for a small business might cost less than $10,000. An average system might cost somewhere between $50,000 and $100,000. A much larger system for a corporation that has thousands of users and stretches around the world might cost millions of dollars. But an average cost, especially for small and medium businesses, is somewhere between $3,000 and $5,000 per end user, including the implementation, from the day you start installation to the day you are running live in production.

Similarly, the installation time varies based on multiple factors. For smaller systems, plan for at least three months, including end training. For larger systems, plan for at least six months to one year.

And the training is important. Consider it an insurance policy, of sorts, to make certain that your employees endorse the system and want to use it. If they reject it, you have not only wasted your money but have also taken a step backward toward different departments in your business speaking different technological languages.

“There is significant training,” Barber says. “Not only will the end users who use the system to conduct daily operations need training, but they may also see their roles changing as they move to a new system because of how the processes are mapped out.”

Close your doors

Perhaps your largest concern with the decision to either install or upgrade your ERP system — other than the considerable investment of money and time — is security. Your data might be susceptible to external hackers, even if you opt for cloud computing and store your data on an outside server.

“There are always security concerns based on the sensitivity of your data and how you run your business. That goes without question,” McKee says. “There will always be individuals and companies that can crack that code, but there is sufficient technology to ward off that threat or at least get an early warning signal. Security is a big issue, but there is sufficient technology to protect you from those kinds of attacks.”

There is also the concern that your own employees might attempt to tamper with the system, so assign each user a unique access name and password, much as you or your IT staff would for any office system of considerable size and importance, and allow each user access to only the parts of the system he or she needs to use for his or her assignments. If you set up the security in advance, you will better protect your data and your business.

The other concern, especially after hearing the successes of Company A, is when you will earn back the money you put into the system. Depending on the speed of the installation and how quickly you and your employees implement the full range of process automation, you could see a full return within two years, and perhaps even just one year. But the consensus is that ERP has evolved so much during the last couple of decades that it is a sound investment, no matter your industry, business size or needs.

“An ERP system may take a little longer to realize that return on investment, but once you hit that break-even point, you’re often going to realize future gains,” Barber says. “These things are much more efficient than people could have imagined years ago, and the efficiency is where companies are going to be able to save most of their money.”

Because ERP can, after all, help you improve the processes and efficiencies of your business. And it can change the way you do business.