Monday, June 24, 2013

ERP Implementation Questions and Concerns

“Companies that try to manage implementation on their own – like defendants who hire themselves for lawyers -- often end up with advisors ill equipped for the job. “


The above quote (author unknown) expresses so much in a few words.  Doctors have an ethical oath and do not practice on family members for the same reason.  Objectivity.  As a trusted advisor, I try to explain to prospects and clients alike the advantages of having an objective third party to manage the implementation of a new solution. 


Fact: Everyone and truly every organization is budget conscience today. 


When trying to cost justify the expense, or is it an investment, in a trusted advisor is often more difficult than the investment in an Enterprise Resource Planning (ERP) solution.   We know the solution costs X, but why do we need an advisor, we can save Y by doing the job ourselves. 


Why are they implementing a new ERP solution in the first place?  What was running so efficiently that they even considered a new approach?


 Sufficient internal capacity rarely exists even at the largest companies to handle the complexities of a full ERP implementation.  Medium and small companies are even more challenged.  The lack of an objective advisor invites additional risks which typically ends up extending the project, increases the budget overruns, lengthens the Return on Investment (ROI), and often causes bad feelings and in some cases loss of employment. 


The goal seems to be to save money, upfront money, by trying to handle the tasks internally.  This is difficult to do when that person is responsible for their regular duties and in addition the responsibility of transforming an entire organization. 


Implementing and ERP solution is not as simple as opening a box, inserting a disk, and following instructions or a quick install guide.  Errors multiply and so does the cost of unraveling them in a timely way.


Perhaps one of the ways a trusted advisor helps most is in setting metrics that an organization utilizes to measure their progress.


So what are some questions that you may want to consider with your advisor?


·         How well does the ERP solution provider understand your business?


It really does not matter how great a solution is, if it does not match your business operations, then it probably is not the right choice.  Is the software designed for a service business?  A manufacturer, distributor, retailer?  Does the supplier have success stories in your industry or similar industry that has similar challenges? 


If the solution is too far off, then it will require too many modifications which will tend to destabilize the solution you are paying for.  The software also has to match your company’s culture.  If there are too many screens or steps then your people will be lost.  If there are too few, you probably are not capturing enough information to prevent errors or drive efficiency.  There is a balance that must be met on both sides.  Availability and need.  Conversion help and the inevitable changes that occur must have a way to be resolved.  Late changes that are not addressed properly will tend to destroy time tables and deliverables.



·         Does the supplier have the resources necessary to deliver the solution and support your organization in the future?


A lot of technology providers have been purchased or have been the subject of mergers and acquisitions lately.  At some point these mega companies will prune off the less profitable solutions and force migration to another solution regardless if it is a good fit or not.  These companies have increased their market share, but have not necessarily increased the effectiveness of their solution.  Are they concerned about your privacy?  That small company that used to service your needs had an agreement with you organization.  What interest does the new supplier have?


Is the solution provider big enough to be able to invest in new solutions?  Are they too small that a bus accident leaves you stranded?  Remember the annual license fee is not for the software that has already been developed.  It is for the development of enhancements that address the constant change in technology.  This fee can be discouraging when considering a solution purchase, but is typically a lot less than hiring your own staff and maintaining the changes needed to stay competitive.



·         Few ERP solution providers have every application needed.  What third party solutions are available and fully integrated to help drive efficiency?


Electronic Data Interchange (EDI), Payroll and Human Resources, Shipment scheduling and billing, Document management solutions are some common examples of applications that are often third party solutions.  These and other applications are specialized industry solutions whose needs are typically better addressed by a firm that is dedicated to the tasks. 


It is not to say the some ERP solution providers do not have modules to address these needs or that this is meant to be a complete list.  It varies.  The point is, does your provider have a tight integration with any solution for which they did not write?  Do they have the interfaces built?  Who is responsible for problems?  How many phone calls will you need to make when problems or issues arise?  Who do you call for help in configuration or training?


Can the provider you select address all of your needs?  It is your responsibility to ask and understand. 


The more of your operations that are integrated and talking to each other, the more efficiency you can drive in your operations, thus increasing the opportunity for cost savings and increased profits.



·         How do I know when the time is right and the provider is the right one?


Is it a leap of faith?  Maybe, but I would suggest it is when the value delivered is greater than the investment.  This implies there is a positive Return on Investment (ROI).  Price factors heavily when considering an ERP solution.  Total Cost of Ownership (TCO) is another big factor.  Upfront costs and ongoing operational costs should be analyzed.  A supplier that brings up budget in the beginning is a good sign.  At the beginning they may just be ballpark or ranges until a thorough analysis is performed.  Would you like to be wowed by a fancy presentation only to find that you could never recoup the investment or would you like to see something less fancy that will improve your operations that is actually affordable? 


Can the solution provider support your organization geographically now or in the future as you expand?  Remote support is one thing, feet on ground is another.  Make sure that you have local support.  Time zones are an important consideration along with location.  If you are West Coast and your supplier is based in the East, do they have support hours that cover your business?  Can you wait three hours for them to show up?


Will this solution provider be around in a few years to help you with the next upgrade?  How often do they come out with release updates?  Do they have user conferences for education of the people using the software?  Do they education themselves on the needs of users?  Do they implement changes that they learn about from user conferences?  What kind of training is available?



The selection process is not really as hard as you might think.  This is where your trusted advisor helps and earns their pay.  The trusted advisor knows and learns about your organization and uses their industry contacts to help narrow the field of possible solutions down to three to five candidates.  Next a match from your internal analysis and solutions can be made to eliminate one or two choices.  From there you can review an executive overview of the solution to determine your final candidates. 


After you are down to two or three choices a concerted effort and departmental analysis needs to be made to determine fit and list needed modifications.  If your supplier (potential supplier) is not involved or does not want to be involved in this process, then you may want to consider another solution. 


One question you may need to address is how much consulting can you expect at no-charge from the solution provider without a commitment.  This time and effort is typically covered by the initial license fee.  Some is included in the sales and prospecting process.  Some is billable project management time.  There is a gray line that separates the two.  Be fair and understand that free ends up costing more in the long run and by sharing the costs the long term benefits are worth the investment.



The key to success is not so much in the goals.  The key is in the growth objectives and results that come from the new solution, capacity and integration.



I invite you to contact us.  We are here to help you implement the best solution available that meets your budget and objectives.  Let us help you concentrate on your business while we concentrate on delivery of a new solution.  Dolvin Consulting works with midsized Manufacturers, Distributors and Specialty Retailers to help them implement new solutions that drive efficiency, reduce costs and increase revenue. 

Monday, June 17, 2013

What is the Best CRM Application?

I had the opportunity to share my thoughts this week in another forum about someone’s question about the best Contact Relationship Management (CRM) application available.  He was looking for suggestions, experiences, and alternatives.  This person had looked at some popular cloud solutions.  He liked and disliked the same feature, customization, for opposite reasons on a couple of different solutions.

As is the case in many postings he was not very specific and did not include a lot of details.  I shared my experience that acknowledged that a lot of people ask that question and it is not confined to just CRM applications.

A lot of people ask that question.

There are a lot of good software solutions both on premise and cloud based to choose from today.  That is the good news.  The bad news is that there are a lot of good software solutions to choose from.  Henry Ford may have had it right when he said: “Any customer can have a car painted any colour that he wants so long as it is black.”

What is right for one organization does not necessarily mean it is good for another.  While most businesses operate similarly, each has some unique needs that are met better by one solution or another.

What we have found consistently, is that the solution that is most tightly integrated or is actually built into your Enterprise Resource Planning (ERP) solution is best, even if it has less features.  Minor tweaks to customize an integrated system are better than trying to fit a square peg in a round hole.

The efficiencies of having a unified database for suspect, prospect, customer conversion, reduced keying/rekeying, and reporting typically outweighs the latest bells and whistles.  Real information presented in real time is an asset to decision makers. 

The ability to aid customer service and marketing by post sales follow up enabled by an integrated system is a feature most stand alone CRM applications lack.  Most will help on the front end of the sales process (marketing), but because of the lack of integration few can help you be proactive in post sales (customer service).  For example, thank you for your recent order of… you may find these complementary items beneficial as our other customers have, here is a coupon for you next purchase, etc.

Automation and integration should be at the top of the list of core components when looking for a solution. 

Any solution.  You can have the most comprehensive system in the world, but if it takes too many steps, especially manual steps or is disconnected from your other systems, then the software has missed the mark for your organization.

People just seem to want what works.  People want and desire choices, but not so many that they cannot make up their mind.  People do not want to invest a lot of time and money on something that does not work.  Do not want to be embarrassed.  And especially do not want to lose their job.  People have limited time and resources.  Most are not educated enough to know what will and will not work.  Evaluation versions sound nice, but it can take more than a month’s time to figure out if a solution works. 

How many times do you want to convert and integrate your systems in a trial and error selection process?

This discussion is leading up to the advantage of investing in Trusted Advisor to help you in the process of software selection and process improvement.  No one wants to invest money on something they feel they can do themselves, but there are distinct advantages of doing so. 

Take for example, painting your house (inside or out).  It is not too hard; there are a few things to know and heck, you probably painted it before.  You also probably do not have the time to manage everything else you have to do now.  How much free time do you have?  Do you want to spend your vacation time painting your house or spend the time with your family?  Do you do a quick job that has to be repeated next year, or do you take your time and end up having no time for family? 

What compromises are you willing to make?

Granted there may be budget issues, but the advantage of an outsider’s view of your operations is a valuable asset in itself.  Then add in a knowledgeable person to oversee the conversion and implementation, the savings will add up.  Your people can concentrate on what they do best and be focused on what needs to happen to move forward as opposed to getting bogged down in unrelated tasks.  This does not mean that you have nothing to do.  It just means you can focus on what specifically needs to be done.

At Dolvin Consulting we work with industry experts so you can concentrate on what you do best.  Contact us today to learn what we do best and how it can save you a lot of aggravation.


Monday, June 10, 2013

ERP and Mobile Applications

A recent article posting asked the question about which Enterprise Resource Planning (ERP) business areas are well suited for mobile applications.   I was happy to see that this article question focused on the premise of “Business Areas” addressed.  A lot of focus today seems to be on the features and associated benefits of a particular function.  This is both good and bad.  It is good in the fact that, hey, here is a technology that can be utilized to fulfill a business need. 

Bad, in the sense, that there is an assumption that the technology will solve all of your problems simply, because it exists.

 A lot of ERP solution providers have added/integrated mobile technology in their operations.  The additions help businesses not, because they exist, but because of their effectiveness in addressing a business challenge.  We in general have this impression that everyone should be using the latest technology for everything under the sun.  This is a false premise.  Just because it exists, does not mean there is a reasonable Return on Investment (ROI) or even if it is practical. 

Just because a given technology exists, does not mean it is practical.

Some companies consider themselves leading edge and try to set the bar high for their competition.  The thought seems to be that we are using the latest whatever and our competition does not, so you should purchase from us.  What most customers care about that I have talked with is high customer service, responsiveness, timeliness and accuracy of deliveries.  They would all like faster, but accuracy is the most important component of an order. 

Most people would like a phone number prominently and easily found on the web page and a real person to answer the phone, take responsibility and direct the call directly to someone who can help.

This is not a technology solution.  This is recognition and responsiveness to the people and business that are trying to do business with you.  They want to work with you.  Are you using your technology to help your staff help them?  Or, is technology a barrier to doing more business?

Social media is a good example.  Social media is not a technology.  It is a conversation and communications forum for the people that are in your world.  Social media uses technology as a delivery mechanism, but it is not in itself technology.

An order may take x-amount-of-time, and unless it is an emergency fulfillment.  Purchasers build that time delay into their ordering system.  What they expect is that if you promise a delivery date, that date is met barring unforeseen acts of God.  If the order is delayed, then down line customers are delayed and disappointed.   This opens the door for the competition to compete. 

It is not the technology that solves the challenge.  It is people. 

I had a meeting recently with a prospect.  What impressed me the most, is that the owner made the customer a first priority.  It is part of their company culture.  When we left his office to take a look at their operations, he placed his name badge on his shirt.  When we walked through the store, he stopped our conversation to help customers (more than once).  That is customer service. 

That is how I would like to be treated when I am in a store. 

At the end of our meeting I asked his advice on a purchase, and made that purchase.  I did not have to do that, but I thought that, one, it is something I do need regardless, and two, I wanted to see how I was treated at checkout.  No discount, no special mention, just treat me like anyone else in the store.  How well did their staff utilize the existing technology and how much of it was their staff and mentoring.  If I am going to propose a new solution to his business, it had better enable them to increase, not merely match, the current level of customer service.    

So specifically, what mobile technologies exist to help the business operations?

·         Inventory management and warehouse management systems are early and relatively easier adopters of mobile technology.  Inventory counting, order picking and verification, sales analysis evaluation. 

o   I must point out that there is a significant difference between consumer grade equipment that tends to have lower upfront costs and industrial rated equipment that can take, for example, repeated drops on the floor. 

·         Distribution of actionable information directly to the hands of those who can utilize it to make more intelligent decisions.   For example, a mobile sales force that is front of their customers or prospects and can check inventory or take orders on-the-spot. 

·         Notification of priority events.  For example, notification that a customer has gone over their credit limit.  A key purchase order has been received.  Report and information distribution.  The sooner you can get the information in the hands of decision makers, the better.

Really, unless it is a computing intensive solution, mobile technology can be an asset to an organization that needs their people to handle multiple functions at the same time. 

As economic concerns grow, businesses need to empower their staff with the right tools to compete.  It is important to recognize that technology alone will not help.  Integrated solutions that utilize technology as the delivery mechanism may be worth the investment.

Contact us today to see how we can help you implement a solution that delivers high customer satisfaction.  Dolvin Consulting works with industry leaders to deliver the right-fit solution for your challenges.  Start the conversation today.  We are here to help. 


Monday, June 3, 2013

ERP Failures and Your Job

Thanks to a friend of mine I was able to read a blog post this week by a CFO who says they lost their job, because of an Enterprise Resource Planning (ERP) failure.  Someone has to be responsible and if this person actually lost their job due to a failed implementation, I am sorry for that company.  I do care for the person in general, I do not know them personally, but he/she is probably lucky to be out of that company. 



The buck certainly has to stop somewhere, but can the failure in something as involved as an ERP implementation really one person’s fault? 

I think not.  Falling on the sword is something characters did in times past.  The CFO should have looked at the numbers.  There is an initial investment and annual maintenance fees.  This should be known before signing.  The ERP solution should have had some examples of typical Return on Investment (ROI) and certainly he/she should have looked at the Total Cost of Ownership (TCO).  You might not know all of the details, but for the most part this is pretty straight forward analysis.  It is what a CFO should do.

My guess is that there was a communication issue and there was not a realistic budget put together for the implementation.  Hardware is straight forward and so is software licensing.  What is difficult to pin point is the amount of time it should take versus how much time it actually takes to transition from an old system to a new one.  A “slick” Salesrep might brush this aside.  From experience we know it is appropriate to double the hardware and software for the implementation. 

Correct, implementation is typically half the cost of a new solution.

I have had an actual, real conversation with a business owner where they tried to convert systems in the past on-their-own and have suffered miserably, took way too much time, invested too much money, and have sworn they would never do that again.  The next sentence had to do with the budgeting numbers proposed as being too high.  The software, he commented, was already written, the hardware he acknowledged was what it was and probably had margin imbedded in it, so that should be negotiable too.  However, the implementation number just seemed too high.  Really?  What happened when “you” tried to do this on your own in the past? 

Yes, the software is already written.  You are not paying for what has been written.  You are investing in an organization that is maintaining the software and constantly making improvements for the way businesses are changing.  We use new technology all the time.  First punch cards, then magnetic media, then modems, fax machines, Electronic data exchange, the Internet.  All in an effort to provide better customer service. 

Why, because the competition is already doing that and your customers expect more.

Yes, the hardware has some margin in it.  “Your” business buys stuff, processes it, marks it up, and sells it for a profit.  ERP solution providers do the same thing.  Most are not greedy, margins are slim on equipment, but they are in the business of being in business.  As a business owner that should be understood.  Yes, question the number, check the Internet, and ask others if the numbers are reasonable.  It is okay for a company to make a profit.  Granted it should not be their whole year’s make up, but it is not unreasonable for them to make money.


Would you want the number to sound optimistic and then have overruns?  At that point you are so far into the process you may not feel like you have any options.  You have come so far, right?  It should only take a little more.  They thought your people would be more involved and that is what they based their number on.  They made assumptions and so did you.

There are two camps and most companies fall somewhere in between.  On one side, a company has little monetary resources, but is able to take their time, rekey information, practice, practice and practice.  When the conversion time comes, it is almost a non conversion, because they have already been using the system.  This works, significantly lengthens the ROI time, but it works, because the people are working the system.

In the other camp the company has monetary resources, but little time.  Caution, this sounds great, but think about the last time someone forced you to do what you always have done in some other way.  Did you care?  Still, this does work, but the investment can be significant.  You are typically hiring others to do the heavy lifting and they are absorbing the learning curve. 

The in between balance of investing enough monetarily and investing in your people is the better choice. 

The exact balance is more art than science and some care is needed here.  Ask the vendor if they have worked with other businesses like yours or similar to yours and where improvement could have been made.  Be sure to ask for references.  Nothing is perfect and you should not look for it, but you can educate yourself on common pitfalls and either avoid them or lessen the impact knowing you are going to hit them too.

There has to be a realistic budget and a look at the resources available. 

One challenge here is that the economy has been so tough lately that a lot of people are already doing two or three jobs and do not have a lot of spare time.  You might need temporary help in the interim.  Not a bad idea, just make sure that the knowledge curve absorbed does not go out the door when they are done.

Anyone could write days worth of material here, the point to acknowledge is that it will take both time and money to have a successful conversion and this is not an area where you should cut too much.  You will need a dedicated project manager with experience to guide you through the process.  Your fee includes this person’s time.  They are knowledgeable and their experience invaluable. 

You might want to compromise in what software you purchase.  Most ERP solutions are based on modules.  You may not be able to implement all of them all at once anyway.  So pick what you need and weigh the others.  Some ERP vendors offer discounts to get everything all at once, but again, this is an area where you actually have control.  You know your budget, be open and honest.  Let the provider help you.  They may come up with ideas you never thought about.

The article I read asked readers about their thoughts.  A lot of good answers came up.  Below is a partial list that you may find helpful.  Contact us for more details.

Define the expected benefits earlier and more clearly and then use as a compass going forward and a benchmark of success at the end.

Assume it will cost more and take longer.  If it doesn't, you're a hero and if it does you're realistic.

Rigorously avoid project creep.  Otherwise the scope will always expand.

Avoid unnecessary customization.

Admit and move on from mistakes faster.

Review the project on a regular basis and often.

Plan on more testing.

Plan on more staff education.

Delegate and verify more.

Don't try to replicate everything from a legacy system.

An ounce of package selection will save you more than a pound of implementation

Focus on business goals and not systems to start.

Document business processes.

Do not accept non-involvement.

Think about systems strategically.

Build a change management process into your approach.

Get all stakeholders in the room early to identify the requirements.

Understand that being part of the core implementation team should be considered a full time job.

Everyone needs to understand it is a project that will involve the entire organization.

One thing most companies learn from trial and error it that while the ERP vendor should provide a project manager, they too should have a trusted advisor.  They need an advocate that can help guide them and prepare them for the bumpy ride ahead.  ERP transitions are like a heart transplant.  Done right and a long life awaits.  Done wrong and you never feel right again.

Contact us today to see how we can help.  That is what we do.   Dolvin Consulting works with companies just like yours to help them find and implement solutions for real world challenges.