Episode 23 The Truth of ERP – Post Election Edition
MFX Up and Under
Welcome to the ERPodcast Episode 23 – the Truth of ERP and a Newsbreak – the Post-election Edition – I’m the Director of Profit From ERP Gene Hammons and your host for the ERPodcast.
So – what’s up in the ERP world, well, like so much else, 2020 has changed a lot of things –
- Item – Cloud Software is booming as the pressure cage of the pandemic accelerates change
- Item – Some things never change – listening to customers is key – even if it’s digitally collected data delivered to the managers via iPhone – companies that listen and react are booming
- Item – A lot of the conventional wisdom of ERP has been shown to be a lie – truth is, we’ve always run ProfitFromERP based on proven truth rather than nebulous marketing spin
So we’re going to talk about the Truth of ERP – over the past few months, I kept getting reminded about an old Winston Churchill quote – a lie gets halfway around the world before the truth has a chance to get it’s pants on. I thought a lot about that as it relates to the ERP world – and realized half of our ERP Consulting work is swimming upstream with the truth on our backs – truths learned the hard way – truths proven time and time again – but implementing these truths is sometimes the hardest part of a software implementation – all that and more after the break on the ERPodcast…
Alliance of Excellence Software Coalition
Today’s ERPodcast is brought to you by ProfitFromERP’s Alliance of Excellence Software Coalition – here’s the thing – you can’t be all things to all people so at ProfitFromERP we’ve put together an alliance of some of everyone.
When it comes to ERP, you may need help going through the selection and evaluation process. Millions of dollars in profit can be on the line – even with ERP platforms costing a fraction of that – the profitability of your business for the next several years can be dramatically affected. And you may say, Gene Hammons, you’re the expert here, we want you to run this project. Great. You also may say, Gene Hammons, we need 7 people to cover 28 national locations and three countries – OK, we can do that too. We have Alliance of Excellence Partners who are some of the best, independent, non-affiliated selection consultants on the planet.
Then you may decide you need NetSuite – which is fine, we have 6 different NetSuite Partner companies who handle implementations – each has a very specialized approach – so one ERP software, 6 different focuses -which if you’re in a very specialized industry can really be critical. But it’s not just NetSuite. There’s three Acumatica partners, 2 Intacct Partners, a Microsoft shop with 14 offices, Infor partners, QAD resources, Zoho, US, Canada, onshore, offshore – teams that do development – and right now, about 20 trusted third party providers when those services are needed. Folks, it all adds up to a small army of highly specialized, extremely experienced teams that we’ve worked with in the past and continue to focus on in the future.
Ahh, but I’m sure you’ve heard the saying ‘one throat to choke’ – meaning one go to source should any issues arise – and issues do tend to arise – just ask the year 2020. ProfitFromERP is the business consulting side of a software project – we manage the teams and bring in the best which keeps the need for throat choking to a minimum – we’ve worked with our Alliance partners before and we know you can trust them to step up when issues arise – that’s our proposition. And it’s why we can say, if you’re looking at ERP, look at ProfitFromERP and the Alliance of Excellence Software Coalition.
Welcome back to Episode 23 of the ERPodcast it’s the Truth of ERP – so forget what you’ve been told and let’s focus on what’s proved true yesterday, today and tomorrow.
The Truth of ERP … Just a little backstory – prior to an MBA, my undergrad degree was Journalism –
I don’t know if you’re aware, but one of the all-time leading business consultants, Peter Drucker started his career as a journalist and his idea of business consulting was you approach each company to write the story of what’s there, and then you determine what’s next. But you have to be unbiased going in. You can’t presuppose to know what you’ll find – every company is at least just a little bit different and many companies in the same industry can be totally opposite in their approach to business. So naturally, in my consulting career I’ve always looked to his example.
And today, in our post-election state, what’s the takeaway. Well, I was fascinated by the journalism of the thing. I’d have discussions with people on one side or another, and realize they were both dealing with a different set of facts. Now how could that be?
We saw scandals ignored by entire swatches of the press. We saw scandals invented by the press. We had multimillion dollar investigations stretching out over the years that found no Russia Russia Russia connection, then new scandals explained away as some sort of Russian hoax –with zero evidence, but repeated so often it polled that 51% of the electorate thought it was true. And then, well, someone counted and found 10,000 candidate lies – of course not all of those were truthfully reported – but no matter.
In any case – it got me thinking about truth – what is the truth in the matter and how is it being hidden/massaged/spun – partial truths leading to outright fabrications. And over the last few months, throw in some odd covid pandemic coverage, shovel on some media downplaying the effects of ‘peaceful protests’ it’s sometimes seems actual truth hasn’t really shown up much. And I realized truth is in short supply – so I started thinking about my world, ERP consulting – clients adopting ERP software and I was thinking, well, we deal purely with truth when it comes to business.
But see, here’s the thing, if you go around thinking you know everything, your quote experience unquote consists of looking for more evidence to support that which you already know – it means you already know everything you’re ever going to know, because you can’t teach a know-it-all anything. In fact, the shortest route to dumb runs through thinking you’re an expert.
So I examined the truths in ERP – and you know what? At Profit from ERP, we’ve been long proponents of re-examining conventional wisdom when it comes to ERP but over the years, that conventional wisdom keeps growing even though it’s not following true conventions nor is it particularly wise – so how is it conventional wisdom?
well, it was a Ronald Reagan quote that said ‘It’s not that they’re ignorant, it’s just that what they do know isn’t true.’
So what’s the Truth of ERP
Conventional Wisdom says ‘buy ERP software and your business will be see huge improvements’.
- Truth is it’s a lot more than simply buying software.
- Truth is 80% of the attempts at ERP will fail.
- Truth is you’re not buying a solution with ERP, you’re buying a toolkit.
The clients and prospects I talk to are really smart people. They run great businesses and the most common problems they really have revolve around dealing with rapid growth and phenomenal success.
Conventional Wisdom says, ‘how hard can ERP be – we can figure this out in house’
- Truth is, ERP is far more complex and the ERP industry survives by making it look simple, when it rarely is.
- Truth is every, and I mean every client in the last 20 years has underestimated how difficult an ERP project is measured by both effort and people needed to get the project to go live. Did I say every? – there was one who was exactly right a few months ago – but that’s one in 25 years, 1 in 400.
Conventional Wisdom says ERP can improve your business.
- Truth is, 9 of 10 companies have no idea HOW MUCH ERP has the potential to impact the business and
- Truth is, without setting those goals, most companies will never reach the goal. You know that about goal setting in your own life, you don’t set a goal, you don’t measure progress to the goal, you don’t reach the goal – the life of your business is no different.
And people will say, Gene, with your ProfitFromERP methodology…when the truth is, it’s not MY methodology. Our platform, our process is created from viewing the top adopting companies who implement ERP – an improvement in selection, a new approach to implementation, – we take what has been proven to be true, what works. And we apply it again and again, further proving it to be true.
And you know what?
Some of the truths we’ve worked with for years are being challenged by made for cloud software – so we continue to evolve, it happens once, it’s an outlier, twice it’s a fad, three times it’s a trend and you better start finding out what’s driving that trend – and underlying drivers are the most powerful and least recognized factors in business software – so it’s management, psychology, economics, – these are the things we focus on and it’s important because if you’re doing a one-project ERP implementation, you never have a chance to see and understand what’s going on across multiple projects, multiple years.
The Truth is, with ProfitFromERP, we save our clients money – that’s well documented – What’s harder to quantify is that a good many of those 80% failure rates are cost overruns in the double and triple original estimates range. Last year, our overall project average was 106% of budget – which in this industry is amazing. Now, granted, we’re getting clients to understand more realistic budgets from the beginning – we’re giving them numbers that can be met – and managing projects so vendors cannot lowball an initial estimate knowing you can’t change horses once you start and stick you with huge overruns – but still, 6% when the average overrun is 186%?
Clients often have other sources of information. Like the controller who’s brother-in-law was in another division of Microsoft but assured him a newly released cloud version of ERP was ‘something Microsoft would stand behind’. Microsoft is huge. But their ERP division is smaller and has less annual revenue than xBox – ERP is not their priority. And the early versions of this particular ERP were horrific – we were hearing it all over the country. But the controller had a brother in law, and although we recommended against it – he pulled that trigger. Truth is, he no longer has a job. The project failed horridly 18 months and 160% over budget and nowhere near go live – as we’d heard was happening everywhere else.
So truth is serious in this business – big money is at stake, both in cost of softwares but more importantly dollars from returns – the cost overruns are in the hundreds of thousands but the missed profits years out are in the millions.
At ProfitFromERP, we’re dealing in truth.
We’re not sugarcoating costs, but we’re also realistic about returns. And when we tell a client this ERP project can improve bottom line numbers by 7%, it’s because we have transactional cost models defining that 7% cost saving potential. Now is it simple, is it easy to drive 7 points on next year’s bottom line? What do you think? Truth is, NO – it’s hard work. But if you put enough people and process change, if you select the right software with an implementation partner who knows your business – when you do it right, the truth is, most of our clients exceed our cost revenue models by year three.
Look, change in any business is hard. For Example, Your operations manager has been doing things the same for many years. He’s found out, by trial and error, by his hard knocks research that his is the best way to do it. He’s proven it over the years that come hell or high water, this system works. He’s experienced that his way is the best way. Research, Proven, Experienced. Is it any wonder he’s hesitant to change when some outside guy walks in telling him this is how the software does it best?
Truth is, you can’t just walk in and say ‘do it because I said so’. You need to show him the research – this is how others have done it in the past. Proven, that after go-live, costs dropped, efficiencies rose. Experienced – knowing that the last ops manager said the same thing and what we found was when you do it right, here’s what happens.
So if you’re ready to ride along with the herd, go with the conventional wisdom, well, the truth is…something different than you expected. And at ProfitFromERP, our future focus is on the truth of ERP, Researched, Proven, Experienced.
And that, my friends, is the Truth of ERP.
Join us next week on the ERPodcast as our guest will be Jay Carson, President of Nice Link – a home furnishings distributor – we’ve got the story of how Nice Link boomed and expanded business outlets during the pandemic while using Acumatica Cloud ERP and some timely advice from Net @ Work a leading Acumatica partner – you won’t want to miss it. Cloud digital transformation for the home furnishings industry. Right here on the ERPodcast.