Why Profit From ERP? Why Not?
Welcome to the new website ProfitFromERP.com and our new approach regarding ERP software consulting, which is a five stage process. We help clients from the beginning to successful completion using a system we’ve developed in our work with nearly 400 software projects over the last 20 years. We know what makes companies successful, and what pitfalls to avoid. Studying successful project teams, we’ve isolated and replicated the structure, framework and methodology to take your project to the goal line.
We gather front-line level detail on all your business data flows and transactional processes. This highlights inefficiencies, uncovers quick wins and sometimes finds blind spots that are easily addressed with the right process and software selection.
Create Cost Benefit Models
We define the important factors that drive Profit From ERP, determining how, how much and where improvement will affect the bottom line – even before the project launches.
The roadmap for success leads to the right software. As a completely software agnostic advisory firm, we’re not limited to recommending ‘our’ solution, but finding your solution. Experience from nearly 400 software projects has produced a deep network of the very best national and international implementation teams. And it’s rare that our negotiated savings (beyond the typical month-end-discounts) don’t completely exceed our fees.
Typical ERP Implementations are complex, time consuming and overwhelming – and today, more than ever – cloud based ERP is interfacing with multiple component software elements. You need someone who’s managed these projects regularly to both protect your budget and keep the original project goals front and center in the software design architecture and configuration.
Most software consultants disappear at go-live. There’s a reason we’re known as ‘Profit From ERP’ and not ‘Go-Live With ERP’. This is where the rubber really meets the road. Have we achieved the goals we set for the project? If not, why not? Is it a user adoption issue? Is training necessary? Does the software actually deliver what was promised? We address it all, until you too, Profit From ERP.
How Do You Start with a 3% Bottom Line Improvement and More Than Triple It?
Our consulting practice launched in 2011 as a way to help clients negotiate the minefield that is ERP Software Selection. In the beginning, we saved clients a great deal of money on software pricing, and helped guide them to the right solutions for their business. We then saw our successful selection projects starting to slip during the implementation phase, and expanded our offerings to include Manage Software Implementations. The Software Implementation phase now includes project management, change management and cost control. The biggest difference we saw was that by 2013, instead of seeing 3-5% bottom line improvements from our Selection clients, our Selection and Implementation services engagements were seeing 5-7% bottom line improvements.
And when we developed the concept of Total Project Monetization – our complete 5-stage process which covers preliminary budgeting, business process improvement, selection, implementation and optimization, we saw many of our clients starting to develop 7-10% bottom line improvements.
Each step along the way, we saw greater efficiencies, greater ROI, and some fantastic customer success stories evolving — all by following a tried and true methodology used by past successful clients.
Seriously — the kind of results we were generating for our client companies — or more accurately that our client companies were generating for themselves — were almost too good to be true. How do we (or you) do it? Here’s a few of the secrets.
Secret #1: Cost Justify that $1 Spent Will Produce a $2 Return
Working for some very large ERP companies, we were exposed to large clients, $1B+ global conglomerate type operations. These companies spent millions on software improvements. And, they also had a staff of 50-100 in IT, with expertise in buying, business and technology analysts throughout the company. Before they could spend one dime, they had to cost justify that $1 spent would result in $2 return, or whichever metric supported the project.
This is now our approach to an initial Cost/Revenue Model to determine our client’s return prior to starting a project. While we don’t need an army of analysts pouring over the entire business process for months, we can do a cost-effective review of processes and map process improvements for almost any size organization. (With a national network of over 3,000 consultants, our project teams range from a single consultant assigned to your project to 14 -20 subject matter experts deployed at various times for larger engagements.)
Secret #2: Don’t Rely on the Demos
Know What You Need & What You’re Getting
Over the years, working with some very successful ERP-adopting companies, we kept seeing common elements emerge – not relying solely on demos and sales presentations. It’s far better to engage with other users with site visits, user group conferences and real-life examples of best practices.
Some essentials include having:
- clearly defined requirements prior to engaging in software evaluations,
- documentation that made sure both software vendor and evaluating committees were talking about the same thing, and
- documentation that software architects could approve in both concept and detail prior to designing implementation plans.
Identifying common elements of successful ERP projects, and engaging this methodology repeatedly with various engagements, we developed a proven methodology for not only avoiding common pitfalls but driving revenues with teamwork, efficiency and ultimately better selection in the first place.
Secret #3: Budget for the Goal
The fact is, when it comes to technology budgets, the most common approach is to create budgets based on what can be carved out next year’s expenditures instead of saying, ‘What would it cost us to achieve a goal of X?’ Sure, a $10,000 budget is fine if it saves $12,000, but what if we don’t even know to ask how we might save $500,000?
Secret #4: Know How to Measure Successful Outcomes
Without measurable, detailed goals, so many ERP projects fail to dedicate the internal staff needed to make the project succeed. ERP implementations stop just short with too much project fatigue to get the ball from the 5-yard line over the goal. The truth is, most companies fail to measure returns from ERP. The fact that we’ve set sail with our Cost/Revenue Model from the beginning, guiding the project through all phases of selection and implementation, and following up after go-live to quantify success puts us ahead of ‘most’ ERP implementations before we even start.
So, our methodology is not magic. Though some of it might sound like common sense, we’ve seen that common sense is often not common practice. Clients who take action and follow our methodology get the results they are after. ERP is a huge expenditure and a major companywide effort. The stakes are high. It takes diligence and processes to make the difference. We at Profit From ERP have a few unique processes to help our clients in several ways:
The Amount We Save You in Software Costs Typically More Than Covers Our Total Billable Hours
Selection and Buying – having negotiating dozens of ERP purchases each year we know what the real market price is in a world of discounts, month end, quarter end, year end, end-of-the world discounts (we’ve seen it all). Given that the average negotiated software prices are 15-20% off list, our 46% off list average has more than covered our total billable hours for all but one of our projects, in the last two years (one client wanted to negotiate on his own – we still found him a working solution starting in the $1.2 million range when his previous shortlist was $5 million+).
We Put the Breaks on Scope Creep
Implementation – cost overruns in the ERP world average 186% of quoted prices. While scope creep is unavoidable (you’ll always find features you want to use that weren’t seen in the demos or estimated in the Statement of Work) our managed projects have never exceeded 110% of quote and average 105%, but often come in under budget. We also are on-time at go-live with the majority of our projects, with a 90%+ delivery success except cases where client companies pushed back due to internal issues.
We Build Budgets You Can Plan On
Total Project Monetization – Prior to starting the project, helping our clients determine whether a ERP deployment, replacement or upgrade is cost effective helps prioritize whether we tackle the project this year, next year or never. It helps our clients develop realistic budgets and examine alternate financing methodology and reliably forecast cash flow issues. Knowing that a project is worth $4million to the company over the next 5 years helps prioritize resources. And after go-live, making sure we’re on target for projected earnings and cost reductions insures we’re attaining the intended result – or identifies root causes and define remediation.
So, Why ProfitFromERP?
ProfitFromERP is a different website, a different concept. We’re not involved with any one ERP vendor, reseller or partner program. We don’t have technical software consultants or our own technology practice.
We’re not about promoting a particular software. We’re not about promoting a company.
We ARE about one thing – and that would be your thing – helping you Profit From ERP.
Gene Hammons, MBA has specialized in ERP software since 2006. A veteran of over 400 ERP projects, he can be reached at gene@profitfromERP.com